Factors Affecting Contractors’ Bidding Decisions for Construction Projects in Saudi Arabia

Abstract

One of the critical decisions taken by contractors is whether or not to bid for a project. This is due to the complexity and uncertainty surrounding this decision, which is influenced by many factors. Given the above challenge, this study aimed to uncover the critical factors affecting the contractors’ bidding decisions in Saudi Arabia-based construction projects. A questionnaire survey, which consisted of 31 factors, was distributed to first-, second- and third-grade contractors. In total, 67 responses were obtained. Median and relative importance index (RII) techniques were adopted for ranking the most critical factors. Based on the received responses, the top six critical factors were “size of the job„, “type of the job„, “company’s strength in the industry„, “designer/design quality„, “rate of return„, and “project cash flow„. The least significant factors were “job start time„ and “labor environment (union/nonunion/cooperative)„. The findings of this study show a level of agreement among all contractors about the critical factors. The findings would benefit contractors and subcontractors by increasing their understanding of the major factors affecting the bidding decision process. Contractors armed with such valuable information will be better able to enhance their bidding decision-making process in terms of efficiency and effectiveness.

Keywords

• bidding decision
• contractors
• Saudi Arabia
• construction industry
• factors