Case studies in awarding the lowest bid price in construction projects

Abstract EN

The basic criterion for selecting a tender for construction projects is usually the price.

Public construction procurement, the process by which contractors are chosen for public construction projects, has traditionally been based on selecting the lowest bidder.

This process, although designed with good intentions, has several shortcomings.

The aim of this paper is to investigate the consequences of selecting the lowest bidder through studying three case studies.

These case studies include a rehabilitation project which is funded by the Italian government, construction a sewage pump station and pressure sewage line, and construction a new pump station which are funded by the Danish government.

The investigations include bidding, evaluation, awarding, and implementation stages; in addition to highlight the encountered problems during these stages.

The findings indicated that all three projects faced a number of problems; among them are delays, cost overruns and disputes.

It is recommended that: Project cost estimate should be checked and agreed upon between all project parties before starting tendering stage.

Bid evaluation process should be a joint effort task between related project parties and including various engineering specialization of expertise in order to be able to control and evaluate all the project items in early stage before starting the implementation stage.

Bid evaluation should focus on the balance of items' prices and correctness of items unites prices.

Awarding project should be to the lowest evaluated responsive bidder, who has the financial and technical capabilities and present the most logical and practical offer.

Factors other than financial offer should be considered in the awarding decision.