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The use of reliability analysis in bid decision-making process
conference contributionposted on 2019-01-01, 00:00 authored by F Ghodoosi, A Bagchi, M. Reza HosseiniM. Reza Hosseini
2019 Canadian Society for Civil Engineering. All rights reserved. In general, contractors prepare bid offers within a short and limited time, when they rely on their experience and intuition. In this process, a wide range of factors may have an impact on the bid pricing risk. Of these, the client's reputation or the record of the projects owned by the client may entail vital contribution on the issue. This study develops a practical quantitative approach which enables estimators to process the bid risk allocation in an easy and rapid manner. Through reliability analysis, the developed method enables practitioners to make informed bid/no-bid decisions based on estimating the probability of the cost overrun. The cost overrun probability distribution is adopted to estimate the expected value of such variable. The practicability of this proposed method is tested against empirical data obtained from 40 university construction projects. The contribution of this study is to provide a simple, rapid and cost-effective method applicable in bid decision-making processes.