Termination reasons and retendering strategies of infrastructure projects in Nigeria | |
| Author | Udofia, Wilson Udo |
| Call Number | AIT Diss. no.CM-16-01 |
| Subject(s) | Infrastructure (Economics)--Nigeria Roads--Design and construction--Nigeria |
| Note | A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Construction, Engineering and Infrastructural Management, School of Engineering and Technology |
| Publisher | Asian Institute of Technology |
| Series Statement | Dissertation ; no. CM-16-01 |
| Abstract | The management of road construction project over the years is characterized with known andunpredicted challenges which influence cost, resources, time and quality. These challenges arefrequently noticed in the form of delays which impede or slow down the progress of projects.Inadequacies in producing valid and viable schedules, through efficient planning that willfacilitate effective control and monitoring usually results in failure on project site and humanmanagement which invariably exert negative influence on material and equipment. These failurespromote cost overrun, time overrun, litigation, and arbitration which are attributes of delays inmost road construction projects. When these challenges are not properly defined and addressed itcan creates circumstances considered reasonable for the termination of a well-conceived projectswhich gulp huge contract sum by the project client. These challenges which are mostly attributedto the lapses on the part contractor usually compel the project client to implement the terminationdecision for default as stipulated in the contract provisions particularly as it may affects projectoutcome. Such negative outcomes usually exert serious consequences on the triangular projectneeds which include the time, cost, and the quality desired by project client. The initiation of the termination decision clearly involves the identification of the basic reasonswhich constitute failures and carefully setting out standard transition schedules in the form ofproject checklists that will outline specific weaknesses/needs of the revised project in the nextphase of bidding known as the retendering. The retendering is seen as one of the viable means ofreviving and reprocuring troubled project towards meeting targeted project objectives. This studywill majorly examine: 1) the reasons for terminating road construction project, 2) the retenderingstrategies applicable in road construction project, 3) the factors considered for the retenderingroad construction project, 4) the road project success criteria, 5) the correlation betweentermination reasons and retendering strategies, and 6) the correlation between retenderingstrategies and road project success criteria.To achieve the outlined objective for this study, the review of previous researches and literatures,journals, and internet searches on the chosen topic was considered pertinent. Additionally, inorder to fully obtained first hand information on the details of project descriptions particularlythe year of contract award, contract sum, funding source, labour strengths, problems encounteredand as well as the complexities associated with the terminated road projects; retendered roadprojects; and measures adopted to ensure the projects were successful. Personal visits on ninemega construction projects was considered vital and also interactions with the nine project/sitemanagers and engineers in Nigeria who were not below the ranked of qualified engineers forscheduled interviews were considered based on advance request sent to them in respect to theprojects. These nine mega road projects under study were regarded as nine case studies meant forpilot surveys. Upon successful visitations to secure necessary information/data, the outcomeobtained in the form of preliminary guides were cross-cased to generate similar constructs whichwere listed as budgetary problems, poor performance and failure in keeping to the agreeddurations basically caused project client to terminate road projects at various project phases.Similarly, in the retendering of the terminated road project, three major factors were equallyadduced which included the assessment, redesigning and retendering related factors. Finally, inassessing the success of the retendered road projects, criteria such as budgeted, time, and qualitycompliance were obtained and all the secured information were well documented. NOTE 520 A questionnaire instrument aimed at obtaining valid information on 60 mega road constructionprojects and very specific on project terminations, retendering strategies and road project successcriteria in Nigeria to be administered on qualified road respondents was developed. Specifically,the questionnaire was developed to attract responses regarding the project site conditions,technical incompetency of the contractor, design problems, faulty contract estimates, budgetaryinadequacies, resource material inadequacies and the excessive claims considered as terminationreasons; the review and assessment of project scope, procurement method,budget, capability ofthe new contractor, project client involvement/commitment, project risk, and the specific projectmanagement techniques as retendering strategies; and as well as road project success criteriavariables which included conformance to the project duration, number of rework activities,number of disputes/complaints on record in the project, number of risk activities on record,number of claims on record in the project, conformance to the project quality and theconformance to the project budget.In order to ensure that the questionnaire instrument designed for assessing the project terminationreasons, the retendering strategies, the road project success criteria, and their relationships isvalid, reliable, and highly consistent, in meeting the needs of the projects and also gain fullclarity of the project respondents in accordance with Cronbach’s Coefficient Alpha on theconsistency and the homogeneity of items (Cooper and Schindler, 1988). Furthermore, to furtherachieve high response rate, Leedy and Ormond (2001) suggested certain procedures forinstrument development that might be significant in facilitating the chances of cooperation aswell as ensure accelerated responses. These guidelines must be brief but concise and adaptingsimple but clear unambiguous language, in checking internal consistency and also providingclear instruction. It further instruct researchers on the coding of responses which helps inprojecting the questionnaire instrument in a concise and more attractive format that will guide inthe administrative phase of