Journal article Open Access

Evaluation on the Performance of Lowest Responsive Bid Contract and the Quality of Materials Used on Governmental Building Projects in Jimma Town

Letarge, Binyam; Quezon, Emer T.; Macarubbo, Yolente C.

Construction industry participants have started recognizing that accepting the least bid price does not guarantee maximum value. Continuous problems of inferior quality of constructing facilities, high incidence of claims and litigation, frequent cost overruns and use of poor quality of materials have become the main features of Ethiopian’s public construction work contracts. This research was undertaken to evaluate the performance of public-owned construction projects awarded on a lowest bid awarding system, to determine the effect of advance payment on the contractor’s performance, compare lowest and average bid systems, and check the quality of local construction materials use by lowest price won contracts. A literature review was carried out to identify different practices and floated questionnaire survey and a laboratory test was conducted for selected and expected materials. Two alternative bid evaluation methods were discussed and suggested the better one from a performance point of view. The questionnaire was distributed to contractors, clients, consultants and other related professionals. Additionally, interviews were conducted with them. A total of 88 questionnaires were distributed, including laboratory test results for selected and expected materials found in Jimma Town. The data were collected and 80 valid questionnaires were analyzed by using SPSS-20, Excel, and laboratory test results requirements. The study identified that the causes of the poor performance of contractors were won projects with the lowest price; therefore more of the respondents do not like the lowest bidding method. Advance payment is the main solution to support the financial problem of contractors, but instead of paying in cash, purchasing the necessary construction materials is seen as an alternative to protect contractors from using the money to other uses. Obviously known that in the current bid awarding method of Ethiopia, most of the time, in order to be the winner of the bid price should be lesser. This leads the bidder not to get adequate profit, this pushes them to use poor quality of local construction materials. Finally, this work provides valuable information to the Ethiopian government, clients, consultants and contractors and other stakeholders who desire to improve bidding methods; usage of advance payment; ways to improve the performance of contractors and to protect the project from contractors using poor quality of construction materials.

Project Management
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