Factors Affecting the Bidding Decision in Sustainable Construction

Abstract

The environmental harms that the construction industry has caused are significantly detrimental and apparent. These harms include the emittance of a substantial amount of carbon dioxide and inducing ground and water contamination. Fortunately, these adverse environmental impacts can be minimized and counteracted by carrying out sustainable construction projects. As sustainable construction projects gain more popularity and are increasingly in demand, it is crucial for those who will execute these projects to be knowledgeable about the nature of sustainable construction projects and be able to determine whether to bid for these projects. The bidding decision is one of the critical decisions that contractors have to make due to the complexity and uncertainty surrounding this choice. Given the above challenge, this research aims to identify the most significant factors that affect the bidding decision in sustainable construction. The methodology adopted in this research is a mix of qualitative and quantitative analysis. An extensive literature review was first conducted to determine the bidding decision factors. After that, a survey was distributed to United Arab Emirates (UAE) construction professionals, where they were asked to rank the significance of the 40 extracted factors. The weighted average approach was then used to prioritize the most significant factors of the bidding decision in sustainable construction. The results showed that the top 10 ranking factors were as follows: client’s financial capabilities, client’s payment history, client’s reputation, project risks, contractor’s financial capabilities, project complexity, experience in similar projects, project type, contractor’s access to technologies required to execute sustainable projects, and material availability. The findings of this research can benefit contractors and subcontractors by increasing their understanding of the major factors affecting the bidding decision in sustainable construction. Contractors armed with such invaluable information will be better equipped to reach more effective better bidding decisions.

1. Introduction

The construction industry is one of the world’s largest industries and has substantial effects on the environment and global society. Previous studies show that many on-site construction activities can cause environmental harm, such as soil and ground contamination, surface and underground water contamination, dust, noise, vibration, impacts on wildlife and natural features, hazardous emissions and odors, and archaeology impacts [1]. In fact, construction projects emit huge amounts of carbon dioxide and methane gas [2]. Moreover, these projects are responsible for more than a third of the world’s greenhouse gas emissions [3]. Additionally, studies have concluded that there is a direct impact from construction projects on pollution and global warming. The results show that 54% of solid waste is attributed to construction, while 72% and 61% of water depletion and timber depletion are attributed to construction projects [4]. With regards to the United Arab Emirates (UAE), a construction boom due to countless megaprojects has caused a huge negative impact on the environment. The UAE has the world’s highest per capita environmental footprint [5]. Also, construction waste accounts for almost 70% of the total weight of solid waste in the UAE, with Dubai producing close to 5000 tons of construction waste per day [6]. The construction industry is a large industry that continues to grow each day; therefore, it is imperative for companies to partake in a more sustainable approach to lessen the environmental threats.

The UAE has developed policies to encourage green and sustainable development. For example, the Abu Dhabi Urban Planning Council developed and promoted Estidama in 2008, which provides a more localized definition of sustainability that considers the region’s unique cultural and climatic conditions [7]. With the advancement of Estidama, a new sustainable city was founded by the Emirate of Abu Dhabi, called Masdar. The new city focuses on providing sustainability in an urban community by providing its residents with clean green energy, clean-tech clusters, business-free zones, and residential buildings with green spaces. Similarly, the Dubai municipality has also launched the green building initiative, which aims to reconcile economic development and environmental protection. The Dubai municipality has made the regulations and specifications of the green building initiative mandatory for governmental buildings and voluntary for privately owned buildings [8].

As the demand for sustainable construction projects in the market increases, it is important to note that the contractor’s decision whether to bid for sustainable construction projects is a complex decision that is affected by several factors [9]. In fact, the bidding decision is one of the most important decisions that a contractor has to make [10]. Selecting a potential project to bid for influences the construction companies’ success. It also reflects on the company’s reputation, as these projects become part of the company’s portfolio. Therefore, it is crucial to bid for projects that strategically align with the company’s vision and add value to the organization [11,12]. Indeed, many factors and elements affect a contractor’s decision to bid for a project. These factors and elements are more difficult to anticipate in sustainable construction projects. There are more restraints, complications, and costs to sustainable projects than traditional construction projects [13]. Additionally, contractors do not have sufficient experience in sustainable construction when compared to traditional construction, which makes the bidding decision for sustainable projects a complex one [9]. The literature review provides an extensive list of factors that affect the bidding decision in traditional construction. For instance, AlSaedi et al. [14] identified the top six critical factors affecting bidding decisions in construction projects in Saudi Arabia as the following: size of the job, type of the job, company’s strength in the industry, designer/design quality, rate of return, and project cash flow. Similarly, Gunduz and Al-Ajji [15] developed bid/no-bid models for design–bid–build projects for contractors. The authors concluded that the top six ranked factors were current workload, need for work, previous experience with employer, timely payment by the employer, availability of other projects for bidding, and reputation of employer in the industry.

