Research On Strategy Design Of Unbalanced Bidding Based On State Compensation Theory

With further implementation of Code of bills of quantities and valuation, the competitionamong contractors on price in the bidding process is increasingly fierce. The separation of thecontract price and item quantities under the condition of unit price contract makes unbalancedbidding becoming the main means of contractors making profit. But the existing use ofunbalanced bidding strategies is only a "gambling" try with a low success rate amongcontractors. SEDA model has initially provided a scientific and rational using guidance ofunbalanced bidding procedures for the contractor for the purpose of achieving revenue.Designing a scientific, reasonable and economical unbalanced bidding strategy for theopportunities identified during the “SEEK” phase can greatly improve the success rate ofunbalanced bidding strategy and create additional profits for the contractor.Based on the above issues of reality as well as previous academic research, and existingresearch results of SEDA model, we discover that previous research on SEDA model justfocused on the “SEEK” phase and rarely mentioned how to design a strategy for theopportunity identified during the “SEEK” phase, which is the “DESIGN” phase. Therefore,under the framework of SEDA model, we introduce contract state compensation theory intothe research on the design of unbalanced bidding strategies. The research can be divided intotwo key issues, which are the design of strategies for a single unbalanced bidding opportunityand multiple unbalanced bidding opportunities. Case studies and Cased-based Reasoning areused to design the unbalance bidding strategies for a single opportunity. While build amathematical model to design strategies for multiple unbalanced bidding opportunities. Thesetwo kinds of strategies are intended to provide a practical reference for contractors using thestrategy of unbalanced bidding. The contents of this research are as follows.First, the contract state compensation theory is introduced into the research onunbalanced bidding and three states of unbalanced bidding are built. Through analysis of thecontract state compensation theory,“Quantity” and “Price” under these three states are givendifferent interpretations. Combining the state compensation theory with the theory ofunbalanced bidding, the method of state analysis is used to categorize “Quantity” and “Price”involved in unbalanced bidding into three different states, which are the “Initial State”, the“Intermediate State” and the “Final State”.Second, the method of Case-based Reasoning is used to design the strategy for a singleunbalanced bidding opportunity. Based on the combination of the state compensation theoryand the theory of unbalanced bidding, we start from the practical cases of single unbalancedbidding opportunities and use the method of state analysis to make a detailed interpretation ofindividual cases. After the case study process, the method of Case-based Reasoning (CBR) isused to design the unbalanced bidding strategies for similar single unbalanced bidding opportunities.Third, a linear programming model for unbalanced bidding is built. On the basis of areview of previous studies, a linear programming model for unbalanced bidding is built todesign the strategies for multiple opportunities. Not only specific solving procedures aregiven but also an actual bidding case is used to test the validation of the solving procedures.Based on the perspective of the contract state compensation, a comprehensive researchon unbalanced bidding is conducted in order to improve the study on SEDA model, to formthe unbalanced bidding strategies for all the single opportunities, and to build a linearprogramming model for the situation of multiple opportunities. Hopefully, expected results ofthis study can allow the contractor to use unbalanced bidding more effectively and moreefficient, to improve the success rate of unbalanced bidding strategies, and even to providereliable reference for contractors to make profit.