Critical factors affecting the markup decision in infrastructure projects in Sri Lanka

Abstract

Sri Lankan construction industry is growing rapidly in current time. There is a lot of new projects available to the contractors due to the boom stage of Sri Lankan construction industry. The tender estimate is a vital path to get the projects. Markup decision is a critical step of tender estimating process. This research analyses the critical factors affecting bid markup decision in infrastructure project in Sri Lankan construction industry. This study expects to fulfill the research gap and uplift the Sri Lankan contractors’ bid markup decision. The aim of this research is to identify critical factors affect bid markup decision in infrastructure projects in Sri Lanka. This research has been conducted through literature reviews, questionnaire survey and cross case analysis. The questionnaire included eighteen factors identified through literature reviews and preliminary interviews with a view to finding the critical factors which affect the bid markup decisions of Sri Lankan contractors. The analysis of data revealed that there is a nine critical factors identified as critical factors and further cross case analysis was done to identify the relationship between markup and each critical factors by selecting ten recently tendered infrastructure projects in Sri Lankan construction industry as this research is limited to infrastructure projects. These conclude that how much each critical factor affects the contractor’s markup decision for their tender estimates. The study recommended that contractors give more attention to the cost estimate accuracy to make an appropriate markup the projects in a better way by avoiding cover estimate uncertainty risk into markup and train staff to estimate accurately and to hire qualified technical staff in order to obtain an accurate estimate.