Improving Procurement Selection Criteria for Managing Construction Tender-Price Volatility on Public Projects


This paper investigates current knowledge with respect to adopted procurement-strategies to managing construction-price in the public sector. The paper reveals that studies are addressing mostly four main areas, i.e., procurement decision support systems, transparency and ethical considerations in procurement, identification of procurement criteria, and overcoming inconsistencies in procurement process. The paper provides for a new perspective with regard to selection of procurement strategy. Selecting a suitable procurement strategy is, therefore, an important milestone for managing project pricing. The review has revealed that the lowest bid is the main criterion of contractor selection in the public sector. There is a need to combine some if not all procurement strategies within a significantly flexible strategy that can have multiple potential advantages in the construction field by serving as a robust decision-making tool. There is a need to develop a public procurement strategy for managing construction price varaiblity and inflation by modelling for fundamental principles such as value for money, benchmarking price perfomance, reducing tendering documentation errors, that collude and cosnipre to impact price inflation, client perception and infrastructure push, and public accountability. The study, thus, deduces two principal factors that serve as key indicators of a procurement selection criterion focused on managing construction tender-price variability and inflation. These include benchmarking price performance and eliminating errors in tender documentation.

Keywords: Construction, Infrastructure, Public Sector, procurement selection criteria, tender-price

Article Review Status: Published

Pages: 1-25 (Download PDF)

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