Impact of Digital Tendering on Construction Cost Variability in Public Projects

Thesis Abstract

This study investigates the impact of digital tendering on construction cost variability in public projects, addressing the persistent challenge of cost overruns and bid volatility in procurement processes. The problem stems from traditional paper-based tendering practices that limit transparency, discourage competitive bidding, and introduce information asymmetry, thereby contributing to unpredictable bid and contract values. The aim is to quantify the extent to which digital tendering reduces cost variability and to identify the mechanisms through which digital platforms influence bidding behavior, supplier participation, and project cost outcomes. Specifically, the objectives are to (1) measure cost variability across digitally tendered versus traditionally tendered public projects; (2) examine the relationship between digital tendering maturity (e-tendering adoption, e-bid submission, online evaluation) and bid dispersion metrics; (3) assess the moderating effects of project size, procurement method, and market competition on cost variability; (4) explore practitioners’ perceptions of digital tendering's influence on transparency, risk allocation, and value for money; and (5) develop a predictive model to forecast bid variability based on digital tendering indicators and project characteristics. The methodology adopts a mixed-methods research design, integrating quantitative analysis with qualitative insights to triangulate findings. The population comprises public sector construction projects awarded under digital tendering platforms within a metropolitan region over a ten-year period (2015–2025). A stratified random sample of 120 completed projects is selected, ensuring representation across project sizes, procurement methods, and sectors (residential, commercial, and infrastructure). For the qualitative strand, 20 semi-structured interviews are conducted with procurement officials, contract managers, and bid consultants, complemented by document analysis of tender documents and platform audit trails. Data collection instruments include a structured database extracted from public procurement records, platform analytics reports, and a validated contractor survey measuring perceived bid volatility and transparency. Instruments are tested for validity and reliability through pilot testing with 15 professionals and Cronbach’s alpha analyses (targeting ? ? 0.70 for multi-item scales). Quantitative data are analyzed using descriptive statistics, measures of variability (coefficient of variation, standard deviation of bid prices), and inferential techniques including multiple regression to assess the relationship between digital tendering indicators (e-tendering adoption index, online bid submission rate, electronic evaluation speed) and bid cost variability, ANOVA to compare variability across tendering modes, and interaction terms to identify moderating effects of project size and market competition. Time-series analysis and difference-in-differences methods are employed to control for temporal effects and policy changes. The qualitative data undergo thematic analysis guided by Braun and Clarke, with coding validated by inter-coder reliability checks (Cohen’s kappa > 0.70). A conceptual model integrating signaling theory and transaction cost economics is applied to interpret how digital tendering reduces information asymmetry, improves governance, and lowers transaction costs, thereby mitigating cost variability. Expected findings anticipate that higher digital tendering maturity correlates with reduced bid dispersion and smoother final contract values, with a more pronounced effect in large-scale and highly competitive markets. The study expects to identify secondary mechanisms, including enhanced bid transparency, faster procurement cycles, and standardized evaluation criteria, as drivers of variability reduction. The contribution to knowledge includes empirical evidence on the causal link between digital tendering and cost stability in public procurement, a validated predictive model for bid variability, and practical guidelines for policymakers on scaling digital tendering to enhance value for money. The study concludes that digital tendering, when well-implemented with robust data governance and platform interoperability, substantially diminishes cost variability in public projects and improves procurement efficiency. Recommendations include fostering interoperability standards, capacity-building for procurement personnel, continuous transparency auditing, and periodic impact assessments to sustain the benefits of digital tendering in public construction.