ARTICLE IN PRESS

Building and Environment 42 (2007) 13731385

www.elsevier.com/locate/buildenv

A framework for contractors to reach strategically correct bid/no bid

and mark-up size decisions
Mehmedali Egemena,, Abdulrezak N. Mohamedb
a

Department of Civil Engineering, Cyprus International University, Haspolat, Mersin 10, Turkey
Department of Civil Engineering, Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey

Received 12 August 2005; accepted 16 November 2005

Abstract
In an effort to uncover the main factors that characterize the two distinct but sequential stages of bidding decisions, namely bid/no bid
and mark-up size decisions, this study identies the key determining factors and their importance weights by presenting survey ndings of
80 contracting organizations from Northern Cyprus and Turkish construction markets regarding this issue. The framework presented in
this study will serve as a basis for a knowledge-based system model which will guide the contracting organizations in reaching
strategically correct bid/no bid and mark-up size decisions. The proposed framework used a reasoning model, which went deeply into
the heart of the decision-making process and helped to clarify the complex picture regarding the two sequential decisions. The results
revealed that there is a distinct and signicant difference in the importance assigned to the same key factors for the two separate decision
processes. Furthermore, the study conrmed the fact that the factors related to strategic considerations have a signicant role in both of
these decision processes. One of the most striking ndings of this research was the distinct difference in approach of varying sizes of
contractors to the overall issue. Hence, these results suggest that any model regarding bidding and mark-up size decisions should
denitely differentiate among different sizes of contractors to reect the approaches of the related contractors in a better manner.
Furthermore, it was interesting to nd out that the correlation between different sizes of contractors approaches was higher in the markup decision process compared to the bidding decision process. In spite of the fact that this study was based on input provided by certain
types of contractors in Northern Cyprus and Turkish construction markets only, we believe that the overall approach, reasoning and
ndings of the proposed framework are of good value to contracting organizations in different construction markets throughout the
world as well.
r 2005 Elsevier Ltd. All rights reserved.
Keywords: Bid/no bid decision; Mark-up; Contractors; Strategic decision; Contractor size; Developing country

1. Introduction
The only possible way for a contractor rm to survive
and acquire its aims are winning tenders and making prot.
Although in some cases, the contractors undertake projects
and make prot without having to win a tender, this is not
the usual application. Contract bidding, like all other
forms of pricing, is essentially about contractors making
strategic decisions in respect of which contracts to bid and
the bid levels necessary to secure them [1].
Corresponding author. Tel.: +90 392 630 10 51;
fax: +90 392 630 28 69.
E-mail address: mehmedali.egemen@emu.edu.tr (M. Egemen).

0360-1323/$ - see front matter r 2005 Elsevier Ltd. All rights reserved.
doi:10.1016/j.buildenv.2005.11.016

One of the most important decisions that have to be

made by contractor rms is whether to bid or not to bid for
a project, when an invitation has been received. For any
construction company, being able to deal successfully with
various bidding situations is of crucial importance,
especially in todays highly competitive construction
market [2]. This decision is basically: Is the project to
bid the kind of work our company has been successful at
completing to the owners satisfaction, and will our
company make a reasonable prot for that work? [3]. So,
the decision is not considering only the probability to win
the tender but also taking into account of the latter part,
which is being able to nish the job as planned with the
expected prot.

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M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

Another important and related decision is regarding

mark-up percentage, which will be decided once the
decision to bid for a project is reached. The contractors
bidding strategy is concerned with setting the mark-up level
to a value that is likely to provide the best payoff [4].
Without right mark-ups, selecting right projects will be
meaningless. Right mark-up in this case will be the
optimum balance between a bid price that is as practically
low as possible to win the tender and as practically high
as possible to maximize prot.
Since contractors bidding behaviors are affected by
numerous factors related both to the specic features of the
project and dynamically changed situations, bidding
decision problems are highly unstructured. Bidding is a
very complex decision requiring simultaneous assessment
of large number of highly inter-related variables to arrive at
a decision [5]. It is usually not an easy job for the senior
management team to consider all the related factors and
their combined impact for bid/no bid and mark-up
decisions in the limited amount of time they have for
every single tender offer. In addition, a decision maker can
hardly consider all of the relevant variables due to ones
bounded rationality and limited capacity of information
processing [6]. Therefore in practice, these decisions are
made in a largely subjective manner, sometimes even
without any reasonable basis [7]. The usual practice is to
make bid decisions on the basis of intuition derived from a
mixture of gut feelings, experience and guesses [8].
Numerous researchers have developed models for bid/no
bid and mark-up size decisions. However, it is difcult to
develop realistic models that capture the complexity and
uncertainty of the full construction contract bidding
situation, which is perhaps why many contractors
did not show interest in such models [4]. The complexity
of the problem, regarding the two decisions in bidding
stage, is so overwhelming that even the experienced
contractors feel that the industry should have a better
technique for arriving at bid/no bid or mark-up size
decisions.
A structured and realistic model, which will gain
acceptance in practice and deal systematically with
different bidding situations and assist the contractors in
reaching the correct decisions will be of great value. This
study is aiming to create a complete framework for
building an integrated knowledge-based system model,
which will guide the contracting organizations in reaching
strategically correct bid/no bid and mark-up size decisions.
A comprehensive list of factors were classied in several
subset groups and systematically organized into different
levels of hierarchies. By conducting a questionnaire survey
based on these hierarchies, the main factors that inuence
these two crucially important decisions were identied and
ranked according to their importance to contractors
operating in Northern Cyprus and Turkish construction
markets. Unlike most of the previously proposed models,
this framework will not only consider the immediate

