An assessment of challenges facing local Contractors when bidding for large road works
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Mzumbe University
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A Dissertation Submitted in Partial Fulfillment of the Requirements for the Award
of Degree of Masters of Science in Procurement and Supply Chain Management of
Mzumbe University
Despite various trainings to build the capacity of local contractors to participate and undertake infrastructure projects in the country, still, most public competition ventures for local and international bidders normally end up with contracts being awarded to foreign contractors. So the main objective of this study was to explore the challenges facing local contractors when bidding for large works projects for the period from 2006/07 to 2011/12. The researcher applied survey research design by involving 21 respondents from the contractors registered in civil works class 1, 2, 3 and 4 and 8 TANROADS staff. Through primary and secondary data, the study was able to reveal that local contractors faced many challenges when they bid for large works projects. These challenges were mainly due to inability to provide bid securities, inadequate technical and managerial skills, lack of experience, stiff competition within contractors and presence of foreign bidders, inadequate access to credit and high financing cost and failure to meet the turnover requirement. Some of the proposed measures to address these challenges were formation of joint ventures, employment of skilled labour, use of bid securing declaration, training, reducing interest on loans or credits, improving preparation of responsive bids, improvement of fair competition and avoiding corruption practices, etc. Basically the output of the research study entails the practical alleviation of all unsuccessful factors hindering local contractor from successful bidding process through training, modification of policies and laws, adoption of transparent procurement systems and developing Contractor’s performance framework for monitoring of the performance of local firms in various aspects related to tendering, number of won tender by each active member of the CRB per calendar year, problems encountered, list of Contractors with exceptional good performance, etc.
Despite various trainings to build the capacity of local contractors to participate and undertake infrastructure projects in the country, still, most public competition ventures for local and international bidders normally end up with contracts being awarded to foreign contractors. So the main objective of this study was to explore the challenges facing local contractors when bidding for large works projects for the period from 2006/07 to 2011/12. The researcher applied survey research design by involving 21 respondents from the contractors registered in civil works class 1, 2, 3 and 4 and 8 TANROADS staff. Through primary and secondary data, the study was able to reveal that local contractors faced many challenges when they bid for large works projects. These challenges were mainly due to inability to provide bid securities, inadequate technical and managerial skills, lack of experience, stiff competition within contractors and presence of foreign bidders, inadequate access to credit and high financing cost and failure to meet the turnover requirement. Some of the proposed measures to address these challenges were formation of joint ventures, employment of skilled labour, use of bid securing declaration, training, reducing interest on loans or credits, improving preparation of responsive bids, improvement of fair competition and avoiding corruption practices, etc. Basically the output of the research study entails the practical alleviation of all unsuccessful factors hindering local contractor from successful bidding process through training, modification of policies and laws, adoption of transparent procurement systems and developing Contractor’s performance framework for monitoring of the performance of local firms in various aspects related to tendering, number of won tender by each active member of the CRB per calendar year, problems encountered, list of Contractors with exceptional good performance, etc.
Keywords
challenges facing local Contractors