The The Interplay between Bidding Strategies and Tender Success Rate Among Small and Medium Enterprise Contractors in Tanzania
Abstract
In a highly competitive construction industry, contractors must secure a sufficient volume of projects and execute them successfully to ensure long-term survival. However, many small and medium-sized enterprises (SME) contractors lack the requisite knowledge of effective bidding strategies, which hampers their ability to secure tenders. This study aims to assess the bidding strategies employed by SME contractors and examine their impact on tender success rates. A questionnaire survey was conducted with building contractors based in Dar es Salaam. The split sample model validation technique was applied, diving the data into training and validation sets. Pearson correlation was applied to identify bidding strategies with a significant positive relationship with tender success rates, which were subsequently incorporated into the regression model. Moderated multiple regression analysis was performed to model the relationship between independent and dependent variables, with company experience serving as a moderating variable. Among the bidding strategies examined, pricing strategy and market intelligence emerged as having a significant positive relationship with tender success rates. The developed model demonstrated moderate predictive power, with the moderation effect contributing to the explained variance. These findings provide valuable insights for SME contractors regarding the selection of effective bidding strategies to enhance their tender success. This study represents the first empirical investigation in Tanzania to model and quantify the influence of bidding strategies on tender success rates of SME contractors.
References
Ahmed, M. O., El-adaway, I. H., Coatney, K. T., & Eid, M. S. (2015). Construction Bidding and the Winner’s Curse: Game Theory Approach. Journal of Construction Engineering and Management, 142(2), 1-9.
Aje, I. O., Oladinrin, T. O., & Nwaole, A. N. (2016). Factors Influencing Success Rate of Contractors in Competitive Bidding for Construction Works in South-East, Nigeria. Journal of Construction in Developing Countries, 21(1), 19-34.
Akoglu, H. (2018). User's guide to correlation coefficients. Turkish Journal of Emergency Medicine, 18(1), 91-93.
Alkhateeb, A. M., Hyari, K. H., & Hiyassat, M. A. (2020). Analyzing bidding competitiveness and success rate of contractors competing for public construction projects. Construction Innovation, ahead-of-print(ahead-of-print), https://doi.org/10.1108/CI-04-2020-0060.
Alsaedi, M., Assaf, S., Hassanain, M., & Abdallah, A. (2019). Factors Affecting Contractors’ Bidding Decisions for Construction Projects in Saudi Arabia. doi:10.3390/buildings9020033, 1(33), 1-13.
Aznar, B., Pellicer, E., Davis, S., & Perez, P. B. (2017). Factors affeccting contractor's bidding success for international infrastructure projects in Australia. Journal of Civil Engineering and Management .
Blumberg, B., Cooper , D., & Schindler , P. (2005). Business Research Methods. Berkshire: Mc Graw Hill.
Brook , M. (2008). Estimating and Tendering for Construction Work (4th ed.). London: Butterworth Heinemann is an imprint of Elsevier.
Chileshe, N., & Kikwasi, G. J. (2014). Risk assessment and management practices (RAMP) within the Tanzania construction industry: Implementation barriers and advocated solutions. International Journal of Construction Management, 14(4), 239-254.
Chileshe, N., Kavishe, N., & Edwards, D. J. (2020). Critical factors influencing the bid or no-bid decision of the indigenous small building contractors in Tanzania. Construction Innovation, DOI: 10.1108/CI-09-2019-0098.
ConsTrack360. (2020). anzania Construction Industry Databook Series – Market Size & Forecast (2015 – 2024). Dar es Salaam: ConsTrack360.
ConsTrack360. (2021). Tanzania Construction Industry Databook Series - Market Size & Forecast (2016 - 2025) by Value and Volume (area and units) across 40+ Market Segments in Residential, Commercial, Industrial, Institutional and Infrastructure Construction - Q2 2021 Update. Dar es Salaam: ConsTrack360.
Darbar, D., & Pitroda, J. (2018). Critical Review On Factors Affecting Bid/ No Bid Decision Making Process Of Contractors In Surat. International Journal of Advance Engineering and Research Development, 5(5), 210-216.
Deitz, G. D., Tokman, M., Richey, R. G., & Morgan, R. M. (2010). Joint venture stability and cooperation: Direct, indirect and contingent effects of resource complementarity and trust. Industrial Marketing Management, 39, 862–873.
Dolma, S. (2010). The central role of the unit of analysis concept in research design. Istanbul University Journal of the School of Business Administration, 39(1), 169-174.
Fango, E. F. (2019). Challenges of Local Contractors in Winning Tender of Road Construction Projects. Addis Ababa Science and Technology University, Business and Management, Addis Ababa.
Flynn, A., & Davis, P. (2016). Investigating the effect of tendering capabilities on SME activity and performance in public contract competitions. International Small Business Journal, 1-21.
Fu, W. K., Drew, D. S., & Lo, H. P. (2002). The effect of experience on contractors’ competitiveness in recurrent bidding. Construction Management and Economics, 20, 655–666.
Gazder, U., & Khan, R. (2018). Effect of Organizational Structures and Types of Construction on Perceptions of Factors Contributing to Project Failure in Pakistan. Mehran University Research Journal of Engineering & Technology, 37(1), 127-138.
Hanák, T., Drozdová, A., & Marovi´c, I. (2021). Bidding Strategy in Construction Public Procurement: A Contractor’s Perspective. Buildings, 11(47), 1-14.
Hasegawa, F. (1988). Built by Japan: Competitive strategies of the Japanese construction industry. New York: John Wiley and Sons.
Kabir, S. M. (2016). Sample And Sampling Designs. In Basic Guidelines for Research: An Introductory Approach for All Disciplines (pp. 168-180). Bangladesh: Book Zone Publication.
