A review of application of multi-criteria decision making methods in construction

Construction is an area of study wherein making decisions adequately can mean the difference between success and failure. Moreover, most of the activities belonging to this sector involve taking into account a large number of conflicting aspects, which hinders their management as a whole. Multi-criteria decision making analysis arose to model complex problems like these. This paper reviews the application of 22 different methods belonging to this discipline in various areas of the construction industry clustered in 11 categories. The most significant methods are briefly discussed, pointing out their principal strengths and limitations. Furthermore, the data gathered while performing the paper are statistically analysed to identify different trends concerning the use of these techniques. The review shows their usefulness in characterizing very different decision making environments, highlighting the reliability acquired by the most pragmatic and widespread methods and the emergent tendency to use some of them in combination

A methodology to select the price criterion in public procurement

The construction sector is a key driver for economic growth in any nation and public procurement is one of its pillars - hence the importance of the study and investigation of its mechanisms, especially tendering criteria. Price is the main deciding factor for most tenders and projects must have an appropriate base price relative to market price to avoid problems during the execution of the project. Most research on price criteria has been developed from the point of view of bidders and has discussed the development of tools and methodologies for determining the optimal bid price. In this paper we propose a methodology for public procurement procedures from the point of view of the administration. The methodology enables setting all aspects of the price criterion based on the size of the project budget, the nature of the work, and the number of bidders

Application of integrated fuzzy VIKOR & AHP methodology to contractor ranking

Contractor selection is a critical activity, which plays an important role in the overall success of any construction project. The implementation of fuzzy multiple criteria decision attribute (MCDA) in selecting contractors has the advantage of rendering subjective and implicit decision making more objective and transparent. An additional merit of fuzzy MCDA is the ability to accommodate quantitative and qualitative information. In this paper, an integrated VIKOR–AHP methodology is proposed to make a selection among the alternative contractors in one of Iranian construction industry projects. In the proposed methodology, the weights of the selection criteria are determined by fuzzy pairwise comparison matrices of AHP

Economic scoring formulae in multi-Attribute construction auctions

Copyright © 2017 ISEC Press. Public tendering implies the free concurrence and competition of bidding companies that certify their solvency, so that those companies proposing the most attractive bid, both technically and economically, are awarded the contracts and carry them out according to the same terms and conditions that they proposed. Generally, there is high competition in public tendering, both concerning the number of bidders (constantly increasing), as well as the profit margin (constantly decreasing). On the other side, handling the procurement process, there is a contracting authority that spends public money while trying to fulfill a particular socio-economic objective. This paper will take the contracting authority's (auctioneer's) point of view which is in charge of devising and implementing the awarding criteria, as well as choosing the best bidder. Particularly, this paper will focus on some aspects of the Economic Scoring Formula (ESF) design. The ESF constitutes a set of mathematical expressions that transform the economic bids submitted by the bidders into scores, so that, eventually, the bidders can be ranked and the best one selected. We will conclude that, despite apparently simple, how ESF are configured eventually have profound consequences on bidding behavior and some bidding results, like a higher or lower bid dispersion

A multiple criteria decision-making approach for increasing the preparedness level of sales departments against COVID-19 and future pandemics: A real-world case

The impact of the pandemic and the lockdown has been more devastating than expected on the world economy. It is essential to formulate strategies in real-time. In this research, a multicriteria decision-making model for increasing the preparedness level of sales departments when facing COVID-19 waves and future pandemics is proposed. The model is comprised of 8 criteria, 29 sub-criteria, and 7 alternatives. The study is based on the integration of the AHP and TOPSIS techniques. AHP is used for calculating the criteria and sub-criteria weights. While, TOPSIS is used for calculating the preparedness level, ranking the companies, and identifying the weaknesses that should be addressed for increasing their effectiveness in the current market scenario. The model is developed with the aid of an experts’ group from the electrical appliance sector and studies from the reported literature. This application is completely novel in the literature and has been applied in the wild with remarkable companies in Colombia. A case study in the electrical appliance sector is presented as a pilot study but it should be noted that the methodology is flexible and scalable in any scenario

A methodology to detect the deviations of the project´s budget compared to market prices

The budget of a project reflects the cost of the investment needed to build an infrastructure, install a system or acquire new materials or supplies. A well-formulated budget in accordance with market prices, allows contractors to prepare offers according to their technical, economic and financial characteristics. On the other hand, it avoids current philosophies that aim to get the contract at any price. Philosophies subsequently used to point out problems and claims during the execution of the project (contradictory prices, delays, etc.) in order to recover some or the entire economic bid carried out during the tendering. In this paper a simple and fast methodology is developed to check if the tendering price is in accordance with market prices, so that the economic viability of the project is not at risk. The application of the methodology on a sample of projects allows us to check the influence of the type of project (civil or building) on the characteristics of the budget. It also allows us to point out the insufficient economic endowment of the projects as the start of the subsequent problems during the execution of the work

