Multi-criteria contractor selection – a practical application of analytic hierarchy process

Abstract

The analytic hierarchy process (AHP) has been proposed by several authors as a method of contractor selection that eliminates the shortcomings of the ‘lowest bidder’ approach commonly used in the construction industry. Most authors only demonstrate the conceptual model for using AHP in contractor selection with hypothetical data. The objective of this study was to take the process a step further by using real-life project data. The study also sought to compare the ranking of contractors with the ‘lowest bidder’ method and AHP. The study concluded that the ranking of the contractors by AHP differed from their ‘lowest bidder’ ranking for most of the contractors (about 68%). This suggests that the extra effort required using AHP compared to using the ‘lowest bidder’ method is justified. However, the reliability of these results is limited by the fact that they are based on a single case only.