Keywords: strategy, bidding process, contracts, risk management, project-based industry, Greece, construction industry
An applicable methodology for strategic risk management during the bidding process
Project-based companies who participate in competitive bids usually base their decision to invest in a bid on the expected contribution to profits. The objective of this study is to show that these companies should consider risk as an integrative parameter of all the factors that interfere in their estimations and direct their bidding effort accordingly. The method proposed integrates Risk Management into the bidding process. Identification and assessment of risks during this very early phase of the project (bid) result in more accurate estimations and give the opportunity of their integration, later, into the contract. In order to assess the loss caused by unmanaged risks, data from 20, same nature, projects of a major member of the Greek construction industry have been analysed and presented in this study. The results strongly suggest that project based industries should integrate the "strategy of risk management" during the bidding process in order to invest in bids leading to profitable projects.