Exploring Bid/No-Bid Decision Factors of Construction Contractors for Building and Infrastructure Projects

Abstract

While contractors may experience financial failure if they bid on an inappropriate project, bidding on the right project may allow them to profit substantially. Therefore, understanding the various factors that influence the bid/no-bid decision is crucial for construction companies in determining whether to pursue a project. The present study aims to identify the critical factors influencing contractors’ bid/no-bid decisions. A total of 112 responses were collected from a questionnaire survey to rate the relative importance of 22 factors, and these factors were then analyzed based on the type of project and the contractor’s years of experience. The results indicate that the client’s ability to pay, clarity of the scope of work, project cash flow, the need for work, and availability of qualified labor are the most critical factors influencing contractors when making bid/no-bid decisions. The factor “previous experience in similar projects” was statistically significant among building and infrastructure projects, while “project location” was statistically significant among contractors with different years of experience. Finally, factor analysis identifies the six major underlying groups: client-related factors, bidding-related factors, contractor-related factors, market-related factors, economy-related factors, and project-related factors. The study’s findings can help contractors better understand the factors influencing their bidding-related decisions.