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ASCE. For personal use only; all rights reserved.Below-Average Bidding MethodPhotios G. Ioannou, M.ASCE1; and Rita E. Awwad2Abstract: The low-bid method, typically used for competitive bidding in the United States, may result in a contract with a Trm that submits either accidentally or deliberately an unrealistically low-bid price. Such an occurrence hurts both the owner and the contractor by promoting disputes, increased costs, and schedule delays. To address this problem, other countries have adopted bidding methods based on the average of the bids submitted. One such approach is the below-average method where the winning bid is closest to but below the average of all bids. A competitive bidding model for the below-average-bid method is presented and its merits relative to the average-bid method and the low-bid method are explored. The below-average-bid process is investigated analytically and through Monte Carlo simulation. The results of bidding models for the below-average, the average, and the low-bid methods are presented in four easy-to-use nomograms which allow contractors to determine the optimal lump-sum bid price for each method without the need for complicated analysis. A comparison of the three methods provides information and insights to help owners with the difTcult choice of a suitable bidding method for the project at hand.DOI: 10.1061/ ASCE CO.1943-7862.0000202CE Database subject headings: Construction management; Contracts; Bids; Pricing; Models; Taiwan; Italy; Peru; Florida.Author keywords: Construction; Contracts; Bids; Pricing; Competition; Model; Simulation; Average bid; Below-average-bid; Low bid; Markup; Contingency; Probability; Innovation; Taiwan; Italy; Peru; Florida.Downloaded from by SHENZHEN UNIVERSITY on 12/31/15. CopyrightIntroductionThe majority of competitively bid construction contracts in the United States use the low-bid method where the contract is awarded to the Trm submitting the lowest responsible bid. Com-petition on pric
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