A Classification of Factors Influencing Participation in Collusive Tendering Agreements

The morality of marketing practices in the construction industry is an issue of economic and social significance which attracts public and legislative concern. Criticisms, as well as negative publicity, are mostly concentrated around collusive tendering: illegal agreements between tenderers that result in seemingly, but not really, competitive bids, price fixing or market distribution schemes that circumvent the spirit of free competition and defraud clients. Even though collusive tendering has been identified as an endemic malaise of building, its behavioural and moral dimensions have not been systematically studied before. These are the focus of this paper which presents a literature review that was carried out in order to identify the variables influencing behavioural intent towards collusive tendering agreements and means of reaching them. The paper describes part of an exploratory empirical investigation involving a random sample of estimators in the largest construction organisations in Australia. First, the respondents’ perceived impact of the list of variables on their expressed behavioural intent are presented. Then, their preferred ethical frameworks are presented and discussed. Finally factor analysis is used to classify the decision making variables. The results indicate a strong teleological orientation of the respondents.