Scoring rules and abnormally low bids criteria in construction tenders: a taxonomic review

Abstract

In the global construction context, the best value or most economically advantageous tender is becoming awidespread approach for contractor selection, as an alternative to other traditional awarding criteria such asthe lowest price. In these multi-attribute tenders, the owner or auctioneer solicits proposals containing both aprice bid and additional technical features. Once the proposals are received, each bidder’s price bid is givenan economic score according to a scoring rule, generally called an economic scoring formula (ESF) and a techni-cal score according to pre-specified criteria. Eventually, the contract is awarded to the bidder with the highestweighted overall score (economic + technical). However, economic scoring formula selection by auctioneers isinvariably and paradoxically a highly intuitive process in practice, involving few theoretical or empiricalconsiderations, despite having been considered traditionally and mistakenly as objective, due to its mathematicalnature. This paper provides a taxonomic classification of a wide variety of ESFs and abnormally low bids criteria(ALBC) gathered in several countries with different tendering approaches. Practical implications concern theoptimal design of price scoring rules in construction contract tenders, as well as future analyses of the effectsof the ESF and ALBC on competitive bidding behaviour.