BIDDING STRATEGY IN CONSTRUCTION

Construction competition in the globalization era is getting tighter. The competitors faced are not only in the regency / city, province, but also in a wider area, even across countries (Soemardi, 2007). The bid strategy is an important factor to improve competitiveness, and is a management skill in using all physical and financial resources of the company, in preparing a comprehensive and competitive bid plan, taking into account various aspects, both internal, external and environmental, aimed at to be able to win the competition, and provide maximum project performance.

Strategy is a comprehensive activity plan that determines the direction and direction that is critical to the allocation of resources to achieve the organization's long-term goals. In practice, strategy is a complex activity, even a risky activity, the choice of how managers plan the mix of strengths and weaknesses of the organization with opportunities and threats in its environment (Single, 2011). Meanwhile, according to Hunger & Wheelen (2001), corporate strategy is a comprehensive planning formula on how the company will achieve its mission and objectives. Male (1991) and Messner (2004) in Hung (2004) state that strategy is a statement and a choice of several viable and available alternatives to achieve organizational goals. Explicitly developed by management, through behavior and decision making to achieve goals and guide organizational behavior. While strategic decisions are actions.

The main problem for the contractor in submitting a bid is to place a competitive bid price, meaning that the bid price cannot be submitted too high in the hope of earning a large profit. Conversely, the bid price cannot be too low in the hope that the opportunity to get a bigger project. These two opposing conditions take place at the same time, so that it will be difficult for the contractor to determine the right and best bid price.

Tarek (2002) in Hung (2004) argues that it is quite difficult to decide on suitable offers when dealing with competitors. Basically the bid strategy is an embodiment of the accuracy of the calculation process with the element of uncertainty and possible benefits associated with the project. There are two things that need to be emphasized, in this strategy, the first is to estimate the percentage of markup that must be added to the total cost, and secondly the possibility of risk / damage, so that appropriate contingency costs can be allocated to each component. Shash (1993) in Ma et al. (2011) argues that two important things must be considered in the bidding process, firstly the decision to bid / no bid and secondly the decision to mark-up.

The decision taken at the time of bidding not only considers the possibility of winning the tender, but must also consider that the company can complete the project in accordance with the terms of the contract. Many factors affect the contractor when conducting a bid / not bid. This decision is very much determined by the provisions of the project specifications and macro environmental conditions, so it is very difficult to determine this decision in a very limited time. (Egemen & Mohamed, 2007)

Many factors influence the decision to bid / no bid. The effect of these factors varies depending on the situation and background. Bids that are made in different time periods will cause different issues, such as different economic conditions, different construction technologies. Likewise, offers made in different countries certainly have different economic, technological, policy and geographical conditions. Projects carried out in developed countries are certainly different from those carried out in developing countries. Projects in developing countries are carried out with great regard to living standards, productivity levels, import policies, availability of qualified, material and heavy equipment, staff, as well as domestic stability and information about project owners. Therefore the careful consideration is needed in carrying out a bid strategy so that the most optimal results are obtained.