Assessment on Performance of Least-Bidders on Ethio-Telecom Construction Projects

Abstract

Ethiopian construction industry participants have long recognized that accepting the lowest price bid does not guarantee maximum value.For the success of any construction project time, cost, quality, and safety performance are the fundamental criteria. More than 50% of theEthio-telecom construction projects are awarded using lowest bidder bid awarding system and most of the contractor of the projects fails to complete and handover the project to the client asper the agreement. Consequently, most of the project face huge amount of time and cost overrun. The other Ethio-telecom construction projects are awarded by fixed price invitation methods almost 98% of the construction project completed with the give time and price, which was awarded by fixed price system. This study focuses the first stated awarding system and tried to analyze the performance of least bidder contractors under Ethio-telecom projects. In this study other factors responsible for impacting the time, cost, safety, and quality performance of Ethio-telecom construction projects were also analyzed. The research has adopted descriptive type of research design and the probability sampling was used to identify the target population; and the target populations were the number of construction projects which was completed in the last five years. The sources of data for this research were primary and secondary data. The primary data were gathered formally through a questionnaires and direct interview of stakeholders which are working in the construction projects. And, the secondary data was gathered through reviewing, examination of documents, reports and records of published documents. Relative importance Index was used to analyze the data. The findings of study revealed that, in average 48.80% of construction projects were time overrun and only 51.20 % of project could achieve completion within contract duration. The amount of time overrun varies between 21.85-80.00%. Cost overrun was in between 0-25% as agreed by respondents with an average of around 10%.The major contributors of this poor performance related to cost are identified and ranked based on their relative importance index (RII) accordingly, Unfair estimation of project contract period (RII=0.808), Lack of proper supervisions (RII=0.806), and Poor scheduling during construction (RII=0.794) were top three factors. Similarly, factors related to time performance were identified and ranked, accordingly, Selection of lower grade of contractor (RII=0.930), Poor human resource management (RII=0.850), and Lack of proper work planning, and scheduling (RII=0.812) were top three factors. Generally, from this study it can be concluded that, the contractor’s performance under lowest bidder bid awarding system was poor in both cost and time context. Hence, Ethio-telecom as client recommended is changing bid warding system to effectively perform the projects progress since it is crucial for development of our country.