scholarly journals Concentration of Bid Prices Just Above the Standard Minimum Price in Public Construction Works

2021 ◽  
Vol 10 (3) ◽  
pp. 177-195
Author(s):  
Satoru Yamaki ◽  
Nobuyoshi Yabuki
Keyword(s):  
Public Works ◽  
Upper Limit ◽  
Evaluation Scores ◽  
Minimum Price ◽  
Bid Price ◽  
Threshold Price ◽  
Technical Evaluation ◽  
Bid Prices ◽  
Public Construction ◽  
Construction Works

In Japan, contract offices are mandated to set threshold prices for public works. A threshold price is the upper limit of the bid price, and a contractor who exceeds this threshold is disqualified. Furthermore, based on the threshold price, a minimum price is set as a price requiring investigation before acceptance. In recent years, bids and contracts for public works have generally had bid prices concentrated slightly above the standard minimum for investigation. It has been pointed out that this tendency is detrimental in terms of the motivation of engineers and social costs. In this study, we confirm that this tendency was alleviated and that the level of the winning bidder's technical evaluation score was feasible at the same time. In addition, we obtained quantitative findings on variables that affect both above. Furthermore, although it is impossible to achieve a perfect balance between alleviating the tendency of prices to concentrate slightly above the standard minimum for investigation and sufficient technical evaluation scores, elements necessary to improve the overall situation were quantitatively identified.

scholarly journals Determining The Effects Of Awarding Lowest Bid Price System On The Construction Projects Of Ethiopian Southern Nation

2022 ◽  
Vol 24 (1) ◽  
pp. 253-260
Author(s):  
Ashenafi Reta ◽  
◽  
Ashebir Alyew ◽  
Keyword(s):  
Construction Industry ◽  
Construction Projects ◽  
System Construction ◽  
A Value ◽  
Maximum Value ◽  
High Incidence ◽  
Bid Price ◽  
Public Construction ◽  
Construction Works

Identifying the effects of low bid award system in construction projects can be used as benchmark to find alternative method to low bid award system in the future of construction industry. The results of questioner survey conducted to determine the effects of awarding lowest bid award system in construction projects of Ethiopian southern nation are presented in this study. Personnel from consultants, owners and contractors are among the survey`s respondent. The result of the study outlines promote transparency, avoid fraud and corruption, promoting competition amongst contractors, excessive time overrun, compromise quality and hindering profitability of contractors as the top ranked effects of low bid award system. Construction industry participants have started recognizing that accepting the least price bid does not guarantee maximum value. Achieving a value-based procurement approach is a challenge, particularly for the Pakistani public sector clients, who are limited in their ability to evaluate the competitive bids based solely on the lowest-bid award system. Persisting problems of inferior quality of constructed facilities, high incidence of claims and litigation, and frequent cost and schedule overruns have become the main features of public construction works contracts. This research was undertaken to assess the performance of public owned construction projects awarded on a lowest bidder bid awarding system.

scholarly journals Sustainable Assessment of Public Works through a Multi-Criteria Framework

2020 ◽  
Vol 12 (17) ◽  
pp. 6896
Author(s):  
Rogério Moreno Perlingeiro ◽  
Mayra Soares Pereira Lima Perlingeiro ◽  
Christine Kowal Chinelli ◽  
Elaine Garrido Vazquez ◽  
Eduardo Linhares Qualharini ◽  
...  
Keyword(s):  
Ease Of Use ◽  
Public Works ◽  
Governmental Organizations ◽  
Assessment Tasks ◽  
Assessment Systems ◽  
Practical Tool ◽  
Environmental Goals ◽  
Public Construction ◽  
Comprehensive Framework ◽  
Construction Works

