Mark-up on construction projects: what have we learnt in the last 20 years?

Abstract

Purpose

With the aim to provide a global view of factors affecting mark-up size on construction projects, this study performs a meta-analytical review of the relevant studies over the past 20 years.

Design/methodology/approach

The analytical process involved the identification and evaluation of the importance of critical factors affecting mark-up size on construction projects, and the assessment of the generalisability of findings of the meta-analysis. A random-effects model was adopted in the statistical meta-analysis.

Findings

The results show that there are 23 critical factors, and the top five factors are: (1) competitiveness of other bidders; (2) number of bidders; (3) relationship and past experience with client; (4) experience on similar project; and (5) project size. A heterogeneity test further shows that there is no statistically significant heterogeneity across the studies, reinforcing the generalisability of the findings to a global context.

Research limitations/implications

The list of critical factors from a global perspective should form a good basis for future efforts in bidding model development.

Practical implications

The research findings have practical implications to both construction clients and contractors in formulating their contracting practices and strategies.

Originality/value

This is the first meta-analysis of a sizeable collection of replicated studies on factors affecting mark-up size on construction projects in the literature.

Citation

Oo, B.L., Lim, B.T.-H. and Runeson, G. (2023), "Mark-up on construction projects: what have we learnt in the last 20 years?", Engineering, Construction and Architectural Management, Vol. 30 No. 9, pp. 4319-4338. https://doi.org/10.1108/ECAM-01-2022-0070