A survey of the bidding practices of Canadian civil engineering construction contractors

Abstract

This paper presents the findings of a survey of the bidding practices of Canadian civil engineering construction contractors. The results of the survey provide insight into the most important factors that contractors consider in making four bid decisions: the decision to bid, the risk allowance, the opportunity allowance, and the markup-size decision. The survey methodology is described to illustrate its effectiveness. Common practices in assessing risks and opportunities, the competition, and markup are discussed. A major conclusion of this paper is that the decision-making process used in bidding is largely subjective and based on experienced judgement. The assessment of the competition is done on an informal basis in most cases, with little use of historical competitor data. Risk and opportunity assessment is subjective and largely based on experience. Although the markup-size decision is critical to the success of a company in achieving its objectives and realizing a profit, markup setting is usually based on experience, with little or no formal methods of analysis.Key words: bidding, markup, risk analysis, surveys, tendering.