A theoretical framework for determining the minimum number of bidders in construction bidding competitions

Stephen C. Ngai, Derek S. Drew*, H. P. Lo, Martin Skitmore

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

43 Citations (Scopus)
1 Downloads (Pure)

Abstract

A theoretical framework is proposed for determining the minimum number of bidders in competition for projects in the construction industry. This is based on the neo-classical micro-economic theory for price determination in construction and the assumption of random contractor-selection. Empirical analysis of the Hong Kong data set not only illustrates the applicability of the framework, but also supports the relevance of the microeconomic model for construction price determination. The main implication for clients is that, in order to obtain the most competitive bids for projects in the most cost-efficient way, they should vary the minimum number of bidders in competition according to market conditions.

Original languageEnglish
Pages (from-to)473-482
Number of pages10
JournalConstruction Management and Economics
Volume20
Issue number6
DOIs
Publication statusPublished - Sep 2002
Externally publishedYes

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