Subcontract and supply enquiries in the tender process of contractors

Samuel Laryea

Construction Management and Economics, 2009, vol. 27, issue 12, 1219-1230

Abstract: In the tender process, contractors often rely on subcontract and supply enquiries to calculate their bid prices. However, this integral part of the bidding process is not empirically articulated in the literature. Over 30 published materials on the tendering process of contractors that talk about enquiries were reviewed and found to be based mainly on experiential knowledge rather than systematic evidence. The empirical research here helps to describe the process of enquiries precisely, improve it in practice, and have some basis to support it in theory. Using a live participant observation case study approach, the whole tender process was shadowed in the offices of two of the top 20 UK civil engineering construction firms. This helped to investigate 15 research questions on how contractors enquire and obtain prices from subcontractors and suppliers. Forty-three subcontract enquiries and 18 supply enquiries were made across two different projects with average value of £7m. An average of 15 subcontract packages and seven supply packages was involved. Thus, two or three subcontractors or suppliers were invited to bid in each package. All enquiries were formulated by the estimator, with occasional involvement of three other personnel. Most subcontract prices were received in an average of 14 working days; and supply prices took five days. The findings show 10 main activities involved in processing enquiries and their durations, as well as wasteful practices associated with enquiries. Contractors should limit their enquiry invitations to a maximum of three per package, and optimize the waiting time for quotations in order to improve cost efficiency.

Keywords: Case study; enquiries; subcontractors; suppliers; UK (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1080/01446190903394533

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