Unit-price-based model for evaluating competitive bids

Wei-Chih Wang*, Han Hsiang Wang, Yu Ting Lai, John Chien Chung Li

*Corresponding author for this work

Research output: Contribution to journalArticle

27 Scopus citations

Abstract

A lump-sum lowest bid method allows project administrators of public construction projects to reject any bid if they determine the bid price is unreasonable. In practice however, few bids are rejected because of the lack of an objective process for evaluating the lowest bids. While past research assessed the bids based on total bid price, this study proposes a bid evaluation model developed based on the level of unit prices. In the proposed model, the lowest bid is assessed according to the unit prices electronically obtained from the owner and all qualified bidders. Moreover, a differential ratio is defined to measure the deviation between the unit prices submitted by both the owner and the lowest bidder. The merits of this innovative model are demonstrated by applying it to two subprojects of a building construction project. Practitioners and governmental officers have confirmed the feasibility of the model provided the languages or clauses describing the modeling algorithms are explicated in the general or special conditions of tendering documents.

Original languageEnglish
Pages (from-to)156-166
Number of pages11
JournalInternational Journal of Project Management
Volume24
Issue number2
DOIs
StatePublished - 1 Feb 2006

Keywords

  • Competitive bid
  • Electronic bidding
  • Project procurement
  • Unit price and cost item

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