project and rm conditions but also take into account

strategic considerations of the rm and possible long-term
effect of the two decisions. Hence it will guide the
contractors to reach strategically correct bid/no bid and
mark-up size decisions. Additionally, the chance of any
contractor to win a tender with a certain mark-up will be
partially affected by how much he is meeting the
expectations of the client (or his representative) after all.
Therefore, the potential market clients and their representatives (consultants) expectations, approaches and
hence perspectives in selecting contractors during bidding
processes will also be included in this framework.
Additionally, major factors, which may exist specically
in developing countries with unstable economies, will also
be considered in order to have a complete framework for
contracting organizations of such countries. Considering
that the contractor rms with different sizes will probably
have rather different approaches while making the specied
decisions, the study will differentiate among various sizes
of contractors as well. In an effort to increase the
acceptance of the model by the practitioners, the developed
model will investigate factors from the perspective of
reasoning subgoals that contribute to the overall decision.
Hence, it will contribute to clarify the complex picture and
allow the future users of the model to follow the
methodology used and the steps followed in reaching the
nal decisions.
2. Literature survey
There is a great volume of literature concerned with
bidding strategies. Researchers have been concerned with
the problem of bidding strategy since the mid-1950s. Since
Friedmans [9] mathematical model, which is known to be
the rst one, the literature has been ooded with many
bidding models. However, most of these models remained
in academic circles and did not nd their way into the
practical world.
Surveys by Ahmad and Minkarah [7] have identied 31
factors that were thought to inuence bidding decision in
US Skitmore [10] identied major factors that affect markup decisions. Subsequently, Ahmad [8] adopted a utility
value approach and proposed a bidding methodology based on the decision analysis technique for
dealing with bid/no bid problem. Seydel [11] has modeled
the competitive bidding problem according to three
criteria, which are protability, risk exposure and continuity. Moselhi et al. [12] developed a decision support
system, which was for correct bid mark-up estimation.
Studies were also conducted for Saudi Arabia
contractors [13,14]. Shash [15] identied 55 factors that
characterize bidding decision in the UK. Dozzi et al. [16]
developed a utility theory model for bid mark-up
determination using 21 criteria in the bidding decision.
Fayek [17] presents a competitive bidding strategy
model for use in setting a mark-up for construction projects. Fayek et al. studied bidding practices in

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M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

Australian and Canadian construction industries [18,19].

Jaselskis and Talukhaba [20] focus on bidding considerations in developing countries, considering the inherent
risks existing specically in these countries regarding
this issue. Wanous et al. [21] had a questionnaire
survey among Syrian contractors. Li et al. [22] applies
articial neural networks for construction mark-up estimation. Li and Love [23] presents a computer-based mark-up
decision support system that integrates a rule-based expert
system and articial neural network-based expert system.
Runeson and Skitmore [24] demonstrated the need to
incorporate market conditions in any future theory.
Wanous et al. [2] determined the main factors affecting
bid decision and ranked them according to importance.
Chua and Li [25] collected a list of determining factors
from the results of past research and opinions of six
experienced practitioners in competitive bidding. Dulaimi
and Hong [26] investigated the impact o contractor size on
the contractors attitude to mark-up decision only. Ling
and Liu [27] investigated the factors considered specically
by more successful and protable contractors in mark-up
percentage decision.
Each of these studies had valuable contributions to
bidding and mark-up decisions separately. However, a very
comprehensive model which will deal with both bid/no bid
and mark-up decisions, not simply consider the immediate
project conditions but also take into account strategic
considerations, include the perspectives of both the clients
and their representatives, differentiate among different
sizes of contractors, consider the special conditions existing
in developing countries and have a very detailed reasoning

1375

process to clarify the complex overall picture will be of

great value.
3. Bid reasoning model
In real applications, a contractor arrives at bid/no bid
and mark-up size decisions only after a complex reasoning
process. Considering this fact, the present research will
investigate various factors from the perspective of reasoning goals that contribute to the overall decision. This
reasoning model will allow the proposed nal model to go
deeply into the decision-making process and to have more
realistic results. Additionally, bid reasoning model selected
will allow the future users of the proposed model to follow
the methodology used and the steps taken in reaching the
nal decisions. Thus, it will contribute to increase the
acceptance of the proposed model in practice.
Through interviews conducted with numerous experienced contractors in the market and a literature search, a
comprehensive list of factors is prepared and categorized
according to various subgoals existing in bidding and
mark-up decisions. Fig. 1 shows the bid reasoning model
with various categories and subgoals that will contribute in
reaching the nal decisions. There are three main categories
of factors that are contributing to the nal decisions, which
are Firm-Related Factors, Project-Related Factors and
Market Conditions/Expectations and Strategic Considerations. Detailed hierarchies and many subgoals exist for
each of these three main categories as shown in Fig. 1.
Firm-related factors are investigated under two main
sections, which are the current need of the contracting

BID/NO BID &

MARK UP
DECISION
3.MARKET
CONDITIONS/
DEMAND &
STRATEGIC
CONSIDERATONS

2.PROJECT
related factors

1.FIRM
related factors

3.1 Competition
considering the
current market
conditions only

1.1 Need for Work

1.2 Strength of
Firm

2.1 Project
Conditions
Contributing to
Profitability

2.2 Risk of the

Project

2.2.1.1 Job
Uncertainty

2.2.1.2 Job
Complexity

2.2.1.3 Risk
Creating Job
Conditions

3.2.2 Client

3.2.3 Project

2.2.2 Risk due to

Unstable Country
Conditions

2.2.1.4 Client &

Consultant

2.2.2.1 Economic
Conditions &
Instability

3.3.Clients(&their
representatives)
expectations

2.3 Competition
considering the
current project

3.2.1 Foreseeable
Future Market Cond.
& Firm's Financial
Situation
2.2.1 Job Related
Risk

3.2 Strategic
Considerations

2.2.2.2 Availability
of Resources
Within the Country

2.2.2.3 Laws &

Government
Regulations

Fig. 1. Subgoals and hierarchical structure in reaching nal bid/no bid and mark-up size decisions.

3.2.4 Consultant
Firm

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M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

organization for obtaining new work and the strength of

the contracting organization compared to possible major
competitors in this bidding process.
Project-related factors are identied and investigated
under three main categories, which are project protability, project risk and competition due to project
conditions. Project risk is further divided into more
subcategories as presented in Fig. 1. Competition expected
considering project-related conditions only is included as a
separate subgoal as well.
Market conditions/expectations and strategic considerations include competition due to existing market conditions only, strategic considerations of the rm and
market clients (and their representatives) overall demand
or expectations from contracting organizations. The
proposed bid reasoning model takes into account strategic
considerations of the rm and possible long-term effect of
the decisions. This is a crucially important subgoal, which
should be dealt separately in detail considering its
contribution in making the nal decisions strategically
correct. The last subgoal under this category (3.3) was
about the nal decision makers (clients or consultants)
expectations from contracting organizations. After all, the
chance of any contractor to win a tender with a certain
mark-up will be partially affected by how much he is
meeting the expectations of the client or his representative.
Hence, possible contribution of this subgoal to the nal
bidding and mark-up decision models should also be taken
into account. The data related to all of these subgoals were
collected from the surveys with practicing contracting
organizations in the specied markets, except for subgoal
3.3. The factors under this subgoal were determined
previously by doing surveys separately with clients [28]
and consultant rms in the market.
Table 1 lists the related factors considered for the
proposed model with their importance weights for both
bid/no bid decision and mark-up size decisions separately,
which are determined after the analysis of survey results
with the contracting rms. In addition to overall
respondents results, the separate importance weights
found for small- and medium-sized contractors are
presented in Table 1 as well. Table 2 lists these factors
extracted from clients and consultants surveys, with their
calculated importance weights in the previous studies
specied before.
4. Data collection
In order to model bidding and mark-up decision
processes, it is required to identify the parameters that
inuence these decisions. Considering the exploratory
nature of the research, data collection has been made with
the aim of maximizing the number of respondents in order
to attain a representative sample of the contractors
available in the market.
The basis of the questionnaires was formed by the
literature review and preliminary consultation with numer-

