Risks of Analytical Models in the Bidding Process

This week I read the article Risk and Price in the Bidding Process of Contractors, which is located at the American Society of Civil Engineers (ASCE) website. This article discusses the differences between the analytical models of the bidding process and the actual processes. In order to generate real data one person observed the biding process of new of the leading construction firms in the UK.  There were significant differences found in the study between actual bidding process and a modeled bidding process. Basically what was determined was that the analytical model does not generate a very accurate model of what actually happens in the pricing of construction bids.

This was an interesting article for me because I use to work for a contractor and was actually a part of several bidding processes. From experience I know that there is a lot of time, organization, and number crunching that goes into make a bid that will benefit you, but be high enough to get the job. I just thought I was interesting to see how people are resorting back to using the old fashion hand calculations and flow diagrams for pricing jobs instead of the computer technology.