ANALYZING BID PRICES QUANTITATIVELY AND PROTEST DECISIONS QUALITATIVELY TO REDUCE PROJECT-RELATED DISPUTES IN ADVANCE

Abstract

Parties to a construction contract can consume significant resources in dealing with project-related disputes. Therefore, it is advantageous for project stakeholders to identify potential issues earlier to avoid such problems as much as possible. This dissertation research explored evidence-based approaches to reduce project-related disputes before commencing construction projects. The research was carried out by examining a cost dataset from a state Department of Transportation that prioritizes the lowest-priced bid and by investigating a bid protest dataset from a Federal Government office that typically prioritizes the best value. With the coefficient of variation of bids as an independent variable of interest, the cost dataset was quantitatively studied using Welch’s t-test, correlation and regression analyses, and the K-nearest neighbors classification. Then, the Government Accountability Office’s decisions on denied bid protests against the U.S. Army Corps of Engineers were qualitatively meta-summarized. The observations showed the limited usefulness of collective intelligence provided by bidders at the time of bid opening in identifying projects likely to experience more significant project cost changes upon completion, as well as the effectiveness of the thematic findings in limitedly helping small businesses fore-test the validity of their cases before filing bid protests. The results could be applied beyond the Architecture, Engineering, and Construction industries as projects occur in all industries and industry sectors.