A comparative analysis of tender sums and final costs of public construction and supply projects in Nigeria

Abstract

Purpose – The purpose of this study is to investigate the relationship between tender figures,consultants’ figures and final construction costs of construction projects under competitive bidding inthe Nigerian construction industry, as guided by the due process policy, a national public procurementreform program.Design/methodology/approach – A total of 13 construction professionals and public contractadministrators were interviewed. Their views were reported intermittently as the secondary datacollected on 137 projects; 95 of these were construction and 42 supply projects. The findings are thenanalyzed and discussed.Findings – The study presents a number of regression models which can be used to predict the finalcost and actual duration of construction and supply projects under the due process regime in Nigeria asfunctions of lowest bids, consultant estimates, successful bid, gross floor area, average bid, contractor’sproposed contract duration and the consultant’s proposed contract duration.Practical implications – The models used, apart from being worthy benchmarks for future study, canbe of immense use to developing countries with the intention of implementing the due process policy ofNigeria in their countries as the limitations of the reform are succinctly discussed. Moreover, with thegrowing prospect for heavy engineering projects, the study will be of use to intending internationalcontractors willing to explore the Nigerian construction market, either by holistic participation or byforming partnerships or alliances with Nigerian domestic firms.Originality/value – The paper presents one of the pioneering stochastic studies based on empiricaldata on construction and supply projects under the due process reform in Nigeria.