In Lebanon, public construction projects are awarded
to the contractor submitting the lowest bid price based on a
competitive bidding process. The contractor has to make a strategic
decision in choosing the appropriate bid price that will offer a
satisfactory profit with a greater probability to win. A simulation
model for bid price decision making based on the lowest bid price
evaluation is developed. The model, built using Crystal Ball decisionengineering
software, considers two main factors affecting the
bidding process: the number of qualified bidders and the size of the
project. The validity of the model is tested on twelve separate
projects. The study also shows how to use the model to conduct risk
analysis and help any specific contractor to decide on his bid price
with associated certainty level in a scientific method.
[1] M. Egemen, and A. Mohamed, "A framework for contractors to reach
strategically correct bid/no bid and markup size decision," Building and
Environment, vol.42, pp.1373-1385, March. 2007.
[2] D. Drew, and M. Skitmore, " The effect of contract type and size on
competitiveness in bidding," Journal of Construction Engineering
Management and Economics, vol.15, pp.469-489, Sept. 1997
[3] R.Sammoura, and A. Elsayed, "A stochastic-simulation model for
lowest bid price evaluation," in 2008 Proc. ICCIDC-I Conf., pp. 168-
176.
[4] Council for Development and Reconstruction CDR. (2007)
http://www.cdr.gov.lb/Plan/main.htm, (date accessed)
[5] Lebanese decree-laws, "General bidding process," Juridical journal,
Eastern library, Nijmeh square, Beirut, Lebanon, 1959.
[6] P. Carr, P.E., and ASCE M., "Investigation of bid price competition
measured through prebid project estimates, actual bid prices, and
number of bidders," Journal of Construction Engineering and
Management, vol.131, pp.1165-1172, Nov. 2005.
[1] M. Egemen, and A. Mohamed, "A framework for contractors to reach
strategically correct bid/no bid and markup size decision," Building and
Environment, vol.42, pp.1373-1385, March. 2007.
[2] D. Drew, and M. Skitmore, " The effect of contract type and size on
competitiveness in bidding," Journal of Construction Engineering
Management and Economics, vol.15, pp.469-489, Sept. 1997
[3] R.Sammoura, and A. Elsayed, "A stochastic-simulation model for
lowest bid price evaluation," in 2008 Proc. ICCIDC-I Conf., pp. 168-
176.
[4] Council for Development and Reconstruction CDR. (2007)
http://www.cdr.gov.lb/Plan/main.htm, (date accessed)
[5] Lebanese decree-laws, "General bidding process," Juridical journal,
Eastern library, Nijmeh square, Beirut, Lebanon, 1959.
[6] P. Carr, P.E., and ASCE M., "Investigation of bid price competition
measured through prebid project estimates, actual bid prices, and
number of bidders," Journal of Construction Engineering and
Management, vol.131, pp.1165-1172, Nov. 2005.
@article{"International Journal of Business, Human and Social Sciences:63072", author = "R. Sammoura", title = "A Simulation Model for Bid Price Decision Making", abstract = "In Lebanon, public construction projects are awarded
to the contractor submitting the lowest bid price based on a
competitive bidding process. The contractor has to make a strategic
decision in choosing the appropriate bid price that will offer a
satisfactory profit with a greater probability to win. A simulation
model for bid price decision making based on the lowest bid price
evaluation is developed. The model, built using Crystal Ball decisionengineering
software, considers two main factors affecting the
bidding process: the number of qualified bidders and the size of the
project. The validity of the model is tested on twelve separate
projects. The study also shows how to use the model to conduct risk
analysis and help any specific contractor to decide on his bid price
with associated certainty level in a scientific method.", keywords = "Bid price, Competition, Decision making,Simulation.", volume = "4", number = "5", pages = "582-4", }