THE REVIEW OF THE CHALLENGES AND PROSPECTS OF PUBLIC PROCUREMENT ACT ,2007 IN THE EXECUTION OF CONSTRUCTION PROJECTS IN NIGERIA

ABSTRACT

The public procurement system in Nigeria has over the years been abused leading to cost inflation, delay in project delivery, poor quality of work, and project abandonment. The aim of this study is to examine the impact of the due process policy on construction projects delivery in Nigeria universities using Ahmadu Bello University as a case study. Tools of data collection used were structured closed and open –ended questionnaires as well as interviews for the respondents who had been involved in the process including survey of related literature on public procurement. In the course of testing the three hypotheses, we applied chi-square, t-test and correlation. Chi-square was used to test the impact of public procurement in the execution of capital projects and Pearson’s correlation coefficient technique was applied to test the relationship between budgetary appropriation and actual funding in the implementation of PPA. Similarly we used t-test to test for the significance of a difference between the contract sum and amount certified. The result of the findings reveals that PPA had made significant impact on the execution of capital projects in Ahmadu Bello University, Zaria. While it was also revealed that there is no significant relationship between budgetary appropriation and actual funding, therefore, there is weak relationship between the variables, T-test was employed to evaluate the significant difference between contract sum and amount certified and the study reveals that there is significant difference between contract sum and amount certified. The study showed that PPA being a new initiative had made a significant impact in the university system which has helped in saving public funds by corrupt practices that usually characterized Public procurement. The study recommended that University management should shorten bureaucracies in the approval process, timeliness of procurement certification, speedy passage of annual Budget, prompt payment of completed contract, enforcement of appropriate rules and attitudinal change.

 

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Project success is basically to gain the research on public procurement act in the execution project Shash(1993) explains that a construction company can either negotiate with the client or use a competitive tendering process to obtain a contract. F.U. and Drew (2002) suggest that competitive tendering is the most common method used for contractor selection.

In competitive tendering process, a client selects a numbers of constructor to tender or not tender. The contractor need to submit an estimated cost to execute the project at hand, if they intend to tender. The client would select the contractor who submitted the best cost for executing the project (Shash 1993, P. 111). Therefore the decision to tender is the first step that contractors need to consider. The are various factors that need to be considered by the contractor in order to make a decision to tender. The decision is highly related to the specific project and macro environment. It is hard to make a decision in a limited time by the management team. The decision generally is made on the basic experience, intuition and guesses. (Egemen and Mohamed 2007, therefore are many researchers that have discovered the factors that affect the tender / no tender process unfortunately, there has not been any similar research project global economic recession, construction related activities are decreased significantly.

1.2   PROBLEM STATEMENT

Research design and procurement effect of tendering is a huge challenge in Act for most contractors who seek government contracts in Nigeria. A study conducted by Obuji (2003) in some West African countries, including Nigeria, revealed that some small scale contractor are not favoured during a tendering process by prospective client because, they neglect various factor that affect the success and failures of submitting a tender for a contract. Some contractors do not structure and draft their tenders in an appropriate manner, hence their chance of being contacted is reduced. Construction industry has complexity in its nature because it contains large number of parties as client contractor, consultants, stakeholders, shareholder, regulators and others contraction project in Nigeria suffer from many problem and complex issues in performance because of many reasons and factor. This project is very important to identify and to evaluate the main factor affecting, contractors tenders in construction project in Nigeria. The practices concerning with tenders such as time, cost, project owner satisfaction and safety checklists will be analyzed in order to know the main practical problem of contractors who do not win tenders as well practical solution. In help enhance of our indigenous contractors in Imo State in winning federal government and foreign contract.