ous experienced contractors in the specied markets. A

pilot study was done, in which semi-structured interviews
were carried out with many contractors and participants
were asked to consider the relevance, complexity, layout
and order of the questionnaires. The nal version of the
questionnaire was reached after incorporating some
modications which were made according to the inputs
obtained in the pilot study.
A total of 80 small- to medium-sized contracting
organizations were included in this survey and the data
have been collected from this sample via questionnaires.
Because of the unavailability of large size or international contractors in Northern Cyprus construction
market, this study focused only on small- and mediumsized regional contractors. The questionnaire included
both quantitative and qualitative factors, which took
advantage of the full spectrum and variety of information available from a wide variety of experienced
contractors. Initially, respondents were briefed about the
overall objectives and the methodology of the survey. In
order to remove the possibility of the responding
rms withholding commercially sensitive information
which may affect their future competitiveness, respondents
were not required to state their companys names in the
questionnaires.
A formal questionnaire, a copy of which can be obtained
from the rst writer, was employed to survey the selected
sample of contractors. The questionnaires consisted of a
comprehensive list of factors, categorized according to
different subgoals of the proposed bid reasoning model,
which are presented in Table 1.
The respondents were asked for their perception of
importance attached to the criteria listed to indicate its
importance for their rms rm while taking the two
crucially important decisions, which are
i. bid/no bid decision for a specic project under certain
circumstances,
ii. mark-up size decision for a specic project under certain
circumstances.
Importance ratings were from 0 to 6, where 0 represented of no importance, 6 represented of most importance and the importance of the factors
steadily increased with increasing values from 1 to 6. For
every single factor, two importance values were specied,
one for each of the two major decisions mentioned
previously.
Data from the questionnaires were extracted to derive
the importance weights of the factors as shown in Table 1.
In addition to considering overall survey results, it is also
important to observe any possible behavioral differences
according to different contractor sizes. For this purpose,
two different sizes of contractors are dened according
to rms annual turnover (small and medium) and the
related importance ratings are calculated for these categories as well.

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1377

Table 1
List of factors and their importance weights considered for bid/no bid and mark-up size decisions by the contracting organizations
Bid/no bid

Mark-up

Overall

Small

Medium

Overall Small

Medium

Factors description
1.1. Need for work
1. The current workload of projects, relative to the capacity of your rm * +
2. Availability (number and size) of other projects within the market * +
3. The current nancial situation of the company *
4. The need for continuity in employment of key personnel and workforce * +
5. The current workload in bid preparation *
6. The major plants and equipment owned. which are not in use

0.904
0.867
0.669
0.544
0.427
0.142

0.851
0.855
0.680
0.430
0.298
0.048

0.952
0.877
0.659
0.647
0.544
0.226

0.700
0.656
0.194
0.408
0.000
0.142

0.658
0.640
0.171
0.307
0.000
0.048

0.738
0.671
0.214
0.500
0.000
0.226

1.2. Strength of firm

1. Completeness of fullling to tender conditions imposed by the client *
2. Financial status of your company (working cash requirement of project) *
3. Experience and familiarity of your rm with this specic type of work * +
4. Possessing enough number of qualied technical staff * +
5. Possessing enough number of required plant and equipment *+
6. Having qualied subcontractors *
7. Having qualied material suppliers *
8. The amount of work to be subcontracted relative to the total volume of work * +
9. The amount of equipment that needs to be hired and the hire rates in the market * +
10. Familiarity of your rm with geographical and social aspects of const. location +
11. Possessing enough number of qualied managerial staff

0.915
0.892
0.779
0.694
0.667
0.594
0.458
0.440
0.271
0.133
0.050

0.899
0.930
0.838
0.772
0.746
0.759
0.395
0.377
0.338
0.180
0.044

0.929
0.857
0.726
0.623
0.595
0.444
0.516
0.496
0.210
0.091
0.056

0.135
0.054
0.696
0.463
0.469
0.077
0.023
0.538
0.479
0.269
0.010

0.149
0.057
0.763
0.399
0.404
0.096
0.026
0.557
0.504
0.294
0.009

0.123
0.052
0.635
0.520
0.528
0.060
0.020
0.520
0.456
0.246
0.012

2.1. Project conditions contributing to profitability of the project

1. Project size (total bid value) * +
2. Terms of payment (monthly/quarterly) * +
3. Project type * +
4. Prots made in similar projects in the past *
5. Project location
6. Project duration

0.944
0.944
0.415
0.327
0.208
0.102

0.934
0.947
0.408
0.360
0.289
0.118

0.952
0.940
0.421
0.298
0.135
0.087

0.765
0.569
0.452
0.110
0.142
0.150

0.789
0.557
0.469
0.101
0.149
0.140

0.742
0.579
0.437
0.119
0.135
0.159

2.2.1.1. Job uncertainty

1. Uncertainty related to the construction site condition * +
2. The completeness of the bid documents (drawings, specications, etc.) * +
3. The amount of changes expected throughout the execution of this project +
4. Condence you have on your subcontractors in this project +
5. Condence you have in cost estimate of your rms estimators in this project
6. Uncertainty due to weather conditions (considering local climate and season)

0.394
0.385
0.158
0.156
0.060
0.019

0.404
0.386
0.127
0.232
0.044
0.022

0.385
0.385
0.187
0.087
0.075
0.016

0.690
0.469
0.538
0.406
0.156
0.185

0.689
0.482
0.553
0.469
0.184
0.171

0.690
0.456
0.524
0.349
0.131
0.198

2.2.1.2. Job complexity

1. Technological difculty of the project being beyond the capability of the rm * +
2. Management of similar size projects in the past * +
3. Any safety hazards during project execution stage +
4. Site location and accessibility possibly creating risk during project execution+

