Impact of considering need for work and risk on performance of construction contractors: An agent-based approach

Competitive bidding is the main mechanism of allocating projects in the construction market. In the traditional single criterion bidding method, the markup decision has a significant impact on a contractor's business success. Contractors usually take into consideration several factors in the process of determining their markup. This study has reviewed the literature and identified a range of contractors' behaviors when making their markup decision within a competitive bidding environment. An additive markup function consisting of three components, namely competition, risk, and need for work, was developed in order to replicate markup behaviors of contractors. Then, agent-based modeling has been employed for simulating the bidding process within a market formed of a set of heterogeneous contractors with different risk attitudes and defined markup behaviors. This model was used to study the impact of considering need for work and risk allowance in markup determination on financial performance of contractors in various market scenarios. Results suggest that the optimal policy is moderation in both dimensions of risk attitude and need for work

Neutral and Risk-Sensitive Models for Competitive Bidding Methods based on Average and Order Statistics.

The low bid method has been the most common competitive bid selection approach used for public projects in the U.S. construction industry. This method is usually coupled with a prequalification process to ensure that the lowest bidder has the financial capacity, the necessary experience, and enough bonding capacity to take charge of the project and to perform the work according to the project's requirements. However, driven by their bad financial status or by their urgent need for work, some contractors tend to abuse the free and price-directed competitive nature of the low bid method by deliberately submitting extremely low bid prices in order to enhance their chance of winning and to at least cover their general and administrative expenses. Thus it is possible for the project to be awarded to an accidental or deliberate unrealistic low bid. This often leads to cost overruns, schedule delays, claims and further disputes between parties during construction. This research investigates alternative competitive bidding methods that have the potential to remedy the aforementioned drawback of the low bid method. Monte Carlo simulation approach is used to study and model average-based bidding methods where the winning bid is defined in relation to the average of submitted bids. This research also studies two other competitive bidding methods: the second low bid method where the second lowest bid is awarded the project and the median bid method where the winner is defined to be the median bid. The merits and shortcomings of these methods are analyzed and compared relative to each other and to the low bid method through produced nomograms that depict the winning probability, the optimum markup and the optimum expected profit under each. After studying the aforementioned bidding methods from the perspective of a risk-neutral contractor, this research uses established principles of decision analysis and utility theory to develop a risk-sensitive bidding model that can be applied to each of the studied bidding methods. This model helps a contractor determine his optimal markup for a project given his risk attitude and his uncertainty about the project's estimated and final costs.Ph.D.Civil EngineeringUniversity of Michigan, Horace H. Rackham School of Graduate Studie

Impact of Considering Need for Work and Risk on Performance of Construction Contractors: An Agent-Based Approach

Competitive bidding is the main mechanism of allocating projects in the construction market. In the traditional single criterion bidding method, the markup decision has a significant impact on a contractor\u27s business success. Contractors usually take into consideration several factors in the process of determining their markup. This study has reviewed the literature and identified a range of contractors\u27 behaviors when making their markup decision within a competitive bidding environment. An additive markup function consisting of three components, namely competition, risk, and need for work, was developed in order to replicate markup behaviors of contractors. Then, agent-based modeling has been employed for simulating the bidding process within a market formed of a set of heterogeneous contractors with different risk attitudes and defined markup behaviors. This model was used to study the impact of considering need for work and risk allowance in markup determination on financial performance of contractors in various market scenarios. Results suggest that the optimal policy is moderation in both dimensions of risk attitude and need for work

Electrophysiologic features of SYT2 mutations causing a treatable neuromuscular syndrome

Objectives: To describe the clinical and electrophysiologic features of synaptotagmin II (SYT2) mutations, a novel neuromuscular syndrome characterized by foot deformities and fatigable ocular and lower limb weakness, and the response to modulators of acetylcholine release. Methods: We performed detailed clinical and neurophysiologic assessment in 2 multigenerational families with dominant SYT2 mutations (c.920T>G [p.Asp307Ala] and c.923G>A [p.Pro308Leu]). Serial clinical and electrophysiologic assessments were performed in members of one family treated first with pyridostigmine and then with 3,4-diaminopyridine. Results: Electrophysiologic testing revealed features indicative of a presynaptic deficit in neurotransmitter release with posttetanic potentiation lasting up to 60 minutes. Treatment with 3,4-diaminopyridine produced both a clinical benefit and an improvement in neuromuscular transmission. Conclusion: SYT2 mutations cause a novel and potentially treatable complex presynaptic congenital myasthenic syndrome characterized by motor neuropathy causing lower limb wasting and foot deformities, with reflex potentiation following exercise and a uniquely prolonged period of posttetanic potentiation.National Institutes of Health (U.S.) (NIH grant NS40296)JPB Foundatio