WORKING TITLE

Analysis of the impact of procurement methods on successful project delivery in Zimbabwe construction
Industry.

INTRODUCTION

Apart from the procurement used, the construction project must be managed in an effective manner. The
demands from clients, competition, and regulatory agencies have been growing rapidly (Crowley and Hancher,
1995). These challenges present a paradox: few of these demands directly contribute to the physical
construction of the project, however, a failure to properly manage them can lead to problems for the entire
project and construction team.

There miltiple procurement methods which include the traditional procurement method in which the contractor
agrees to build the design that he has been provided by the employer, the contractor is only responsible for
building not design. There is also the design and build omes in various forms but is typified by the contractor
taking both design and construction responsibility. In integrated D&B contracting the contractor develops the
design and constructs the building based on a set of requirements provided by the employer.(Greg Richards,
2006). There is management procurement, this method is based upon the client appointing a consultant who will
prepare project drawings and project specifications. There is also Public-Private Partnership this method is
characterized by high level of skillfull input since the subcontractors engaged are experts in thei various fields,
usually the result is that the construction process is by some level of precision synonymous with the
manufacturing industry. There are multiple procurement methods all with different traits, advantages and
disadvantages.(Lillian Nwachukwu, 2014) while the design and build and traditional procurement methods
mostly offers the cheapest price. The private-public offers the best quality and highest probability of
completion.(

The selection of a procurement method increases chances of successful completion of a construction project
(Alhazmi and McCaffer, 2000). It can also fulfill the client goals, and keep the schedule of the cost, time and
quality. So it is extremely critical to select an appropriate procurement method in the process of construction
management. The procurement method used must go hand in hand with size, budget, cash flow forecast, time of
construction, only to name a few factors which determine the type of procurement used. In order to get the
perfect procurement method the clients advisers should identify the needs and wants of the client in order to
determine the perfect procurement method to use. This enables them to see how best to procure the contractor

At the same time there are more and more procedures in which the decisive criterion of choosing a
procurement method. On the other hand, the research results show that the cheapest procurement methods often
have problems with completing the project this is due to problems because very often lowering the price means
lowering the quality. This is subjective as this is true in some cases. We analyzed in this research the common
framework applied in the selection of construction project contractors and its associated failures, and
summarized the ideal model criteria for selecting a suitable contractor.

PROBLEM STATEMENT

The use of the traditional procurement system is plagued by problems such as the fact that it is too slow, this is
due to the contiguous nature of the various phase and stages of the process and especially the separation of the
design and construction phase. (ResearchGate, Ann T. Kong). The slow speed of this method may be partly
attributed to the complexity in designing modern buildings (Newcombe 1996:75). The traditional system,
however, has also been continuously identified as the slowest method of procuring construction projects
available to a client(Masterman 1992:37; Chang and Ive 2002:696). There are issues of uncertenity of cost by
using this method with the exception of the lump sum price. The uncertainty of price is only at the beginning of
the construction process this is because nomone knows the final construction project price until the project has
been completed(Hovet 1994). Because of the long period of time taken to design, document and tender, there
are inevitably significant changes in the market forces, tender prices, interest and inflation rates (Lavender
1990:224; Turner 1990:76-7). Price fluctuations in construction materials have also been found to be
particularly significant in economically unstable countries (Akinci and Fischer 1998:67; The Aqua Group
1999:73; Kayode cited in Akpan and Igwe 2001:367). There are also issues with effects of buildability which
are caused by the fact that What looks good on paper or the computer screen can be difficult to build and
designs are sometimes impractical (Tenah 2001:33). As mentioned earlier, this can result in variations initiated
by either clients or contractors. Buildability, as “the extent to which the design of a building facilitates ease of
construction, subject to the overall requirements for the completed building” is considered to be underprovided
for most construction projects. Since the design is done without the input of the contractor the contractor might
then underestimate the buildability of the project and therefore underpricing the contingency of the project.in
short this method has more risk to the contractor.

