International Journal of Project Management 19 (2001) 313324

www.elsevier.com/locate/ijproman

Multi-criteria assessment of the probability of winning in the

competitive bidding process
E. Cagno a, F. Caron a,*, A. Perego b
a

Department of Mechanical Engineering, Politecnico di Milano, Piazza Leonardo da Vinci 32, 20133 Milano, Italy
b
Department of Mechanical Engineering, Universita degli Studi di Brescia, Via Branze 38, 25123 Brescia, Italy
Received 1 April 1999; received in revised form 30 August 1999; accepted 14 March 2000

Abstract
The paper describes a simulation approach based on the Analytic Hierarchy Process (AHP) to assess the probability of winning
in a competitive bidding process where competing bids are evaluated on a multiple criteria basis, assuming the point of view of the
contractor. The model allows the contractor to dene his bidding strategy on the basis of the information currently available concerning the owner, the competitors, and the prole of his own bid. The model is applied to an auction, where a number of contractors compete for the design and construction of a process plant in a developing country. # 2001 Elsevier Science Ltd and
IPMA. All rights reserved.
Keywords: Competitive bidding; Multi-Attribute Decision Making (MADM); Analytic Hierarchy Process (AHP); Uncertainty; Simulation

1. Introduction
From the contractor point of view competitive bidding
poses the problem of the choice of the competitive prole
of the single bid, pursuing the objective of winning the
competition without overbidding. The bid prole in terms
of technical, nancial, service-related and contractual
aspects determines both the expected cost (C) and the
probability of winning (PWIN) (Fig. 1). The latter
depends, indeed, on the competitive value of the bid
which may be evaluated considering both the evaluation
criteria set by the owner, and the competitors' bids
prole. The bidding problem is generally a question of
choosing the bid prole which maximizes the expected
prot contribution (EPC = PWIN(P C)), where P is the
price oered. However, in order to enter a new market or
when there is a work under-load, the contractor could
accept a lower EPC, trading o a lower prot contribution with a greater probability of winning.
In industrial practice, bids are usually evaluated on
the basis of multiple criteria considering the main
aspects which take value for the owner [1]. The appraisal
* Corresponding author. Tel.: +39-2-2399-4812; fax: +39-2-70638377.
E-mail address: franco.caron@polimi.it (F. Caron).

scheme is therefore a sort of Multi-Attribute Decision

Making (MADM) technique where both economic and
technical elements must be considered. In fact, due to the
complexity of the oered `product', bids may conform
dierently to the specic requirements and be nonhomogeneous in their technical, nancial, service-related
and contractual aspects. Moreover, the growing level of
competition together with increased customer expectations
have broadened the spectrum of service and nancial
aspects which are used to dierentiate competing bids.
Since competitive bidding is a one of a kind process,
the proposal manager has to face the uncertainty concerning his judgments, due to an imprecise and vague
knowledge of the competing context (e.g. the appraisal
scheme of the owner and the prole of competitors'
bids) and the estimated cost of the bid, as well. The
degree of uncertainty is generally high at the beginning
of the bid preparation process and reduces as new pieces
of information become available.
Both the problem of accurate cost estimate and
quantitative evaluation of the probability of winning are
well recognised as fundamental issues in the bid preparation process [25]. The paper focuses on the latter
issue, since fewer results are available, especially in
decision contexts in which multiple, quantitative and
qualitative, factors have to be considered. The paper

0263-7863/01/$20.00 # 2001 Elsevier Science Ltd and IPMA. All rights reserved.
PII: S0263-7863(00)00020-X

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E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

Fig. 1. Decision framework in the bid preparation process.

