The construction project is a complex process and has many inherent uncertainties. They were especially deciding whether the procurement method is the lowest bid method or the best value method. Each procurement method has advantages and disadvantages, and there is yet to be any objective model to help such decisions. This research wants to develop such decision-making support to help the owner decide between the lowest bid method or the best value method to address this problem. This research will collect the parameter of the contractors, are bidding estimation, schedule estimation, schedule growth, work safety record, working capital, performance score evaluation, how many projects in 5 years, and how many years have been operated. Then will simulate it through SIMUL8 to get the real cost, schedule growth, and cost growth. K-means cluster analysis is proposed to make the clusters between the contractors, and the analysis of variance (ANOVA) will be conducted to see the significant difference between the clusters. The heterogeneous and homogeneous of the contractors will be seen on the ANOVA. Two scenarios also are shown to demonstrate the applicability of the proposed method.

The construction project is a complex process and has many inherent uncertainties. They were especially deciding whether the procurement method is the lowest bid method or the best value method. Each procurement method has advantages and disadvantages, and there is yet to be any objective model to help such decisions. This research wants to develop such decision-making support to help the owner decide between the lowest bid method or the best value method to address this problem. This research will collect the parameter of the contractors, are bidding estimation, schedule estimation, schedule growth, work safety record, working capital, performance score evaluation, how many projects in 5 years, and how many years have been operated. Then will simulate it through SIMUL8 to get the real cost, schedule growth, and cost growth. K-means cluster analysis is proposed to make the clusters between the contractors, and the analysis of variance (ANOVA) will be conducted to see the significant difference between the clusters. The heterogeneous and homogeneous of the contractors will be seen on the ANOVA. Two scenarios also are shown to demonstrate the applicability of the proposed method.

Abdelrahman, M., Zayed, T., & Elyamany, A. (2008). Best-Value Model Based on Project Specific Characteristics. Journal of Construction Engineering and Management, 134(3), 179-188. doi:doi:10.1061/(ASCE)0733-9364(2008)134:3(179)
Ameh, O. J., & Osegbo, E. E. (2011). Study of relationship between time overrun and productivity on construction sites.
Bacher, J. (2002). Cluster Analysis. Script. Nuremberg. In.
Coad, A., Holm, J. R., Krafft, J., & Quatraro, F. (2018). Firm age and performance. Journal of Evolutionary Economics, 28(1), 1-11.
Dikmen, I., Birgonul, M., & Budayan, C. (2009). Strategic Group Analysis in the Construction Industry. Journal of Construction Engineering and Management-asce - J CONSTR ENG MANAGE-ASCE, 135. doi:10.1061/(ASCE)0733-9364(2009)135:4(288)
Everitt, B. (1980). Cluster analysis. Quality and Quantity, 14(1), 75-100. doi:10.1007/BF00154794
Gransberg, D. D., & Ellicott, M. A. (1996). Best value contracting: Breaking the low-bid paradigm. AACE International Transactions, VEC51.
Gransberg, D. D., & Ellicott, M. A. (1997). Best-value contracting criteria. Cost engineering, 39(6), 31.
Gransberg Douglas, D. (2020). Does Low Bid Award Facilitate Wrongdoing? US Implications of Quebec’s Charbonneau Commission Report. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 12(1), 03719004. doi:10.1061/(ASCE)LA.1943-4170.0000357
Grogan, T. (1992). Low bids raise hidden costs. Engineering News-Record, 228(13), 30-31.
Hartford, L. (2002). Owner’s responsibility to construction. In.
Hauge, J. W., & Paige, K. N. (2004). Learning SIMUL8: the complete guide: PlainVu.
Holt, G. D. (1996). Applying cluster analysis to construction contractor classification. Building and Environment, 31(6), 557-568.
Holt, G. D. (1998). Which contractor selection methodology? International Journal of Project Management, 16(3), 153-164. doi:https://doi.org/10.1016/S0263-7863(97)00035-5
Huang, X. (2011). An analysis of the selection of project contractor in the construction management process. International journal of business and management, 6(3), 184.