However, there is a lack of guidelines in the literature when it comes to bidding decisions in sustainable construction projects. Therefore, the main aim of this study is to identify and assess the key factors affecting the bid/no-bid decision for sustainable construction projects. The detailed objectives are as follows:

• Identify the main factors that affect the contractor’s bid/no-bid decision for sustainable construction projects;
• Assess the importance of these factors through a survey of construction professionals in the UAE.

This research is significant and adds to the body of knowledge as sustainable construction projects are becoming more relevant and more in demand in today’s market. Although the literature review is very rich in providing guidelines for bidding decisions in traditional construction projects, there is no such comprehensive list of factors that affect the bidding decisions in sustainable construction projects in the UAE. Hence, this study bridges the gap and highlights the most significant factors that should be considered when bidding for sustainable construction projects. The outcomes of this study will help local and international contractors in the UAE to understand more about the prominent factors underlying the logic behind bidding decisions in sustainable construction. Thus, this study will assist contractors in evaluating sustainable construction projects reasonably before making any formal commitments. Furthermore, this study not only allows contractors to explore all factors to help them achieve a more efficient bidding strategy but will also benefit society as a whole, as it encourages the pursuit of more sustainable construction projects.

Practical Applications

Bidding decisions play a crucial role in sustainable construction projects. Understanding key bidding factors can allow contractors to make informed decisions and ensure bidding for sustainable projects that aligns with their organization’s strategy, capabilities, and expertise. This in turn decreases the risk of project failure in the future due to contractor incompetence. Further, this research opens the gate for contractors to consider new bidding decision factors and interpret the existing factors from a different perspective, with due consideration for the unique characteristics of sustainable construction projects. In fact, it could help encourage contractors to propose innovative solutions through the adoption of cutting-edge technologies in order to boost their bidding strategy and increase their chances of being selected when bidding for sustainable construction projects. This study also helps foster a sense of social responsibility and sustainable development among contractors as they start integrating sustainability considerations in their bidding process.

This paper starts with a literature review of relevant studies to the explore factors affecting bidding decisions, presents the research method and data analysis, provides a discussion, and then concludes with major findings and future recommendations.

2. Factors Affecting the Bidding Decision

The comprehensive literature review regarding the factors affecting the bidding decision of contractors led to the selection of 40 factors, which were categorized into five groups: project characteristics, contractor-related factors, contract-related factors, client-related factors, and external-environment-related factors, as shown in

Table 1. Factors affecting the bidding decision.

