Analysis of the Potential Risks of Winning the Bid at a Low Price in Construction Project Management

DOI

10.2991/assehr.k.211209.259How to use a DOI?

Keywords

management; winning bidding at a low price; claim; construction project

Abstract

In the international world, winning biding at a low price in construction industry is a normal bidding mode under FIDIC contract conditions. This method is also promoted and widely used in the Chinese market. Under this contract condition, the principal of consistent use of honest and trustworthy lowest bid is followed. While a specific construction project, in different geographical locations, consisted of different participating companies and personnel structures, under different management mode and philosophy, makes the manifestation of disputes varied. But to sum up, the disputes mainly include the project quality, cost, and management. Especially, the cost of the dispute is more prominent, this is normally named “Low bid, high claim”. Implementing project successfully under FIDIC contract condition, preventing the risks, and avoiding claim and counterclaim events requires construction technicians and project consulting personnel to strengthen project consulting management, enhance the precaution consciousness, and take effective measures. Firstly, this article is based on the analysis of bidding data from several recent different-scale projects in Chongqing. It shows there exist extremely low-price bid winner cases and the importance of taking measures throughout the whole life cycle is emphasized. The following sections are conducting the discussion about the potential risks in different stages. Finally, some key points in prevention and settlement of disputes to achieve a satisfying risk management like pre-confirmation of contract clauses are presented.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Chenxi Luo
PY  - 2021
DA  - 2021/12/15
TI  - Analysis of the Potential Risks of Winning the Bid at a Low Price in Construction Project Management
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 1597
EP  - 1602
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.259
DO  - 10.2991/assehr.k.211209.259
ID  - Luo2021
ER  -