An Empirical Study of Contractors’ Bidding Trends in Recurrent Bidding: A Case of Singapore Public Sector Construction Projects

There have been limited empirical studies that aimed to establish the tenability of the stationarity assumption in recurrent construction bidding, and thus the need for and importance of allowing for continuity in bidding models remain unexplored. This study examined the bidding trends of individual contractors according to their level of experience in recurrent bidding, to test the tenability of the stationarity assumption. The data sample was a past bidding dataset of Singapore public sector construction projects over a five-year period between 2017 and 2021, with over 8000 bidding records from more than 900 contractors. The results show that there were statistically significant changes in the contractors’ bidding trends, irrespective of their level of experience in recurrent bidding and different time periodicities, ranging between 10 and 20 months. Thus, the stationarity assumption that contractors behave in a probabilistically consistent way over time, regardless of changing conditions, was untenable for the data sample involved. The observed changes in the contractors’ bidding trends cannot be regarded as random, but represent a continuous strategic process in response to changes in market forces. It is postulated that the possible causes of changes vary among individual contractors, in which there are a set of varying internal and external factors they consider at the time of bidding. The findings have implications for future bidding modelling attempts, in allowing for continuity in recurrent bidding. Contractors should systematically review and re-optimize their bidding strategy by leveraging their historical bidding data and bidding feedback information from clients, since their potential competitors will do the same thing for recurrent bidding.

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