ASSESSMENT OF TENDER SUCCESS OF CONTRACTORS IN CONSTRUCTION PROJECTS IN OYO STATE, NIGERIA

Abstract

The study examined the success rate of contractors on tenders submitted for projects in Oyo State. It examined the strategies adopted by contractors on tenders submitted for projects; assessed the success rate of contractors on tenders submitted for projects and evaluated the factors that are influencing the tender success of contractors in construction projects. These were with a view to enhancing the chances of winning tenders by contractors. Data used for this study were collected from both the primary and secondary sources. Primary data were collected using questionnaire administered on 63 contractors that were registered with Oyo State Ministry of Works and Transport. The study made use of total enumeration of the targeted respondents in the contractors’ organizations and the respondents include architects, quantity surveyors and engineers (civil, structural, mechanical and electrical). In all, 48 (76. %) copies of questionnaire were retrieved and used for analysis. Information required from the questionnaire included strategies used by contractors to tender for projects and factors influencing the tender success of contractors in Oyo State. The secondary data collected include information on 116 projects tendered for by contractors between 2009 and 2018 which included bidding strategies used and success rate of contractor. Collected data were subjected to frequency distribution and mean item score. The study revealed that the bidding strategies that the contractors are aware of in Oyo State is negotiated work with mean score (MS) of 4.40 which was followed by lowest bid (MS = 4.35), method statement (MS = 4.02) and selective bidding (MS = 4.00). Similarly, the contractors used the same bidding strategies such as negotiated work (MS = 3.94), lowest bid (MS = 3.94), selective bidding (MS = 3.54) and method statement (MS = 3.52) when bidding for projects in Oyo State. Among these strategies used by contractors for bidding, contractors found lowest bid (MS = 4.00), public relation (MS = 3.62), negotiated work (MS = 3.60) and method statement (MS = 3.60) as the most effective. In relation to the success rate of contractors on tenders submitted for projects, the results show that 40(34.5%) of contractors used lowest bid as the bidding strategy, 16(13.8%) used selective strategy, 12(10.3%) used joint venture, 11(9.5%) used negotiated work while 18(15.5%) used other strategies. The success rate of contractors using the significant strategies revealed that out of 50 projects, 40(80%) were won while 10(20%) were lost when lowest bid was used. When selective bidding strategy was used on 16 projects, 15(93.8%) were won and 1(6.2%) lost. Using public relation in bidding for 8 projects, 6(75%) were won while 2(25%) were lost. For joint venture, 2(16.7%) were loss while 10(83.3%) won out of 12 projects. In risk control strategy, out of 8 projects, 7(87.5%) were won while 1(12.5%) lost. Method statement strategy was used on 2 projects and all were won by the contractors. Negotiated work strategy was employed by contractors on 10 projects and all were won. Claims strategy was used in bidding for a project which was won. Overall, 98(84.5%) of the projects were won by the contractors when bidding strategies such as lowest bid, selective bidding, joint venture and negotiated work were employed while 18(15.5%) of the projects were lost. The study further revealed that the top ranked factors that are influencing the bidding success of contractors on projects tendered for in Oyo State is ‘up to date payment of taxes’ with MS = 5.00. Other factors include kick-back (MS = 5.00), level of experience (MS = 4.67), financial stability (MS = 4.52), past performance and quality (MS = 4.52), firm’s reputation (MS = 4.36) and experience of technical personnel (MS = 4.31). The study concluded that there are bidding strategies being used by contractors in Oyo State and the contractors are aware of the strategies and found them effective. The study also established that the contractors succeeded on projects tendered for using lowest bid, selective bidding, joint venture, negotiated, public relation, and risk control.