presents a simulation based AHP (Analytic Hierarchy

Process) approach to the problem of assessing the
probability of winning in a competitive bidding process,
focusing on the uncertainty typical of this kind of process.
2. Literature review
Models so far developed to assess the probability of
winning are mainly based on the assumption that the
competitive value of the bid and thus the probability of
winning primarily depend on the price oered. Various
methods of calculating PWIN as a function of the price
oered have been suggested [4,610]. In most cases, the
computation of PWIN is a hard task due to the necessity,
on one hand, to consider the relationships of dependence among the probability of winning of competing
bids and on the other, to refer to historical data on
competitors' past performances. These diculties have
the eect of reducing the user's condence in the results
of the above-mentioned techniques. Moreover, taking
decisions based just upon the price is getting less and
less important and the only way to design useful decisional support tools is to take into account non-price
competitive factors as well.
As a consequence, the importance of non-price factors is well recognised in the literature [5,1114]. Table 1
provides a tentative overview of the main competitive
factors describing the prole of a bid concerning the
design and construction of a process plant. Even though
some papers also suggest to correct price based models
with non-price elements [5,1113], no analytical means
is provided to implement these suggestions. So the

application of MADM techniques appears to be a more

eective way to approach this kind of problem. Such
techniques include:
. scoring methods which are simple, exible, and
capable of integrating non-homogenous information (quantitative and qualitative, objective and
subjective), taking advantage of the full spectrum
and the variety of information available from previous competitions or the expertise and perception
from managers and practitioners.
. standard AHP [15,16] is based on a deterministic
approach, concerning the comparison of various
bid proles [14]. In the deterministic version of
AHP, judgments are expressed in a linguistic
scale and every judgment is translated into a
numerical point value (see Fig. 2). The result of the
evaluation process is a list of priority indices
representing the relative competitive value of each
bid. If the contractor feels unsatised with the
priority index associated with his own bid, the bid
prole could be modied and the priority indices
re-evaluated.

The application of scoring methods and the deterministic AHP to competitive bidding has two main shortcomings:
1. the techniques make no reference to the uncertainty which characterizes the contractor's judgments;
2. the techniques do not provide a quantitative measure of the probability of winning.

E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

315

Table 1
Relevant factors in process plant design and construction
Delivery time

Time interval between the coming into force of the contract and the plant start-up

Technical assistance
Technology transfer
Process technology
Dependability
Safety
Price
Terms of payment
Financial package
Utilisation of local vendors
Contractors co-operation

Maintenance service oered to the owner after plant start-up

Training service to help operators and managers eectively run the plant
Process features inuencing plant performance (quality, eciency,...)
Plant performance in terms of reliability, maintainability, availability and supportability
Plant performance in terms of operators safety and environmental impact
Monetary value of the oered plant
Time prole for the owner expenditures
Capacity of proposing convenient nancial sources to the owner
Share of local goods and services within the bid scope of work
Measure of the overall nancial solidity and technical capacity provided by co-operation forms
(consortium, joint-venture,...)
Measure of the accomplishment of contract clauses specied in tender documents
Fine the contractor commits to pay in case of damages for the owner due to delay in delivery time

Conformity to tender documents

Liquidated damages clause

Fig. 2. Basic structure of the AHP.

Indeed, judgments are translated into point numerical

values irrespective of the level of uncertainty which
inevitably characterizes the decision maker when he
assumes the importance of evaluation criteria and when
he compares the competing bids.
Moreover, even if there is a correlation between the
priority index and the probability of winning, in that a
bid with a higher priority index has a greater probability
of winning, no quantitative measure of the probability
of winning can be evinced by this analysis. In fact, two
bids with the same dierence in priority indices could
either have extremely dierent probabilities of winning
if the contractor is very condent in his judgments and,
on the other hand, very similar probabilities of winning
if the contractor is very uncertain.

In the following section, a probabilistic version of the

AHP is presented which is able to include the uncertainty of
the contractor judgments and thus provide both a measure
of the dispersion of each priority index around its mean
value, and a quantitative measure of the probability of
winning.
3. Assessing the probability of winning
AHP can deal with decisional problems in both a deterministic and a probabilistic way, even if the vast majority of
previous applications has used a deterministic model [16].
This characteristic is not exclusive of AHP, since every
MADM technique can be extended to include uncertainty.

