The second low bid method

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dc.contributor.author Awwad, Rita
dc.contributor.author Ioannou, Photios
dc.date.accessioned 2017-05-09T10:54:50Z
dc.date.available 2017-05-09T10:54:50Z
dc.date.issued 2017-05-09
dc.identifier.uri http://hdl.handle.net/10725/5626
dc.description.abstract The low bid method has been the most common competitive bid selection approach used for public projects in the U.S. construction industry and worldwide. This method is usually coupled with a prequalification process to ensure that the lowest bidder has the financial capacity, the necessary experience, and enough bonding capacity to take charge of the project and to perform the work according to the project’s requirements. However, driven by their bad financial status or by their urgent need for work, some contractors tend to abuse the free and price-directed competitive nature of the low bid method by deliberately submitting extremely low bid prices in order to enhance their chance of winning and to at least cover their general and administrative expenses. Thus it is possible for the project to be awarded to an accidental or deliberate unrealistic low bid. This often leads to cost overruns, schedule delays, claims and further disputes between parties during construction. Alternatively, an owner could have paid a little more and reduced these risks by eliminating the lowest bid and rather awarding the contract to the second lowest bidder. This paper uses Monte Carlo simulation approach to analyze and model the second low bid method where the contractor whose bid is the second lowest one among submitted bids is awarded the contract. The simulation results are presented in nomographs that are used to determine optimal markup and optimum profit for a given project and to compare the merits and disadvantages of the low and second low bidding methods. en_US
dc.language.iso en en_US
dc.title The second low bid method en_US
dc.type Conference Paper / Proceeding en_US
dc.author.school SOE en_US
dc.author.idnumber 199906210 en_US
dc.author.department Civil Engineering en_US
dc.description.embargo N/A en_US
dc.identifier.ctation Awwad, R., & Ioannou, P. THE SECOND LOW BID METHOD. en_US
dc.author.email rita.awwad@lau.edu.lb en_US
dc.conference.date October 17-19, 2012 en_US
dc.conference.place Beirut, Lebanon en_US
dc.conference.title Proceedings of the CIB W78 2012: 29th International Conference en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url http://itc.scix.net/data/works/att/w78-2012-Paper-86.pdf en_US
dc.author.affiliation Lebanese American University en_US

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