Assessment of tender evaluation criteria in the construction industry

Abstract

"The purpose of this study was to evaluate the construction industries perception of tender evaluations, and to identify the significance of contract selection in the construction project delivery. A critical review of literature was undertaken and is structured under two main sections: a) Tendering and contractor selection in the construction industry; b) Tender Evaluation. Seven tender evaluation criteria and six tender evaluation methods were extracted from the review and assessed by 39 consultants and 30 contractors. The survey also assessed the knowledge and understanding of the respondents on the different types of tender evaluation methods and the involvement of pre-qualification questionnaires. A case study was conducted on a live project which compared the ‘lowest bidder’ method against the Analytic Hierarchy Process (AHP) approach. Both methods presented different results with the AHP recommending a different contractor. Overall it is clear that the construction industry deem the contractor selection process as being significant and that the traditional tender evaluation ‘lowest bidder’ is still the most used tender evaluation method. However there is strong evidence to suggest that the Construction industry are gradually moving away from the ‘lowest bidder’ approach and are moving more towards an alternative which are the multicriteria tender evaluation methods.