0.685
0.510
0.227
0.104

0.728
0.575
0.184
0.123

0.647
0.452
0.266
0.087

0.581
0.600
0.381
0.440

0.671
0.667
0.430
0.496

0.500
0.540
0.337
0.389

2.2.1.3. Risk creating job and contract conditions

1. The rigidity of specications * +
2. Allowed project duration being enough * +
3. The penalty conditions for not being able to complete the project on time *+
4. Payment conditions of the project creating a risky environment * +
5. Allowed duration for bid preparation being enough *
6. The contract type of the project+
7. Dispute resolution process creating any possible risks for the contractor rm
8. Warranty issues, which might possibly create risks +
9. Any environment issues related to project

0.479
0.460
0.429
0.427
0.340
0.192
0.123
0.110
0.027

0.566
0.491
0.447
0.482
0.289
0.149
0.127
0.110
0.018

0.401
0.433
0.413
0.377
0.385
0.230
0.119
0.111
0.036

0.583
0.515
0.665
0.819
0.006
0.558
0.071
0.315
0.123

0.658
0.544
0.746
0.877
0.000
0.531
0.092
0.404
0.114

0.516
0.488
0.591
0.766
0.012
0.583
0.052
0.234
0.131

2.2.1.4. Client and consultant of the project

1. The current nancial capability of the client * +
2. The history of clients payments in past projects (considering delays, shortages) * +
3. The clients attitude, characteristics and stability in needs *
4. The consultants attitude, characteristics and the easiness to work with him

0.902
0.725
0.294
0.088

0.952
0.746
0.355
0.083

0.857
0.706
0.238
0.091

0.538
0.438
0.144
0.052

0.632
0.509
0.145
0.044

0.452
0.373
0.143
0.060

2.2.2.1. Economic conditions and instability

1. Risk due to ination rate of tender currency (& ination compensation methods)+
2. Risk due to the current ination rate in the country +

0.165
0.058

0.211
0.057

0.123
0.060

0.848
0.408

0.882
0.443

0.817
0.377

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M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

Table 1 (continued )
Bid/no bid

Mark-up

Overall

Small

Medium

Overall Small

Medium

3. Stability of exchange rates in the country

4. Monetary and Fiscal Policy of the government against economic uctuations

0.044
0.038

0.048
0.039

0.040
0.036

0.154
0.056

0.189
0.057

0.123
0.056

2.2.2.2. Availability of resources within the region

1. Availability of required qualied labor within the region *
2. Availability of the required materials within the region *
3. Availability of the required plants and equipment within the region *

0.304
0.292
0.292

0.320
0.298
0.303

0.290
0.286
0.282

0.069
0.067
0.067

0.066
0.066
0.066

0.071
0.067
0.067

2.2.2.3. Laws and government regulations in construction

1. The policies and legislation regarding licenses, permits, approvals in the country
2. The laws related to claims and disputes within the country
3. Tax policy of the government in the country +
4. The policies and legislation regarding minimum wage rates within the country
5. The amount of use of unregistered labor within the market
6. Overall application effectiveness of competitive tendering in constr. projects

0.135
0.119
0.075
0.071
0.052
0.040

0.175
0.149
0.101
0.092
0.061
0.035

0.099
0.091
0.052
0.052
0.044
0.044

0.135
0.223
0.260
0.200
0.081
0.040

0.175
0.232
0.211
0.193
0.092
0.035

0.099
0.214
0.306
0.206
0.071
0.044

2.3. Competition (considering only the current project)

1. The possible number of competitors passing the requirements *+
2. The desire of qualied contractors to bid and win the project * +

0.429
0.375

0.478
0.434

0.385
0.321

0.969
0.819

0.965
0.807

0.972
0.829

3.1. Competition (considering only the current market conditions)

1. Amount of other protable projects currently in progress within the market +
2. The level of winning offers mark-ups in recent times in the market +
3. Possible workloads of your major possible competitors during the project period
4. Threats due to new entrants into the market increasing competitiveness

0.148
0.104
0.075
0.044

0.154
0.096
0.079
0.048

0.143
0.111
0.071
0.040

0.781
0.646
0.244
0.044

0.741
0.715
0.232
0.048

0.817
0.583
0.254
0.040

3.2.1. Foreseeable future market conditions & firms financial situation

1. Markets direction (whether it is declining, expanding, etc.) *
2. Amount of possible upcoming protable projects out for tender in near future *+
3. Existing nancial conditions indicating a nancial risk in near future *
4. The ratio of your rms current market share to the expected or aimed share *

0.508
0.446
0.346
0.288

0.465
0.373
0.289
0.215

0.548
0.512
0.397
0.353

0.146
0.375
0.040
0.127

0.154
0.294
0.031
0.127

0.139
0.448
0.048
0.127

3.2.2. Client (considering long-term gains/losses)

1. Amount of work the client carries out regularly * +
2. The amount of repeat business level that the client been following * +
3. The clients possible effect by giving recommendations in referral markets

0.773
0.281
0.100

0.820
0.272
0.066

0.730
0.290
0.131

0.742
0.415
0.117

0.684
0.329
0.079

0.794
0.492
0.151

3.2.3. Project (considering long-term gains and losses)

1. Projects possible contribution to increase the contractor rms classication * +
2. Projects possible contribution to increase the rms identity and brand strength * +
3. Possible contribution in increasing rms market share and dominance in market * +
4. Possible contribution in building long-term relationships with other key parties * +
5. Contribution in maintaining long-term relations with important inuence markets *+
6. Projects possible contribution in improving your rms staff expertise *
7. Projects possible contribution to break into a new market with productive future * +
8. Contribution to rms future due to value of the completed project to the public *
9. Possible contribution to the rms internal market (employees satisfaction, etc.)

0.742
0.598
0.425
0.417
0.415
0.360
0.338
0.256
0.050

0.706
0.553
0.390
0.390
0.382
0.443
0.250
0.189
0.009

0.774
0.639
0.456
0.440
0.444
0.286
0.417
0.317
0.087

0.798
0.619
0.463
0.256
0.281
0.085
0.417
0.033
0.025

0.803
0.575
0.417
0.224
0.149
0.101
0.382
0.000
0.009

0.794
0.659
0.504
0.286
0.401
0.071
0.448
0.063
0.040

3.2.4. Consultant firm (considering long-term gains and losses)

1. The amount of construction work the consultant has been carrying out regularly *
2. The consultants possible effect by giving recommendations in referral markets

0.425
0.144

0.526
0.158

0.333
0.131

0.119
0.058

0.118
0.026

0.119
0.087

5. Research ndings and discussions

5.1. Characteristics of the respondents
This section outlines the results from the analyses that
were conducted on empirical data obtained from the survey.
Before interpreting the research ndings, it is important to
consider general characteristics of the respondents. The

responding contractor rms were all from Northern Cyprus

and Turkish construction markets. Descriptive statistics
about the respondents are summarized in Table 3.
In general terms, the respondent sample can be
summarized as constituting mainly small- to medium-sized
regional or national rms, having building works as their
major eld of activity and located throughout Northern
Cyprus and Turkey.

