Number of Bidders in Small and Medium Public Construction Procurement in Malaysia

Abstract

A competitive bidding price depends on a number of bidders who enter the auction. It increases the intensity of competition and it reduces the purchasing cost. The number of bidders is important because the cost of bidding may become a sunk cost. The probability to win an auction depends on the expected number of bidders. This affects bidders' decisions on whether to bid or not to bid. The research uses several statistical analyses to examine the 195 bidding data collected from Public Works Department of Malaysia. It finds that the project value, the distance from the project site to supply source and state region affect the number of bidders.