This paper reviews the key papers published in the time period from 1999 to 2013 and extracted the effective factors on overhead costs of the literature further by sending questionnaire to 49 authoritative contractor companies in Iran and collecting 25 valid responses. Overhead costs, the major sectors of the project costs, is one of the important cost stations which can have better control and management which leads to the increasing of the winning chance in the bids’ companies and have a considerable effect on the financial condition of the company. Construction companies must search continuously for finding ways of reducing their costs and offering high quality services if they want to stay in the competition. The increasing of the competitiveness of the active companies in the field of construction is one of the most important strategic purposes in the construction industry. Nowadays, construction industry is one of the most important sectors in the competitive markets. Keywords: contractor, Ghana, interview and documents, pricing, tendering. Thus looking at the three systematic processes of formal risk management, it cannot be concluded that contractors in Ghana practice formal risk management although it is clear that they take account of risks when pricing their work. The contractors’ risk allowances seemed to be guided by concerns about competition and winning the job rather than the true cost of risk. Indeed, none of the contractors indicated any knowledge of published risk models. No formal and analytical risk models were used. This was based mainly on the direct judgement of the quantity surveyors who calculated the price, based on their intuition and experience. Risk allowances of 5-7.5% were included in the profit margin of some bill item prices. The main determinants of price seemed to be the actual direct costs level of competition delivery time of the project payment regime and clarity of tender documents. Most of them established their bidding price by building up prices for labour (14%), plant (9%), materials (45%), overhead (15%) and profit (10%). Seven contractors were studied to ascertain how they put together a price, and how risk apportionment influences price. Therefore one objective was to test whether there are systematic differences between the approaches in different places. The contextual nature of tendering practices suggested that there may be differences in approach between countries. Box 219 Reading, RG6 6AW The way that contractors in Ghana establish a bidding price, and include allowances for risk in their prices is investigated using unstructured interviews and documentary analysis. HOW CONTRACTORS IN GHANA INCLUDE RISK IN THEIR BID PRICES Samuel Laryea and Will Hughes School of Construction Management and Engineering, University of Reading, UK, P.O.
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