Bid or no-bid decision factors of indigenous contractors in Nigeria

Olatunji, Oluwole Alfred ORCID: https://orcid.org/0000-0002-9726-4218 and Aje, Olaniyi Isaac and Makanjuola, Sina (2017) Bid or no-bid decision factors of indigenous contractors in Nigeria. Engineering, Construction and Architectural Management, 24 (3). pp. 378-392. ISSN 0969-9988


Abstract

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.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty/School / Institute/Centre: No Faculty
Faculty/School / Institute/Centre: No Faculty
Date Deposited: 04 May 2022 01:48
Last Modified: 16 May 2022 03:24
Uncontrolled Keywords: Bidding; Performance monitoring; Sub Saharan Africa; Subcontracting; Supply chain management; Tendering
Fields of Research (2020): 33 BUILT ENVIRONMENT AND DESIGN > 3302 Building > 330299 Building not elsewhere classified
33 BUILT ENVIRONMENT AND DESIGN > 3302 Building > 330207 Quantity surveying
33 BUILT ENVIRONMENT AND DESIGN > 3302 Building > 330203 Building industry studies
Socio-Economic Objectives (2020): 12 CONSTRUCTION > 1299 Other construction > 129999 Other construction not elsewhere classified
Identification Number or DOI: https://doi.org/10.1108/ECAM-01-2016-0029
URI: http://eprints.usq.edu.au/id/eprint/48109

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