Competitiveness of inexperienced and experienced contractors in bidding

This paper tests the assertion that experienced contractors are more competitive than inexperienced contractors by measuring the effect of experience on bidding competitiveness for building contracts procured by a regular client. Contractors are grouped into experienced and inexperienced contractors, and two levels of contractors' experience are identified: (1) bidding experience only and (2) bidding plus construction experience. Results of two-sample t tests show that experienced contractors are more competitive than inexperienced contractors. Contractors' competitiveness in respect of school contracts and other contracts are further compared in evaluating the relationship between the project type and experience effect. Experienced contractors are, on average, more competitive in competing for school contracts. It emerges that the factor of project type familiarity amplifies the experience effect. A comparison of experienced contractors' competitiveness in bidding for (1) new building works and (2) alteration and extension works shows that the effect of experience would be more significant when contract works packages are highly standardized.