A quantifiable method of assessing the risk of selecting the lowest bidder in construction projects:A literature review

Contractor selection is an important step in ensuring the success of any construction project. Failing to adequately select the winning contractor may lead to problems in the project delivery phase such as bad quality and delay in the expected project duration; which ultimately results in cost overruns. This paper reviewed the strength of existing studies on the link between contractor selection strategy and project outcomes, with a view of proposing an approach on how one might try to examine this relationship moving forward. There are research that try to establish a direct relationship between contractor selection strategy and the outcome of the construction project. There are also decision support tools such as AHP or ANP that help clients prioritise various factors when selecting contractors. However the majority of these research and tools are informed by self-perception questionnaires and surveys that makes it difficult to gauge the strength of the relationship between contractor selection and project outcomes. In other words, there are hardly any empirical research that tries to establish this relationship. Literature review on the sources of cost overruns did not entirely reveal contractor selection as a main source of cost overrun; although from the explanations given for causes of cost overruns, one would be able to see how wrong contractor selection does play a part. Literature review on the various approaches to contractor selection on the other hand, did little to show the effect of contractor selection on the outcome of construction projects. Hence, the future direction of the research is to help clients see choosing a particular contractor selection strategy; whether lowest bid, or best value, affects the outcome of a construction project: cost and duration

A Review of Multi-Criteria Assessment of the Social Sustainability of Infrastructures

[EN] Nowadays multi-criteria methods enable non-monetary aspects to be incorporated into the assessment of infrastructure sustainability. Yet evaluation of the social aspects is still neglected and the multi-criteria assessment of these social aspects is still an emerging topic. Therefore, the aim of this article is to review the current state of multi-criteria infrastructure assessment studies that include social aspects. The review includes an analysis of the social criteria, participation and assessment methods. The results identify mobility and access, safety and local development among the most frequent criteria. The Analytic Hierarchy Process and Simple Additive Weighting methods are the most frequently used. Treatments of equity, uncertainty, learning and consideration of the context, however, are not properly analyzed yet. Anyway, the methods for implementing the evaluation must guarantee the social effect on the result, improvement of the representation of the social context and techniques to facilitate the evaluation in the absence of information.This research was funded by the Government of Chile under the Doctoral Fellowship Program Abroad (grant CONICYT-2015/72160059), the project DIUFRO DI14-0096 and the Spanish Ministry of Economy and Competitiveness along with FEDER funding (Projects BIA2014-56574-R and BIA2017-85098-R).Sierra-Varela, LA.; Yepes, V.; Pellicer, E. (2018). A Review of Multi-Criteria Assessment of the Social Sustainability of Infrastructures. Journal of Cleaner Production. 187:496-513. https://doi.org/10.1016/j.jclepro.2018.03.022S49651318

Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement

[EN] Public works procurement regulates two award procedures from within the same criteria: either the price or a variety of different conditions. Although the question of price may not seem the most important factor to be considered, it is imperative to always be aware of it when bearing in mind the award criteria. Economic scoring formulae (ESF) are numerous and each agency has the authority to determine which will be used for each of their bids, making this article a comparative analysis of all the options. The results show that most formulas give the highest score to the most economic bidder, it is necessary to eliminate the use of formulas that give the highest score to the offers which are closest to the average of all bids submitted. One should always opt for formulas with moderate or strong scoring gradients across various stages or phases, thereby giving more weight to economic analysis, as set out in the various administrative clauses.Fuentes Bargues, JL.; González-Gaya, C. (2013). Analysis of the Scoring Formula of Economic Criteria in Public Works Procurement. International Journal of Economic Behavior and Organization. 1(1):1-12. doi:10.11648/j.ijebo.20130101.11S1121

A risk-oriented tender evaluation system for construction projects in Malaysia

Purpose: This paper presents results of an empirical investigation involving private construction clients in Malaysia, which seeks to establish appropriate tender evaluation criteria and weightings for a risk-oriented tender evaluation system. Design/Methodology/Approach: At the initial stage of this study, a list of significant risks is identified and gathered through literature review. These risks are then mapped onto tender evaluation criteria. Following this, the identified risks and their mappings are validated through a questionnaire survey to determine appropriate criteria for tender evaluation. Weightings for the selected evaluation criteria are established through an analytic hierarchy process (AHP) group decision-making (GDM) method. Findings: In practice, different lists of criteria, covering tender’s technical capability and financial performance, are often used by different client organisations. However, there is a paucity of research behind the selection of these criteria and the weighting being attributed to different criteria. Originality/Value: This study provides an important and a valuable insight into the actual criteria used during tender evaluation practice based on an analysis of documentary evidence. Both current practice and existing tender evaluation studies failed to address the risk element adequately. There is a lack of an explicit link between evaluation criteria and project risks. This study fills this knowledge gap by identifying tender evaluation criteria through reviewing criteria used in practice and examining their links to risk factors