Evaluating bid item prices to support contractor selection - a case study

Bid price is a highly-weighted appraisal criterion in a multi-criteria evaluation method to select contractors for construction projects. By evaluating both the magnitude and reasonableness of the bid price, this study presents an electronically-facilitated model for evaluating bid prices. The model defines a reasonable total price for a project and a reasonable cost for each cost category (or bid item) by considering the project prices estimated by the project owner and submitted by all qualified bidders. Scoring systems are then employed to score the prices submitted by bidders, and weighting methods are used to integrate the derived scores. The bidder with the highest integrated score receives the most favorable price appraisal. The merits of the proposed model are demonstrated by its successful application to a recent public construction project in Taiwan.