ANALYSIS OF CONVENTIONAL PROCUREMENT STRATEGIES AND THEIR APPLICATION IN NIGERIA CONSTRUCTION INDUSTRY

CHAPTER ONE

1.0   Introduction

Strategies for the procurement of building projects have not changed significantly in the last 25 years, though time and cost overruns are still prevalent throughout the industry (Smith and Love, 2001). In a response to reduce the incidence of time and costs overruns, the disputes that may often arise, and the likelihood of project success, alternative forms of procurement method such as partnering and alliancing have been advocated (Love et al. 1998). Not all forms of procurement method, however, are appropriate for particular project types, as client objectives and priorities invariably differ (Skitmore and Marsden, 1988; Love et al. 1997). The objectives and priorities of a client need to be matched to a procurement system. To do this effectively, it is essential that the characteristics of various procurement systems and selection methods available are understood by clients and their advisors before a procurement method is selected. In this report, the characteristics of the most common procurement systems and methods are presented. In conjunction with this research work the reader should also refer to the material developed by the New South Wales Government (2005) ‘Procurement Methodology Guidelines for Construction’ and the Western Australian Department of Housing and Works ‘Local Government Procurement Guide’ (2006).

1.1   Background of Study

Procurement has been seen to be process of obtaining or buying supplies of something like fixed assets (land, building, etc) especially for individual and government.

Therefore, procurement strategies has become a fashionable term with our construction industry, practitioners and researchers determines the overall framework and structure of responsibilities within the process, it is also a key factor contributing to the overall client satisfaction and project success.

Procurement strategies and their application is of important in our construction industry.

However, one must not be carried by which ever method of procurement strategies proposed for a construction project, the major issue is the different types of procurement are contractual obligations, responsibilities and line of communication between the parties. One thing to remember is that which ever method that is used, the statutory duties of the professionals are always distinct and mandatory. Hence the engagement of a builder in the procuring contract is statutorily required and highly recommended whichever procurement strategy that is adopted.

1.2   Statement of Problem

The general aim of study is to ascertain by reviewing, evaluating and identifying how procurement strategies can be applied in our Nigeria construction industry. Therefore, this issue raised the researcher’s interest to know how procurement strategies can be applied in our construction industry particularly Nigerian economy.

1.3   Purpose of the Study

The following list below are the core reason and purpose of this study which will be accomplished by the researcher.

1.  To determine what are the procurement strategies;

2.  To know its application in our Nigerian construction industry;

3.  To know the statutory duties of a builder in construction industry;

4.  To know what is construction industry.

1.4   Research Question

The research work is guided with same research question, which will be administered and distributed among the researchers area of study which are the respondents to this research work.

1.  What are the procurement strategies?

2.  Where can they be applied in Nigerian construction industry?

3.  How can we know the statutory duties of a building in our construction industry?

4.  What is construction industry?

1.5   Statement of Hypothesis

The researcher formed some of the hypothesis which will be tested to support this study. The hypothesis will be tested at 0.05 level of significance using the t-test method.

The research hypothesis are as follows.

1.  H1: The application of conventional procurement strategies is significant to the Nigeria construction industry

H0: The application of conventional procurement strategies is not significant to the Nigeria construction industry

1.6   Signification of the Study

It is hoped that the findings of the study will help the construction industries in Nigeria reflect upon various variables that influence the conventional procurement strategies. In so doing, they could investigate the possibility of introducing those variable to their industries which may consequently lead to reducing the cost.

The findings of this study are therefore expected to provide new knowledge about the factors behind conventional procurement strategies with respect to Nigeria construction industry.

1.7   Justification of the Study

I want to justify this research work based on the objectives and the significance of this research work, what is within its coverage, this research work is with no doubt necessary to be carried out. Because if done will greatly analyze conventional procurement strategies variable and its application to the construction company in Nigeria .

1.8   Scope of the Study

This research work covered a population study of 58 respondents from Enugu, Enugu state. More to that, this research work will be considering the conventional procurement strategies and its application to the construction company. One research hypothesis will be tested in light of the study, a descriptive method of data analysis will be was employed in the study.

1.9   Definition of Terms

Procurement are the procedures used by the procuring entity to acquire goods, services and works.

Negotiation simply refers to the mutual discussion and arrangement of the terms of a transaction or agreement for the purpose of arriving at a common understanding of contract essentials (e.g., technical requirements, schedule, prices, and terms).