EFFECTS OF PRE-QUALIFICATION CRITERIA ON PERFORMANCE OF CONTRACTORS IN KADUNA STATE, NIGERIA

ABSTRACT

The effect of pre-qualification criteria on performance of contractors cannot be overemphasized. Problems faced in Project management can be attributed on poor pre- qualification criteria adopted by the public and private sectors as necessitated this study. The study aimed at evaluating the effect of pre-qualification criteria on performance of contractors in Kaduna State.  The study sampled 162 supervisors and management staff of Kaduna State Ministry of Land, Works and Housing. The study utilized closed ended questionnaires and adopted both descriptive and inferential method of analysis. The result of descriptive analysis revealed that construction professionals identified financial stability, soundness and Management and technical skills and capability as the most significant factor influencing the choice of prequalification. Also the the overall quality prequalification criteria with mean scores of 3.38 and 3.34 respectively, which indicated that quality prequalification criteria is significant. The study concludes that parties to contract should comply with the procedures leading to contract award such as identification of client’s requirements; preparation of clients‟ strategic brief and identification of procedures, organizational structures and range of consultants.

CHAPTER ONE

1.0       INTRODUCTION

1.1       Background to the Study

Contractors are those involved in the construction stage of construction projects and so any decision taken about their selection affects the performance of the project. The process of selecting contractors for a proposed project is a major decision which may influence the progress and success of any construction project. Selecting an inappropriate contractor for a project could therefore lead to project behind schedule, price changes and substandard work (Ologunagba & Akinmusire, 2016).

It is due to inappropriate criteria been selected when evaluating qualification of contractor, inappropriate significance attributed to the criteria and inappropriate methodology applied for the contractor evaluation and selection as identified by Ologunagba and Akinmusire (2016﴿ in their selection and evaluation process. The complexity of contractor selection is attributed to its uncertainty nature. It is due to fuzziness associated with contractor performance, experience, prequalification criteria and qualitative judgment ﴾Ologunagba & Akinmusire, 2016).

The decision made by the client or his representative directly or indirectly affect the success or otherwise of a project outcome (Nkanta et al., 2017). Thus, a wrong approach in selection could lead to project failure. The client is faced with choosing between using competitive bidding and negotiation to select contractor ﴾Ologunagba & Akinmusire, 2016). Most public client organizations adopt a selective approach for inviting tenderer for construction projects. This helps to prevent default and associated overhead costs of contractors. It enables the clients to assess the liability, competency and capability of potential contractors to satisfactorily carry out the contract.

It also minimizes the potential risks involved in the project (plebankiewiez, 2010). Ologunagba and Akinmusire, (2016) expressed that wrong tendering practice is a major contribution to inefficiency in Nigeria construction industry. However, some contractor selection methods currently in existence are criticized as incomplete and biased and lacking consideration in terms of contractor’s performance (Nkanta et al., 2017).

In addition, there have been steady increase in the range of methods used for procurement of construction works in the last two decades For instance, in Nigeria, we have “Due process’’ which is meant for transparency and accountability, but yet there have not be improvement in the success rate of construction projects. Project management is faced with many problems which can be attributed on poor pre-qualification criteria adopted by the public and private sectors. In the light of the above, this research work focuses on the effect of pre-qualification criteria on performance of contractors in Kaduna State through an in-depth study, analysis and realistic research.

1.2       Statement of the Research Problem

There is emerging acceptance to award of projects to contractors who quote low rates with anticipation of getting jobs. Evidence suggests that this approach accounts for delay in project completion, suspension of projects, poor performance and increase in total cost of the projects (Anyanwu, 2013). A capable construction contractor is requisite in proper procedure and  completion of a construction project. However, the objective of the selection process is not only to ensure that the contractors’ characteristics and capabilities match the requirements of the project under consideration but also the limitation of potential bidders (Anyanwu, 2013).

In such a case, it is essential not only to judge whether the contractor fulfils the basic criteria, but also to what degree that criterion is fulfilled. Kenneth and Josphat (2016) further assert that contractor selection plays a vital role in the project performance. The appointment of quality contractor for the right project is the most crucial challenge for any decision maker. The critical sources of delay are due to the fact that the project contractor does not have enough working capital, late advance payment, poor planning, poor site management and inadequate contractor’s experience (Kenneth & Josphat, 2016). The selection of the contractor is one of the most significant issues affecting the success of a construction project and it is one of the most challenging decision-making aspects of a construction project (Kenneth & Josphat, 2016). In the other words, it means to attain the best outcome in the cost, time, quality triangle for construction project management. All these studies overlooked the contributions and influences of project location on the prequalification. Previous studies on contractors’ prequalification criteria in Nigeria were not location specific while studies on geographical peculiarities of contractors’ prequalification with particular reference to Kaduna State region are sparse. Thus, it is imperative to evaluate the effect of pre-qualification criteria on performance of contractors in Kaduna State.

1.3       Research Questions

The research will be premised on the following research questions

i.      What  are  the  existing  contractors’  prequalification  criteria  that  affect  the performance of construction industry in Kaduna State?

ii.      What are the factors that influence the choice of prequalification criteria in the performance of contractors in Kaduna State?

iii.      How  have  the  major  challenges  of  prequalification  criteria  affected  the performance of building contractors in Kaduna State?

1.4       Aim and objectives of the Study

The aim of this study is to evaluate the effects of pre-qualification criteria on performance of contractors in Kaduna State with a view of:

i.      To identify and examine the existing contractors’ prequalification criteria in the construction industry in Kaduna State so as to determine the most significant criteria.

ii.      To identify and examine the factors that influences the choice of prequalification criteria in Kaduna State.

iii.      To determine how the major challenges of prequalification criteria has affected the performance of building contractors in Kaduna State.

1.5       Justification for the Study

It is part of the intending achievements of this study as a matter of importance to reduce the  poor understanding  of pre-qualification  criteria of contractors  in  Kaduna State. Additionally, at the completion of this study, it is expected that challenges affecting pre- qualification of contractors in Kaduna State, Nigeria will reduce because it will serve as an eye opener and a stimulating factor to key into the sector. Government and private individuals will be able to have a reasonable data about how contractors perceived pre- qualification criteria; thereby making them adjusts in the techniques and methods employed by them. It is however clear to see the essence of this study is purely awareness test and stimulating pill that will heal our nonchalant attitude towards pre-qualification criteria, as such reducing the gap of literature with respect to this particular area of study. Finally, the study will serve as a reference to students and future researchers on this area.

1.6       Scope of the Study

The study focuses on the effect of pre-qualification criteria on performance of contractors in  Kaduna  State.  This  study  was  limited  to  building  projects  in  selected  public organizations and on the criteria used in assessing the contractors. The samples were taken from the multitude of projects which the selected public organisations have used in the last 10 years (2009-2019). The prequalification criteria for selection that was used within this period shall be included. The groups of respondents that was selected for this research work are those who have been involved in the contractor selection practices of building project at one time or the other in Kaduna State.  The selection of Kaduna State is a conscious one, because it is an administrative hub in northern Nigeria, thus, it selection for the purpose of this study.

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