From demand driven contractor selection towards value driven contractor selection

Abstract

The procurement of a construction contractor should consider more aspects than only cost or price. Taking value and price into account to select the ‘best value for money’ bid results in adopting a structured multi‐criteria approach. An alternative contractor selection method is presented, which identifies the contractor with the best potential to deliver the highest value for money. An investigation of the client needs and product performances for contractor selection has been conducted for a building type, and the relative weight of each product performance is analysed through a questionnaire. The relative weights of the product performances are identified by allocating a fictional budget to the client needs and translating these values into the relative weight of the product performances by using the quality function deployment method. In the contractor selection method, the relative importance of the product performances are combined with the scores of the bids, resulting in the best bid and contractor in a specific building project.

Keywords:

• Procurement
• contractor selection
• multi‐criteria selection
• tendering
• quality function deployment
• value