An analytical study of critical factors affecting contractor efficiency in construction projects in Indian scenario

Purpose: Recent studies show that lowest bidder technique is mainly used in developing countries such as India to award a contract. It has been demonstrated that the lowest bid is not always the accurate one and can lead to cost overruns and time extensions amongst other problems. The aim of this study was to investigate the critical factors impacting contractor’s efficiency in Indian construction projects. Research approach: A survey was sent to participants of construction projects awarded by the government with the lowest bidder technique in Uttar Pradesh, India. For further research, snowball sampling was used, and structured interviews were conducted amongst experienced managers and engineers of these projects on both client’s and contractor’s side. Findings: It was observed that, to a greater extent, the delays were caused due to contractor’s opportunistic behaviour. The main findings are that new bidding methodologies are to be tested as they can lead to the choice of a more accurate and realistic bidder. In addition, subjective evaluation components, such as schedule and workforce, should be reflected in contract award methods in addition to the cost criteria. Further studies should be performed on the choice of contract awarding methodology based on the project size and type. Originality value: The researcher’s focus was to analyze the influence of contracting methodologies and factors affecting contractor’s performance in lowest bid award project, where this is an area of least focus amongst researchers in the Indian subcontinent.