Impact of Procurement Methods and Procurement Requirements on Cost Over-run of Public Building Projects in Uganda

Abstract

Cost over-run in building projects is endemic and routinely increases construction cost to as high as 52% of contract sums in Uganda. The consequence of this is underachievement of investment objectives due to additional costs to complete projects. This research investigated how procurement requirements and procurement methods combine to determine cost over-run of building projects. Procurement requirements of bid time, performance bond, insurance, workload and experience of contractors were investigated within contexts of procurement methods of open domestic bidding, restricted domestic bidding, open international bidding, restricted international bidding and requests for quotations. Purposive and snow-ball sampling were used in identifying construction professionals, consultants and contractors of building projects with cost over-runs. Correlation and independence of procurement requirements on 37 cost over-run datasets were analysed by Spearman's bivariate correlation co-efficient at 5% level of significance and variable inflationary factor of less than 5 respectively. Bid time and performance bond were found to reduce cost over-run of building projects most followed by workload and experience. Insurance increased cost over-run marginally. The novel contribution of this research is a model that explains 63% of cost over-run with 9% margin of error. The variants of the model for each procurement method are presented