Multi-attribute Tender Evaluation of Construction Projects

RESEARCH TITLE: Multi-attribute Tender Evaluation of Construction Projects

KEYWORDS: Construction Tenders, Multi-attribute simultaneous sealed-bid auctions, Cost-Quality Evaluation.

 There is an increasing trend in the construction industry to move from the traditional cost evaluation of tenders, e.g. "lowest-price win", towards a "multi-attribute selection" for the nomination of the successful bidder. The motivation is to achieve best value for the client.

In the late 1980s and early 1990s the construction industries of the United Kingdom and the United States were facing a major decline in the construction volume. The factors that led to the decline were many and diverse: overheated economies, mismanagement, excessive number of disputes, inefficiency and greed are some of them. The effects of the decline on the economies of the two countries were devastating, if you bear in mind that construction accounts for around 8% of GDP in United Kingdom and around 4% in the United States.

In an attempt to find a solution to the problem, the government of UK appointed Sir Michael Latham to lead an investigation that will give a solution to the conflicts and inefficiencies of the British construction industry. The result of the investigation was a report, published in 1994, titled "Constructing the Team", Final Report of the Government/Industry Review of Procurement and Contractual Arrangements in the UK Construction Industry. In the report, Sir Latham makes 30 recommendations for improving the industry. Among the most notable ones is the recommendation on implementing productivity improvements leading to a 30% reduction in real costs. The report triggered a cascade of papers on measuring performance of contractors, quality of projects, success of the project and the quality of construction contract documents, among others. Following Latham's report was Sir Egan's "Rethinking Construction", the report of the construction task force. In "Rethinking Construction", Sir Egan pointed out that the UK construction is underachieving and substantial improvements in quality and efficiency are possible. The answer to Sir Egan's challenges came from the "KPI Report for the Minister for Construction" by the KPI Working Group in 2000. KPI stands for Key Performance Indicators and based on those indicators the report "..sets out a comprehensive framework which construction enterprises can use to measure their performance against the rest of the industry", KPI Working Group (2000).

In Japan, after the collapse of the "Land Bubble", similar troubles emerged in the economy. In the 1990s, Prime Minister Junichiro Koizumi vow to achieve a 30% cut in all government costs, including public works. An outstanding 10% cut in public works costs, without hurting the economy was achieved, but to reach the 30% target seemed to be an extraordinary task. By aiming to deliver better value for money, quality and efficiency in public works projects, the "Public Works Quality Assurance Promotion Law" was passed in April of 2005. Japan's Ministry of Land, Infrastructure and Transportation (MLIT), as a result of the law, is now moving towards a cost-quality evaluation of public works tenders.

The objective of this research is to deliver a model for evaluating multi-attribute (e.g., cost, quality) based tenders for public works construction projects. The motivation behind such an attempt, apart form the obvious need and the apparent lack of such a model, is to provide to the research community a tool that evaluates construction projects tenders based not only on the cost but also on the quality and on other relevant properties of the project. The research is divided into two parts. The first part of the research seeks to evaluate quality of construction projects at the tendering stage (i.e. pre-construction stage). In order to do so, pre-construction quality of a project needs to be defined as precisely as possible and then a way must be found in order to quantify and measure it. For measuring quality possibly a methodology based on cost-benefits analysis will be developed. The second part of the research is devoted into constructing a model that will enable us to evaluate multi-attribute bids such as cost-quality bids for construction projects. For this purpose a model based on multi-attribute simultaneous sealed-bid auctions will be developed.

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最終更新日 2013年2月22日(金曜)13:52


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