Analysis of contractors' administrative characteristics in bid decision factors

Abstract

Purpose

The normative literature suggests that there are more than seventy decision factors that contractors must consider if they intend to success in their bid and projects. In addition, such factors have been grouped in relation to project characteristics, client attributes, contractors' business administration and external factors. The extant literature suggests that the relationships between many of the bid decision factors are orthogonal and may not explain how bid-decisions shape project outcomes.

Design/methodology/approach

This knowledge gap has stagnated research in this area. Building on findings of recent studies, this study unbundles bid decision themes by analysing key factors amongst contractors' administrative characteristics. In addition, the study determines intrinsic predictive correlation between the sub-themes. A total of 17 variables were listed in a structured questionnaire survey and presented to participants recruited through purposive snowballing. In total, 50 responses were received and formed the basis of descriptive and inferential statistical analyses.

Findings

The study found that the 17 factors are significant in bid decisions and consequently in bid successes. However, the explanatory variables attached to the themes are most efficient if categorised into six sub-themes. These are contractor's administration depth, strategic direction, commercial intention and own market advantage, resources, experience as well as openness to technology imposed by new projects. Furthermore, four theoretical positions are significant. Contractors bid for projects strategically; they are less reliant on their resource capabilities in bid decisions; every bid decision aligns with a risk strategy, and financial stability enables them to establish appropriate risk mitigation arrangements that could ensure project success.

Originality/value

These findings provide some support for the conceptual premise that bid decisions need to be rational, considered and strategically contribute to project outcomes.

Citation

Olatunji, O.A., Ramanayaka, C.D.E., Rotimi, F.E. and Rotimi, J.O.B. (2023), "Analysis of contractors' administrative characteristics in bid decision factors", Engineering, Construction and Architectural Management, Vol. 30 No. 6, pp. 2420-2435. https://doi.org/10.1108/ECAM-12-2021-1063