Study of "errors made by contractors at the bidding stage" using fuzzy set theory

Abstract

The construction business, like any other business, is risky. However, construction projects are perceived to have more inherent risks due to the involvement of many contracting parties such as owners, designers, contractors, subcontractors, suppliers, etc. Construction projects are unique and built only once. During the bidding stage contractor is facing a greater risk of having mistakes in pricing Bill of quantities and preparing project schedule, due to lack of details about site, client, construction drawings, etc. It is a tiresome exercise for the Quantity surveyors to accurately price a bill of quantities which normally comprises over two hundred measured work items. Contractor’s risk exposure to have errors (mistakes) commences with the receipt of tender and in order to arrive at a commercially viable and competitive tender price, the tenders often adopt rule of thumb and various guesswork within the restricted time frame available for submission of duly completed tender. This research discusses about the risk areas in the construction industry and what are the errors happened to contractors and their importance and contribution in a dispute case. Also it discuss what are the procedures to be followed to minimize disputes. To collect data, an industry – wide survey was undertaken covering roads and building projects. From the survey and the data analysis, it is identified the importance of each bidding error, made by contractors, and their relationship to dispute case, at the post contract stage. By this research it is expected to establish a relationship between risks in the construction industry and mistakes of contractors at the bidding stage. Then those relationships are justified by analyzing some case studies in construction industry.