Enhancing the sustainability of public works has been a key agenda in recent years for many governmental organizations. Public works contribute significantly to a large portion of engineering works and have great potential to impact the sustainability of cities. Thus, evaluating the sustainability of these projects is highly relevant, mainly regarding their impacts on environmental, social, and economic aspects. There are currently assessment systems and methods with different scopes and approaches. Yet, there remains uncertainty when it comes to considering public works’ sustainability and how useful criteria can be incorporated into the proposed assessment tasks to ensure such a goal. This study contributes to filling this gap by developing, through an extensive and detailed bibliographic research, a flexible and comprehensive framework composed of 214 criteria distributed across nine categories that measure the degree of sustainability of public works, with emphasis on economic, social and environmental goals. The proposed framework can act as a practical tool, functioning as a checklist applicable to all types of public construction works, and at any stage of the lifecycle. Evaluation of the framework by professionals indicated its suitability when encompassing sustainability objectives, its viability, and its ease of use.

Bidding competitiveness: a comparative analysis of different bid auctions in Malaysia

2016 ◽  
Vol 14 (4) ◽  
pp. 678-698 ◽  
Author(s):  
Mohd Azrai Azman
Keyword(s):  
Probability Distributions ◽  
Winning Strategy ◽  
Economic Consequences ◽  
Least Square ◽  
Public Works ◽  
Price Ratio ◽  
Content Type ◽  
Bid Price ◽  
Auction Mechanisms ◽  
Bid Prices

Purpose This research aims to contrast bid competitiveness with respect to the average bid auction (ABA) and the non-ABA bidding formats used by the Public Works Department (PWD) of Malaysia. Design/methodology/approach The research uses the ordinary least square regression and the Monte–Carlo simulation to point out significant predictors which affect the bid ratio and fitting probability distributions to bidding data, respectively. Findings This research shows that the bidding strategy adopted is dependent on the different formats used. In the ABA format, bidders are more likely to submit identical bid prices. In the non-ABA format, they bid according to the first-price auction strategy, which suggests greater variation between bid prices as a winning strategy and the reduction in the bid price to an estimated price ratio when more bidders bid. Practical implications Bidders lose more money when the distance between the project location and a firm’s operational office is greater. Best-fit probability density functions follow a gamma distribution for the ABA format and a Weibull distribution for the non-ABA format. The location and number of bidders affect bidders’ strategy to win. Originality/value This research presents empirical insights concerning the comparisons of different type of bidding formats practiced by PWD of Malaysia and its implications on the construction companies’ bidding behaviors especially when it comes to its economic consequences. The significant factors that affect the different auction mechanisms used can serve as a basis for improving the present methods employed by PWD and in other countries.

Framework for Sustainable Procurement - Identifying Elements for Construction Works

2020 ◽  
Vol 897 ◽  
pp. 245-249
Author(s):  
Reini Wirahadikusumah ◽  
Muhamad Abduh ◽  
Yunita Messah
Keyword(s):  
Construction Industry ◽  
Environmental Performance ◽  
Public Procurement ◽  
Government Agency ◽  
Public Works ◽  
Sustainable Construction ◽  
Sustainable Procurement ◽  
The Government ◽  
Depth Interviews ◽  
Construction Works

Sustainable procurement has been considered an opportunity for improving the environmental performance of the construction industry. The development of sustainable procurement in Indonesia is still in its initial phase. Therefore, a framework is needed to establish an outlook to explore the enablers and barriers for promoting sustainable procurement in the construction industry. In the formulation of the framework, the first step is to identify the important elements. The approach was explorative-descriptive. Based on ISO 20400, as the guidelines for sustainable procurement, and literature on sustainable procurement for construction works, a list of elements was gathered. In-depth interviews were conducted to identify the most significant elements for the Indonesian construction public procurement context. Respondents included procurement experts from the government agency, (i.e., the National Public Procurement Agency and the Ministry of Public Works and Housing), academics, and procurement specialists who are the members of the Indonesian Procurement Professionals Association. Results suggest that all elements contained in ISO 20400 are relevant with the kinds of literature on construction works; also, Indonesian respondents agreed with all the identified elements ranging from “important” to “very important.” This finding will be subsequently used to further understand the complex cause-effect relationships among the important elements in developing the framework for sustainable construction public procurement.

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