The effect of contract type and contract size on competitiveness in construction contract bidding

Abstract

Although competitiveness relationships can be considered within a bid or by examining bid distributions, construction contract bidding is essentially concerned with competitiveness relationships between contractors and the contracts for which they are bidding. This paper offers a model which measures the effect of contract type and contract size on competitiveness in construction contract bidding. Multiple regression is used to construct a prediction equation relating bidder competitiveness (the dependent variable) to the independent variables of bidder, contract type and contract size.

The regression model shows that, in terms of competitiveness, contract size is more important than contract type. The most competitive contractors seem to be those with a preferred contract size range. Contractors' competitiveness towards a contract type is affected by the degree of contract type standardisation and sizes of contract contained within a contract type. The greater the degree of contract type standardisation and the larger the sizes of contract within a contract type, the greater the likely competitiveness of bidders.