Procurement methods and contractor's bidding strategy in Middle East construction industry

Abstract

The type of procurement methods used in the implementation of the projects is vital for the client. The implementation of the projects using the unsuitable procurement method will contribute to the failure of the project being completed within the budget, time and quality. The strategy of the contractor also depends on the types of procurement used. The common method of procurement used by the client is the Traditional method. Some of the contractors and the clients do not favour this procurement method. The aim of this study is to determine the current procurement methods available in the Middle East construction industry and the factors affecting bidding strategies of the contractors. The objectives of the study are to evaluate the current procurement methods in the Middle East construction industry and to identify the preferred procurement method, to assess the factors affecting the bidding strategy of the contractors in the Middle East construction industry and to identify the factors that are taken into consideration by the contractors before deciding to bid for the project. The data are collected through questionnaires and interviews. A total of 25 respondents comprising of Project manager, Construction manager, Site engineer and Site supervisor were identified. The data is analyzed by using SPSS. From the study, the current procurement methods in the Middle East construction industry are Traditional method, Design & Build and Package Deal. The preferred procurement methods in the Middle east are contract management, Design & build, Develop & construct and turnkey method. The factors affecting the bidding strategy of the contractors in the Middle East construction industry are past experience, type of owner and past loss and profit. The factors that are taken into consideration by the contractors before deciding to bid for the project are availability of time for tendering, type of project and project size.