The other procurement methods also come with their own problems towards project delivery. The design and
build procurement method needs to be used by experienced contractors and also a client with adequate
knowledge towards the method. This method has risk on time as the contractor may underestimate time related
with designing of the building itself

The Zimbabwean construction industry is plagued by corruption in procurement as there are delays,
incomplete /Unfinished construction projects in Zimbabwe also poor standard projects that are not
meeting expected quality are prevalent. This is evident in the dualisation of the beitbridge-harare-chirundu
highway which was awarded to Geiger international, the US$ 2.7 biillion contracted in 2016 and up to today
nothing has been done. This contract is said to have been awarded by corruptly. When government announced
the estimated cost of the Beitbridge – Chirundu Highway dualization project, there was an outcry from
Zimbabweans who argued that the price was inflated. It was also revealed that local contractors would receive a
40% share of the first phase of the project, valued at $400 million. There was no criteria on how the local
players were going to be selected. The fusion of fraudulent Austrian-Chinese companies with local
tenderpreneurs, equally without capacity, meant the project was primarily for the self-aggrandizement of the
negotiators. Predictably, when the underhand deals failed to materialize the project fell through. (Farai
Maguwu, 2018). Another case of this corruption is Harare city council procuring a company for $500 000 to
rehabilitate roads without going to tender. Corruption is said to have played a major part in procuring this
contract. There was nepotism, inflation of contract prices only to name a few of the tactics of corruption used.
(The Sunday Mail, 11December 2016)

Projects taking too long to be completed. For example, ZINWA was managing fourteen (14) dam projects
during the period 2004 to 2009. After being examined the projects I examined showed that most of them had
exceeded the period within which they were supposed to be completed. Nine (9) of the projects had exceeded
the periods by four (4) years and above.

There were inefficiencies in the management of construction projects which deprived intended beneficiaries of
the much. The delays in the completion of the projects were mainly due to failure to prioritise projects, selection
of incompetent contractors, delays in payment of certificates to contractors.

This resulted in the increase in costs to the projects in terms of interest charges on outstanding certificates, stand
in time for machinery and escalating costs.

The research was motivated by the public outcry on the long delays to complete construction projects. Other
stakeholders like the news media and Ministry of Finance had expressed concern on the management of projects
as evidenced by a huge number that had been lying uncompleted for a number of years throughout the country.

INTRODUCTION

Procurement strategy identifies the best way of achieving the objectives of the project and value for money. It
identifies the best way of delivering a project. There are four main types of procurement which are as follows.

Traditional procurement is when the contracting authority enters into separate agreements between the architect
and main contractors. Its downside is the contractor is selected after design.
Design and build is when there is a single contractor to act as the sole point of responsibility to a contracting
authority for the design, management and delivery of a construction project on time.

Then we also have partnership whereby agreements and conventional contracts might be complementary , but
there are essential differences between the function of a contract and a partnering arrangement.

Joint venture is whereby the contracting authority and the contractor form a joint entity to deliver the project.
Hence also these strategies have their downfall and also can be effective in the delivery of projects.

BACKGROUND

All tender selection proceedings in Zimbabwe are governed from the procurement Act Chapter 22:14 acts of
1999 and 2001, The procurement act provides for the procurement of goods construction work and services by
the state statutory bodies and other persons.

According to Part 4, procurement proceedings section 31, subsection 1m, the procuring entity shall accept
whichever valid tender offers the lowest price unless other criteria are specified in the solicitation document in
which event those criteria shall be followed.

This. Procurement function is vital to any organization and tendering strategies have become part of a
business’s success than ever before. Despite the importance of the procurement function, their process has been
a subject of controversy in recent years. Since 2009, there have been a number of debates on the handling of
government tenders. Almost every major government project has generated controversy and such projects
include construction of airport road in Harare. The enactment of the Indigenization Act has also complicated
the tender selection criteria and locally owned companies are supposed to be given priority. Therefore,
tendering in Zimbabwe is froth with a myriad of challenges which need to be addressed. This study was
motivated by desire to come up with a feasible tender selection model.

