WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 15, 2018
A Survey on Factors Affecting the Contractor’s Mark-Up Size Decision
Authors: , , ,
Abstract: Construction industry is a competitive industry and the only possible way for a contractor to survive is by winning the tenders and making profit. Therefore, a “right” mark-up size is essential for contractor which to maximum possible profit, at the same time keeping its bid at a competitive level. Hence possessing a sound knowledge of the factors affecting the contractors’ mark-up size decision is imperative in identifying the “right” mark-up size in bidding. This paper aim to identify the current practices in contractors’ mark-up size decision and factors considered important in the mark-up size decision. Questionnaires survey were conducted and distributed to the 200 contractors in Malaysia. It was found that the range of the mark-up size varies from five (5%) to twenty-five (25%) but the most preference mark-up size is 10 % to 15%. Experience, previous record and market survey are commonly practiced by contractors in determining their mark-up size. However, the bidding models were not utilized by contractors since they do not have sufficient information and the complexity of these models. Findings also indicate that the ranking of most influence category of factors were company characteristics, followed by project characteristics, economic situation, project documentation and bidding situation. The finding of this research shows that the top ten influence factors that affect the mark-up size decision are overall economy, size of project, experience in such project, availability of required cash, degree of difficulty, degree of safety, project cash flow, competition, current workload and need for work.
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Pages: 18-26
WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 15, 2018, Art. #4