Advertisements
Chapter One of An Assessment of Electronic Tendering in Nigeria Construction Industry
INTRODUCTION
Background to the Study
Information and communication technology (ICT) have now made it possible for essential changes in the modes of operation of all businesses and industries throughout the world. It is now a fact that the much-anticipated global village is a reality. The amount of business conducted electronically has reached hundreds of billions of dollars, and there is little doubt that the emergence of the internet is continually revolutionising access to communication and information (Kajewski & Weippert, 2004). The construction industry has been one of the most impacted by these radical changes. Construction industry professionals now aim at paralleling the level of use of ICTs by other industries in the performance of their activities (Ibidapo, 2000). Tendering is one of the aspects of the procurement process where information technology is useful. In spite of the positive benefits e-tendering on the procurement process in the Nigerian construction industry, there are still countless shortcomings (Black et al, 2005).
Advertisements
On the other hand, a serious subject of doubt is that the availability of the facilities necessary for participation in e-tendering by industry practitioners is in question. Most professional practices in Nigeria make use of stand-alone computers running few application packages for word processing and spread sheeting. Stakeholders need to employ an accurate level of proficiency in the use of information technology and communication for effective use of e-tendering. This is necessary since several technicalities are usually involved in forming and managing electronic collaborative relationships between professionals with often-diverse interests and contributions. The necessary requirements in terms of proficiency are far from being met. This is indicative of a gap in skill as mapped out in the work of Oyediran & Kalu (2005).
The use of ICT is usually intended to enable collaboration in construction business processes but it effectively has almost no legal validity even in developed countries. The various forms of contract available for use within the construction industry usually give no indication of the admissibility of electronically exchanged documents in contracts. Hence, the use of ICT remains legally ineffective in current conditions. Worthy of note is the lack of infrastructure for conducting safe and secure business through the internet. Although several financial institutions have experimented with several e-payment solutions in Nigeria, these have remained available to only a privileged few. Yet there appears to be little knowledge about even the most popular electronic payment media.
Several research efforts have been concentrated on the implementation of information and technology tools in the Nigerian construction industry. While Oyediran & Odusami (2005) studied the extent of usage of the computer particularly among Nigerian quantity surveyors, (Oladapo, 2006) studied the influence of information and communication technology on professional practice, and Oladapo (2007) investigated the impediements to the use of ICT in the Nigerian construction industry. However, no prior attempt has been made at measuring or quantifying the level of benefits being achieved or the problems being experienced by industry stakeholders who have been using electronic means to perform tendering functions. The uniqueness of the work lies in the Nigerian context. Nigeria is a developing economy in Africa. The level and pace of development has been lethargic in many respects. The adoption of ICT in the construction has nonetheless been found desirable borrowing from its impact in other sectors of the economy, especially the services sector. A roadmap for ICT adoption in the Nigerian construction sector requires a benchmark study to underpin the adoption process in order to measure up to technologically advanced nations. A study of the challenges encountered in the effort to adopt e-tendering as well as an assessment of the level of benefits obtainable at present in the Nigerian construction industry (NCI) is thus essential. This study draws impetus from the need to fill a gap in knowledge in this area of technological innovation in construction as a thorough search of existing literature has shown the dearth of similar work in this area, particularly e-tendering. It is also critical that the factors affecting the art of e- tendering be examined as prelude to contributing to policy debate on e-tendering for the Nigerian construction industry.
Statement of the Problem
In spite of the fact that previous researchers generally conclude that e-tendering system is effective, the question is why tendering process is still based on manual activities i.e. traditional tendering system. Despite the benefits of e-tendering and the contribution to the procurement phase of a project, there are factors and challenges that affect the wide use of e-tendering. One of the factors that hinder the used of e-tendering is the isolated nature of processes without extensive integration prior or after tendering (Chilipunde, 2013). However, majority of the construction and consultancy firms are still sceptical of the potential benefits mainly due to limited human resources as regards the operation of the e-tendering process. These includes, financial resources, accessibility of internet, computer literacy amongst tendering participants, e-tendering software not user friendly, ineffective e-tendering infrastructure, legal and security issues, lack of government policy and the people. These are the main factors that hinder the use of e-tendering in the developed countries (Mohemad et al., 2010). Research has shown that no extensive study has been conducted on this ineffectiveness and wide use of e-tendering in the Nigerian construction industry. This study will however assess electronic tendering in Nigeria construction industry.
Research Questions
This research will be carried out to answer the following research questions:
i) What are the challenges facing e-tendering among contractors for construction projects in Nigeria?
ii) What are the effects of e-tendering for construction projects on contractors in Nigeria?
iii) What are the reasons for e-tendering for construction projects by contractors in Nigeria?
Objectives of the Study
The aim of this research is to assess electronic tendering in Nigeria construction industry. However, the specific objectives of the study are:
i) To ascertain the challenges facing facing e-tendering among contractors for construction projects in Nigeria
ii) To determine the effects of e-tendering for construction projects on contractors in Nigeria
iii) To identify the reasons for e-tendering for construction projects by contractors in Nigeria
Significance of the Study
This study seeks to assess contactors tender for construction project in Nigeria. It will help contractors become aware of the factors that are needed to be considered when they intend to submit tenders for different projects. This research will also provide the information that would be used by any contractor to create a competitive bidding strategy. This study will also give a clear insight into the various ways in which profit and efficiency from contracts and contracting can be increased and how the challenges facing contract tendering can be properly tackled. The study also gives a clear insight into the various factors affecting e-tenders and their effects on contractor’s efficiency and chances of winning a contract in Nigeria. The findings and recommendations of the researcher will help in building a strong and better contract policy and tendering guideline for contractors in Nigeria.
Scope of the Study
For the purpose of reliability and validity, the study will be carried out in Lagos State since that is where the headquarters of construction contractors is located. Based on the findings of this study other possible researchable areas may include studies on the various effects of other aspects of contracts such as contract laws in Nigeria and contract management and control.
Definitions of Terms
The following terms were used in the course of this study:
Construction: is the process of constructing a building or infrastructure. Construction differs from manufacturing in that manufacturing typically involves mass production of similar items without a designated purchaser, while construction typically takes place on location for a known client.
Contract: A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Contract is a branch of the law of obligations in jurisdictions of the civil law tradition.
Contractor: a person who is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of a building project.
Project: Planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.
Electronic tendering: an internet based process wherein the complete tendering process; from advertising to receiving and submitting tender-related information are done online. This enables firms to be more efficient as paper-based transactions are reduced or eliminated, facilitating for a more speedy exchange of information.
Advertisements
