Research On Transaction Costs And Benefits Of Bidding And Tenderding In Construction Project

The bidding and tendering is one of the most significant approaches for business in construction projects in China,in which the jurisprudence and supervision are essentially related to the transaction cost.Though the bidding and terndering improves the level of trading of construction market,it raises more and more issues restricting and affecting the fairness and justice during the development of the market.This paper uses the “Transaction Cost Theory” to study the origins of diseconomy,low effenciency,and violation of rules and law during the bidding and tendering process,in order to give suggestions to reduce transaction costs and optimize transaction benefits.First of all,this study explains how the cost forms in the construction projects using Transaction Cost Theory and classifys different types of transaction cost and benefit.Follow by,this study reviews current documents and researches,and analyzes related real-world cases to discuss the influencing factors of transaction costs and benefits from four different aspects,which are “rationality of bidding and tendering lawtem”,“friendly relationship among trading entities”,“completeness of bidding contract”,and “applicability of bidding methods”.Ten hypotheses are raised out based on the anylyses of these four aspects,seven of which are verified based on the Structual Equation Model(SEM)on real cases.The analysis finds out that: 1.Proper legal regulations can help facilitate the completeness of bidding contract and enhance the relationship among trading parties,which reduces the prior transaction cost.2.The completeness of bidding contract can improve transaction benefits and decrease afterward transaction cost.3.Good relationship among trading subjects is helpful to bring benefits to transaction.4.Anticipation transaction cost and transaction cost are positively correlated.In the end,this paper proposes suggestions from four different demensions,which are optimizing legal regulations and laws,regulating completeness of bidding contract,building good relationship among trading parties,and enhancing the control of the whole trading process,to bring down the transactions costs and raise up the transaction benefits in bidding and tendering process in construction projects in China.This paper proposes a series of optimization measures by using the best transactions cost of bidding and tendering to achieve the most ideal tranding results,to give advice to regulate the behavior of the trading subjects and improve the level of the whole trading market.