An Assessment of Factors Affecting the Selection of Procurement Methods in Nigeria Construction Projects
Chapter One
Aim and Objectives of the Study
This research aims to evaluate the factor that influence the choice of procurement method with a view to helping clients and consultants to be more selective in their choice of procurement system. In order to achieve this aim, the objectives of the study are to:
- To identify the criteria for the selection of procurement methods
- To identify the significant factors that affects the selection of procurement methods in construction projects.
- To evaluate the effects of the factors on selection of procurement methods.
CHAPTER TWO
LITERATURE REVIEW
The Nigeria Construction Industry
In Nigeria, like most developing countries, the construction industry plays a dominant role in the economic activities of the country. It is the sector of the economy, which transforms various resources into constructed economic and social infrastructures and facilities. According to Aniekwu and Osedeme (2002), in Nigeria, usually a substantial percentage of the economic resources laid out by the government in the form of budget proposals, is being devoted to the provision of infrastructural facilities and bases for other developmental objectives and these resources will have to be expended in and by the construction industry. This includes the construction of both buildings and civil engineering works with professionals and trained experts performing varied functions. Building works varies enormously in its scope and nature, from the erection of large multi- storey blocks to the execution of minor repair and maintenance works. The Nigerian construction industry evolved from the public works department (PWD) that metamorphosed into the Federal Ministry of Works and now Federal Ministry of Housing, Land and Urban Development (Wahab and Lawal, 2011). The industry is responsible for the employment of up to 2.5% of the employed persons or labour force in Nigeria (National Bureau of Statistics, 2010). In Nigeria, the contribution of the building and construction sector to the Gross Domestic Product is 3.01% during the first quarter of 2012. This was an improvement over a contribution of 2.82% during the first quarter of 2011 (National Bureau of Statistics, 2012). However, in many countries the construction industry often account for between 7-10 percent of the Gross Domestic Product (Wahab and Lawal, 2011). Thus, even with this improvement, much still has to be done to improve on the sector’s contribution to economic growth since it is an important part of the economical backbone of any country.
Construction Procurement Methods
The term ‘procurement method’ is used to describe the often complex network of relationships which are formed between clients, consultants and construction companies, to enable a building project to be realized (Sarah, Stanley and Hugh, 2007). Traditionally, construction projects starts with the client’s brief on which designs are based. The Architect and engineers prepare designs, in collaboration with quantity surveyor who advises on the cost implications of design variables. Tender process afterwards produces the contractor for the execution of the work. On the award, the successful contractor executes the work as designed under the supervision of the consultants. Thus, the approach separates the design, tendering process and construction as separate tasks. This separation of activities also led to sequencing of activities in which design is completed before construction commences. However, the variants of procurement methods available today metamorphosized from the need to improve construction project delivery, that is, project completion within time and budget (Babatunde, Opawole, & Ujaddughe, 2010) as well as due to the increased awareness of most clients especially in terms of the project performance criteria of time, cost and quality (Maizon et.al 2006). This has resulted in the evolution of the several variants of procurement method, and at present, there are more than a handful of procurement methods all with the major aim of meeting a quality product delivery at economical cost and time. A number of such procurement methods that are available in the construction industry are being explained hereafter.
Traditional method
The traditional procurement system remains by far the most popular method. The traditional structure for project procurement is a sequential method because the employer takes his scheme to an advanced stage with his professional team before appointing a contractor (SC Quantity Surveyors, 2012). The consultant’s role is seen as an independent one. The designer is employed to advise the client, design, ensure the work is kept within the cost limit and complies with the standards required. A quantity surveyor is engaged to give guidance on design costs and budgets, prepare bills of quantities, check tenders, prepare interim valuations and advise on the value of variations. The contract sum is often based on a Bill of Quantities provided by the Quantity Surveyor which quantifies, as far as possible, every aspect of the works. Consultant structural and services engineers may be employed either by the client, or his advisers, to design the specialist parts of the project.
CHAPTER THREE
RESEARCH METHODOLOGY
Research Population
The research population shall be government-funded organizations in Ondo State that have procurement/project/works department or section responsible for carrying out procurement of construction works within the organization. These will be represented by in-house construction industry professionals working with such organizations.
Sample Frame
The sample frame shall be limited to four set of public client organizations within Ondo State namely; Ministries, Local Governments, Agencies and Tertiary Institutions.
Sample Size
Since the number of the sample frame is too wide to be covered due to financial and time constraints there is a need to select a sample size, the sample size for this study is 20.
Data Collection Method/Techniques
The method of data collection will be the use of questionnaire. The data collection techniques will be the purposive sampling method. This is due to the nature of research problems and numerous population targets. The preliminary section of the questionnaire dwells on the background information of the respondents in order to check for the quality of data being analyzed while the other three sections addresses each of the three research objectives that forms the basis of this study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
Data presentation
A total number of 60 questionnaires were distributed within Ondo State which is the scope of the research. 15 were distributed to Ministries, 12 to Local Governments, 22 to Agencies and 11 to Tertiary Institutions. After distribution, a total number of 46 questionnaires were received and analyzed.
Summary of characteristics of respondents
Majority of the respondents are organizations that procure building projects mostly. This represents about 74% of the respondents. 26% engages in the procurement of civil engineering works while 0% is involved in heavy engineering procurement. This indicates that the findings of this research work have a larger bearing on procurement of building works than civil engineering works.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Conclusions
This study identified and assessed the various methods of procurement used for construction works in Ondo State, Nigeria. It has also identified and assessed the various factors that affect the choice of procurement methods for construction works in Ondo State, Nigeria. It has also being able to establish the relationship that exists between procurement method used and the cost and time performance of the construction projects in Ondo State, Nigeria. Therefore, it is concluded from the study that the direct labour method of procurement is the most used and considered the easiest procurement method in terms of its process and activities for the procurement of construction works in the public sector in Ondo state.
An examination of the factors that affects the selection of construction procurement methods also reveals that complexity i.e the need to have a competent contractor to handle client’s unique and high technology requirements and whose design and construction skills can be relied upon to satisfy their requirements in terms of the project’s characteristics and the services involved is the most significant factor to be considered in choosing a procurement method for construction works in the public sector of Ondo State, Nigeria. It follows then that consideration should be given to selecting a procurement method which will help to objectively assess the contractors in order to select one who can successfully achieve client’s objectives and technical requirements. Once this can be accomplished, then the client’s need for other important factors such as speed, time and cost certainty, and achieving value for money and public accountability can be achieved. Thus, a successful project can be realized.
Recommendations
From the conclusions reached, it is hereby recommended that;
- in selecting a procurement method for government-funded construction projects inOndo state, construction professionals working on such projects should give more attention to the need to carefully assess the procurement method to be used as to its satisfying the criteria of selecting a competent and reliable contractor whose design and construction skills could be relied upon in satisfying client’s need and project
Areas of further research
The results and conclusions reached in this study are inconclusive and are subject to further research. They give rise to other research questions that also needs to be addressed. This includes;
- assessing factors to be considered in determining if the design and construction skilland technicality of a contractor can be relied upon during the pre-contract
- developing a model that would relate the factors influencing the selection of procurement methods to the cost and time performance of a project.
REFERENCES
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