Tenders with Different Risk Preferences in Construction Industry

Underlying the fact that different tenderers have different preferences on risk-taking, this study investigates the different tenderers' behaviors in one-shot construction bid auctions. Our model extends the preconditions of previous assumption that all tenderers are characterized by neutral risk-taking in the original tendering model for lowest-price sealed tender. A general tendering model for the lowest-price sealed tender is established to explain the behavior of tenderers during the tendering. The results indicate that construction estimate is affected by the degree of uncertainties in the construction industry. Therefore, in a lowest-price sealed tender, risk-averse tenders would tender a higher price and conversely risk-seeking tenderers would tender a lower price when risk-neutral tenderers would tender a middle price. However, the risk-seeking tenderers are more likely to win the bid.Auction, tender, uncertainty, preference, construction industry

Reforming the public sector in the EU: the new public procurement regime

Commentary on the significance of the regulation of public procurement in the common market and impact on increased potential for doing business with the public sector. Article by Christopher Bovis (Professor of Law and Jean Monnet Chair in European Business Law, Lancashire Law School) published in Amicus Curiae - Journal of the Society for Advanced Legal Studies. The Journal is produced by the Society for Advanced Legal Studies at the Institute of Advanced Legal Studies, University of London

AXA General Insurance Ltd v Lord Advocate : analysis

Discusses the Supreme Court decision in AXA General Insurance Ltd, Petitioners on whether Scottish legislation which reversed a House of Lords ruling concerning the actionability of certain asbestos-related conditions breached insurers' rights

Quality of tender documents: case studies from the UK

Tendering is one of the stages in construction procurement that requires extensive information and documents exchange. However, tender documents are not always clear in practice. The aim of this study was to ascertain the clarity and adequacy of tender documents used in practice. Access was negotiated into two UK construction firms and the whole tender process for two projects was shadowed for 6-7 weeks in each firm using an ethnographic approach. A significant amount of tender queries, amendments and addenda were recorded. This showed that quality of tender documentation is still a problem in construction despite the existence of standards like Co-ordinated Project Information (1987) and British Standard 1192 (1984 and 1990) that are meant to help in producing clear and consistent project information. Poor quality tender documents are a source of inaccurate estimates, claims and disputes on contracts. Six recommendations are presented to help in improving the quality of tender documentation. Further research is needed into the recommendations to help improve the quality of tender documents, perhaps in conjunction with an industry-wide investigation into the level of incorporation of CPI principles in practice