Group	Factor	Sources
Project-Related Factors	Project Duration	[14,16,17,18]
	Project Type	[14,16,17,19,20,21]
	Project Size	[14,16,17,19,21,22]
	Project Location	[14,16,17,19,21]
	Project Start Time	[14,17,19,20,23]
	Project Risks	[17,19,23,24,25]
	Site Conditions	[19,21,26,27]
	Project Complexity	[17,19,20,23,25]
Contract-Related Factors	Type of Contract	[21,23,24,28]
	Amount of required insurance	[21,23,24,25]
	Amount of Bid Bonds	[29,30,31]
	Clarity of Contract Clauses	[29,30,31]
	Completeness of Bid Documents	[24,25,26,28]
	Ability to Modify the Contract	[26,27,28]
	Length of Bidding Period	[23,24,25,28]
	Amount of Liquidated Damages	[23,28,32]
	Payment Terms	[23,24,28]
Contractor-Related Factors	Financial Capabilities of the Contractor	[20,22,33,34,35,36]
	Equipment Availability	[34,35,37,38]
	Experience in Similar Projects	[35,36,37,39]
	Profits Made in Similar Projects	[32,38,40,41]
	Risk Tolerance	[17,42,43,44]
	Previous Relationship Levels with Client	[32,39,41]
	Experience and Competence of the Contractor’s Staff	[33,41,44]
	Contractor’s Access to Technologies Required to Execute Sustainable Projects	[45]
	Availability of Skilled Workforce	[33,41,46]
	Current Workload	[19,22,33,41]
	Contractor’s Strategic Goals	[17,19,35,41]
	Reputational Benefits	[33,41,47]
Client-Related Factors	Financial Capabilities of the Client	[33,40,41]
	Client’s Reputation	[33,41,44,48]
	History of Client’s Payments in Past Projects	[17,24,37,41]
	Client’s Requirements from Contractor	[17,27,38,49]
	Client’s Level of Monitoring Over Contractor	[29,30,31]
	Client’s Policy in Resolving Disputes	[29,30,31]
External-Environment-Related Factors	Availability of Material	[26,28,44,50]
	Political Stability	[26,27,46]
	Government Regulations and Approvals	[14,16,32,45,51]
	Competitors’ Identities	[16,23,32,51]
	Economic Stability	[27,40,43]

.

2.1. Project-Related Factors

This group focuses on factors that directly relate to the project itself. It focuses on several aspects of the project, such as duration, location, size, type, etc. These factors give the contractor an idea about the project as a whole and whether to bid for it. Project duration is the time needed to complete a project. Project duration affects the contractor’s indirect cost and the commitment of the needed resources. Additionally, the contractor will need to know key details of the project to be able to plan and see whether they can complete the project in the allotted time using their current workforce and equipment [16]. Project type refers to the nature of the construction project that will be executed. This is important since the contractor’s experience and expertise in a particular project type can be a deciding factor on whether to bid for a project [20]. Project size refers to the magnitude of the construction project that will be executed. This is an important factor since, as the project size increases, costs would also increase, and more experience might be required to execute the project. Contractors need to be aware of this possibility before deciding to bid for the project [22]. Project location is factor that refers to the area in which the construction project will take place. This is important since the location can be used as a tool to expand the contractor’s services abroad. It is also important to consider since the terrain might not be suitable or might be unsafe to work on [19].

The project start time refers to the date on which the construction project begins. It allows contractors to know how much time is afforded to them to prepare for the project prior to its initiation. Moreover, it is vital to know the start date to account for possible effects arising from the weather, climate, and seasonal economic effects [23]. Understanding the risks associated with a project prior to bidding allows the contractor to study and prepare for these complexities and to minimize these risks [25]. Furthermore, the site condition refers to the examination of the state of the site of the construction project. It is important for the contractor to study the area in which the project will take place to account for any irregularities or any problems that could arise due to site issues [27]. Finally, the complexity of the project refers to the severity of the complexities and challenges that are associated with the construction project. Contractors need to be technically capable and have enough experience and knowledge to tackle complex projects [20].

2.2. Contract-Related Factors

This group includes factors related to the contract. The contract type is one of the crucial factors that affects the bidding decision, as it entails how the payments will be disbursed, whether a lump-sum, unit-price, or cost-plus arrangement [28]. Furthermore, the required insurance and bid bonds are also significant factors in the bidding decision, as the former entails the premium that the contractor needs to pay. The latter provides a guarantee that the winning bidder will take up the contract as per the bid terms [25,31]. The clarity of contract clauses is another important factor, referring to transparency in the contract document and contract conditions, such as the commencement date, the parties to the agreement, and recitals describing the basis upon which the agreement is made [29]. Additionally, completeness of bid documents refers to the completeness of a project’s drawings and specifications. This provides the prospective bidders all the necessary information that they need to prepare their bids [24]. Incomplete documents create issues during the construction phase that may result in delays or cost overruns. The contract should also provide some flexibility to allow for change incorporation and modification in terms of any scope revision [28]. Another important factor is the time of bidding; lengthy tendering processes can bog down managers’ schedules, reducing the attractiveness of the financial returns for the project [23]. The amount of liquidation damages is another key factor in bidding decisions, as it determines the amount to be paid in case of contract breaches [32]. Settling this from the very beginning will help save time and resources spent on potential disputes. Lastly, payment terms are also essential in contract negotiations and should be established in a way to maximize the speed with which contractors are paid without compromising the client’s convenience [24]. Unfair payment terms may discourage contractors from bidding.

