Significant factors influencing the bid mark-up decision of infrastructure projects in Sri Lanka

Abstract Tender estimates play a vital role in achieving bid successes. A bid price which has an optimum mark-up is governed by many factors. The research aims to identify the significant factors influencing the bid mark-up decision of infrastructure projects in Sri Lanka. Using a literature review, semi-structured interviews and a questionnaire survey, the study identifies nine significant factors influencing the mark-up decision of infrastructure projects. The identified significant factors are ‘estimated direct cost’, ‘competitiveness of other bids’, ‘type of work’, ‘project duration’, ‘the ability to predict pre-tender estimate’, ‘project location’, ‘reliability of the company estimate’, ‘number of bidders’ and ‘need for work’, respectively. The study also reveals potential relationships between the identified significant factors and bid mark-up based on case studies. Amongst, ‘reliability of the company estimate’, ‘number of bidders’ and ‘type of work’ have shown positive relationships with mark-up. The contents should be of interest to bidders and researchers in construction.

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