Effective tendering for large scale overseas turnkey projects

Abstract

The study has concentrated on selected problems created at a contractor's organisational level when pursuing large scale overseas turnkey project opportunities by accepting the responsibility of a main contractor. The benefits of such projects.attract contractors from many countries creating fierce competion. A cross section of opinions expressed independently on various contents of the work provides additional evidence of the.need.for this research. The main objectives of the study were to identify the causes of uncompetitive bids and to examine solutions to similar problems outside the construction industry. The method of approach has been to review the existing state comprehensively, to apply systems analysis to the contractor's tendering process, to identify sensitive areas and to develop new techniques to improve tendering performance. The study has identified three major sources of stress in tendering personnel - complexity, uncertainty and time constraint - and has suggested possible ways of improving the environment in which crucial decisions have to be taken. By examining developments in Decision Theory, it has been possible to identify ways of controlling risks and to develop utility curves to deal with multiple objectives. The major conclusions of the study are that a) facts, b) subjective assessments and c) consequences of present decisions need careful evaluation to control risk and thereby reduce the contingency element in tenders. A structured approach to decision making is likely to lead to rational decision making. The human factor in tendering has been considered by examining and applying relevant developments in the field of psychology to suggest ways to improve overall tendering performance. The proposals are directed towards improving the Sponsor's competitiveness. The main recommendations are to provide targets for each tender by efficient feedback and to introducemeasure of tendering effectiveness. These proposals have been subJected to the criticism of contractors' senior staff.