Novel A + Q Method for Improving Conventional Lowest Bid Contractor Selection Based on Post-performance Records

Abstract

The lowest bid (LB) procurement method is widely adopted because of its simplicity, objectivity, and limited human involvement in the contractor selection process. However, this method has been criticized for its pure price competition that does not consider performance differences between contractors. To address the aforementioned issue, this study introduces the A + Q method, which considers both the historical performance records and the Market Price Elasticity of Performance index of contractors, in order to evaluate bid prices in conjunction with contractor performance. The proposed method allows project owners to select high-performance contractors while affording the simplicity of traditional LB methods, as demonstrated through a case study and simulations on road construction procurement. Therefore, the systematic approach of the proposed method to LB procurement can enable a healthier construction procurement market to be realized in the long run.