2.3. Contractor-Related Factors

This group includes the factors that are specific to the contractors. To begin with, the financial capabilities of the contractor should be carefully evaluated before bidding for any project to ensure that the contractor can execute it successfully [36]. Contractors also need to be aware of the equipment required to execute the project and run inventories to ensure the availability of the equipment [37]. In addition, contractors’ experience in similar projects is also another key factor in bidding decisions, especially in sustainable construction. Sustainable construction is different from traditional construction and has its own challenges; contractors must have the proper experience and staff competencies to tackle these obstacles [45]. In fact, due to the complex nature of sustainable construction projects, contractors need to also have access to the technologies required to successfully execute sustainable construction projects. Furthermore, examining the profits made in similar projects in the past is important since contractors are much less likely to bid for a similar type of project in which they have recorded losses in rather than profits [41]. Additionally, contractors are advised to evaluate the risks that accompany construction projects they are pursuing in order to establish risk response plans to be able to mitigate or avoid them [44]. Moreover, previous relationships and communication levels with clients is another important factor. For a construction project to be executed and run smoothly, the relationship and communication between the contractor and client must be of adequate quality. Contractors have to evaluate the client’s work ethic and whether the client will be cooperative for the duration of the construction project [39].

The contractor’s current workload refers to the projects the contractor is currently working on as well as the bids in hand. Some contractors might already have construction projects they are executing and bids they are either submitting or preparing to submit, which would make it hard for them to bid for a new project [33]. Contractors must evaluate their current workload and whether they can add another construction project to their roster. The contractor’s long-term strategy goals refer to the contractor’s identification of future plans and the strategies needed to reach them. Contractors often look at the bigger picture when it comes to the future of the company and pursue construction projects that aid in achieving long-term goals. Indeed, contractors need to pursue construction projects that are aligned with their long-term strategies [19]. Lastly, the contractor’s reputational benefits refer to the advantages a contractor gains due to their positive public perception. Contractors with positive reputations tend to be known for their trustworthiness and professionalism in regard to their work ethic and executing construction projects. A positive reputation can aid contractors in winning more construction projects [47].

2.4. Client-Related Factors

This group consists of factors that relate to a client’s conditions. The financial capabilities of the client are important to consider in the bidding decision, as this will confirm whether or not the client will be able to finance the project and pay the contractor. Also, every project needs to be planned according to a budget. Projects have objectives and are planned accordingly to meet these objectives while sticking to a budget [39]. Another significant factor is the client’s reputation. Contractors usually look for a good reputation in their clients to avoid monetary problems and lawsuits [48]. Moreover, the history of the client’s payments in past projects represents the client’s reliability in paying money to the contractors and paying them on time. This factor is important, as the basis of business is revenue; if the client does not pay the contractor, this would cause delays in the project and financial loss on the contractor’s side [17]. Furthermore, the client’s requirements of the contractor, such as functionality of the building, quality of the building, total price of the project, and completion time, should be approved by the two parties prior to signing of the contract. The contractor should be aware of all of these requirements in order to determine whether they have the resources and competencies to deliver the project successfully before submitting a bid [49]. Clients monitor their contractors by appointing on-site representatives; this benefits the client by enhancing work execution, safety, and quality. However, the level of strictness might affect the contractor’s ability to work, which could lead to delays and cost overruns. Finally, the client’s policy in resolving disputes is how a client provides the opportunity to resolve a conflict or complaint quickly, fairly, and without reprisal with their contractors. An effective dispute resolution policy is crucial to ensure the best opportunity to resolve disputes without the need for expensive legal fees and limiting delays in the project [31].

