Mark-up on construction projects: what have we learnt in the last 20 years?

Abstract

PurposeWith the aim to provide a global view of factors affecting mark-up size on construction projects, this study performs a meta-analytical review of the relevant studies over the past 20 years.Design/methodology/approachThe analytical process involved the identification and evaluation of the importance of critical factors affecting mark-up size on construction projects, and the assessment of the generalisability of findings of the meta-analysis. A random-effects model was adopted in the statistical meta-analysis.FindingsThe results show that there are 23 critical factors, and the top five factors are: (1) competitiveness of other bidders; (2) number of bidders; (3) relationship and past experience with client; (4) experience on similar project; and (5) project size. A heterogeneity test further shows that there is no statistically significant heterogeneity across the studies, reinforcing the generalisability of the findings to a global context.Research limitations/implicationsThe list of critical factors from a global perspective should form a good basis for future efforts in bidding model development.Practical implicationsThe research findings have practical implications to both construction clients and contractors in formulating their contracting practices and strategies.Originality/valueThis is the first meta-analysis of a sizeable collection of replicated studies on factors affecting mark-up size on construction projects in the literature.

Critical Factors Influencing Bid Mark-up Decision in Public Street Project – A Review

“…However, the contractors mainly make the considerations based on intuition and experience (Adnan et al, 2018). The prejudices of decision-making and the conventional use of competitive bidding in the construction industry have been the motivational drive for researchers worldwide to acknowledge the importance of factors influencing bid decision-making by contractors (Oo et al, 2022b). Furthermore, these models are convoluted, time-consuming and overburdened with data processing for contractors to make bidding decisions (Ghodoosi et al, 2021).…”

“…After a decision to bid, the next step requires the contractor to evaluate the bid price (Oo et al, 2022b). After completing the cost estimate, the contractor must assess the project's price.…”

“…The effectiveness of making bid decisions in different bidding situations plays a vital role in contractors working out the estimate into a tender bid (Oyeyipo et al, 2016). The correct choice in bidding decision-making strategies based on the given factors may cause contractors' businesses to succeed in any construction project (Oo et al, 2022b).…”

Factors affecting contractors’ bid or no-bid and mark-up decisions: a case of the Jilin province, China

“…In particular, this study used the most frequent measuring statistics in the collection of replicated studies, that is, the RII so that it can be included in a meta-analysis. It is noted that in meta-analyses in construction management research, some relevant studies have not been included because of insufficient statistical data and/or use of different measuring statistics (Hussein and Zayed, 2021; Oo et al , 2022a, 2022b). Next, research on contractors’ bidding decision-making in the context of Chinese construction industry remains scarce.…”

“…To the research community, this study could facilitate a meta-analysis, that is, a robust statistical approach for an orderly summarisation of studies so that knowledge can be extracted from the myriad individual studies (Glass, 1976;Hedges, 1992). Such summarisation based on a collection of replicated studies is warranted and imperative to shed light on the critical factors affecting contractors' bidding decisions in guiding future research efforts in construction tendering (Oo et al, 2022a(Oo et al, , 2022b.…”