The selective competitive tendering system is the most common method of contractor selection for capital works such as highways. By choosing the identity and number of contractors who shall tender, the client can control the competition to give the best value for money. For a client with a continuing programme of work this optimisation need not conflict with the objective of contractors to achieve a satisfactory and consistent return on their capital. The client can help to provide a framework in which contractors can do this by matching his demand for work to the available resources, assessing the effectiveness of the tendering competition, choosing only those contractors to tender who are truly competitive and encouraging contractors to improve the accuracy of their tendering. Methods are presented to assist in these tasks and it is concluded that the optimum number of contracts to invite to tender for highway schemes is that number which can usually be expected to be fully competitive under normal trading conditions. A statistical analysis of the bids submitted for highway schemes between 1970 and 1975 revealed how the system operated and that it behaved differently when demand for construction was high compared with the period of low demand. (Author/publisher)
Abstract