Critical factors influencing the bid or no-bid decision of the indigenous small building contractors in Tanzania

Abstract

Purpose This study aims to investigate and ranks the critical factors influencing the bid or no-bid decision and their importance for the indigenous small building contractors within the Tanzanian construction industry. Design/methodology/approach An interpretivist epistemological design was adopted to extensively manually review and search extant literature on bid or no-bid decision-making criteria. A total of 30 most common bid or no-bid decision-making criteria were identified. These were included in a questionnaire survey data collection instrument. The survey was distributed to 40 small indigenous (local) building contractors in Dar es Salaam, Tanzania. In total, 33 responses were received. Response data was subjected to both descriptive and inferential statistics. Findings The results show a disparity of ranking of the 30 bid/no-bid criteria factors among the two grades of small contractors, with 11 factors having statistically significant differences (p = < 0.05). Based on the overall sample, the most highly ranked seven factors in ascending order were: availability of capital; financial capacity of the client; project size; profitability; project type; need of work; and current workload. The following were the least ranked: tax liability; the degree of safety; availability of other projects; availability of labor; bidding document price; and uncertainty because of weather conditions. Availability of capital and financial capacity of the client were jointly ranked as the most important by Class VI contractors. In comparison, availability of capital and need of study were rated highly for Class VII contractors. Research limitations/implications The sample consisted of indigenous small building contractors in one industry operating in Tanzania only and did not include the perceptions of the foreign contractors based in Dar es Salaam. Future studies are required to expand the current research and investigate this specific aspect further. Practical implications The identified “bid/no-bid criteria” information will allow indigenous small building contractors to enhance the efficiency and effectiveness of their bidding decision-making process. Emergent findings will enable said contractors to: better fit into the competitive construction business environment; increase their awareness of existing decision-making practices; and develop appropriate strategies for evaluation of opportunities encountered. Cumulatively, these findings benefit small indigenous building contractors by increasing their understanding of the factors influencing bid decision. Originality/value The study represents the first empirical study in Tanzania on the critical factors influencing the bid or no-bid decision among the indigenous small building contractors, which face fierce competition from foreign contractors.

Risk Handling Responsibilities in Tanzanian Project-Based Organisations

“…Independent t-test or Student's t-test was used for independent samples comparing shipyard naval workers vs. the control group in personality variables and burnout. It has also been used in Tanzanian survey related studies [32,33,35]…”

“…In-person delivery provided an opportunity to get a filled questionnaire during the visit hence a high response rate. This approach was previously adopted in similar studies by Chileshe et al [32,33] in Tanzania. A total of 80 out of 88 questionnaires were fairly returned filled from civil contractor Classes I and II as well as foreign and local consulting engineering firms.…”

A Bid/Mark-Up Decision Support Model in Contractor’s Tender Strategy Development Phase Based on Project Complexity Measurement in the Downstream Sector of Petroleum Industry

“…The current study aims to examine one of the key decisions in the preproject phase, tendering strategy, by exploring the relationship between the inherent project characteristics and a key feature of a bid from the perspective of the contractor. Although there are dozens of research studies in the literature that have investigated this key decision of the contractor [8,10,35,36], the two-folded gap including modeling the complexity factors of the project and considering the schedule parameter of the project is obvious in previous studies. Accordingly, the current study models the complexity of a project as a foundation for the development of the contractor's bid strategy.…”

“…Therefore, the proposal mark-up will act as the coverage for contractors' risk in terms of time and cost factors. However, in the context of this research, a tender strategy from the contractor's point of view [6][7][8], the effective factors of a bid/no-bid decision [9,10] and the model development for improving bid/no-bid and mark-up percentage decision making [9,11,12] are investigated. Nevertheless, reviewing the preceding investigations shows that a lack of application of a project complexity assessment to support the bid/no-bid decision and consequently the determination of the mark-up percentage is apparent especially in the domain of time.…”

Enhancement of Bid Decision-Making in Construction Projects: A Reliability Analysis Approach

“…Consequently, commonly used bid decision-making practices lack reliability and accuracy. These processes remain overly complex and based on intuition, subjective judgement and experience (Chileshe et al, 2020). This exposes contractors to a wide range of damaging consequences, including the possibility of driving contractors into bankruptcy (Sonmez & Sözgen, 2017;Yazdani et al, 2019).…”