Impact of the Characteristics of Contractors on the Construction Quality of Public Works

This study aimed to clarify whether the characteristics of contractors and the winning bid rate impact the quality of construction projects. The winning bid rate is the ratio of the winning bid amount to the target price, which is the estimated amount determined by the client based on the substance of the work and the required technology. This study used data on the pre-qualification system and construction quality evaluation for public works in Japan. We conducted an empirical analysis using panel regression to examine whether contractor characteristics and winning bid rates affect construction quality. The empirical analysis showed that the quality of construction projects tended to be high for contractors with high profitability, financial soundness and technical expertise. Moreover, the quality tended to be high for contractors with high winning bid rates. The originality of this research lies in its use of quantitative data from the actual pre-qualification system and construction quality evaluation and statistical methods to demonstrate the relationship between the winning bid rate, characteristics of contractors and quality of public works projects.