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Lowest price or value? Investigation of UK construction clients' tender selection process

Author

Listed:
  • Chee Wong
  • Gary Holt
  • Patricia Cooper

Abstract

There is a growing urge for a shift from 'lowest-price wins' to 'multi-criteria selection' practices in the contractor selection process. The rationale is to achieve best value (for money) for the client. Earlier investigations have found that the tender price (i.e. capital cost) still dominates the final selection decision despite increased emphases on the need for contractor selection based on 'value'. This paper provides insights into the evaluation of contractors' attributes, particularly for project-specific criteria (PSC), that is, criteria against which tendering contractors may be considered. The importance attached by clients to the 'lowestprice wins' philosophy is also reported. The perceived importance of PSC (i.e. their influence on final selection choice) is determined through a structured questionnaire survey of UK construction clients. The results show an increasing use of PSC. It is also found that 'lowest-price' is not now necessarily the client's principal selection criterion, but rather, the realization that cost has to be tempered with evaluation of PSC in any attempt to identify value for money.

Suggested Citation

  • Chee Wong & Gary Holt & Patricia Cooper, 2000. "Lowest price or value? Investigation of UK construction clients' tender selection process," Construction Management and Economics, Taylor & Francis Journals, vol. 18(7), pages 767-774.
    • Handle: RePEc:taf:conmgt:v:18:y:2000:i:7:p:767-774
    DOI: 10.1080/014461900433050
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    Citations

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    Cited by:

    1. Mohamed Mahmoud Fawzy & Ahmed Shawky Elsharkawy & Yasser Aly Khalifa & Abbas Atef hassan, 2024. "Contractor selection by using multi-criteria decision-making for Egyptian road maintenance," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 15(6), pages 2351-2365, June.
    2. Cheaitou, Ali & Larbi, Rim & Al Housani, Bashayer, 2019. "Decision making framework for tender evaluation and contractor selection in public organizations with risk considerations," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    3. Shrey Jain & Sunil Kumar Jauhar & Piyush, 2024. "A machine-learning-based framework for contractor selection and order allocation in public construction projects considering sustainability, risk, and safety," Annals of Operations Research, Springer, vol. 338(1), pages 225-267, July.
    4. Mimović Predrag & Krstić Ana, 2016. "Application of Multi-Criteria Analysis in the Public Procurement Process Optimization," Economic Themes, Sciendo, vol. 54(1), pages 103-128, March.
    5. Lauri Pulkka & Miro Ristimäki & Karoliina Rajakallio & Seppo Junnila, 2016. "Applicability and benefits of the ecosystem concept in the construction industry," Construction Management and Economics, Taylor & Francis Journals, vol. 34(2), pages 129-144, February.
    6. Bingsheng Liu & Tengfei Huo & Pinchao Liao & Jie Gong & Bin Xue, 2015. "A Group Decision-Making Aggregation Model for Contractor Selection in Large Scale Construction Projects Based on Two-Stage Partial Least Squares (PLS) Path Modeling," Group Decision and Negotiation, Springer, vol. 24(5), pages 855-883, September.
    7. Ali Al-Otaibi & Patrick Aaniamenga Bowan & Mahmoud M. Abdel daiem & Noha Said & John Obas Ebohon & Aasem Alabdullatief & Essa Al-Enazi & Greg Watts, 2022. "Identifying the Barriers to Sustainable Management of Construction and Demolition Waste in Developed and Developing Countries," Sustainability, MDPI, vol. 14(13), pages 1-17, June.
    8. Kwo-Wuu Wang & Yuan-Yu Hsu & Wen-der Yu & Shao-tsai Cheng, 2018. "Determination of Project Procurement Method with a Graphical Analytic Model," Sustainability, MDPI, vol. 10(10), pages 1-17, October.
    9. Amirhosein Jafari, 2013. "A contractor pre-qualification model based on the quality function deployment method," Construction Management and Economics, Taylor & Francis Journals, vol. 31(7), pages 746-760, July.
    10. Huixia Huang & Chi Zhou & Hepu Deng, 2024. "A DEA Game Cross-Efficiency Model with Loss Aversion for Contractor Selection," Mathematics, MDPI, vol. 12(10), pages 1-20, May.
    11. Florence Phua, 2005. "Determining the relationship between fee structure and project performance between firms: an empirical study based on institutional and task environment perspectives," Construction Management and Economics, Taylor & Francis Journals, vol. 23(1), pages 45-56.

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