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E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

In the probabilistic version, uncertainty in judgments

can be accounted for by substituting the point estimates
with interval judgments, i.e., judgments which can take
values in a given range according to a specied probability distribution function [17]. Interval judgments can
represent both the uncertainty of each individual
involved in the decision process and the dispersion of
judgments in group decision making. This approach
avoids the reduction of the contractor judgments to
point estimates, taking into account explicitly the
uncertainty inherent in the decision process. Moreover,
it is a source of useful information (e.g., the estimate of
the probability of winning) which would be lost otherwise. While in the deterministic approach judgments are
point estimates and the outcome is a comparison
between the competing bids in terms of their nal
priority indices, in the probabilistic approach judgments
are random variables and so are the overall priority
indices. In addition to single-point priority indices
(assuming the mean value of the distribution of the nal
priority as the single-point estimate) two kinds of relevant information are therefore available:
. a measure of the dispersion, such as the standard
deviation, of nal priorities around the singlepoint estimate;
. the probability of winning the auction for each
competitor.

The probabilistic approach requires the denition of:

1. a means to derive the nal priorities and the
probabilities of winning;
2. the probability distribution to describe the interval
judgments.
When some or all the judgments in the decision hierarchy are treated as random variables, the application of
any analytic means to assess the probability of winning
generally becomes a theoretically and computationally
prohibitive problem [1719]. As a consequence, it is
easier and more practical to handle the uncertainty
regarding judgments in AHP using a Monte Carlo
simulation approach. At each replication, a set of point
judgments are extracted from the corresponding probability distribution functions (interval judgments). A
test evaluates the consistency of the set of judgments
and, in case of unacceptable inconsistency (i.e., consistency index above a given threshold [15]), a new set of
point judgments is extracted. Final overall priorities
describing the competitive value of each bid are derived,
according to the standard AHP procedure, from each
set of consistent point judgments. The number of replications in which a given bid outperforms the others, is
recorded and divided by the overall number of replications, giving an estimate of the bid's probability of

winning the auction.1 The number of replications must

be sucient to obtain a condence interval for the
probabilities of winning with a pre-set error at a pre-set
condence level.2 A owchart for the proposed Monte
Carlo simulation approach is given in Fig. 3.
The Monte Carlo approach can disregard the particular
distribution used to describe the interval judgments;
nevertheless, some recommendations should be considered. Although there are dierent ways of modeling
individual judgments [19] and aggregating them into a
group judgment [19,21], both choices should reect a
very precautionary approach in a highly dynamic and
risky environment such as competitive bidding. In this
context it is therefore recommended that:
. each expert is only asked a lower bound and an
upper bound for his judgment;
. a uniform distribution is used in the interval
between the lower and upper bounds (i.e., giving
equal likelihood to all the possible values in the
interval judgment) for individual judgment;
. a uniform distribution is also used for group
judgment considering an interval judgment determined by the minimum lower bound and the
maximum upper bound stemming from individual
judgments.

This approach, giving equal likelihood to all the possible values included in an interval judgment, guarantees
maximum safeguard of the residual uncertainty both for
individual and group judgments. Furthermore, it
resolves the typical problem that experts are inclined to
be excessively condent in their single-point estimates
(i.e. the most likely) giving unreasonable strict ranges
near the most likely value [22]. Moreover, there is no
need to ask for excessively strict interval judgments,
since the probability distribution of nal priorities is
generally more thickened than the probability distributions of the interval judgments thanks to the intrinsic
robustness of the AHP based approach [23,24]. This is
especially true for a high number of hierarchy levels and
elements to compare at each level.

1
Since the victory-event is of a Bernoulli distribution (the contractor wins or loses), the probability of winning can be modeled as a
binomial variable. Thus, provided a pre-set error and condence level
are satised, the ratio of the number of victories and the width of the
sample, i.e. the number of times that a bid wins over the overall
replications otherwise called the sample proportion gives the
asymptotic estimate of the probabilitly of winning.
2
The width of the sample (i.e. the number of replications)is
obtained by equalising the half condence interval and the maximum
per-set error. However the reader could refer to Montgomery [20] for a
rigorous and completer review of the dierent approaches to constructing the interval for the probability of winning and calculating the
right width of the sample.

