Bid cutting: an empirical study of practice in South-East Queensland
The nature, status and role of bid cutting in construction bidding are examined from economic, legal, ethical and management perspectives. Some possible means of countering its negative effects are considered including its prohibition by legislation, the use of bid depositories, earlier formalisation of subcontracts, withdrawal of subcontract prices and through alternative procurement methods.
An empirical survey of bid cutting practice is described involving a sample of main contractors (MCs) and subcontractors (SCs) in SouthEast Queensland. The practice of bid cutting was found to be widespread. All the MCs considered the practice to be ethical and all the SCs considered it to be unethical. In some cases, MCs awarded contracts elsewhere, even after telling SCs they had the job. Most of the SCs had tried individually to counteract bid cutting but were unable to continue this while others were complying with MC bid cutting attempts. SC bid withdrawals are very rare and litigation is never applied by either MCs or SCs. Mainly as a result of incomplete project documentation, MCs disliked the idea of making the subcontract binding at the time of main contract bid subject to its success, although it was generally recognised that it would reduce bid-cutting by the MC – view that was also shared by half the SCs. Most respondents thought the construction management procurement option might reduce bid cutting but none had sufficient direct experience to be sure.
Impact and interest:
Citation counts are sourced monthly from and citation databases.
These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.
Citations counts from theindexing service can be viewed at the linked Google Scholar™ search.
Full-text downloads displays the total number of times this work’s files (e.g., a PDF) have been downloaded from QUT ePrints as well as the number of downloads in the previous 365 days. The count includes downloads for all files if a work has more than one.
|Item Type:||Journal Article|
|Keywords:||Bid cutting, bid shopping, bid peddling, bidding, tendering, subcontracting, practice, economics, law, ethics|
|Subjects:||Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200)|
|Divisions:||Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering|
|Copyright Owner:||Copyright 2001 Blackwell Publishing|
|Copyright Statement:||The definitive version is available at www.blackwell-synergy.com|
|Deposited On:||16 May 2006|
|Last Modified:||10 Aug 2011 18:21|
Repository Staff Only: item control page