ARTICLE IN PRESS
M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

5.2. General findings

Some general ndings were noted from the survey as
follows:

1379

A total of 52.5% of the respondents thought it was

extremely difcult to model such complex decisionmaking processes.

5.3. Key determining factors selected for the final model






Percentages of work obtained through competitive

bidding by the responding contractor rms ranged from
20% to 100%.
A total of 92.5% of the responding contractors have
never used any statistical or mathematical model to
assist their bid/no bid or mark-up size decisions.
Almost all (97.5%) of the responding rms use intuition
as their primary tool in this decision-making process.
Most of the respondents (91.25%) thought that a
bidding decision and mark-up size determination model,
which can be effectively applied in practice, would be of
great value.

Table 2
Perceived level of importance for clients and consultants combined needs
and expectations from contracting organizations (aggregated response)
Factor description

Importance
weight

Price that the contractor rm offers

No. of years the contractor rm has been doing work in the
market
Availability of highly qualied technical staff in the
contractor rm
Availability of previous experience with similar projects
The image and identity of the contractor rm in the market
Maximum nancial capacity
Availability of highly qualied managerial staff in the
contractor rm
Type of plant and equipment available and suitability of the
equipment
Previous records of claims and disputes
References about the contractor
The products place (if chosen by the contractor)
Type of project control, monitoring process and cost
control
Proposed construction method
The contractor rm being a sectoral brand in the market
Warranty conditions the contractor rm offers
Current workload of the contractor
Contractors familiarity with local suppliers, labor,
subcontractors, etc.
Average importance weight

0.952
0.910
0.782
0.772
0.736
0.724
0.663
0.651
0.638
0.618
0.616
0.564
0.537
0.521
0.516
0.478
0.428
0.653

Among the 83 factors listed in Table 1, there were some

factors with very low importance weights assigned. Therefore, discarding these factors and using the remaining
factors in the proposed model would not change the
effectiveness of the nal model in practical applications.
Hence, the factors having importance weights less than
0.250 were discarded. Importance weight of 0.250 corresponded to an average importance score of 1.5 out of 6 in
the survey, which corresponded to a very low importance
level. The factors to be included in the nal bid/no bid
decision model and mark-up size decision model are shown
in Table 1 with an * and + in front of them, respectively.
After discarding the factors with low importance, a total of
50 and 44 factors remained to be included in the bid/no bid
and mark-up size decision models framework, respectively.
The following discussions in this article will also be based
on these selected important factors as well.
5.4. Differences between bid/no bid and mark-up decisions
Comparison between the two decision processes can be
started by considering the subgoals average importance
values. Table 4 presents the average of importance scores
obtained for each of the 16 subgoals available in the
proposed framework.
It is obvious from these ndings that most of the
subgoals have signicantly varying amount of importance
values for bid/no bid and mark-up decisions. For bid/no
bid decision, the rst ve subgoals having highest average
importance scores were 1.1, 2.1, 2.2.1.4, 1.2 and 2.2.1.2.
However, for mark-up size decision, the rst ve most
important subgoals were 2.3, 3.1, 2.2.2.1, 2.1 and 1.1.
An obvious nding is the competitions very high role in
the mark-up decision process. The rst two most important
subgoals are related to competition in this decision process.
On the other hand, the most important subgoals for bid/no
bid decision process involved need for work, project
protability, client and consultant of the project and
strength of rm but not competition. Subgoal 3.1

Table 3
Descriptive statistics about the characteristics of the respondents
Variable

Category 1

Category 2

Category 3

Category 4

Size of the rm (by annual

turnover in million $)
Experience of rm in the
market (years)
Major eld of activity
Location of the rms head
ofce

Small contractors o15

(47.5%)
o8 years (%11.25)

Medium contractors 1660

(52.5%)
815 (% 26.25)

1625 (%43.75)

26+ (%18.75)

Building (% 93.75)
Northern Cyprus (% 51.25)

Other (% 6.25)
Turkey (% 48.75)

0.456
0
0.336
0.546
0.413
0.526

0.402
0
0.397
0.527
0.444
0.425

0.353
0
0.453
0.510
0.472
0.333

0.286

0.307

0.736
0.600
0.653
0.385
0.550
0.402
0.600

0.623
0.673
0.662
0.395
0.652
0.455
0.684

0.296

0.682
0.634
0.658
0.390
0.598
0.427
0.640

0.103

0.021

0.117
0.036
0.059
0.193

0.113
0.073
0.010
0.010
0.102
0.053
0.084

0.211
0.886
0.728
0.294
0.507
0.425
a

0.260
0.894
0.714
0.375
0.579
0.472

0.535
0.487
0.605
0.548
0.566
0.627
0.571
0.663

0.588
0.486
0.595
0.526
0.501
0.576
0.488
0.628

There are no important factors under the specic subgoal for the specied decision.

1.1
1.2
2.1
2.2.1.1
2.2.1.2
2.2.1.3
2.2.1.4
2.2.2.1
2.2.2.2
2.2.2.3
2.3
3.1
3.2.1
3.2.2
3.2.3
3.2.4
a

0.306
0.901
0.700
0.448
0.643
0.515

0.636
0.484
0.586
0.505
0.442
0.530
0.413
0.597

Small contrac. Medium

contrac

Overall
contrac.

Difference
between small
& medium

Overall
contrac.

Small contrac. Medium

contrac.

Mark-up decision

Bid/no bid decision

0.095
0.015
0.028
0.154
0.137
0.090

0.101
0.003
0.019
0.043
0.125
0.097
0.158
0.066

Difference
between small
& medium
0.094
0.148
0.063
0.136
0.097
0.149
0.152
0.628
0.296
0.260
0.492
0.714
0.022
0.052
0.028
0.425

Overall
contrac.

0.088
0.186
0.057
0.153
0.085
0.172
0.114
0.663
0.307
0.211
0.430
0.728
0.042
0.040
0.012
0.526

0.099
0.115
0.067
0.120
0.108
0.128
0.188
0.597
0.286
0.306
0.548
0.700
0.005
0.133
0.044
0.333

Small contrac. Medium

contrac.