E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

317

Fig. 3. Flowchart of the proposed Monte Carlo simulation approach.

Fig. 4. Hierarchy of the competitive factors and bids in the example problem.

4. Example problem
Consider an auction for the design and construction
of a process plant in a developing country.3 In the pre3

The example has been written in strict collaboration with the

proposal team in an Engineering & Contracting company which was
directly responsible for arranging the bid and acquiring a similar project.

qualication phase, three out of a number of contractors (say contractors A, B and C) are invited to the
nal evaluation process. Assume that contractor A
wants to estimate his probability of winning the auction
in order to dene his bidding strategy and/or to adjust
his bid prole. On the basis of the tender documents
concerning the auction and the information available
about the behavior of the owner in previous auctions, a
set of evaluation criteria has been assumed [25] (see

0.026
0.764
0.108
0.128
0.031
0.110
0.523
0.367
0.039
0.564
0.346
0.090
0.126
0.230
0.648
0.122
0.142
0.071
0.517
0.412
0.033
0.084
0.472
0.444
0.045
0.657
0.147
0.196
0.021
0.182
0.273
0.545
0.041
0.318
0.255
0.427
0.114
0.199
0.356
0.445
0.217
0.708
0.123
0.169
0.127
0.333
0.167
0.500
0.038
0.182
0.545
0.273
Weight
Alternative
A
B
C
Priority
0.359
0.336
0.305

Tender
document
Contractor
cooperation
Local
vendors
Financial
pack
Terms
payment
Process
technology
Technical
assistance

Technical
transfer
Delivery
time

Dependability

Safety

Price

Financial conditions 0.346

Plant performance 0.176
Service level 0.382
Weight

Table 2
Deterministic approach: relative importance of each factor, relative priorities of each alternative for each factor and nal single-point overall priorities

Liquidated
damages

E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

Contractual conditions 0.096

318

Fig. 4 and refer to Table 1 for a detailed description of

each competitive factor).
Assuming contractor A uses a deterministic approach,
Table 2 reports the relative importance of each factor,
the relative priorities of each alternative for each factor
and the nal single-point overall priorities (Appendix A
reports the details which allow the reader to obtain the
results in Table 2). Contractor A's bid seems to be the
most competitive but the expert would probably be little
condent with the obtained rank. In fact, the priorities
of competing bids resulting from the deterministic
approach are very similar and it is hardly possible to
associate a measure of the degree of likelihood to the
obtained rank. Further analysis is needed to understand
if the resulting dierence in the competitive value of the
alternatives is real or misleading. It should be noted that
even if the overall priorities were very dierentiated, it
could be misleading to be excessively condent about
the supremacy of the rst ranked alternative without a
measure of the degree of likelihood of the obtained
rank. A step further could be to carry on a sensitivity
analysis on the most critical assumptions. For illustrative purposes, Table 3 reports the range of variation
of the importance weights of the rst level evaluation
criteria which preserves the obtained rank. Considering
for example the service level, the estimated weight 0.382
may vary from 0.327 to 0.518 without modifying the
rank order: A B C. When reaching the extreme values,
0.327 and 0.518, the rank order becomes: B A C and A
C B, respectively.
If contractor A uses the probabilistic approach based
on interval judgments, the distributions of the priority
of the three bids and their mean and standard deviation
values are shown in Fig. 5 and Table 4, respectively. The
probability of winning corresponding to the percentage
of simulation runs in which each bid resulted in a winner
is given in Table 5. By way of example, the matrix of the
interval-paired comparisons of the upper-level competitive factors, i.e. service level, plant performance, nancial
conditions and contractual conditions is reported in
Table 6. The assessment by interval judgments of the
relative importance of each factor and the evaluation of
alternative bids with respect to each competitive factor
are fully reported in Appendix B. The reader is referred
to Fig. 3 and Appendix B to reproduce results in
Tables 4 and 5, and Fig. 5. It should be noted that in the
case considered interval judgments represent a contractor's guess about the main features of the competing
bids and the owner's evaluation criteria. It is assumed
that a strong uncertainty characterizes the decision
makers resulting in very wide interval judgments (see
Table 6 and all tables in Appendix B). The sample width
for the calculation of the probability of winning is about
10,000 to give a pre-set error less than 1% with condence level at 95%. The corresponding computation
time is negligible (less than 20 s on a 166 MHz CPU).