Karjalainen , K., & Kemppainen , K. (2008). Journal of Purchasing and Supply Management, 14(4), 230–240.
Khalid, K., Hilman, H., & Kumar, D. (2012). Get Along With Quantitative Research Process. International Journal of Research in Management, 2(2), 15-29.
Kimms, A. (2007). On the amount and timing of project payments with hints to customary contracting in Germany. Gest. Prod., São Carlos, 14(3), 441-451.
Kissi, E., Agyekum, K., Baiden, B. K., Agyei, T. R., Eshun, B. T., & Badu, E. (2019). Factors influencing tender pricing strategies of construction SMEs in Ghana. International Journal of Construction Management, https://doi.org/10.1080/15623599.2019.1625995.
Lambropoulos, S. (2013). Objective Construction Contract Award using Cost, Time and Durability Utility. Social and Behavioral Sciences 7, 74, 123-133.
Lufele, S. (2020). Evaluating the Impact of Emerging Contractors' Failure to Secure Tenders from the Tender Market. Johannesburg: Springer Nature.
Mwita, R. (2013). An Assessment Of Challenges Facing Local Contractors When Bidding For Large Road Works. Mzumbe University, Morogoro.
Nield, T. A. (2017). Coping with public tenders: Supporting suppliers. Master's thesis, University of Twente.
Oke, A. E., Aigbavboa, C. O., & Ijie, O. (2017). Assessment of Qualitative Factors Influencing Contractors Tender and Project Success in an Emerging Economy. 53rd ASC Annual International Conference Proceedings, 463-470.
Oo, B. L., Lo, H.-P., & Lim, B. T.-H. (2012). The effect of bidding success in construction bidding. Engineering, Construction and Architectural Management, 19(1), 25-39.
Pallant, J. (2007). SPSS Survival Manual; A Step by Step Guide to Data Analysis Using SPSS for Windows Third Edition (3rd ed.). Sydney : Open University Press.
Pe Rez, P. B., Skitmore, M., Pellicer, E., & Lez-Cruz, M. G. (2015b). Scoring rules and abnormally low bids criteria in construction tenders: a taxonomic review. Construction Management and Economics, 33(4), 259–278.
Pearce, J. A., & Robinson, R. B. (2003). Formulation, implementation, and control of competitive strategy (8th ed.). New York : McGraw-Hill.
Pek, J., Wong, O., & Wong, C. M. (2017). Data Transformations for Inf ansformations for Inference with Linear Regr ence with Linear Regression: Clarifications and Recommendations. Practical Assessment, Research, and Evaluation, 22(9), 1-11.
Perez, B., Cruz, G., Diego, F., & Pellicer, E. (2014). Estimating future bidding performance of competitor bidder in capped tenders. Journal of Civil Engineering and Management in Press, 1-12.
Perez, P. B., Hitschfeld, M., Melia, D. M., & Dominguez, D. (2015a). Modeling bidding competitiveness and position performance in multi-attribute construction auctions. Operations Research Perspectives, 2, 24-35.
Prajapati, R., Pitroda, J., & Bhavsar, J. J. (2015). A Review on Competitive Bidding Procedure and Strategy of Bidding. Journal of International Academic Research For Multidisciplinary, 2(12), 84-96.
Sahin, M., Yavuz, E., & Uckardes, F. (2018). Multicollinearity problem and bias estimates in Japanese quail. Pakistan Journal of Zoology, 50(2).
Shokri-Ghasabeh, M. and Chileshe, N. (2016), “Critical factors influencing the bid/no bid decision in the Australian construction industry”, Construction Innovation, Vol. 16 No. 2, pp. 127-157.
Smith, A. J. (1995). Estimating, Tendering and Bidding for Construction Theory and Practice. Hong Kong: Macmillan.
Tan, Y., Shen, L., & Langston, C. (2010). Contractors’ Competition Strategies in Bidding: Hong Kong Study. Journal Of Construction Engineering And Management, 136(10), 1069-1077.
Vandi, M. (2020). Bidding Strategies for Winning Construction Bids in South Africa. Walden Dissertations and Doctoral Studies, Walden University.
Vesper, V. D. (1979). Long Range Plann. Strategic mapping: A tool for corporate planners, 12(6), 75-92.
Warszawski, A. (1996). Strategic planning in construction companies. Journal of Construction Engineering and Management , 122(2), 133–140.
Waterson, p., Griffiths, p., Stride,, C., Murphy, & Hignett, S. (2015). Psychometric properties of the Hospital Survey on Patient Safety Culture: findings from the UK. Qual Saf Health Care, 1-5.
Wibowo, M. A., Astana, I. Y., & Rusdi , H. (2015). An analysis of bidding strategy, project performance and company performance relationship in construction. The 5th International Conference of Euro Asia Civil Engineering Forum (EACEF-5), 125, 95 – 102.
Yan, P., Liu, J., & Skitmore, M. (2018). Individual, Group, and Organizational Factors Affecting Group Bidding Decisions for Construction Projects. Advances in Civil Engineering, 1-10.
Zentner, A. (2017). What is a good value of "Coefficient of determination" or R squared in multiple linear regression? Retrieved June 14, 2021, from Retrieved from: https://www.researchgate.net/post/what_is_a_good_value_of_Coefficient_of_determination_or_R_squared_in_multiple_linear_regression/5935d0c15b49526db0147ccd
Copyright (c) 2025 Joseph Jeremiah Temu, Valentine George Mruma Luvara, Nyamagere Gladys Sospeter
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Copyright for this article is retained by the author(s), with first publication rights granted to the journal. This is an open-access article distributed under the terms and conditions of the Creative Commons Attribution license (https://creativecommons.org/licenses/by-nc-nd/4.0/).