Difference between bid/no bid & mark-up

decisions

1380

Subgoal

Table 4
Average importance scores for different subgoals

ARTICLE IN PRESS

M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

Medium rank

3
2
5
7
1
4
6
8
9
15
12.5
10
14
16
12.5
19
11
28
17
24
18
21
31
37
36
25
23
43.5
22
32.5
20
32.5
29
35
30
34
27
26
45.5
45.5
48
38
41
39
43.5
42
49
47
40
50

0.952
0.940
0.929
0.952
0.857
0.857
0.877
0.726
0.730
0.774
0.706
0.623
0.647
0.659
0.595
0.639
0.444
0.647
0.452
0.548
0.401
0.433
0.516
0.512
0.496
0.413
0.385
0.544
0.377
0.456
0.333
0.44
0.421
0.444
0.385
0.385
0.321
0.286
0.397
0.385
0.417
0.298
0.29
0.238
0.286
0.282
0.353
0.29
0.21
0.317
0.517

1.5
3
4
1.5
6.5
6.5
5
10
9
8
11
16
13.5
12
17
15
25.5
13.5
24
18
32
28
20
21
22
31
35.5
19
38
23
40
27
29
25.5
35.5
35.5
41
46.5
33
35.5
30
43
44.5
49
46.5
48
39
44.5
50
42

2.3.1
2.2.2.1.1
2.2.1.3.4
2.3.2
3.2.3.1
3.1.1
2.1.1
3.2.2.1
1.1.1
1.2.3
2.2.1.1.1
2.2.1.3.3
1.1.2
3.1.2
3.2.3.2
2.2.1.2.2
2.2.1.3.1
2.2.1.2.1
2.1.2
2.2.1.3.6
1.2.8
2.2.1.1.3
2.2.1.4.1
2.2.1.3.2
1.2.9
1.2.5
2.2.1.1.2
1.2.4
3.2.3.3
2.1.3
2.2.1.2.4
2.2.1.4.2
3.2.3.7
3.2.2.2
1.1.4
2.2.2.1.2
2.2.1.1.4
2.2.1.2.3
3.2.1.2
2.2.1.3.8
3.2.3.5
1.2.10
2.2.2.3.3
3.2.3.4

0.548

0.969
0.848
0.819
0.819
0.798
0.781
0.765
0.742
0.700
0.696
0.69
0.665
0.656
0.646
0.619
0.6
0.583
0.581
0.569
0.558
0.538
0.538
0.538
0.515
0.479
0.469
0.469
0.463
0.463
0.452
0.44
0.438
0.417
0.415
0.408
0.408
0.406
0.381
0.375
0.315
0.281
0.269
0.26
0.256

1
2
3.5
3.5
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
22
22
22
24
25
26.5
26.5
28.5
28.5
30
31
32
33
34
35.5
35.5
37
38
39
40
41
42
43
44

0.553

0.965
0.882
0.877
0.807
0.803
0.741
0.789
0.684
0.658
0.763
0.689
0.746
0.64
0.715
0.575
0.667
0.658
0.671
0.557
0.531
0.557
0.553
0.632
0.544
0.504
0.404
0.482
0.399
0.417
0.469
0.496
0.509
0.382
0.329
0.307
0.443
0.469
0.43
0.294
0.404
0.149
0.294
0.211
0.224

Small score
1
2
3
4
5
9
6
12
15.5
7
11
8
17
10
19
14
15.5
13
20.5
24
20.5
22
18
23
26
34.5
28
36
33
29.5
27
25
37
38
39
31
29.5
32
40.5
34.5
44
40.5
43
42

Small rank

0.545

0.972
0.817
0.766
0.829
0.794
0.817
0.742
0.794
0.738
0.635
0.769
0.591
0.671
0.583
0.659
0.54
0.516
0.5
0.579
0.583
0.52
0.524
0.452
0.488
0.456
0.528
0.456
0.52
0.504
0.437
0.389
0.373
0.448
0.492
0.5
0.377
0.349
0.337
0.448
0.234
0.431
0.246
0.306
0.286

Medium score

1
3.5
7
2
5.5
3.5
8
5.5
9
13
10
14
11
15.5
12
18
23
25.5
17
15.5
21.5
20
31
28
29.5
19
29.5
21.5
24
34
36
38
32.5
27
25.5
37
39
40
32.5
44
35
43
41
42

Medium rank

Spearman rank correlation coefcient (rs ) between small rank and medium rank for bid/no bid decision 0.766; for mark-up decision 0.831; correlation is signicant at 1% level for both.

0.934
0.947
0.899
0.851
0.952
0.930
0.855
0.838
0.820
0.706
0.746
0.772
0.728
0.680
0.746
0.553
0.759
0.430
0.575
0.465
0.566
0.491
0.395
0.373
0.377
0.447
0.478
0.298
0.482
0.390
0.526
0.390
0.408
0.382
0.404
0.386
0.434
0.443
0.289
0.289
0.250
0.360
0.320
0.355
0.298
0.303
0.215
0.272
0.338
0.189
0.527

Overall rank

M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

1.5
1.5
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26.5
26.5
28.5
28.5
30.5
30.5
32
33.5
33.5
35
36
37
38
39
40
41
42
43
44
45.5
45.5
47
48
49
50

Overall score

0.944
0.944
0.915
0.904
0.902
0.892
0.867
0.779
0.773
0.742
0.725
0.694
0.685
0.669
0.667
0.598
0.594
0.544
0.510
0.508
0.479
0.460
0.458
0.446
0.440
0.429
0.429
0.427
0.427
0.425
0.425
0.417
0.415
0.415
0.394
0.385
0.375
0.360
0.346
0.340
0.338
0.327
0.304
0.294
0.292
0.292
0.288
0.281
0.271
0.256
0.522

Medium score

2.1.1
2.1.2
1.2.1
1.1.1
2.2.1.4.1
1.2.2
1.1.2
1.2.3
3.2.2.1
3.2.3.1
2.2.1.4.2
1.2.4
2.2.1.2.1
1.1.3
1.2.5
3.2.3.2
1.2.6
1.1.4
2.2.1.2.2
3.2.1.1
2.2.1.3.1
2.2.1.3.2
1.2.7
3.2.1.2
1.2.8
2.2.1.3.3
2.3.1
1.1.5
2.2.1.3.4
3.2.3.3
3.2.4.1
3.2.3.4
2.1.3
3.2.3.5
2.2.1.1.1
2.2.1.1.2
2.3.2
3.2.3.6
3.2.1.3
2.2.1.3.5
3.2.3.7
2.1.4
2.2.2.2.1
2.2.1.4.3
2.2.2.2.2
2.2.2.2.3
3.2.1.4
3.2.2.2
1.2.9
3.2.3.8
Average

