Factors Affecting Contractor’s Bidding Success for International Infrastructure Projects in Australia

Abstract

Abstract. This paper examines the effects of different factors on the success or failure of bids for infrastructure projects in Australia. Logistic regression analysis was used to empirically determine which factors have the largest effect on bidding success. Data was collected from 123 bids submitted by several infrastructure companies with subsidiaries in Australia. The analysis found that having a competitive advantage and a local partner, and also not competing against a local company were the most important factors; as they significantly increase the chances of success. However, four other factors, having relevant expertise, resource availability, a previous relationship with the client, and a previous relationship with consortium members, are 'essential' to be able to compete; as the absence of any of these four factors results in bid failure, although having them is not a guarantee of success. Results of this paper provide valuable information for any company considering the opportunity of entering into Australia's infrastructure market as well as for companies that are already present in that country and are considering whether to bid for a specific project.

Risk Management as a Success Factor in the International Activity of Spanish Engineering

“…The formation of joint ventures reduces the risks of international activity, and constituted an important success factor in international companies in the 1980s (Arditi and Gutierrez 1991). Similarly, participation by companies in international networks (Gunhan and Arditi 2005;Raftery et al 1998) or the disposition of a local partner (Aznar et al 2017) will favor their international performance.…”

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

“…Studies on bid decision making for the most part have focused on selecting the most important factors; conducting interviews with experts to explore relationships among influential factors; or designing bid decision making models using different techniques (Aznar et al, 2017). Few studies have attempted to develop workable, systematic methods for bid decision-making (Sonmez & Sözgen, 2017).…”

Individual, Group, and Organizational Factors Affecting Group Bidding Decisions for Construction Projects

“…For example, Olatunji et al [23] identify 11 critical factors that influence contractors' bid/no bid decisions and analyze the correlations between these factors. Aznar et al [6] identify 11 bidding factors and examine effects of these factors on bidding success. Some studies also investigate factors and propose a decision model to aid bidding.…”

“…For example, Bagies and Fortune [26] built a comprehensive list of bidding factors comprising 10 categories: (1) project characteristics, (2) business benefits, (3) client characteristics, (4) the contract, (5) project finance, (6) percentage of insurance premium, (7) firms' previous experience, (8) the bidding situation, (9) the economic situation, and (10) competition. Egemen and Mohamed [21] developed a hierarchical structure of factors affecting bidding decisions that has three main categories: (1) firm related, (2) project related, and (3) market condition/expectations and strategic considerations related.…”

“…Bidding decisions and factors influencing the processes involved have elicited wide attention in previous studies relating to construction management (CM) [6][7][8][9][10]. However, the focus of these studies is mainly on project characteristics, the construction companies' resources available, and economic environmental factors such as market conditions.…”