Factors affecting a contractor's mark-up size decision in Saudi Arabia

Abstract

Deciding upon the right mark-up to add to an estimate is not an easy task for a contractor. The mark-up must be small enough to ensure a good chance of winning the contract, yet big enough to realize a reasonable profit. The determination of the proper mark-up size entails the evaluation of numerous factors. This study presents 37 factors, with their relative importance to contractors operating in Saudi Arabia, underlying the mark-up size decision. The size of contract and availability of required cash, not competition, labour availability and profitability, are the most important factors that affect mark-up size decision.