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Classifying the Level of Bid Price Volatility Based on Machine Learning with Parameters from Bid Documents as Risk Factors

Author

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  • YeEun Jang

    (Department of Architectural & Urban Systems Engineering, Ewha Womans University, Seoul 03760, Korea)

  • JeongWook Son

    (Department of Architectural & Urban Systems Engineering, Ewha Womans University, Seoul 03760, Korea)

  • June-Seong Yi

    (Department of Architectural & Urban Systems Engineering, Ewha Womans University, Seoul 03760, Korea)

Abstract

The purpose of this study is to classify the bid price volatility level with machine learning and parameters from bid documents as risk factors. To this end, we studied project-oriented risk factors affecting the bid price and pre-bid clarification document as the uncertainty of bid documents through preliminary research. The authors collected Caltrans’s bid summary and pre-bid clarification document from 2011–2018 as data samples. To train the classification model, the data were preprocessed to create a final dataset of 269 projects consisting of input and output parameters. The projects in which the bid inquiries were not resolved in the pre-bid clarification had higher bid averages and bid ranges than the risk-resolved projects. Besides this, regarding the two classification models with neural network (NN) algorithms, Model 2, which included the uncertainty in the bid documents as a parameter, predicted the bid average risk and bid range risk more accurately (52.5% and 72.5%, respectively) than Model 1 (26.4% and 23.3%, respectively). The accuracy of Model 2 was verified with 40 verification test datasets.

Suggested Citation

  • YeEun Jang & JeongWook Son & June-Seong Yi, 2021. "Classifying the Level of Bid Price Volatility Based on Machine Learning with Parameters from Bid Documents as Risk Factors," Sustainability, MDPI, vol. 13(7), pages 1-18, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:7:p:3886-:d:527872
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    References listed on IDEAS

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    3. M. Wanous & A. H. Boussabaine & J. Lewis, 2000. "To bid or not to bid: a parametric solution," Construction Management and Economics, Taylor & Francis Journals, vol. 18(4), pages 457-466.
    4. Roger Miller & Donald R. Lessard, 2008. "Evolving Strategy: Risk Management and the Shaping of Mega-Projects," Chapters, in: Hugo Priemus & Bent Flyvbjerg & Bert van Wee (ed.), Decision-Making on Mega-Projects, chapter 8, Edward Elgar Publishing.
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    Cited by:

    1. Sunkuk Kim, 2021. "Technology and Management for Sustainable Buildings and Infrastructures," Sustainability, MDPI, vol. 13(16), pages 1-3, August.

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