Kashiwagi, D., Child, G., Kashiwagi, J., & Sullivan, K. (2014). Price Based Environment of Design and Engineering Services. Journal for the Advancement of Performance Information and Value, 6(1), 40. doi:10.37265/japiv.v6i1.70
Le, N., Chong, W., & Kashiwagi, D. (2021). Using the Best Value Approach to Improve Project Performance in the Vietnam Construction Industry. Journal for the Advancement of Performance Information and Value, 13, 8. doi:10.37265/japiv.v13i1.131
Lee, H.-Y., Shiue, F.-J., Zheng, M.-C., & Chang, Y.-C. (2020). Integrating value estimation and simulation for contractor selection. Automation in Construction, 119, 103340.
Lin, C.-C., Wang, W.-C., & Yu, W.-D. (2008). Improving AHP for construction with an adaptive AHP approach (A3). Automation in Construction, 17(2), 180-187. doi:https://doi.org/10.1016/j.autcon.2007.03.004
Lines, B. C., Kakarapalli, R., & Nguyen, P. H. D. (2020). Does Best Value Procurement Cost More than Low-Bid? A Total Project Cost Perspective. International Journal of Construction Education and Research, 1-16. doi:10.1080/15578771.2020.1777489
Mohamad, I. B., & Usman, D. (2013). Standardization and its effects on K-means clustering algorithm. Research Journal of Applied Sciences, Engineering and Technology, 6(17), 3299-3303.
Nasir, D., McCabe, B., & Hartono, L. (2003). Evaluating Risk in Construction–Schedule Model (ERIC–S): Construction Schedule Risk Model. Journal of Construction Engineering and Management, 129(5), 518-527. doi:doi:10.1061/(ASCE)0733-9364(2003)129:5(518)
Nguyen, P. H. D., Lines, B. C., & Tran, D. Q. (2018). Best-Value Procurement in Design-Bid-Build Construction Projects: Empirical Analysis of Selection Outcomes. Journal of Construction Engineering and Management, 144(10), 04018093. doi:doi:10.1061/(ASCE)CO.1943-7862.0001550
Ökmen, Ö., & Öztaş, A. (2008). Construction Project Network Evaluation with Correlated Schedule Risk Analysis Model. Journal of Construction Engineering and Management, 134(1), 49-63. doi:doi:10.1061/(ASCE)0733-9364(2008)134:1(49)
Perrenoud, A., Lines, B. C., Savicky, J., & Sullivan, K. T. (2017). Using Best-Value Procurement to Measure the Impact of Initial Risk-Management Capability on Qualitative Construction Performance. Journal of Management in Engineering, 33(5), 04017019. doi:doi:10.1061/(ASCE)ME.1943-5479.0000535
Ridwan, M. R., & Retnawati, H. (2021). Application of Cluster Analysis Using Agglomerative Method. NUMERICAL Jurnal Matematika dan Pendidikan Matematika, 5, 33-48. doi:10.25217/numerical.v5i1.1358
Singh, D., & Tiong, R. L. (2006). Contractor selection criteria: investigation of opinions of Singapore construction practitioners. Journal of Construction Engineering and Management, 132(9), 998-1008.
Sullivan, K. T., & Guo, Y. (2009). Contractor cash flow and profitability analysis between best value and low bid. Cost engineering, 51(9), 16-20.
Trebuňa, P., & Halčinová, J. (2012). Experimental Modelling of the Cluster Analysis Processes. Procedia Engineering, 48, 673-678. doi:https://doi.org/10.1016/j.proeng.2012.09.569
Waga Arachchige, A., & Ranasinghe, M. (2015). Study on the impact of accidents on construction projects.
Wang, W.-C., Yu, W.-d., Yang, I. T., Lin, C.-C., Lee, M.-T., & Cheng, Y.-Y. (2013). Applying the AHP to support the best-value contractor selection – lessons learned from two case studies in Taiwan. Journal of Civil Engineering and Management, 19(1), 24-36. doi:10.3846/13923730.2012.734851
Yang, J. B., & Wang, W. C. (2003). Contractor selection by the most advantageous tendering approach in Taiwan. Journal of the Chinese Institute of Engineers, 26(3), 381-387. doi:10.1080/02533839.2003.9670792
Yu, W.-d., & Wang, K.-W. (2012). Best Value or Lowest Bid? A Quantitative Perspective. Journal of Construction Engineering and Management, 138(1), 128-134. doi:10.1061/(ASCE)CO.1943-7862.0000414