2.5. External-Environment-Related Factors

This group comprises of factors that relate to the surrounding environment in which the project will take place. The availability of needed material in the local market is important since locally available materials will cost less, will require less time to acquire, and will decrease the risks of the project [44]. Moreover, contractors should keep in mind that sustainable materials are unique and might be difficult to import, which will ultimately cause an uptick in costs due to shipping fees and any other additional costs. Also, shipping large amounts of materials along with fluctuations in price and inflation will cost the contractor greatly [50]. Political stability is also a vital factor to ensure that there is a stable government that will guarantee project completion and protection of all parties involved. Moreover, political instability can severely harm the economic situation of the country, which can affect labor, equipment, and material prices and availability in the country as well as the policies provided for the construction industry [26]. Governmental regulations and approvals refer to the regulations regarding sustainable construction as established by the government. Government regulations, codes, and policies must be followed by all parties in the construction industry. These regulations are mandatory to implement, and they tend to differ from standard construction project regulations. Therefore, they may require a certain expertise as well as additional costs that must be considered by the contractor [51]. The competitors’ identity refers to the knowledge of other potential bidders along with their capabilities, financials, and strengths, which will give contractors insight into who they are competing against [23]. Finally, the stability of the economic situation relates to the overall economy as well as the fluctuations in labor and material prices. Changes in the labor and material prices can financially harm the contractor and lead to losses on the project. Knowing the state of the economy allows the contractor to prepare the bid carefully and account for such fluctuations.

3. Materials and Methods

This study uses a qualitative approach to identify the most critical factors that affect the bidding decision in sustainable construction projects. Firstly, a comprehensive literature review in regard to the bidding process for contractors, the factors affecting a contractor’s bid/no-bid decision, sustainable construction projects, the complexities of sustainable construction projects, and the factors that affect sustainable construction projects will be conducted. This is essential to this research paper, as the composition of the survey that will be distributed to the United Arab Emirates (UAE) construction professionals will depend on the comprehensive literature review on the factors that affect a contractor’s bid/no-bid decision. The comprehensive literature review was completed by analyzing dependable and trustworthy academic, scientific, and scholarly databases and sources. Furthermore, the keywords that were used in the databases and sources’ search engines included the following: bid/no-bid decision, factors affecting bidding decision, contractor’s bidding process, sustainable construction project challenges, and sustainable construction projects and bidding. The initial number of English articles from the years 2010–2022 related to this field was 82. The titles and abstracts of these studies were then screened to exclude irrelevant material, and the filtered studies were then further screened by examining the full text to ensure compliance with the objective of this research. The total number of articles refined in the end for this research was 37. Most of the articles dated from 2011 to 2022, as this period witnessed the peak in the awareness towards sustainable construction.

The factors extracted were then used to develop the survey. The construction companies based in the UAE are the primary focus of the survey. Companies received an email invitation to complete an electronic version of the survey. The first section of the survey contains generic questions about construction site experiences, firms, and projects completed. The survey’s second section focuses on the significance of the factors based on a Likert scale of 1–5, with 1 being very insignificant and 5 being very significant. The sampling method followed a non-parametric snowball technique, where respondents were asked to refer other potential participants with knowledge/experience in sustainable construction to answer the survey.

Once the data collection phase was completed, the data analysis phase began. The results were examined by calculating the weighted average for each factor using the equation below [52]:

$$Weighted Average=\frac{\sum {a.n}_x}{N}$$

(1)

where

N is the total number of responses;

a is the scoring from 1 to 5;

n_x is the number of participants who scored from 1–5 for a particular factor.

In an attempt to further triangulate the data, the degree of agreement on the relative importance of the factors explored among the contractors that belong to the small–medium sized projects (AED < 50 Million and 200–500 Million) and the large sized projects (AED 201–500 Million and >500 Million) were assessed using Spearman’s correlation efficient (r_s). This value varies between +1 and −1, where +1 indicates a perfect positive agreement and −1 indicates a perfect disagreement between the parties. It is calculated according to the following formula [53]:

$${\mathrm{r}}_{\mathrm{s}}=1-\frac{6\sum d_i^2}{n(n^2-1)}$$

(2)

where

d_i = difference in ranking between every two parties;

n = number of bidding decision factors used in this study.

The weighted average approach is an ideal way to rank the significance of the factors and cross-compare the relative importance of the factors in different groups. The higher the weighted average value, the stronger the perceived effect of the bid/no-bid factor. Once the calculations are conducted, the factors affecting the bidding decision are then ranked based on their importance values. Recommendations are then provided at the end to motivate contractors to bid for sustainable construction projects. Fifty-five responses were collected out of 150 surveys that were distributed, which represents a 37% response rate. The results show that 73% of the respondents were from local firms, while 27% were from international firms (head offices are outside UAE). Furthermore, 85.5% of the respondents were contractors, while 15.5% were subcontractors.

