Abstract:
Construction industry participants have started recognizing that accepting the least bid price does not guarantee
maximum value. Continuous problems of inferior quality of constructing facilities, high incidence of claims and litigation, frequentcost
overruns and use of poor quality of materials have become the main features of Ethiopian’s public construction work contracts.This
research was undertaken to evaluate the performance of public owned construction projects awarded on a lowest bid awarding
system, to determine the effect of advance payment on the contractor’s performance, compare lowest and average bid systems,and
check the quality of local construction materials use by lowest price won contracts. A literature review was carried out to
identifydifferent practices and floated questionnaire survey and laboratory test was conducted for selected and expected materials.
Twoalternative bid evaluation methods were discussed and suggested the better one from performance point of view. The
questionnairewas distributed to contractors, clients, consultants and other related professional. Additionally, interviews were
conducted with them.A total of 88 questionnaires were distributed, including laboratory test results for selected and expected
materials found in JimmaTown. The data were collected and 80 valid questionnaires were analyzed by using SPSS-20, Excel, and
laboratory test resultsrequirement. The study identified that the causes of poor performance of contractors were won projects with
lowest price; thereforemore of the respondents do not like the lowest bidding method. Advance payment is the main solution to
support financial problemof contractors, but instead of paying in cash, purchasing the necessary construction materials is seen as
an alternative to protectcontractors from using the money to other uses. Obviously known that in the current bid awarding method of
Ethiopia, most of thetime, in order to be the winner of the bid price should be lesser. This leads the bidder not to get adequate profit,
this pushes them touse poor quality of local construction materials. Finally, this work provides valuable information to the Ethiopian
government, clients,consultants and contractors and other stakeholders who desire to improve bidding methods; usage of advance
payment; ways toimprove performance of contractors and to protect the project from contractors using poor quality of construction
materials.
