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    In the architectural subproject,only about 46.05% (263/571) of cost items have a rea-sonable unit price, and up to around 53.95% of unitprices are either suspicious or unreasonable. Similarly,the number of cost items with reasonable unit prices isalso less than half (34.03%) of the total number of costitems (1619) in the electrical subproject. The middle ofTable 3 illustrates the two extreme values of differentialratio found in each subproject. The extreme differentialratio values indicate how widely the unit prices proposedTable 2Types of accepting/rejecting of bidder explanation or evidenceNo. Bidder s explanation or evidence Description Suggested decision1 Self-supplied equipment The unit price associated with executing these equipment-relatedcost items is lower than if acquired in the normal marketAccepted2 Guaranteed low price from material suppliers Certain materials can be provided at a low price because they areprovided in large volume for this and other projects in which thebidder is involvedAccepted3 Guaranteed low price from subcontractors Several subcontractors and crews are happy to charge low prices tomaintain good relationships with the bidder to gain future jobopportunitiesAccepted4 Owner s mistaken estimates The unit price estimated by the owner is unreasonable or wrong Accepted5 Mistakenly filled in data The bidder filled in the cost data mistakenly Rejected6 Bidding strategy Frequently, many Taiwanese bidders argue that they are willing tofaithfully perform the job even when the work is expected to benon-profitable. The unreasonably low unit prices are submittedonly to win the contract to keep the bidder s company aliveRejected7 False interpretation of work requirements The bidder had wrong interpretation of the amount of the workrequired for a particular cost itemRejected8 Ambiguous technical specifications The bidder prefers to a low unit price of the cost item that hasambiguous specificationsDiscussed by both owner and lowest bidder can vary. For example,in the architectural subproject, the smallest and largestvalues of Dj are  98% and 5,347%, respectively. Cer-tainly, the unit prices corresponding to these two ex-treme values of Dj should be categorized asunreasonable.Table 4 further shows the sums of the extended costsof the reasonable, suspicious and unreasonable items ineach subproject. In the architectural subproject, the rea-sonable cost is approximately 76.89% of the total bidprice. Assume that the threshold ratio (TR ) is prede-fined as 30%. Although the suspicious unit prices havenot been clarified, the lowest bid of this subproject canbe directly considered reasonable because the sum ofboth the suspicious and unreasonable costs is just23.11% (below 30%).As indicated earlier, the lowest bid price of an electri-cal subproject is suspicious (namely, bid ratio is below0.8). Based on the proposed model, although the suspi-cious items have not been clarified, the lowest bid of theelectrical subproject can be directly considered unrea-sonable. Namely, the unreasonable cost of the lowestbid is up to 44.30%, which exceeds the threshold ratio(30%). Thus, the lowest bid of the electrical subprojectshould be rejected. And the second lowest then becomesthe lowest; the modeling steps then should be repeated.However, as noted earlier, this electrical subprojectwas awarded to the lowest bidder and no bid assess-ments were conducted. To learn more about the effectof this lowest bid on the subproject, the owner of thesubproject and the electrical contractor were inter-viewed. The owner indicated that the contractor hadbeen proposing to use substituted equipment and mate-rials throughout the construction phase to reduce costs.Consequently, arguments frequently arise between theowner and the contractor. Additionally, the contractoradmitted that his bidding strategy was simply intendedto gain the contract, increase the business volume ofhis company, and thus allow him to profit on sales ofshares.5.2. Evaluation results of an alternative modelThe above model considers the minimum unit price(minj) and maximum unit price (maxj) submitted byother qualified bidders with respect to each cost item jfor clarifying suspicious unit prices. An alternative ap-proach is considering the average unit price (avej) calcu-lated from the prices submitted by all qualified bidders(including the lowest bidder) in the evaluation step. Inan alternative model, the criteria used to assess each unitprice (Bj) can be as follows:  Reasonable unit price – If  r1 6 Dj 6 r1, then Bj isreasonable. This criterion is the same as that of theoriginal model.  Suspicious unit price – If { r2 6 Dj 6  r1 and(1   r2)avej 6 Bj}or{r1 < Dj 6 r2 and Bj 6 (1 + r2)-avej} then Bj is suspicious. For example, supposer1 = 0.3 and r2 = 0.4. Then, if { 0.4 6 Dj <  0.3and 0.6avej 6 Bj} or {0.3 < Dj 6 0.4 and Bj 6 1.4avej} then Bj is suspicious. This criterion is stricterthan that of the original model. The practical implica-tion is that a slightly low Bj, such as, 0.4 6 Dj <  0.3 can be treated as suspicious pro-vided it is not too low, for example, Bj must be greaterthan or equal to 0.6avej. Furthermore, a slightly highBj such as, 0.3 < Dj 6 0.4 can be treated as suspiciousprovided it is not too high (for example, Bj must belower than or equal to 1.4avej).  Unreasonable unit price – If Bj is not consideredeither reasonable or suspicious, then it is consideredunreasonable.Clarification then is conducted to clarify the suspi-cious unit prices based on the aforementioned explana-tion-based phase. Also suppose r1 = 0.3 and r2 = 0.4.According to the alternative model, Table 5 lists the rea-sonable, suspicious and unreasonable costs for the samesubprojects. This alternative model suggests the samedecisions in accepting/rejecting the lowest bids for the architectural and electrical subprojects. Generally, whenapplied to the two subprojects, the results of this alter-native model closely resemble those of the originalmodel. For example, in the architectural subproject, thereasonable costs evaluated using both models are identi-cal. Moreover, the percentages of the suspicious costsobtained from the original and alternative models are7.57% and 7.25%, respectively, and the difference is only0.32%.
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