Table 2. Respondents’ profile.

Category		Respondents (Total 55)
		Number	%
Years of experience	>20 years	4	7.3
	11–20 years	21	38.2
	5–10 years	15	27.3
	<5 years	15	27.3
Company	Local	40	73
	International	15	27
Project type/Expertise	Buildings	31	56.4
	Infrastructure	16	29.1
	Others	8	14.5
Role	Contractor	47	85.5
	Subcontractor	8	14.5
Average Project Size, AED	<50 Million	13	23.6
	50–200 Million	15	27.3
	201–500 Million	8	14.5
	>500 Million	19	34.5

shows the respondents’ profile.

4. Results

The weighted average of each group is shown in Figure 1, while the weighted average, as well as the ranking of each factor are shown in

Table 3. Ranking of bidding factors.

Factor	Weighted Average	Rank
Financial capabilities of the client	4.36	1
The history of the client’s payments in past projects	4.18	2
Client’s reputation	4.09	3
Project risks	4.05	4
Financial capabilities of the contractor	4.04	5
Project complexity	4.04	6
Experience in similar projects	3.96	7
Project type	3.95	8
Contractor’s access to technologies required to execute sustainable projects	3.95	9
Availability of material	3.93	10
Availability of skilled workforce	3.93	11
Government regulations and approvals	3.91	12
Project size	3.89	13
Economic stability	3.87	14
Client’s requirements from contractor	3.85	15
Completeness of bid documents	3.85	16
Experience and competence of the contractor’s staff	3.82	17
Site conditions	3.80	18
Type of contract	3.78	19
Project location	3.76	20
Previous relationship with client	3.75	21
Payment terms	3.75	22
Political stability	3.73	23
Reputational benefits	3.73	24
Clarity of contract clauses	3.73	25
Contractor’s strategic goals	3.71	26
Amount of liquidated damages	3.69	27
Risk tolerance	3.64	28
Current workload	3.60	29
Profits made in similar projects in the past	3.58	30
Project duration	3.58	31
Equipment availability	3.56	32
Client’s policy in resolving disputes	3.51	33
Client’s level of monitoring over contractor	3.38	34
Length of bidding period	3.36	35
Ability to modify the contract	3.36	36
Competitors’ identities	3.29	37
Amount of the bid bonds	3.24	38
Amount of required insurance	3.20	39
Project start time	2.93	40

. The reliability test performed on the data also showed that the Cronbach’s alpha value was 0.90; this indicates a very high level of internal consistency as suggested by Taber [54].

Table 4. Difference of ranking of factors between the two groups of contractors.

Factor	Ranking of Small–Medium-Size Contractors	Ranking of Large-Size Contractors
Project Duration	29	25
Project Type	22	4
Project Size	13	11
Project Location	23	17
Project Start Time	40	39
Project Risks	16	1
Site Conditions	31	2
Project Complexity	12	3
Type of Contract	26	8
Amount of required insurance	38	38
Amount of Bid Bonds	39	37
Clarity of Contract Clauses	27	12
Completeness of Bid Documents	11	19
Ability to Modify the Contract	36	33
Length of Bidding Period	35	35
Amount of Liquidated Damages	21	30
Payment Terms	8	34
Financial Capabilities of the Contractor	2	18
Equipment Availability	33	21
Experience in Similar Projects	6	16
Profits Made in Similar Projects	18	40
Risk Tolerance	32	31
Previous Relationship Levels with Client	19	22
Experience and Competence of the Contractor’s Staff	7	27
Contractor’s Access to Technologies Required to Execute Sustainable Projects	9	13
Availability of Skilled Workforce	14	10
Current Workload	17	36
Contractor’s Strategic Goals	25	20
Reputational Benefits	15	23
Financial Capabilities of the Client	1	5
Client’s Reputation	3	14
History of Client’s Payments in Past Projects	4	28
Client’s Requirements from Contractor	5	29
Client’s Level of Monitoring Over Contractor	37	32
Client’s Policy in Resolving Disputes	30	15
Availability of Material	20	24
Political Stability	28	26
Government Regulations and Approvals	24	7
Competitors’ Identities	34	9
Economic Stability	10	6

also shows the difference in rankings of the factors between the two groups of contractors.

