Public tendering procedures - an optimisation approach

Many people in search of homeownership in urban areas are currently facing high building and property costs. Those interested in realising ownership usually refer to housing associations, architects, or prefabricated housing manufacturers. Since the end of the 20th century, an increasing number of joint building ventures have appeared in the German housing market. Hence, they can be seen as an alternative in realising appropriate living space as well as a new instrument in urban development and design. Since municipal building areas are scarce, there is intense competition between different stakeholders. Joint building ventures compete among each other as well as among other types of housing. By means of an extensive catalogue of requirements for the allocation of building sites, municipalities manage to delegate certain responsibilities to the citizens. In order to ensure that this does not act against the general interest of joint building ventures, it is important to include the diverse interests of various partners by establishing a transparent and fair tender and award system. This study provides insights on the design of an optimised public tendering and which tendering criteria maximise the utility of potential home owners. The study adopts a choice-based conjoint analysis approach, using a web-based survey. The data were collected and analysed via the survey platform Sawtooth. The study was conducted with a sample of potential home owners in Germany, who evaluated tendering criteria. Understanding the potential home owners’ preferences of tendering criteria offers several opportunities and implications for municipalities and might help to enforce an efficient and effective tendering process.