Application of Fuzzy AHP and Fuzzy TOPSIS in Selecting Proper Contractors: Case of Sistan and Baluchistan Province Gas Company

ABSTRACT: The selection of contractors is, counted to be the most substantial decision of an employer before the execution of a project. During the recent years there have been many problems during the execution of projects leading to waste of lots of capitals. Yet, there is always a significant risk during the selection of contractors. In this research, legal limits and requirements in connection with the organization of governmental tenders are studied to determine effective factors on the selection of contractors by Sistan & Baluchistan Province Gas Company in Iran, and to present proper solutions to choose the most appropriate contractor. A descriptive - measurement method is used for this research to gather information from experts of the company to analyze them in order to design a fuzzy model to assess if contractors are qualified or not. In this context, a fuzzy method of AHP (Analytic Hierarchy Process) is applied to determine weights of criteria and sub-criteria in selection of contractors. Then, the fuzzy method of TOPSIS (Technique for Order Preference by Similarity to Ideal Situation) is used to classify the top three contractors who achieved highest points of evaluation. By applying fuzzy AHP method, the relative weight of executive records, good records, financial powers, technical and planning capacities, and equipment and machinery criteria are determined to be 0.215, 0.216, 0.205, 0.186, and 0.178 respectively. Three best qualified liable contractors are then selected based on the given scores in three conditions as the pessimistic, most likely and optimistic to the above criteria using fuzzy TOPSIS technique. The proposed model in this research, offers a systematic method to identify effective measures for evaluating competence of contractors and selection of contractors that involve and consider the employer's goals; as well as the type of project, available resources and executive constraints. Keywords: Contractor selection, analytic hierarchy process, TOPSIS, fuzzy set, triangular fuzzy numbers. …………………………………………………………………………………………………………………………