the pilot study and other study needs. The instrument wasadministered to 10 selected project owners, directors, managers and/or authorized officers ofgovernment handling mega road construction projects in Nigeria and who are not below the rankof qualified engineers with a duration of one month to freely expressed their views including theaddition of other information considered useful in meeting the intended objective of the studyusing a 5 point-likert scale design. The preliminary questionnaire instruments were retrieved andnecessary alignments were effected based on the responses received from the projectsrespondents in the survey. A pilot study therefore is often used to test the design of the full scaleexperiment and for possible adjustment where it is considered necessary in order to obtain a clearoutcome, hence the pilot survey significantly aided in the generation of a valid questionnaireentitled Project Termination and Retendering Strategies in Road Construction Projects in Nigeria(PTRS). The90 items questionnaire instrument was divided into two parts comprising fivesections, A, B, C, D and E. Section A addressed information of the respondent with six items;section B addressedspecific information on project with nine items; section C addressed thereasons for considering termination which were grouped based on the variables of time, budgetand performance with 40 items; section D addressed theevaluation of retendering strategies with42 items; and section E equally addressed factors to evaluate the road project success criteria inwith eight items only as shown in the appendix. NOTE 520 The instrument was administered personally on 60 randomly sampled mega road constructionprojects in Nigeria with adequate time span of four-six weeks given to road project respondentsso that they can fully understanding the instrument before indicating their choice. This samenumber were personally retrieved and analyzed which represented 100% response rate. The meanvalues for the variables under study and standard deviation were used as preliminary analysis toexamine and identify the items as termination reasons, retendering strategies, and road projectsuccess criteria. Based on the 5 – point scale which ranges from 1- 5 as used in this study, thevalue 3.0 on the scale is considered as a benchmark for the selection of variables which impliesthat any factor or mean below 3.0 were dropped. Accordingly, the 25 variables each wereselected from those which constitute the 40 termination reasons and the 42 retendering strategies.These 25 variables were statistically considered valid and reliable for factor analysis.In thisstudy mean scores with standard deviation ranging from 3.067*± 0.861 to 3.367*± 1.125,3.017*± 1.186 to 3.483**±0.892 and 3.068*± 0.944 to 3.441**± 1.006 were obtained for thetermination reasons, retendering strategies and road project success criteria respectively. Thisprocedure was used in obtaining 25 variables each for the termination and the retenderingstrategies from the initial variables of 40 and 42 while the eight variables of the road projectsuccess were retained.Considering the number of constructs involve in this study, factors analysis shall used to reducevariables into relatively smaller groups of underlying factors that summarized the essentialinformation contained in the variables by grouping variables with similar characteristics together.Therefore, the termination reasons and the retendering strategies variables which have 25variables each were reduced to seven factors each using factor analysis. To ensure whether theselected variables for factor analysis were appropriate or not, two tests were used, the Kaiser-Meyer-Oikun (KMO) which is as an index used in comparing the magnitudes of the partialcorrelation coefficient on the adequacy of sample with below 0.5 as unacceptable limit and theBartlell’s test of sphericity which is also used in checking the appropriateness of the factoranalysis which stressed that the for an hypothesis to be rejected that the population correlationmatrix was not-identical, the level of significant level should be smaller than 0.05. These sevenfactors which constitute the termination reasons were categorized and named as the project siteconditions, technical incompetency of the contractor, design problems, faulty contract estimates,budgetary inadequacies, resource material inadequacies, and the excess claims. Similarly, theseven factors which also constitute the retendering strategieswere theclient or managementinvolvement and participation, contractor capabilities, budget,assessment and review of projectscope, procurement method, specific project management techniques and the project risk werealso identified and categorized.More so, the regression analysis shall be used in this study to establish whether relationshipexists, the strength and the form of relationship among the termination reasons, the retenderingstrategies, and the road project success criteria applicable in Nigeria using regressional equations.These study findings therefore indicates the practical interpretation of field statistics reportobtained during survey of the projects. In the perspective of the termination reasons, the projectsite conditions, the design problems and the resource material inadequacies were identified basedon the revealed relationship with the retendering strategies which indicate them as major NOTE 520 termination reasons and others listed as the technical incompetency of the contractor, budgetaryinadequacies,faulty contract estimate and the excess claims. This implies that, the variables ofthe project site conditions, design problems and the resource material inadequacies whichconstitute the major termination reasons showed significant relationship with the variables ofretendering strategies among others and can be regarded as road project termination reasons. On the retendering strategies, the review and assessment of project scope in this study isconsidered as a major strategy based on its significant correlation involving the variables of theproject site condition, technical incompetency of the old contractor, faulty contract estimates, andthe resource material inadequacies at P<0.05 with a coefficient of determination (R2) of 68.6%.This indicates that accurate identification of the project site and other geological conditions basedon viable project feasibility studies adequately facilitates the execution of the project. Thisdirectly implies that valid contract estimate with the required site data will truly represent thevarious work schedules and packages during construction phase. Such