Contractors Opportunistic Bidding in the Public Construction Market

In the public construction market, the award price levels of many projects are abnormally low and such a situation has long been to blame for poor project quality. Previous studies have regarded the abnormal low-bids are generated by insufficient market demands, excessive suppliers, and the unsound bidding system. However, few studies noticed that the "sell to produce" characteristic of construction projects may induce contractors to adopt opportunistic bidding strategy, offering a low bid and then make up the amount initially sacrificed from beyond-contractual reward (BCR) gained through cutting corners and raising claims. This book thus aims to introduce contractors opportunistic bidding behavior and its impacts on the construction market. A systemic overview of contractors pricing behavior under two main streams of contractor selection system, the price-based and qualification-based systems, is presented. Several managerial policies in reducing contractors opportunistic bidding behavior are evaluated.