CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Shash (1993) explains that a construction company can either negotiate with the client or use a competitive tendering process to obtain a contract. Fu 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 contractors to tender for the proposed project. The selected contractors must to decide whether to tender or not tender. The contractors 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.
There are various factors that need to be considered by the contractors in order to make the decision to tender or not. 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 basis of experience, intuition and guesses. (Egemen and Mohamed 2007, p.1373)
There are many researchers that have discovered the factors that affect the tender/ no tender process. Unfortunately, there has not been any similar research projects carried out in Nigeria. Furthermore, during the global economic recession, construction related activities are decreased significantly. Construction contractors‟ original tender/ no tender decision making criteria may be changed.
1.2 PROBLEM STATEMENT
Designing and implementing an effective tender is a huge challenge 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 contractors are not favoured during a tendering process by prospective clients because, they neglect various factors 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 contracted is reduced.
Construction industry has complexity in its nature because it contains large number of parties as clients, contractors, consultants, stakeholders, shareholders, regulators and others. Construction projects in Nigeria suffer from many problems and complex issues in performance because of many reasons and factors. This project is very important to identify and to evaluate the main factors affecting contractors’ tenders in construction projects 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 problems of contractors who do not win tenders as well as practical solutions to help enhance the chances of our indigenous contractors in Imo state in winning Federal government and foreign contracts.
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