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Gates' bidding model

Skitmore, Martin, Pettitt, Anthony N., & McVinish, Ross S. (2007) Gates' bidding model. Journal of Construction Engineering and Management, 133(11), pp. 855-863.

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Abstract

In evaluating closed-bid competitive procurement auctions, the most crucial issue is to determine the probability of placing a winning bid for a given mark-up level. There has long been disagreement on how this should be done due to the absence of a mathematical derivation of one of the main evaluation techniques – Gates' method. Gates' method is shown in this paper to be valid if, and only if, bids can be described using the proportional hazards family of statistical distributions. When mark-up values are included in Gates' method, it is seen that the underlying statistical distribution required for the method to work is closely related to the Weibull distribution. Likelihood based methods are suggested for parameter estimation and an illustrative example is provided by analysis of Shaffer and Micheau's (1971) construction contract bidding data.

Impact and interest:

12 citations in Scopus
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5 citations in Web of Science®

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ID Code: 13406
Item Type: Journal Article
Additional Information: Author contact details: rm.skitmore@qut.edu.au
Keywords: Bidding models, Gates, proportional hazards
DOI: 10.1061/(ASCE)0733-9364(2007)133:11(855)
ISSN: 0733-9364
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Quantity Surveying (120203)
Divisions: Current > Schools > School of Curriculum
Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > QUT Faculties & Divisions > Faculty of Science and Technology
Past > Schools > School of Urban Development
Copyright Owner: Copyright 2007 American Society of Civil Engineers (ASCE)
Copyright Statement: Reproduced in accordance with the copyright policy of the publisher.
Deposited On: 01 May 2008
Last Modified: 25 Mar 2013 18:07

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