A decision support tool for construction bidding

A reliable estimate of markup is essential for successful bid proposals. This paper presents a decision support model for construction bidding. The developed model can assist contractors in estimating markup, and owners and/or their agents in evaluating bid proposals. The model is generic and can be used as a tool to evaluate different alternatives in engineering, procurement, and construction. It utilizes the multi‐attribute utility theory and the analytic hierarchy process and makes use of their advantages. Unlike models developed for similar purposes, the proposed model provides a decision support environment for the two functions; that is, estimating markup and evaluating bids. It also enables the user to construct the decision hierarchy that best suits his/her company’s business environment and bidding strategy in a flexible manner. It accounts for the decision maker’s attitude towards risk. Two numerical examples are presented to demonstrate the use and capabilities of the proposed model.