A decision support system for contractor prequalification for surety bonding

In the construction bonding business, a complex and comprehensive prequalification or assessment process is done to evaluate contractor, project, and contractual risks. Previous studies have focused mainly on contractor prequalification from the owner's or consultant's perspective. There remains a need for a model to evaluate the contractor and project-specific aspects (i.e., project team and contractual risks) from the surety bonding perspective. This paper identifies and classifies the most relevant evaluation criteria that surety underwriters and brokers consider when evaluating a specific construction project for bonding purposes. Several data collection techniques (questionnaires, one-on-one interviews, and interacting group meetings), with highly experienced surety experts, were conducted to compile a comprehensive and detailed list of the evaluation criteria. Both fuzzy logic and expert systems are combined to develop a decision support system (DSS) for use in contractor and project evaluation. An approach for fuzzy membership function estimation is presented using a traditional membership function estimation technique, integrated with data of contractor prequalification cases. Thirty-eight alternative system configurations are investigated to determine the most accurate one. The system is validated using 32 prequalification cases, and the accuracy of the system is found to be 84.0%.

Research highlights
► A model was developed to evaluate both contractor- and project-specific aspects from the surety bonding perspective.
► The model provides a systematic and structured approach for contractor prequalification.
► A comprehensive and detailed list of the important criteria for contractor and project prequalification was complied.
► A new approach for fuzzy membership function estimation is presented.
► The model decreases the subjectivity in the contractor prequalification process and makes its logic easy to trace.