1.1 Research questions

 

In line, with the statement of the problem above, the research wishes to provide answers to the following questions:

• What is the impact of Public Procurement Act in the execution of capital projects in Ahmadu Bello University?
• What is the relationship between budgetary appropriation and actual funding for the implementation of public procurement in Ahmadu Bello University?
• What is the relationship between saving benefits (Amount Certified) and total capital expenditure (Contract Sum) for the implementation of Public procurement Act in Ahmadu Bello University?
• What are the challenges and prospects of public procurement Act in the implementation of capital projects in Ahmadu Bello University?
• What is the extent of awareness of public procurement Act in Ahmadu Bello University?

1.2 Objectives of the study

 

In line, with the statement of the problem above, the major objectives of this research are hereby stated:

• To determine the impact of public procurement Act in the execution of capital projects in Ahmadu Bello
• To determine the relationship between budgetary appropriation and actual funding for the implementation of public procurement in Ahmadu Bello University.
• To determine the relationship between saving benefits (Amount Certified) and total capital expenditure (Contract Sum) for the implementation of Public procurement Act in Ahmadu Bello
• To identify challenges and prospects of public procurement implementation in Ahmadu Bello
• To determine the extent of awareness of public procurement Act in Ahmadu Bello

1.3  Hypotheses

 

The following research hypotheses have been formulated for testing in the course of this study:

• H₀₁: The Implementation of public procurement Act has not made any significant impact on the execution of capital projects in Ahmadu Bello University.
• H₀₂: There is no significant relationship between budgetary appropriation and actual funding for the implementation of public procurement in Ahmadu Bello University.
• H₀₃: There is no significant difference between saving benefits(Amount Certified) and the total capital expenditure(Contract Sum).

1.5   SIGNIFICANCE OF THE STUDY

This research will help contractors become aware of what the factor which need to be considered when they intend to submit tenders for different projects. This research will also provide the information that could be used by any contractor to create a competitive bidding strategy.

This study will also give a dear insight into the various ways in which profit and efficiency from contracts and contracting can be increased and how the challenges facing contract tendering can be properly tackled. The study also gives a clear insight into the various factors affecting tenders and their effects on contractor efficiency and chance of winning a contact in Nigeria.

The findings and recommendations of the researcher will help in building a strong and better contract policy and tendering guideline for contractors especially small scale contractors in Imo State other construction companies in Nigeria.

1.6   SCOPE AND LIMITATION OF STUDY

This research focuses mainly on the assessment of the factors that affect tender for construction project, using construction companies and private contractors in Imo State as case study. Results and recommendations may not be used to generalize other construction companies or contractors in other parts of Nigeria as the researcher could not cover a wider scoped due to financial and time constraints. Based on the finding of this study other possible researchable areas may include studies on the various effect of other aspects of contracts such as contract laws in Nigeria and contract management and control.

The only limitation faced by the researcher in the course of carrying out this study was the delay in getting data from the various respondents.

Most respondents were reluctant in filling questionnaires administered to them due to their busy schedules and nature of their work. The research found it difficult to collect responses form the various respondents and this almost hampered the success of this study.

1.7   DEFINITION OF TERMS

1. Tender: According to Simmons (2002) a tender to an offer (usually by a contract or a vendor) to take a job or supply goods.

ii       Contract: Erikson (2002) defined contract as an agreement that creates on obligation binding upon the parties thereto

the essentials of a contract are as follows:

1)      Mutual assent:

2)      A legal consideration which in most instances need not be pecuniary.

3)      Parties who have legal capacity to make a contract.

4)      Absence of proud or duress and

5)      A subject matter that is not illegal or against public policy.

iii     Contractor: According to Simmons (2002) a contractor referees to an organization or individual that contract with another organization or individual (the owner) for the construction of a building, road or their facility.

iv      Construction / projects: In the fields of architecture and civil engineering construction is a process that consists of the building or assembling of infrastructure for from being a single activity. Large scale construction is a feat of human multitasking. Normally the job is managed by a project manager and supervised by a construction manager, design execution of a project, effective planning is essential involved with the design and execution of the infrastructure in question must consider the environmental impact of the job. The successful scheduling, budgeting, construction site safety, logistics, inconvenience to the public caused by construction delays and building etc Marshall (2001)

 

 

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