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COMPARISONS OF PROCUREMENT CHARACTERISTICS OF TRADITIONAL AND LABOUR-ONLY PROCUREMENTS IN HOUSING PROJECTS IN NIGERIA

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ABSTRACT

 

Procurement characteristics of Traditional and Labour-only are compared in some selected states of Nigeria. The objective of this study is to examine if procurement risks, generation of claims, variations to original design, control of sub-contractors and procurement prospects are the same for both methods. The study obtains its primary data through the use of designed questionnaires that are sent to clients, contractors and consultants. In all, 120 questionnaires were sent to these respondents who recently completed their housing projects based on the two methods. Results of the study indicate that there is no significant difference between both methods in terms of risks of value for money, getting good satisfaction, generation of more claims and variation to original design while a significant difference exists between both methods in risk of timely completion of project. Labour-only method demonstrates less risk of timely completion of project than the Traditional method. Characteristics of both methods are not significantly different from each other when control of subcontractors, benefits of getting good quality material and workmanship, satisfaction with co-ordination and planning. improved relationship between project team and timely delivery of project are benefits of comparisons. Labour-only differs significantly from Traditional method in terms of prospect of getting good value for money spent on the project. This study concludes that there are various types of risks inherent in use of both methods in housing projects and Labour-only method indicates characteristics of early completion of project and prospects of getting good value for money. Recommendations of the study are that clients, contractors and consultants should use Labour-only for execution of their future housing projects and also they are at liberty to use any of the two methods as they best satisfy their requirements. Implications of this study to policy makers and other stakeholders in the construction industry is that Labour-only method should be explored for use in large and complex projects as significant cost savings can be achieved, timely delivery of project and good value for money are equally achievable with the use of the method. Results of this study serve as a springboard for further research in perfecting the use of  Labour-only method for construction projects.

 

 

CHAPTER ONE

 

INTRODUCTION

 

1.1 Background of the Study

 

Due to the complex nature and unique characteristics of the construction industry, construction projects rely on the efficient organization at all levels of the teams involved, including the clients, architects, engineers, contractors and materials providers. A construction project must proceed through stages of concept, scheme design, bidding, contracting, construction, service and maintenance (Chen and Wu, 2010).As suggested by Chen and Wu (2010), construction projects rely on integrated efforts of several hierarchically linked parties (including clients, architects, engineers, general contractors, suppliers and subcontractors) using their differentiated technology, knowledge and skills. These parties are usually independent organizations with different objectives and goals, operating processes and management styles.

 

Partnering is defined by Al-Amoudi (2011), as a strategic commitment between companies or firms in order to develop their performance in a mutual project. It is a strategic action that delivers marked improvements in construction performance. It is driven by a clear understanding of mutual objectives and co-operative decision- making by multiple firms all focused on using feedback to continuously improve their joint performance (Chen and Wu 2010). Although the definitions of partnering in construction vary from one study to another, there exists a common consensus on the key elements of partnering; co-operation and teamwork, commitment, mutual trust and respect, communication, equity, responsiveness to problems, continuous evaluation, common goals and joint problem resolution (Hong et.al,2012).

 

In a Partnering arrangement, the fundamental components are formalized mutual objectives, agreed problem resolution methods and an active search for continuous measurable improvements (Adnan et.al 2011).Hong et.al(2012) viewed partnering as structured management approach with the objective project performance measures, usually denoted by signing on a partnering charter, launching regular partnering workshops, developing a partnering performance monitoring matrix and establishing an agreed issue resolution mechanism. Consequently, it is necessary to replace traditional relationships with a shared culture without regard to organizational boundaries. Such relationship is based on trust, dedication to common goals, and an understanding of individual expectations and values(Chen and Wu 2010).Unlike other systematic approach to management such as management contracting, construction management, design and build among others, partnering focuses upon the importance that all parties have to play in the construction process as opposed to the „top down‟ approach (Naoum, 2001).The ultimate goal of partnering is be to achieve a “win-win” situation for all parties(Adnan et.al 2011).

