Purpose The decision to bid or not to bid for new projects determines contractors’ propensity for business success or failure. The purpose of this paper is to investigate the factors that affect the decision of indigenous construction contractors to bid or not to bid in Nigeria. Design/methodology/approach Analysis was conducted on data from questionnaires received from 64 engineering management employees of leading construction companies which are members of Nigeria’s Federation of Construction Industry. The study identified 41 significant decision factors often considered by Nigerian indigenous contractors before the bid. Mean item scores were obtained for each of the factors. Principal component analysis was used to point out the most significant decision factors. Findings Results revealed significant orthogonal relationships between the factors. Only 11 of the 41 factors are statistically significant to influence contractors’ decision to bid or not to bid. Most of the significant items were amongst the least rated items by the participants. The post hoc decision factors include consultant’s interpretation of project specifications, previous relationship between the intending bidder and client, availability of other projects at the time of bidding, technological complexity of the project under consideration and prequalification requirements. Others include the propensity for resource price fluctuation, business capacity of partners, amount of own work vs subcontracted work, required rate of return on investment and difficulty in obtaining finance. Originality/value The practical implication of these findings are as follows: the orthogonal relationship between the decision factors implies non-linear relationship between the factors and actual decision to bid or not to bid, and that bid success is often not predictable by bid behaviour; many of the bid decision factors rated highest by indigenous contractors seldom impact the contractors’ actual bid decisions; local and international players can adopt the significant decision factors elicited in this study for managing their structures for inter-organizational partnerships.
Purpose -Management capability is one of the major criteria for evaluating construction contractors during prequalification and tender evaluation This paper aims to investigate the impact of contractors' management capability as a prequalification criterion on cost and time performance of selected building projects. Design/methodology/approach -Prequalification assessments of management capability of wining contractors as well as cost data relating to 77 completed building projects executed between 2004 and 2007 are obtained. The data obtained from a questionnaire and archival data are analyzed using one-way analysis of variance and multiple regression. Findings -The results reveal that contractors' management capability has significant impact on cost and time performance of building projects as evidenced by p-values of 0.042 and 0.039, respectively. Practical implications -The research could be of significant benefit at the research implementation stage of public procurement practice especially in relation to the construction industry in Nigeria. Construction practitioners involved in prequalification and tender evaluation should continue to seek relevant information relating to management capability from the candidate contractors during prequalification and tender evaluation. Originality/value -Models capable of predicting the final cost and duration of building projects are eventually derived based on prequalification assessment of contractors on management capability, proposed contract duration and the initial contract figure. The goodness of fit of the models as defined by the value of R 2 is found to be 96.2 percent and 90.01 percent for cost and time, respectively; thus signifying high predictive efficacy of the models.
Purpose Evidence suggests project owners could use advance payments to prevent cost escalations. The purpose of this paper is to elicit the relationships between causations of overruns when advance payments are issued to contractors. Design/methodology/approach In total, 97 responses from a questionnaire survey were analysed. Additional data on 51 projects, completed between 2000 and 2014 under different advance payments regimes, were also obtained and analysed. Findings Project owners issue advance payments to contractors so as to avoid delays. However, statistical correlation between advance payments and overrun causations are not significant. Although cost overruns were higher in large projects than in small projects, schedule overruns were more in small projects than in large projects. Schedule overruns were caused most significantly by contractors’ site management approaches. Design and documentation issues were identified as the most prevalent cause of cost overruns. Regression models are proposed to elicit overruns when advance payments are issued. Practical implications Extant debates on project overruns in construction and project management literature are robust. Nonetheless, the study elicits considerable knowledge gaps regarding the roles of advance payments in fostering project performance. Originality/value This pioneering work indexes the relationship between advance payment and project overruns in Nigeria. It is also the first attempt to document the probability distribution of overruns in Nigeria, particularly under specific advance payment regimes.
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