5. Discussion

The results revealed that the top 10 factors that affect the bidding decision in sustainable construction include financial capabilities of the client, history of client’s payments in past projects, client’s reputation, project risks, financial capability of the contractor, project complexity, experience in similar projects, project type, contractor’s access to special technologies required to execute sustainable construction projects, and availability of material. Having financial concerns at the top of the factors list comes as no surprise, as previous studies have highlighted the fact that cost is the most significant barrier to sustainable development [55]. Moreover, the fact that project risks is among the top five factors indicates that construction professionals in the UAE are becoming more aware of the unique risks that sustainable construction encounters as compared to the risks in traditional construction, such as the need for special materials as well as governmental approvals and certifications [46]. That is why it is very significant to study the risks associated with the project and come up with risk allocation structure and response plans before submitting a bid proposal.

Even though the principal factors influencing bid/no-bid decisions can be comparable across general building and civil engineering projects, the unique characteristics and risks of sustainable construction are significantly different from those of traditional construction projects. This further contributes to the bidding decision and introduces heterogeneity across contractors in terms of their ranking of the bid/no-bid factors, as it challenges their inherent preferences as applicable to traditional construction projects. As a matter of fact, previous studies done in the GCC region in the field of bidding decisions in traditional construction have not emphasized the significance of project risks as a major factor [14,56]. This further illustrates the impact that the unique characteristics of sustainable construction have had on the factors that affect the bidding decision. In addition, in a relatively recent study done by Jarkas et al. [38], where the authors ranked critical bidding decision factors in traditional construction projects in Qatar, the results were different from the conclusions made in this study. The authors stated that the top five factors were mainly contractor-related issues such as the need for work and current workload. This current research, however, emphasizes the importance of client-related factors, specifically in terms of financial capabilities and payments. This highlights the shift in contractors’ perceptions as they become more aware of the financial burdens encountered in sustainable construction projects. Hence, the ranking of the factors has changed accordingly as contractors’ priorities have changed. It has become clear through this study that as far as bidding in sustainable construction is concerned, the need to ensure the client’s financial capabilities outweighs other factors that might be more significant when bidding for traditional construction projects. Furthermore, the contractor’s access to technologies and special materials as well as their experience and competencies are all factors that highly impact the bidding decision. In fact, this echoes previous studies that claimed that the absence of a skilled workforce, who have sufficient experience in handling sustainable materials and technology, makes it difficult to successfully deliver sustainable construction projects [57]. Indeed, the fact that the majority of the respondents work for local companies (73%) might have influenced the prioritization of this factor, as local contractors in the UAE might find it rather difficult to access advanced technologies required to execute sustainable construction projects as compared to international companies that would have access to more resources. On the other hand, the lowest ranked factors include the ability to modify the contract, competitors’ identities, the amount of bid bonds, the amount of required insurance, and project start time.

The results revealed that client-related factors had the highest weighted average at approximately 3.90. Then comes contractor-related factors at approximately 3.77, followed by project-related factors at approximately 3.75. Finally, the bottom two groups were external-environment-related factors at 3.75 and contract-related factors at 3.55. This could be justified by the fact that clients are ultimately the party that proposes and funds these projects. So, clients must have characteristics such as high financial capabilities, a respectable reputation, and clear requirements for a sustainable construction projects so contractors and subcontractors would be more likely to bid for their sustainable construction project jobs [34]. Moreover, the contractor-related factors were the second highest ranking group since the contractors’ financial capabilities, experience, and technological capabilities are all necessary when undertaking a sustainable construction project. Sustainable construction will require more financial backing, different materials, and more advanced equipment and technologies than traditional construction. The equipment and technologies needed or the skilled laborers needed to perform these tasks may not be entirely available in the UAE because sustainable construction is not as popular as traditional construction. Therefore, contractors need to be fully equipped and experienced in these aspects prior to bidding for a sustainable construction project [58]. Next is the project-related factors. These factors focus on the type of project being constructed, the risks related to the project, the size of the project, and more. These all play a vital role in a contractors’ bidding decisions since different project types may require different methods of execution, while project size will relate to the financial capability as well as the staff and labor availability within the contractor’s firm. The complexities and risks are important to consider since they can cause delays, financial losses, or major setbacks to the contractor [18]. Contractors in the UAE will need to analyze previous sustainable construction projects and understand the risks related to these types of projects prior to bidding for them.

