The Failure Mode and Effect Analysis of Tender for Construction Companies in Indonesia

Abstract

This study analysed the factors influencing the failure to win the tender with a risk management approach. Data were collected from 75 national-level construction companies to be involved in a failure risk assessment based on the criteria for severity, occurrence and detection scores. The dominant factor is viewed from tender documents and estimates. The failure mode and effect analysis (FMEA) method was used to identify the highest risk dominant factor. The study results indicate critical factors and become a priority for immediate improvement. (1). A tender document can be identified based on the following factors: (a). The basic design: compliance with the scope of work; detailed design; detail on the scope of work; the implementation schedule; (b). The scope of work: detail in the work area; (c). The schedule: the implementation schedule. (2). The estimation can be identified based on the following reflective indicators: (a). The estimator does not understand the scope of work; (b). Estimates are less competitive and tend to be underpriced; (c). The tender value being overpriced or underpriced; (d). Marketing ability.