Current competitive bidding strategies and their deficiencies are reviewed. A new bidding strategy method (LOMARK) is presented for use by small to medium-sized contractors working in the local market environment. The method estimates an optimal markup by predicting the chances of winning future bids by treating the local market structure as a single system. Some advantages of the LOMARK method are that it: (1) Assumes implicit dependency between bids; (2) expands the data base for beating a given set of major competitors; (3) varies the percentage markup based on the probable known competitors; (4) is easy to understand; (5) does not require operation by digital computer; and (6) assumes a business strategy. Since LOMARK is not a sequential bidding model, it can not be used in deciding which jobs to bid in the future.
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Wade et al. (1976) studied this question.