RESEACH QUESTIONS

1)What are the causes of inappropriate tender selection

2)How do client’s criteria select their tenders

3) What can be done to improve the propose the tender procedures

 OBJECTIVES

To investigate the

1) To provide an efficient tender selection criteria model to the Zimbabwean public sector construction
Projects .
2) To analyse the existing tender selection criteria by the public sector
3) To compare the Public and Private sector tender selection criteria
4) To evaluate the effectiveness of the public sector tender selection criteria

JUSTIFICATION
The Public sector makes use of the single criteria model where the lowest bidder is selected by open
tendering .This open bidding process unrestricted by prequalification of contractors do not provide a public
sector client with increased value.

The Multi Criteria Evaluation Models

In most cases, it can be stated that contractor’s selection problem is a multi-criteria problem. Many multi-
criteria techniques are proposed and applied (Goicoechea et al. 1992, Zavadskas et al. 2008). Skibniewski and
Chao
(1992), Banaitis and Banaitiene (2006), Mitkus and Trinkuniene (2006), Ginevicius and Podvezko (2008),
Turskis (2008) and Zavadskas et al. (2008), Plebankiewicz (2009) investigated assessment of construction firms
and contractor’s evaluation problems. There is a Multi Criteria Bidding System which is an evaluation method
that considers not only the cost as the awarding reason, but also considers other important attributes. The key of
Multi attributes system is that the selection process of the contractors is based on more attributes such as, bid
price or cost, time, quality, managerial safety accountability, competence and sufficiency of contractors (Liu et
al., 2000). The main concept of the Multi Attributes Bidding System is that the selection process of the
contractors will be based on more attributes than just the price, and the successful bidder will be the one who
has
the highest combined bidding value of the multiple attributes. The scores of those attributes are transformed into
values and those values of all the attributes are totaled to give the combined bidding value.
One Multi Criteria model is the performance predicting system for contractor selection, proposed by Alarcon
and
Mourgues (2002). The proposed system utilizes a methodology that predicts the potential performance of the
contractors under analysis. The model takes into account the most important characteristics of the contractors
and projects that influence project performance such as contractor organization chart, contractor resources,
project location, project type, and others. Similar framework was introduced by Alsugair (1999). This
framework
proposed a bid evaluation framework by identifying 36 evaluation factors which grouped into main 9 classes
such as financial evaluation of the bid, bid understanding, completeness of bid documents and others. Those
factors were presented in question forms where the evaluating score results from the score given against each
question.
Russell (1996) created another model. In his model, valuation is done in two steps. Step one is contractor
1screening using the dimension – wide strategy method, while the second step is evaluating the remaining
contractors using the dimensional weighting method. Also prequalification formulas are used to determine a
contractor’s capabilities based on certain variables or characteristics such as contractor previous experience in

Limitations A major limitation of the current research is the limited availability of past public sector
construction project data. Even though the participating clients had similar types of construction needs, the
different procurement practices of the clients require that the data for each client be treated separately. The wide
type of construction work the clients’ undertook along with the inherent amount of unknowns in a construction
project lead to variability of cost overruns. With sufficient amount of data it is possible that further significant
and important trends may have been identifiable. However, concerns about confidentiality and the scarcity of
resources available to assist with the data collection are listed as the main reasons why other public sector
clients that are major purchasers of construction services within the ICI sector declined to participate. Further
limitations to the current research include the inability to use the engineer’s estimate in the data. The engineer’s
estimate was excluded primarily because the availability of the estimate and the stage of project in which the
estimate was developed varied amongst the participating clients. Comparing the estimate to the final cost may
have provided information to help improve the accuracy of a project’s budget. Furthermore, testing whether or
not the gap between the low 43 bid price and the engineer’s estimate is correlated to the amount of cost
escalation of a project would be of interest.

Specifically, the findings demonstrate that:

• An open bidding process unrestricted by prequalification of contractors did not provide a public sector client
with increased value.

That client’s large projects that had a large amount of competition (many bidders) were more prone to large cost
escalation.

