Bidding Behavior Model in Integrated Evaluation System for Public Works

Abstract

Up to now, a bidding price is the only criteria to decide the winner of contract. The decrease of public works budget incurred severe bidding price competition, and sometimes caused the dumping.“The Law Promoting the Quality Assurance of Public Works” was enforced in the year 2005, and requests to adopt Integrated Evaluation System. In the system, the company that shows the highest evaluated value can win the contract. Companies are supposed to behave so as to maximize the evaluated value based on their technical capabilities, owner's minimum requirements and so on. This paper aims to find out the bidder's behavior model. First, we defined the technical capability function that shows the relation between the quality of construction work and the bidding price, then obtain the relation between the additional cost to the minimum requirement and the achievable quality. The behavior model is obtained by maximizing the function in terms of the cost. The constructed model is used for the analysis of the bidding behavior from the view points of the owner and the bidder.