Enhancing Bid Decision Making in the Construction Industry: A New Multi-Criteria Prospect Model

In the construction industry, government agencies and private sector clients typically adopt competitive bidding to determine contract awards. Two critical decisions that bidders face in competitive bidding include those regarding (1) whether or not to submit a bid and (2) what markup scale to use on the submitted bid (if the answer to the first is in the affirmative). This paper proposes a Multi-Criteria Prospect Model for Bidding Decision (BD-MCPM) to assist contractors to make these two decisions. A Vietnam bid case was used to validate the efficacy of BD-MCPM. Results indicate that the proposed BD-MCPM can effectively assist primary decision makers (PDMs) to select bids on which their firm should bid and to establish optimal markup scales.