 

In the construction or building industry, Partnering is a disputes prevention mechanism among parties, leading to construction projects being delivered quickly, efficiently and cost effective as it is intent to avoid or solve disputes thereby reducing the cost of litigation and arbitration (Okae-Adow 2013). Partnering enables the industry to understand more clearly its clients‟ needs and objectives including improved efficiency and cost-effectiveness, increased innovation opportunities and the continuous improvement of quality products and services (Adnan et.al 2011).

 

Chen and Wu, (2010) posit that many articles have been written on partnering. Most of those papers however, are based on theory, and very few or no empirical data are available on perceived critical success and failure factors of partnering in the construction industry. Partnering appears to be a device that encourages greater integration of the project team and create competitive advantages to all that participate in the project (Naoum, 2001).

 

1.2 Statement of Research Problem

 

According to Naoum (2001), most procurement systems are adversarial by design and still rely much on contractually explicit procedures rather than on mutually agreed methods to achieve financially sound objectives for all the team. The idea of partnering has attracted a lot of attention in construction practices and is proposed as one of the best solutions to address the availability of limited projects in the construction industry (Adnan et.al 2011). Chen and Wu, (2010) opined that, in traditional construction contracts, each team involved in a project acts independently, which frequently causes communication and co-operation problems that impact production and efficiency. In construction industry, there is usually an adversarial attitude between contractor and designer, or client (Al-Amoudi 2011). In Nigeria the concept of partnering is new; awareness is low and the potential benefits not yet understood or explored by stakeholders (Najimu 2012). However, Awodele (2014) argued that, there is huge embrace of partnering as alternative due to perceived failings of traditional system of procuring construction contract that calls for changes. There are many abandoned projects all over due to improper planning and thre is also no succession plan in Nigeria leading to a lot of completed projects not utilized (Ekunget.al, 2013). Due to this, there is a need to assess the prospects of partnering in the Nigerian construction industry.

 

1.3 Justification of the Study

 

As stated by Chen and Wu, (2010), Construction firms are now searching increasingly actively for better management approaches for maintaining a competitive advantage and improving performance. As a result of the increased growth in the use of partnering, many researchers have investigated the benefits achieved by the partnering process (Naoum, 2001).

 

Chen and Wu, (2010) also stated that, “because of differences in professional background, technology, knowledge and perspective among participants, problems in communications and cooperation are commonplace, often compromising project performance and results”. Previous studies on partnering, suggest that project success will be derived more readily than other traditional management approaches.

 

According to Oyedele (2013), Construction projects in Nigeria suffer from “capital flight, capital stagnation and capital sink‟‟. The construction industry is neither organized nor controlled, underfunded, highly litigious and has high appearance record in Nigerian court, high rate of entry and exit by contractors, high turnover of employees and the life-span of construction project in Nigeria is unpredictable. Therefore, improvements on efficient management processes and qualitative project delivery, is anticipated to be achieved with the implementation of partnering as a procurement method in Nigeria.

 

1.4 Aim and Objectives

 

1.4.1 Aim

 

The aim of the research work is to determine the prospect of partnering as a procurement method in the Nigerian construction industry with the view to propose improvement on efficient quality practices of project delivery.

 

1.4.2 Objectives

 

The aim of the study was achieved using the following objectives;

 

1. To determine awareness of the concept of partnering as a procurement method in the Nigerian Construction Industry.

 

2. To determine the applicability of partnering as a procurement method in the Nigerian Construction Industry.

 

3. To identify the benefits of using partnering as a procurement method in the Nigerian Construction Industry.

 

4. To identify the challenges of using partnering as a procurement method in the Nigerian construction industry.

 

1.5 Scope and Limitations

 

1.5.1  Scope

 

This research determined the prospect of partnering as a relatively new procurement method in the Nigerian Construction Industry and considers only the clients, contractors and consultants as the respondents.

 

1.5.2  Limitations

 

 

Limited literatures that covered issues relating to partnering in Nigeria posed great limitation to this work Abuja (the Federal Capital Territory of Nigeria) was considered as the area of study for the research. The rationale for the selection of Abuja as the area of study was due to the numerous construction activities in the study area. The generality of the research findings was also affected by limited respondents.

 

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