The fourth-ranked group is the external-related factors; these factors are important to consider in the UAE since sustainable construction remains in its early stages. Therefore, it is imperative for a contractor to look into the availability of the required materials within the UAE as well as studying the economic situation to ensure that fluctuations of material and labor prices and inflation in the economy do not pose a major loss for the project. Also, sustainable construction requires certain certifications and requirements to be deemed sustainable; therefore, contractors must be fully aware of the government regulations prior to bidding for these projects [59]. The final group is the contract-related factors, which includes the type of contract being proposed, the allocated time for bidding, the completeness of bid documents, and more. Even though, these factors were not ranked as high as compared to other groups according to the perceptions of construction professionals in the UAE, one still cannot deny that understanding the entirety of the project by having the complete bid documents and knowing the type of contract as well as the clauses within it are significant factors that contractors need to consider prior to bidding for a project [29]. It is also worth noting that the Spearman’s correlation coefficient turned out to be 0.318 between the two groups of contractors, with a p-value of 0.046 (i.e., correlation is significant at the 95% level). This indicates that there is a weak level of agreement between contractors who work on small–medium-size projects and those who work on large-size projects. This further indicates that the size of the project can in fact potentially influence the prioritization of the different bidding decision factors. For instance, the most important factors for small–medium-sized contractors when bidding for sustainable construction projects are client-related factors such as the financial capabilities of the client and the client’s reputation. While for the large-sized contractors, the most important factors when bidding for sustainable construction projects are project-related factors such as project risks and project complexity.

6. Conclusions

Sustainable construction has been gaining more attention in recent years due to its positive influence on the environment. However, factors that affect the bidding decision in sustainable construction are different from those in conventional construction due to the difference in the level of complexity and interaction. Therefore, the aim of this paper is to identify the factors influencing a contractors’ bid/no-bid decision regarding sustainable construction projects in the UAE. Extensive research and a literature review were conducted to find the needed factors. Forty factors were extracted, with some of the factors being specific to sustainable construction projects, such as the contractor’s access to technologies required to execute sustainable projects and the availability of sustainable materials and resources. The factors were then classified into five groups: project-related, contract-related, contractor-related, client-related and external-environment-related factors. After that, a survey was developed to determine the perceptions of UAE construction professionals on the importance of these factors. The results showed that client-related factors were ranked the highest based on the weighted average. This was followed by the contractor-related factors, project-related factors, external-environment-related factors, and contract-related factors, respectively. Moreover, the top ten factors were the client’s financial capabilities, client’s payment history, client’s reputation, project risks, contractor’s financial capabilities, project complexity, experience in similar projects, project type, contractor’s access to technologies required to execute sustainable projects, and material availability. This paper fills a gap in the literature, as there is a shortage of studies with regard to bidding decisions in sustainable construction projects. Indeed, this exploratory study would help provide guidance to contractors in the UAE to focus on and act upon the cardinal factors that impact their bidding behaviors in a sustainable construction environment. Future recommendations include expanding this exploratory study to include inferential tests. One of the limitations of this study is that the majority of the respondents are contractors, with a very small percentage of subcontractors. Future research efforts can focus on expanding the sample size to include more subcontractors in the survey responses. Other future directions include replicating the same study in other parts of the world and comparing the results.

Policy Implementations

• Encourage project delivery methods that allow the involvement of contractors during the design stage so that they are made aware from an early stage of all the special materials and technologies required to execute the sustainable construction project;
• Instigate a formal client financial assessment application as a proviso before the bidding process starts to ensure that the client has the proper financial capabilities needed to successfully budget the considered sustainable construction project;
• Instigate a formal risk response assessment application before issuing a construction permit to ensure that contractors have minimum requirements to overcome the unique risks posed by the considered sustainable construction project.