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AN APPRAISAL OF PREQUALIFICATION CRITERIA USED FOR CONTRACTORS SELECTION IN PUBLIC BUILDING PROJECTS IN NIGERIA.

 Format: MS-WORD   Chapters: 1-5

 Pages: 1-71   Attributes: DOWNLOADABLE

 Amount: 3,000

 Nov 09, 2022 |  05:28 pm |  14


AN APPRAISAL OF PREQUALIFICATION CRITERIA USED FOR CONTRACTORS SELECTION IN PUBLIC BUILDING PROJECTS IN NIGERIA.


1.0

 

BACKGROUND OF THE STUDY

In  this  era  of  globalization  and  increasing  competitive  environment,  the  need  for evaluating  contractors’  performance   becomes   more  crucial. This is  because  the technological complexity of construction projects generates enormous risks, and selecting a capable contractor is one of the most important tasks faced by a construction client or his representative who wishes to achieve successful project outcome (Fong and Choi, 2000). 


The importance of contractor selection is mostly underestimated and neglected in construction (Turksi, 2008). The contractor selection is a risk management process for the fact that the duly selected should be competent to bear portions of the risks in the project.


As  construction   projects  become more complex, so also is the contractor selection  process  as  observed  by  Li  et  al  (2005). This involves  the  elimination  of incompetent  contractors from the  bidding process following a set  of pre determined criteria. This practice and procedure of contractor selection in the construction industry is found in most countries, Nigeria inclusive. Several researchers have proposed some selection criteria in order to minimize contract failure and also meet the client’s objective.


Selection of competent contractor has been observed to be a key to the success of a project (Anagnostopoulos and Vavatsikos, 2006) . Holt et, al. (1996) described contractor selection as a system of selecting competent contractor and negotiating the contracts. It is a task which needs to be addressed at the early stage of any contract programme (El-sawalhi et, al., 2007). This process comes after advertisement.

 

The quality of a good contractor is in his ability to complete a project on time, within budgeted cost and to the desired quality. This is not always the case in Nigeria (Fong and Choi, 2000). Several cases as reported in Ogunsemi and Aje (2005) are characterized by cost and time overruns, leading to substandard work, disputes and abandonments. 


These emanate from several factors which include the wrong choice of contractor. In order to select  the  most  appropriate contractor  for  a project,  baselines criteria which  include financial stability, technical expertise, experience, and performance measures must be observed including other general information about the contractor (Turkis, 2008, Russell and Skibniewski, 1998, Hatush and Skitmore, 1997a). 


Hatush and Skitmore (1997b) and Odusanmi  (1998)   view   contractor   selection   criteria   in   two   stages   namely,   the prequalification and the bid /evaluation stages. Prequalification was defined by Moore (1985) and Stephen (1984) as the screening of construction contractors by project owners or their representatives according to a predetermined set of criteria deemed necessary for successful project performance.


According to Procurement Act (2007), this selection depends on the stipulated criteria and weightings, upon which an entity or contract administrators in the various public procurement offices seeks to give consideration to. In understanding the desires of clients and establish the best set of criteria to use for assessing contractors or applicants in reaching  decision  as  to  which,  contractor  or  service  provider  qualifies  in  the  pre qualification process (Bulama,  2005).   


Olatunji  (2007) pointed out that  a successful applicant  contractor  during  prequalification  must  not  have  less  than  70%  in  the assessment. This is carried out to determine the contractor’s competence or ability to participate  in  the  project  bid.  Contractor  prequalification  and  tender  evaluation  are therefore, decision making processes that occur within the overall procurement process 


Bid  evaluation  is  the  procedure  used  in  strategic  assessment  of  bids  submitted  by prospective contractors who have been successfully pre-qualified. The strategy used for bid evaluation should reflect the client’s objectives (Hardy, 1978). These, according to Herbsman and Ellis (1992), amount to the ‘major’ criteria includes cost, time, and quality and measured by the bid amount, time of execution, and quality of previous work done respectively.  This  implies that  the winning  bid  is  fully responsive to  the contract  in addition to the bidders’ qualification to undertake the contract (Hardy, 1978).


Ajayi  (2010)  observed  that  in  Nigeria,  the  lowest  bidder  methodology  of  awarding contract  is a  frequently used  method of selecting  contractors and observed that,  this method has been abused.


Olatunji (2007) found that about 25% of respondent see the lowest bid selection which aims at saving cost as a wrong approach for the fact that the project is subjected to  a risk of not getting optimum performance if the whole life cycle of the project is considered. This therefore calls for a modernization of the affected tendering method. Hatush and Skitmore (1997a) opined that lowest bidder methodology also tends to affect the project performance and the client bears the risk. This study focused on the five major categories of prequalification and its subdivisions.














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