WSEAS Transactions on Business and Economics


Print ISSN: 1109-9526
E-ISSN: 2224-2899

Volume 15, 2018

Notice: As of 2014 and for the forthcoming years, the publication frequency/periodicity of WSEAS Journals is adapted to the 'continuously updated' model. What this means is that instead of being separated into issues, new papers will be added on a continuous basis, allowing a more regular flow and shorter publication times. The papers will appear in reverse order, therefore the most recent one will be on top.

Volume 15, 2018


A Survey on Factors Affecting the Contractor’s Mark-Up Size Decision

AUTHORS: Hamimah Adnan, Mat Ijak Rami, Norazian Mohd Yusuwan, Muhammad Redza Rosman

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ABSTRACT: Construction industry is a competitive industry and the only possible way for a contractor to survive is by winning the tenders and making profit. Therefore, a right mark up size is essential for contractor which to maximum possible profit, at the same time keeping its bid at a competitive level. Hence possessing a sound knowledge of the factors affecting the contractors mark up size decision is imperative in identifying the right mark up size in bidding. This paper aim to identify the current practices in contractors mark up size decision and factors considered important in the mark up size decision. Questionnaires survey were conducted and distributed to the 200 contractors in Malaysia. It was found that the range of the mark up size varies from five (5%) to twenty five (25%) but the most preference mark up size is 10 % to 15%. Experience, previous record and market survey are commonly practiced by contractors in determining their mark up size. However, the bidding models were not utilized by contractors since they do not have sufficient information and the complexity of these models. Findings also indicate that the ranking of most influence category of factors were company characteristics, followed by project characteristics, economic situation, project documentation and bidding situation. The finding of this research shows that the top ten influence factors that affect the mark-up size decision are overall economy, size of project, experience in such project, availability of required cash, degree of difficulty, degree of safety, project cash flow, competition, current workload and need for work.

KEYWORDS: Contractor s Mark Up, Size Decision

REFERENCES:

[1] Huan Ma. (2011). “Factors Affecting the Bid/No Bid Decision Making Process of Small to Medium Size Contractor in Auckland.” Thesis Degree of Bachelor of Construction, Unitec New Zealand.

[2] Clough, R.H and Sear, G.A (1994)Construction Contractinng, Technology and Engineering, Wiley

[3] Mohammed, F.D & Hong, G.S (2002), The factors influencing bid mark up decisions of large and medium size contractors in Singapore, Construction Management Economics, 20, 601- 610

[4] Allan Ashworth (2002), Pre-Contract Studies Development Economics, Tendering and Estimating. (2nd edition), USA: Blackwell Science Ltd.

[5] Ling, Y. (2005). Global Factors Affecting Margin-size of Construction Projects.” Journal of Construction Research, 6(1), pp 91-106.

[6] Egemen, M., and Mohamed, A. (2008). SCBMD: A knowledge-based system software for strategically correct bid/no bid and markup size decisions. Automation in Construction, 17(7), 864-872.

[7] Liu, M. and Ling, Y. (2005). “Factors Considered by Successful and Profitable Contractors in Mark-up Size Decision in Singapore.” Building and Environment, 40(11), pp 1557-1565.

[8] Liu, M. and Ling, Y. (2005). “Modelling a Contractor’s Mark-up Estimation.” Journal of Construction Engineering and Management. vol. 131, Issue 4, pp 391-399.

[9] Bageis, A. S., & Fortune, C. (2009). Factors affecting the bid/no bid decision in the Saudi Arabian construction contractors.Construction Management & Economics, 27(1), pp 53-71.

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 15, 2018, Art. #4, pp. 18-26


Copyright © 2018 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0