Unlocking Innovation: Developing a Decision Making Framework for the Bidding Process of Innovative Projects

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Abstract

This master thesis is focused on developing a comprehensive decision-making framework for the bidding process of innovative projects in the EPC industry. The research explores the current literature on the bidding process, risks, uncertainties, managing risks during the bidding process, and decision-making. It identifies EPC contractors' internal and external challenges and provides insights into overcoming them. The research also assesses the risks associated with EPC contractors and provides recommendations for risk mitigation. One of the significant challenges in deciding whether to fund innovative projects is assessing the innovativeness level of the project. This assessment is crucial because more innovativeness means more unknowns and risks. Additionally, human factors play a significant role in decision-making since risks perception can vary from person to person. Therefore, a decision-making framework that encompasses all the factors involved in the bidding process for innovative projects is necessary. This thesis addresses three research questions: (1) How do you manage risks in the bidding process for innovative projects in the body of knowledge? (2) how are decisions taken during the bidding process by EPC contractors? Furthermore, (3) what are the challenges and opportunities for improving decision-making? Finally, the thesis proposes a new decision-making framework that integrates innovativeness assessment in the decision-making process by considering all the factors around such decisions.