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    Bid or no-bid decision factors of indigenous contractors in Nigeria

    Access Status
    Fulltext not available
    Authors
    Olatunji, Oluwole
    Aje, O.
    Makanjuola, S.
    Date
    2017
    Type
    Journal Article
    
    Metadata
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    Citation
    Olatunji, O. and Aje, O. and Makanjuola, S. 2017. Bid or no-bid decision factors of indigenous contractors in Nigeria. Engineering, Construction and Architectural Management. 24 (3): pp. 378-392.
    Source Title
    Engineering, Construction and Architectural Management
    DOI
    10.1108/ECAM-01-2016-0029
    ISSN
    0969-9988
    School
    Department of Construction Management
    URI
    http://hdl.handle.net/20.500.11937/54543
    Collection
    • Curtin Research Publications
    Abstract

    © 2017 Emerald Publishing Limited. Purpose: The decision to bid or not to bid for new projects determines contractors' propensity for business success or failure. The purpose of this paper is to investigate the factors that affect the decision of indigenous construction contractors to bid or not to bid in Nigeria. Design/methodology/approach: Analysis was conducted on data from questionnaires received from 64 engineering management employees of leading construction companies which are members of Nigeria' s Federation of Construction Industry. The study identified 41 significant decision factors often considered by Nigerian indigenous contractors before the bid. Mean item scores were obtained for each of the factors. Principal component analysis was used to point out the most significant decision factors. Findings: Results revealed significant orthogonal relationships between the factors. Only 11 of the 41 factors are statistically significant to influence contractors' decision to bid or not to bid. Most of the significant items were amongst the least rated items by the participants. The post hoc decision factors include consultant' s interpretation of project specifications, previous relationship between the intending bidder and client, availability of other projects at the time of bidding, technological complexity of the project under consideration and prequalification requirements. Others include the propensity for resource price fluctuation, business capacity of partners, amount of own work vs subcontracted work, required rate of return on investment and difficulty in obtaining finance. Originality/value: The practical implication of these findings are as follows: the orthogonal relationship between the decision factors implies non-linear relationship between the factors and actual decision to bid or not to bid, and that bid success is often not predictable by bid behaviour; many of the bid decision factors rated highest by indigenous contractors seldom impact the contractors' actual bid decisions; local and international players can adopt the significant decision factors elicited in this study for managing their structures for inter-organizational partnerships.

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