Small rank

Factor

Small score

Overall score

Factor

Overall rank

Mark-up decision

Bid/no bid decision

Table 5
Importance ratings and ranks for bid/no bid and mark-up decision processa

ARTICLE IN PRESS
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M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

(competition considering the current market conditions

only) and 2.2.2.1 (economic conditions and instability)
included no important factors selected for bid/no bid
decision process while they both had a very high
importance scores (0.714 and 0.628) for mark-up decision
process. Subgoal 2.3 (competition considering the current
project) had a moderately high average score (0.402) for
bid/no bid decision process while it had the highest score
(0.894) for mark-up decision process. Although some
subgoals included under risk of the project had much
higher scores for mark-up decision process, it was
interesting to see some of the subgoals having higher
values for bid/no bid decision. Furthermore, the results in
Table 4 show that 3.2 Strategic considerations also
include factors with major roles in both bid/no bid and
mark-up decision processes.
In addition to comparing subgoals, importance scores
for the factors included under subgoals should also be
investigated to draw conclusions about the differences in
bidding and mark-up decision processes. As shown in
Table 5, the average importance rating for the factors
included in bid/no bid and mark-up decision processes are
0.522 and 0.548, respectively, which shows that the average
importance rating assigned to the selected factors in the
latter decision process is a higher than the former one.
Additionally, bid/no bid decision process involved more
factors than mark-up decision process (50 vs. 44). When
the factors listed in Table 5 are considered separately, it can
be seen that most of the listed factors have signicantly
different importance ratings assigned for the two decision
processes. The rst ve most important factors in bidding
decision process are 2.1.1, 2.1.2, 1.2.1, 1.1.1 and 2.2.1.4.1.
On the other hand, for the mark-up decision process, all of
the rst ve most important factors were completely
different and they were 2.3.1, 2.2.2.1.1, 2.2.1.3.4, 2.3.2,
and 3.2.3.1, respectively.
5.5. Bid/no bid decision process for different sizes of
contractors
When the values for bidding decision process in Table 4
are investigated, it is seen that small-sized contractors
assigned higher average importance score to 10 of the
subgoals compared to medium-sized contractors. However,
medium-sized contractors assigned higher average importance score to only three subgoals. This reveals that for
majority of subgoals, small-sized contractors assign more
importance on the specied factors than medium-sized
contractors.
When all of the 50 factors included for bid/no bid
decision process are investigated separately, a better
comparison can be made between the two different sizes
of contractors. Table 5 shows the ranks derived from the
importance values assigned by the respondents to the listed
factors for different sizes of contractors. Average importance scores found for small and medium contractors are
0.527 and 0.517, respectively. It is seen that smaller

contractors assigned slightly more emphasis on the

specied factors. Spearman rank correlation coefcient
test showed fairly strong correlation to exist between two
different sizes of contractors (rs 0:766, 1% signicance
level). However, when the factors are investigated separately in detail, it can be seen that both the scores and the
ranks for bid/no bid decision process vary very signicantly
according to the sizes of the contractors.
First of all, small contractors selected the factor
2.2.1.4.1 Current nancial capability of the client as the
most important factor while medium contractors assigned
rank 6.5 to the same factor with a lower importance score.
This reveals that the nancial capability of the client is
treated as a more important criterion by smaller contractors. Alternatively, medium contractors selected factors
2.1.1 Project size and 1.1.1 The current workload of
projects as the most important factors in this decision
process while small contractors assigned lower ranks to
these specied factors.
There were some factors, which were found very
important by both types of contracting organizations.
Factors 2.1.2 Terms of payment, 1.2.1 Fullling to tender
conditions and 1.2.2 Working cash requirement of the
project were found crucially important by both types of
contractors.
Factors 1.2.3, 1.2.4, 1.2.5, which were about Experience
about the type of work, Possessing qualied technical
staff and Required plant, were assigned much higher
importance scores by small-sized contractors. Since it may
usually be more difcult for smaller rms to deal with
different types of work or to nd required resources, these
ndings seem to be reasonable. Additionally, the factor
1.2.6 Having qualied subcontractors had very signicantly different importance scores and ranks between two
different groups of contractors. It is clear that smaller
contractors depend more on subcontractors for nishing
their projects successfully and hence assign much more
importance on this factor in bid decision process (0.759 vs.
0.444). Factors related to job complexity (2.2.1.2.1 and
2.2.1.2.2) were given more importance by smaller contractors. This is expected since smaller contractors might
usually have more difculty dealing with complex projects.
Most of the factors under subgoal 2.2.1.3 Risk creating job
and contract conditions, were assigned higher scores by
small contractors. This may be explained by the fact that it
will probably be more difcult for smaller rms to deal
with unexpected problems during project execution stage.
Another interesting nding is regarding the factor 3.2.4.1,
which is about The amount of construction work
consultant rm has been carrying out. Smaller contractors
assigned much higher importance score on this factor,
which is an indication that smaller rms might consider
possibility of repetitive works from the same consultants
future clients while medium contractors usually do not.
On the other hand, factors 1.1.4 The need for continuity
in employment and 1.1.5 Current workload in bid
preparation were assigned much higher importance scores

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by medium-sized contractors (0.647 vs. 0.430 and 0.544 vs.