• Prequalification is correlated with lower cost escalation.

• Low bids from a client’s past projects can assist in capital budget planning utilizing linear regression.

• A strong results-oriented culture possessed by the public sector client is correlated with less cost escalation.

OUTLINE METHODOLOGY
Introduction

Methodology is a philosophical framework within which the research is conducted or the foundation upon
which the research is based on Brown (2006). This chapter reviews explanations of methods of data collection
and analysis, procedures used in the field study and discuses the way the research was developed. Moreover,
proposal methodology also addresses research philosophy, research approach, its design and sampling issues.

Research Philosophy

The research philosophy used was the Critical analysis. Offers a different perspective to positivism and
interpretivist, the philosophy questions currently held values and assumptions, it challenges conventional
social structures. It involves researchers and participants to discard false consciousness in order to develop new
ways of understanding as a guide to effective action confronting social systems. Those adhering to critical
enquiry perspective accuse interpretivist of adopting a critical stance towards the they are exploring ,
whereas the test of researchers is to call the structures and values of society onto question .

At the current status quo , there exist a socio-political culture of tendering based on the lowest bid
( Competitive tendering ) , this is very common in public sector projects . Therefore our research
addresses the challenges of this tendering criteria as of being inefficient and ineffective as shown by
available concrete evidence , furthermore it proposes an ideal model which is effective and efficient to
carry out tendering , for example multi criteria .

Research Type

The descriptive analytical methodology and field of study were used in this research. The descriptive
methodology was the main used methodology in this study, to describe the main feature of collective data in
qualitative for example case studies , focus groups interviews .

Research Approach

The research is based on qualitative approach .

Qualitative research methods are interpretative and aim to provide a depth of understanding they
include experiments questioneers ,focus groups .

This is phenomena based on quality or kind

Qualitative data was gathered by the following resources .

1. Books and references.
2. Periodicals, papers and master thesis.
3. Internet.
4. Interviews with experts, academics and professionals to enrich the research results.
5. Interviews with contracting firms' managers in Bulawayo to find out the main barriers to
implementing sustainable construction.
6. Questionnaire distribution.

Research Design
The research is based on investigator triangulation. The Study makes use of investigator triangulation since
it makes use of multiple investigators to gather the information.

Study

Zimbabwe

Target Population

The covered sample was possible to be reached in different locations and by different means of
communication; through emails, faxes and visits. For deeper information and deeper analysis the
researcher decided to diversify the followed methodology by preparing a short interview with the five chosen
ministries and councils in Zimbabwe to increase the argument and enrich the
findings of the study.

The following are the chosen ministries and studies

 State Procurement Board (has overall responsibility over public procurement in Zimbabwe)
 Ministry of Local Government, Urban and Rural Development
 Ministry of Transport and Infrastructural Development
 Harare City Council
 Bulawayo City council

Sampling frame

• State Procurement Board (has overall responsibility over public procurement in Zimbabwe)

• Ministry of Finance (responsible for provision of financial resources)

• Ministry of Local Government, Urban and Rural Development

• Ministry of Water Resources and Development (Responsible for water provision)

• Ministry of Transport and Infrastructural Development (Tender for construction of Airport Road in Harare)

• Ministry of Housing and Social Amenities (Irregularities in allocation of Willowvale Road Flats in Harare)

• Ministry of State Enterprises and Parastatals (responsible for state owned enterprises like ZESA, who are
alleged of flouting tender procedures):

Data Collection Methods

Primary Data Collection

Primary sources are original materials on which research is based. They are first hand testimony or direct
evidence concerning a topic under consideration. They present information in its original form, neither
interpreted nor condensed nor evaluated by other writers.

Example. Diaries and data were collected from the local authorities
Secondary Data Collection

Secondary sources offer interpretation or analysis based on primary sources. They may explain primary sources
and often uses them to support a specific thesis or argument or to persuade the reader to accept a certain point of
view. Such works are one or more steps removed from the event—being written with the benefit of hindsight.

Example, Research and analysis,

Analysis and presentation

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