In many countries the construction industry has, however, attracted criticism forinefficiencies in outcomes such as time and cost overruns, low productivity, poorquality and inadequate customer satisfaction (Latham, 1994, Egan, 1998, Ericsson,2002, Chan et al., 2003). Practitioners, researchers and society at large have,therefore, called for a change in attitudes, behaviour and procedures in order toincrease the chances for construction projects to be successful and result in improvedend products (Love et al., 2000, Dubois and Gadde, 2002).
Increased complexity, uncertainty, and time
pressure in construction projects haveincreased the need for cooperation
among different project actors (Anvuur andKumaraswamy, 2007).
Traditionally, relationships are, however, very competitive
andadversarial in the construction industry (Cheung et al.,
2003), which to a large extentis due to the customary procurement
procedures potentially causing many problems inall stages of the buying
process (Eriksson and Laan, 2007). Therefore, in order to
takeadvantage of collaboration, procurement procedures is one key
improvement area andcan contribute substantially to project success
(Cheung et al., 2003, Eriksson, 2007).
A change of procurement procedures is, however, impeded by clients’ habitualbehaviour (Laedre et al.,
2006). Although procurement procedures need to be tailoredto enhance
the fulfilment of different project objectives (Cox and Thompson, 1997,
Love et al., 1998, Wardaniet al., 2006), clients
tend to choose those procurementprocedures they have a habit of using,
regardless of any differences between projects(Laedre et al.,
2006). In order to enhance change, an increased understanding of
howdifferent procurement procedures affect different aspects of project
performance isvital. Earlier research efforts in this area have been
limited to the investigation of howa single or a few specific
procurement alternatives affect one or two projectobjectives. In order
to achieve successful governance of construction projects aholistic and
systemic approach to procurement procedures is crucial (Cox
andThompson, 1997, Eriksson and Pesämaa, 2007, Eriksson, 2008b). Since a
systemicperspective on the effect of procurement procedures on
different aspects of projectperformance is lacking in the construction
management literature, this research effortaims to fill this
theoretical gap that has potential to bring important
practicalimplications.
Different studies have confirmed the use
ofvarious types of procurement methods for projectdelivery in Nigeria.
Studies of Ogunsanmi, Iyagbaand Omirin (2003), Ojo, Adeyemi and
Fagbenle
(2006), and Dada (2012) all confirm the use ofTraditional, Design
and Build, ProjectManagement, Construction Management,
Labouronly,Direct Labour and other types such asAlliancing, Partnering
and Joint Venturesprocurements in the Nigerian constructionindustry.
The use of these procurement methodscan significantly affect the
performance of mostprojects.
1.2 STATEMENTOF THE PROBLEM
The Nigeria construction industry is modeled after the British
system being our colonialmaster, although, since independence in 1960,
it has incorporated the styles of other Europeancountries, such as
Italy, Germany and France (Mansfield, 1994). This industry is of
paramount importance foremployment and economic growth (Ogunsemi,
2004). The Nigerian construction industry forms nearly 70% ofthe
nation’s fixed capital formation Federal Office of Statistics
(FOS)(2004), yet its performance within the economy has been,
andcontinues to be, very poor due to cost overruns resulting to
abandonment of projects. For example, the Nigerian construction
industry’s contribution toemployment has remained consistently at 1.0%
over the last decade against the World Bank’saverage observation of
about 3.2% in developing countries (Idrus, 2008). The traditional
design-bid-buildsystem of procurement is still dominant in the Nigerian
construction sector and this may likelycontinue to be the trend. In
addition, the Nigerian construction sector comprises the
clients,contractors, subcontractors, suppliers, and key professional
actors responsible for design andsupervision of projects. The
professionals includes architects, engineers (structural and
services),and Quantity Surveyors. There are professional bodies that
regulate the activities of theseprofessionals.
Delay in project execution is a major problem in the Nigerian
construction industry. Thisoccurs both in small and large projects.
Virtually, all the projects executed over the years inNigeria were
faced with problem of delay in delivery. Odeyinka and Yusuf (1997)
observed thatseven out of every ten projects suffer delay in Nigeria.
Nigerian construction industry is facedwith problem of cost overrun.
Ogunsemi and Jagboro(2004) noted that one of the most seriousproblems
the Nigerian construction industry is faced with is the project cost
overrun, withattendant consequence of completing projects at sums
higher than the initial sum. Therefore,working with realistic project
estimate is necessary at the outset of a project work, which
wouldeliminate uncertainty and as well provide a platform for project
success. Idrus and Sodangi (2008) also observed that the last decade
has however exposed the declining level of clients’ satisfactionfrom the
built facilities as a result of poor quality performance in addition
to the perennialproblems of time and cost overruns in the Nigerian
construction industry.
The Nigerian construction industry continues to occupy an
important position in thenation’s economy even though it contributes
less than the manufacturing or other serviceindustries,. This industry
plays an important role in the economy, and the products of
itsactivities are so vital to the achievement of national socio-economic
development goals ofcreating job opportunities and social amenities
and infrastructures (Anaman, 2007).
1.3 OBJECTIVES OF THE STUDY
The main aim of this study is to examine procurement systems and
it impact on cost management and delivery. Specific objectives of the
study are:
1.4 RESEARCH QUESTIONS
To guide the study and achieve the objectives of the study, the following research questions were formulated:
1.5 RESEARCH HYPOTHESES
Hi: Variations in procurement systems affect construction cost.
Hi: Challenges encountered when using procurement systems contribute to construction cost overrun.
Hi: There is a significant impact between procurement systems and construction cost management and delivery.
1.6 SIGNIFICANCE OF THE STUDY
This study will be of importance to personnels in the construction
industry and the general public because it would not only clarify but
also create awareness of the extent to which inadequacies in cost
management and procurement systems can adversely affect project
performance. The study will also help contractors, clients, consultants
and all parties involved in construction projects about ways of
improving their current method of cost management and control.
The study will also be of great benefit for other student
researchers’ who may want to venture into the same subject matter.
Having gotten results-both empirically and theoretically, the study
will serve as a foundation for future research studies.
1.7 SCOPE OF THE STUDY
The study will cover some selected contractors from Owerri. All
findings and recommendations from the study may not reflect the true
view of the traditional roles and changing roles of quantity surveyors
as the researcher could not cover a wider area due to financial and
time constraints.
1.8 DEFINITION OF TERMS
REFERENCES
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