E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

319

Table 3
Sensitivity analysis: range of variation of the importance weights of the rst level evaluation criteria which preserve the obtained rank: A B C (for
each extreme value of the variation range the new rank order is reported)
Service level
0.382

0.327
Rank
1B
2A
3C

Priority
0.347
0.346
0.307
Financial conditions
0.346

0.239
Rank
1A
2C
3B

Priority
0.385
0.308
0.307

Plant performance
0.176

0.518

Priority
0.397
0.302
0.301

Rank
1A
2C
3B

Rank
1A
2B
3C

0.389

Priority
0.349
0.348
0.303

Rank
1B
2A
3C

Rank
1A
2B
3C

Priority
0.388
0.338
0.274
Contractual conditions
0.096
Priority
0.347
0.336
0.317

0.323

Priority
0.335
0.334
0.331

Rank
1B
2A
3C

Priority
0.473
0.338
0.189

Rank
1A
2B
3C

Fig. 5. Distributions of the bids' priority (representing bids competitive value).

Some conclusions can be drawn by analyzing the distributions of nal priority. For instance, distribution of
contractor A is almost never overlapped with the distribution of contractor C, i.e., the bid of contractor A is
almost certainly `better' than the one of contractor C.
Second, nal priorities are little spread around the
respective mean values even though the original interval
judgments are very wide. More denitive conclusions
about the relative dominance of bids stems from the
analysis of the probabilities of winning. Contractor A
has the `greatest' probability of being awarded the contract (69.5%), while B is a long way behind (28.2%).
Contractor C is even further behind with very little
probability of winning (2.3%). With the current estimate of the competitive context, competitor A is likely
to be awarded the contract. Nevertheless, the contractor

can use this information in order to adjust his bid conguration according to all the possible above-cited
objectives (e.g. maximising the expected prot contribution, taking the risk corresponding to a given level
of probability of winning, etc.), in particular, to adapt
the bid to the owner evaluation factors and their relative
importance.

Table 4
Mean and standard deviation of the distributions of the bids priority
Distribution

Mean
Standard deviation

0.360
0.023

0.337
0.022

0.303
0.018

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E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

1. the models aiming to calculate the probability of

winning only on the basis of the price oered;
2. the single-point scoring methods which are unable
to take into account the uncertainty and to estimate the probability of winning.

Table 5
Probability of winning of the three short-listed bids
Bid

Table 6
Contractor's interval judgments of owner's preferences: comparison
matrix of the upper-level competitive factors and example of question
and answer
Bid value

Service

Performance Finance Contract

Service
Performance
Financial condition
Contract

1
[1/61/2]
[1/1.61/1.2]
[1/51/3]

[26]
1
[16]
[1/1.71/1.2]

[1.21.6]
[1/61]
1
[1/51/2]

[35]
[1.21.7]
[25]
1

Q: ``In order to assess the competitive value of the bid, which factor,
between Service Level and Contractual Conditions, is more important,
and by how much?''
A: ``Service Level is between moderately more important (=3) and
strongly more important (=5) than Contractual Conditions (=[35])

