Internal factors influencing bid/no bid decision for contractors on construction projects: The case in Hanoi

Abstract

Purpose - A pre-bid screening and analysis procedure can save company resources and reduce overall costs. Bidding construction projects is considered a vital decision for contractors. The objective of this paper is to identify and rank the internal factors influencing the bidding decision from the perspective of local contractors operating in Hanoi, Vietnam. Design/methodology/approach - This study was investigated through a questionnaire, which included a randomly selected sample of 196 contractors in the construction industry in Hanoi. The questionnaire was structured based on relevant literature influencing the bidders’ decision. Cronbach’s Alpha, EFA, Relative important index (RII), and Binary Logistics Regression model are used to explore the impact of each independent variable. Findings - Three internal factors, including Contractor Related (CR), Contractor Benefit (CB) and contractor’s previous experience (CE), facilitate the bidding decision for construction projects of contractors. The study also ranks the importance of each criterion, and the 5 criteria considered most important are “past profit in a similar job,” “previous relationship and communication level with the clients,” “need for wor,” “reliability of subcontractors,” “management or technical expertise from past similar jobs”. Implication - Investors and contractors need to pay attention to profits from similar projects in the past, relationships with investors, or job needs to improve contractors’ decision-making and hone their competitiveness in project bidding. Originality/value - This study is among the first to examine this research topic in the context of Vietnam. The research also helps improve the theoretical basis of factors affecting bidding participation and assists investors and contractors in building effective bidding strategies.