0.298). The fact that medium contractors have larger and
more stable employees may explain the fact that factor
1.1.4 is taken more seriously by the medium contractors.
Also, it was interesting to nd out that all of the factors
included under subgoal 3.2.1 Foreseeable future market
conditions and rms nancial situation and almost all of
the factors under subgoal 3.2.3 Project considering longterm gains and losses having higher importance ratings for
medium-sized contractors. This is a clear indication of
larger-sized contractors taking strategic considerations
more into consideration in bidding decision process. The
only exception under this subgoal was related to factor
3.2.3.6 Projects contribution in increasing staffs expertise, which was given more importance by smaller
contractors. Considering that smaller contractors staff
might not usually have enough expertise in different types
of projects, this result seems reasonable.
5.6. Mark-up decision process for different sizes of
contractors
When the mark-up decision process values presented in
Table 4 are investigated, it is observed that all of the
subgoals included under strategic considerations received
higher scores from medium-sized contractors, which is an
indication that medium-sized contractors are taking
strategic considerations more seriously during mark-up
decision process.
Table 5 shows that the average importance scores found
for small and medium contractors are 0.553 and 0.545,
respectively. Spearman rank correlation coefcient test
showed fairly strong correlation to exist between two
different sizes of contractors (rs 0:831, 1% signicance
level). This coefcient is signicantly higher than the
coefcient found for bidding decision process.
This reveals that in mark-up decision process, small- and
medium-sized contractors have more correlation in the
ranks assigned to the listed factors.
When the factors in Table 5 are considered separately, it
is seen that both types of contractors assigned very high
importance ratings (0.965 and 0.972) and selected the
factor 2.3.1 The possible number of competitors passing
the requirements as the most important factor in mark-up
decision process. It seems that there are many major
factors, which have high importance ratings for both types
of contractors. Factor 2.3.2, which is related to the possible
desire of qualied contractors to win the project, was
assigned very high scores (0.807 and 0.829) and ranks by
small and medium contractors, respectively.
Factor 2.2.2.1.1, which is related to risk due to ination
rate, was assigned very high importance ratings and ranked
2nd and 3.5th by small- and medium-sized contractors,
respectively.
Almost all of the factors (except 2.2.1.3.6) of the subgoal
2.2.1.3 Risk creating job and contract conditions were
assigned much higher importance ratings by smaller

1383

contractors. Considering the difculty for smaller rms to

deal with unexpected problems during project execution
stage, it should be expected that smaller rms assign more
signicance on risk creating conditions. Of specic interest,
smaller contractors assigned higher importance to 3.1.2
which indicates that they the level of winning mark-ups in
the market is taken more seriously by smaller contractor
rms. On the other hand, factor 3.1.1 Amount of other
protable projects currently in the market received high
scores from both groups and it was ranked much higher by
medium contractors. Factor 1.2.3 Experience with the
specic type of work was also assigned a much higher
rating and score by smaller contractors. Considering the
fact that smaller contractors will usually have less
experience with different types of projects, it seems
reasonable for smaller contractors to assign more importance on this factor. Additionally, factors 2.2.1.4.1 and
2.2.1.4.2 both received signicantly higher scores from
smaller contractors. This reveals the fact that smaller
contractors assign much more importance on the nancial
capability and payment history of clients. Another interesting nding was related to job complexity and these
factors (2.2.1.2.1 and 2.2.1.2.2) were given more importance by smaller contractors. Considering that it may
generally be harder for smaller contractors to deal with
complexities in a project, this nding should actually be
expected.
On the other hand, there are other factors which are
assigned higher signicance by medium contractors. All the
factors under the subgoal 3.2.2 Client considering longterm gains/losses were assigned signicantly higher scores
by medium-sized contractors.
Additionally, most of the factors under subgoal 3.2.3
Project considering long-term gains and losses received
higher scores from medium contractors. These results
reveal that larger-sized contractors usually takes future
gains from the project into more consideration while
making mark-up decision as well. Also, all of the factors
included under subgoal 1.1 Need for work were assigned
more importance by medium-sized contractors. This is an
indication that larger-sized contractors assign higher
signicance on their need for work, while deciding about
mark-up value.
6. Conclusions
A structured and realistic model, which will gain
acceptance in practice, deal systematically with different
bidding situations and assist the contractors in reaching the
correct bid/no bid and mark-up percentage decisions will
be of great value. This work was part of a study being
carried out to build an integrated knowledge-based system,
which will guide the contracting organizations in reaching
strategically correct bid/no bid and mark-up size decisions.
In an effort to uncover the main factors that characterize
the two distinct but sequential stages of bidding decisions,

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M. Egemen, A.N. Mohamed / Building and Environment 42 (2007) 13731385

namely bid/no bid and mark-up size decisions, this study

identies the key determining factors and their importance
weights by using the data from Northern Cyprus and
Turkish construction markets.
In real applications, a contractor arrives at bid/no bid
and mark-up size decisions only after a complex reasoning
process. Considering this fact, the present research
investigated various factors from the perspective of reasoning subgoals that contribute to the overall decision. This
reasoning model allowed the proposed framework to go
deeply into the heart of the decision-making process and
helped to clarify the complex picture regarding the two
sequential decisions during bidding stage in construction
projects.
The results reveal that there is a distinct and signicant
difference in the importance assigned to the factors for the
two separate decision processes. For bid/no bid decision
process, the most important factors were found to be
mostly related to need for work, project protability,
strength of rm and clients nancial situation. However, for the mark-up decision process, it was observed that
most important factors were usually related to competition and risk.
Furthermore, it is also apparent from the ndings that
the factors related to strategic considerations have
signicant roles in both bid/no bid and mark-up decision
processes. Hence, the fact that strategic considerations
was included in detail within the proposed framework was
proven to be a correct decision for an accurate and
strategic model. Moreover, the results suggest that
strategic considerations is assigned more signicance by
larger-sized contracting organizations (medium contractors
in this case) during both bidding and mark-up decision
processes.
One of the most striking ndings of this research was the
distinct approach difference of varying sizes of contractors
to the overall issue. Although private projects for building
works was the major eld of activity for almost all of the
responding contractors, it was found that the importance
scores and ranks vary signicantly between the groups of
contractors categorized according to their sizes. This is a
very strong indication that the responding contractors of
different sizes have signicantly different approaches to
both of the decisions in bidding process. Hence, these
results suggest that any model regarding bidding and markup decisions should denitely differentiate among different
sizes of contractors. Thus, the proposed model will reect
the priorities and approaches of the related contractors to
the bidding decisions in a more realistic and accurate
manner.
Furthermore, it was interesting to nd out that the
correlation between small and medium contractors approaches was higher in mark-up decision process compared
to the bidding decision process. Compared to mark-up
decision process, it is seen that differentiating between
contractors of different sizes will be even more important
in bidding decision process.

Because of the unavailability of large-sized or international contractors in Northern Cyprus construction market, this study focused only on small- and medium-sized
regional contractors, which are mostly involved in private
building construction works. In spite of the fact that this
study was based on input provided by certain types of
contractors in Northern Cyprus and Turkish construction
markets only, we believe that the approach, reasoning,
ndings and the overall framework proposed are of good
value to contracting organizations in different markets
throughout the world.
The ndings of this study will serve as a detailed and
complete framework for the proposed knowledge-based
system model, which is currently under research and will be
published in a companion paper. This study could be
extended to include large international contractors or
contractors involved mostly in public projects to observe
the possible differences in their approaches to the issue.
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