Performance Study Of Lowest Bidder Bid Awarding System In Public Construction Projects

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Ethiopian construction industry participants have long recognized that accepting the lowest pricernbid does not guarantee maximum value. Achieving a value-based procurement approach is arnchallenge, particularly for the Ethiopian public sector clients who are limited in their ability tornevaluate the competitive bids based solely on the low-bid award system. In the current economicrnclimate it is increasingly likely that construction organizations will submit abnormally lowrntenders to win new work. Persisting problems of inferior quality of constructed facilities, highrnincidence of claims and litigation, and frequent cost and schedule overruns have become thernmain features of Ethiopian public construction works contracts.rnThis research was undertaken to assess the performance of public owned construction projectsrnawarded on a least bidder bid awarding system and to seek construction professionals’ opinionsrnabout the current traditional bidding procedure and other alternative systems for evaluation ofrnbids and awarding contracts.rnAn extensive literature search was carried out to identify different practices, a questionnairernsurvey was conducted among the different groups that make up the construction industry inrnEthiopia, and projects data were collected from selected federal government clients andrnconsultants administering public construction works.rnA number of alternative bid evaluation and contract award procedures are presented andrndiscussed in this research; some of these alternatives are in use in other countries and industries,rnand some are emerging. Federal government regulations are reviewed to examine the objectivesrnand intent of the law on this issue.rnThe research showed that least responsive bid evaluation and contract award procedurern(awarding contracts to the contractor who offers the least price) have been the main method ofrnawarding public constructions works contract. Only in rare situations other factors, basically therncontractors past record on projects owned by that particular public client, has been taken in tornaccount in awarding contracts. Competitive low bid method has been highly criticized for itsrnixrnnegative impact on disputes/claims, coordination, quality control and project duration. Most ofrnthe projects have been suffering in material and equipment shortages. Manpower shortage wasrnalso encountered in many projects. On the other hand, other alternative bidding proceduresrnincluded in the study were highly appreciated by respondents for their positive effects on thesernattributes. Particularly, the researcher shared the idea of adopting the average bid method ofrnawarding contracts among responsive bidders which are supported by many constructionrnprofessionals included in the study.

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Performance Study Of Lowest Bidder Bid Awarding System In Public Construction Projects

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