Assessing Final Cost of Construction at Bid Time

摘要

Vendor (contractor and subcontractor) selection impacts the success of any construction project. There are various systems for awarding construction contracts but the low bid system is commonly used. This docs not necessarily guarantee that the client gets an optimum tender in terms of final cost. Unless bid evaluation is carried out in a way that allows the bid organizer to assess the likely total final cost, he may end up accepting a low bid offer that does not result in the lowest final cost to the owner (including the cost of delays, claims, and making good on problems). As a result, an empirical study of the weights and impacts associated with various final cost determining factors was conducted through qualitative and quantitative investigations. The results of this study identified and quantified seven primary factors (change orders, level of scope definition, bid process, contract risks, market conditions, risk management, and performance issues) that account for the difference between bid price (or an estimate based on unit rates) and final cost of construction under different project conditions for stipulated price and unit price contracts. The positive skewness resulting from simulating the cost impact data shows that there is a greater tendency for projects in oil and gas engineering construction to experience cost overruns, rather than savings.