5. Conclusions
The paper has focused on the quantitative evaluation
of the probability of winning in the competitive bidding
process assuming the point of view of a potential contractor. The estimate of the probability of winning,
which depends on the competitive value of the proposed
bid with respect to competitors' bids, is a fundamental
input to the bidding strategy preparation.
The assessment of the bid competitive value and the
related probability of winning requires a guess about
both the appraisal scheme of the owner (i.e. owner's
evaluation criteria and relative importance of each criterion) and the prole of competitors' bids. It is
assumed that the owner evaluates competing bids on a
multiple criteria basis (e.g. technical, nancial, servicerelated and contractual aspects)
The paper proposes a simulation version of a MADM
technique (namely, the Analytic Hierarchy Process)
which is able to consider the multi-criteria appraisal
scheme of the owner. The model takes into account the
uncertainty which characterizes the competitive bidding
process, since it provides a framework supporting the
correct use of the information currently available concerning the competitive context. In fact: (i) it can be fed
by interval judgments about the relative importance of
criteria and competing bids; (ii) it does not force uncertain judgments into point priorities; (iii) it provides
measures of the likelihood of bids' priority, i.e. standard
deviations of nal priorities and probabilities of winning;
and (iv) it is very robust since uncertainty included in
the interval judgments tends to be reduced when calculating for each bid the probability of winning. The
model addresses the main shortcomings of previous
applications. More specically, it is an extension of:

Appendix A. Application of AHP with single point

judgments
Assessment by single point judgments of the relative
importance of each competitive factor and evaluation of
alternative bids with respect to each competitive factor
Bid value

Service Performance Finance Contract

Service
Performance
Financial
condition
Contract

1
1/2
1/1.2

2
1
2

1.2
1/2
1

4
1.7
4

1/4

1/1.7

1/4

Performance

Process
Dependability Safety
technology

Process technology 1
Dependability
1/3
Safety
1/5

Contract

3
1
1/2

5
2
1

Contract
Tender
Liquidated
cooperation document damages

Contract
1
cooperation
Tender document 1/1.3
Liquidated
1/1.5
damages

1.3

1.5

1
1/1.2

1.2
1

Process technology

A
B
C

1
2
2

1/2
1
1.4

1/2
1/1.4
1

Safety

A
B
C

1
1.5
3

1/1.5
1
2

1/3
1/2
1

E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

321

Terms of payment

Dependability

A
B
C

1
5
6

1/5
1
1/1.2

1/6
1.2
1

A
B
C

1
1/1.3
1.4

1.3
1
1.6

1/1.4
1/1.6
1

Local vendors

Price

A
B
C

1
3
1/2

1/3
1
1/5

2
5
1

A
B
C

1
1/5
1/3

5
1
1.2

3
1/1.2
1

Tender document

A
B
C

1
4
4

1/4
1
1/1.7

1/4
1.7
1

Service

Delivery Technical Technology

time
assistance transfer

Delivery time
1
Technical assistance 4
Technology transfer 5

1/4
1
2

1/5
1/2
1

Financial condition Price Terms Financial Local

package vendors
Price
Terms of payment
Financial package
Local vendors

1
1/1.4
3
3

1.4
1
4
4

1/3
1/4
1
1/1.2

1/3
1/4
1.2
1

Financial package

A
B
C

1
7
6

1/7
1
1/1.3

1/6
1.3
1

Contract cooperation

A
B
C

1
1/1.7
1/6

1.7
1
1/4

6
4
1

Liquidated damages

A
B
C

1
1/7
1/6

7
1
1.2

6
1/1.2
1

Appendix B. Application of AHP with interval judgments

Delivery time

A
B
C

1
3
1.5

1/3
1
1/2

1/1.5
2
1

Assessment by interval judgments of the relative

importance of each competitive factor and evaluation of
alternative bids with respect to each competitive factor
Bid value

Technology transfer

A
B
C

1
1/6
1/4

6
1
1.3

4
1/1.3
1

Service

PerformanceFinance Contract

Service
1
[26]
[1.21.6] [35]
Performance[1/61/2]
1
[1/61] [1.21.7]
Financial
[1/1.61/1.2][16]
1
[25]
condition
Contract
[1/51/3]
[1/1.71/1.2] [1/51/2]1