schedules alsoaccommodate the materials requirements sufficiently to meet the demand of the project inaddition to the technical and professional competencies expected from the contractor inaccurately defining the project scope prior to tendering process with emphasis on confirmedproject feasibility report. The Procurement method in this study is considered as a major strategy based on its significantcorrelation involving the variables which constitutes the technical incompetency of the oldcontractor, design problems, faulty contract estimates and the budgetary inadequacies at P<0.05with a (R2) of 60.3%. This indicates the attributes of a good procurement system which includethe professional and technical capabilities of the contractor in adequately planning to succeed inall the phases of the project execution. It further include valid contract estimate which providerecords of schedules in utilizing budgeted funds for the completion of the project throughappropriate selection of method and the procedures for the procurement of the projectparticularly during project bidding. The project risk in this study is also considered as a majorstrategy based on its significant correlation involving the variables which constitutes the projectsite conditions, design problems, faulty contract estimates, resource material inadequacies, andthe excess claims at P<0.05 with R2 of 79.2%. This shows significant progress in theprocurement of project based on sufficient knowledge of the project site conditions whichequally enhances the preparation of good and transparent contract estimate. Accurate preparationof viable project estimate provides the needed impetus in the planning and the allocation ofresource material which eliminates the request for additional funding against contract agreementin the form of risk claims or absolute failures. It further suggests the incorporation of standardproject risk management plan into project bidding to checkmate failures.Regarding the road project success criteria, the number of disputes/complaints on record in thisstudy is considered as a major road project success criteria based on its significant correlationinvolving the variables which constitutes the budget, capability of the new contractor, clientinvolvement/commitment, and the project risk at P<0.05 with R2 of 0.54%. This is an indicationof project compliance to a functional budget provisions suggesting an acceptable procurementmodalities involving the contractor and the project client, success can be attain with a high level NOTE 520 of risk control which significantly helps in curbing the occurrence of disputes/complaints in theproject. Additionally, the number of rework activities is considered as a major project successcriteria based on its significant correlation involving the variables which constitutes theprocurement method, the project client involvement /commitment, at P<0.05 with R2 of 0.54%.This indicates that when a project is properly procured in line with the appropriate proceduresand methods and with the commitment and participation of the project client, the number ofrework activities can drastically be reduced if not fully eliminated. In the same manner, theconformance to the project duration is considered as a major project success criteria based on itssignificant correlation involving the variables which constitutes the procurement method,capability of the new contractor, the project client involvement /commitment, and the project riskat P<0.05 with R2 of 0.573%. This also indicates a commitment of both the contractor and theproject client in engaging the services of each other through a transparent procurementmechanism which foster the chances of success based on their commitment in eliminating orreducing activities that can result into the extension of time beyond the approved contractualduration through proper supervision and monitoring.This study therefore proposed two null hypotheses which were: 1) there is no significantrelationship between the termination reasons and the retendering strategies in road constructionprojects and, 2) there is no significant relationship between the retendering strategies and theproject success criteria in road construction projects. Based on the resulting regressionalequations involving the retendering strategies (GR) and the termination (GT) factors, the nullhypothesis which states that there is no significant relationship between the termination reasonsand the retendering strategies was rejected and the alternate hypothesis accepted that there exist asignificant relationship between the termination reasons and the retendering strategies based onthe studied statistics involving the termination reasons and the retendering strategies. This furtherimplies that the reasons for termination of contract and retendering strategies adopted in thestudy are significantly correlated. Similarly, based on the resulting regressional equationsinvolving the road project success criteria (S) and the retendering strategies (GR) factorsthe nullhypothesis which states that there is no significant relationship between the retendering strategiesand the road project success criteria was rejected and the alternate hypothesis accepted whichstates that, there exist a significant relationship between the retendering strategies and the roadproject success criteria based on the studied statistics involving the retendering strategies and theroad project success criteria in Nigeria. This implies that the success of road construction projectis dependenton the retendering strategies adopted and both are significantly correlated. Findingsof this study revealed the existence of significant relationship among the variables of thetermination reasons, the retendering strategies, and the road project success criteria through theregression analysis. This study has provided a clear indication that identified retenderingstrategies effective in restructuring a terminated/troubled road construction project based on theproject success criteria considered in this study. |
| Year | 2016 |
| Corresponding Series Added Entry | Asian Institute of Technology. Dissertation ; no. CM-16-01 |
| Type | Dissertation |
| School | School of Engineering and Technology (SET) |
| Department | Department of Civil and Infrastucture Engineering (DCIE) |
| Academic Program/FoS | Construction Engineering and Infrastructure Management (CM) |
| Chairperson(s) | Hadikusumo, B.H.W. ;Santoso, Djoen S. (Co-Chairperson); |
| Examination Committee(s) | Chotchai Charoenngam ;Kunnawee Kanitpong; |
| Degree | Thesis (Ph.D.) - Asian Institute of Technology, 2016 |