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E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

Performance

Process
Dependability Safety
technology

Process technology 1
Dependability
[1/41]
Safety
[1/61/2]

[14]
1
[1/41]

[26]
[14]
1

Contract

Contract
cooperation

Tender
document

Liquidated
damages

Contract
cooperation
Tender
document
Liquidated
damages

[11.5]

[1.21.7]

[1/1.51]

[11.3]

[1/1.71/1.2]

[1/1.31]

Tender document

A
B
C

1
[25]
[26]

[1/51/2]
1
[1/21/1.4]

[1/61/2]
[1.42]
1

Service

Delivery
time

Technical
assistance

Technical
transfer

Delivery time
Technical assistance
Technical transfer

1
[26]
[27]

[1/61/2]
1
[13]

[1/71/2]
[1/31]
1

Financial
condition

Technical assistance

A
B
C

1
[1/41/2]
[1.23]

[24]
1
[26]

[1/31/1.2]
[1/61/2]
1

Price

Terms

Financial Local
package vendors

Price
1
[1.21.6] [1/61/2] [1/71/3]
Terms of
[1/1.61/1.2] 1
[1/41/1.8] [1/51/2]
payment
Financial
[26]
[1.84] 1
[11.4]
package
Local vendors [37]
[25]
[1/1.41] 1

Process technology

Delivery time

A
B
C

1
[27]
[1.22]

[1/71/2]
1
[1.41.6]

[1/21/1.2]
[1/1.61/1.4]
1

A
B
C

1
[24]
[1.53]

[1/41/2]
1
[1/31/1.5]

[1/31/1.5]
[1.53]
1

Safety

Technology transfer A

A
B
C

1
[1.21.6]
[23]

[1/1.61/1.2]
1
[26]

[1/31/2]
[1/61/2]
1

A
B
C

1
[69]
[1.86]
[1/91/6]
1
[1/1.21/1.8]
[1/61/1.8] [1.21.8] 1

Terms of payment

Dependability

A
B
C

1
[27]
[26]

[1/71/2]
1
[1/1.71]

[1/61/2]
[11.7]
1

A
B
C

1
[1/1.71/1.2]
[1.21.5]

[1.21.7]
1
[1.21.6]

[1/1.51/1.2]
[1/1.61/1.2]
1

Local vendors

Price

A
B
C

1
[13]
[1/51/2]

[1/31]
1
[1/81/3]

[25]
[38]
1

A
B
C

1
[1/91/5]
[1/51/2]

[59]
1
[1.21.6]

[25]
[1/1.61/1.2]
1

E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

Financial package

A
B
C

1
[69]
[57]

[1/91/6]
1
[1/1.51]

[1/71/5]
[11.5]
1

Contract cooperation

A
B
C

1
[1/31/1.7]
[1/61/2]

[1.73]
1
[1/61/1.8]

[26]
[1.86]
1

Liquidated damages

A
B
C

1
[1/91/6]
[1/81/2]

[69]
1
[1.24]

[28]
[1/41/1.2]
1

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Enrico Cagno has done M.S. in Production and Management Engineering
at the Politecnico di Milano, Italy. He
is a Ph.D. student of Industrial Engineering in the Department of
Mechanical Engineering, Politecnico
di Milano. His primary research interests are Project Management, Decision
Support System, Competitive Bidding
and Risk Analysis.

Franco Caron is an Associate Professor in the Department of Mechanical Engineering at the Politecnico di
Milano, Italy, where he teaches Project
Management. He also teaches Industrial Logistics at the University of
Brescia. His research interests include
Project
Management,
Integrated
Logistics, Risk Analysis and Simulation Methodologies.

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E. Cagno et al. / International Journal of Project Management 19 (2001) 313324

Alessandro Perego is a Research Professor in the Department of Mechanical Engineering at the University of
Brescia, Italy, where he teaches Industrial Logistics. His research interests
are Project Management and Integrated Logistics.