31-05-2013, 02:07 PM
Factors influencing the selection of procurement systems in the South African construction industry
ABSTRACT
Procurement systems are vital in ensuring the successful implementation of a construction project,
precisely executed for all phases of any particular project. Therefore, this paper aims to investigate, in
a systematic manner, the factors that influence the selection of a procurement system in the South
African construction industry. An extensive theory and literature review of procurement systems was
conducted. The literature reviewed included a sample of 6 case studies of completed building and civil
engineering projects within South Africa. Questionnaire surveys were carried out using a 4-round
Delphi method approach to conduct the empirical study in order to obtain participants’ opinions about
the factors that influence the selection of procurement systems, as well as the utility value of various
procurement systems on each factor as identified. Finally, data analysis of both qualitative and
quantitative techniques was performed using the Statistical Package for Social Sciences (SPSS). After
qualitative analysis, the findings indicate that factors that influence the selection of procurement
systems are closely linked to the problem areas or they cut across all the phases of the project as
identified in this paper. Therefore, these factors are categorically classified into internal and external
factors.
INTRODUCTION
To some extent, procurement systems are not foreign to the South African construction industry. Two studies
conducted within the SADC region, one for South Africa
and the other for Botswana by Rwelamila and Meyer
(1996) have revealed that South Africa had adopted a
ready-made construction framework, including the hybrids
of traditional procurement systems during the years
when South Africa was a British colony. Although the
South African procurement system is based on the British
model, the context and the application of this model were
unsystematic for the then apartheid South Africa; this was
due to the different set-up and institutional arrangements
between South Africa and Britain.
Traditional procurement systems
This method is called ‘traditional’ because it has been in
existence for a long time and has been the only choice
available for most clients of the construction industry for
many years. Using this method, the client enters into an
agreement with the design consultant (an architect or
engineer) to actually carry out the design work and
prepare contract documents.
Following the completion of this phase, the contractor is
then appointed based upon the owner’s criteria and the
owner enters into a contract with the successful
contractor for the assembly of the project elements. In
essence, the client is under two contractual obligations;
the design professional and the contractor.
Selective tendering
This consists of the client drawing up a shortlist of
contractors that are known to have the appropriate
qualifications to carry out the work satisfactorily. Those
contractors who seek to be listed are then asked for
further details concerning their technical competence,
financial standing, resources at their disposal and
relevant experience. Pre-qualifying contractors who are
on the list are invited to tender (Pilcher, 1992)
Negotiated tendering
This method is applied in several or different contexts,
but the essence is that tenders are obtained by the client
inviting a single contractor of his/her choice to submit a
tender for a particular project.
Non-traditional procurement systems
Non-traditional is a generic term which is used to refer to
all emerging or contemporary procurement systems of
the construction industry other than the traditional procurement
system. Over the past number of years, the
construction industry has undergone changes in a
manner never seen before. The increased size and complexity
of the construction projects, financial challenges,
political and social consideration, and information
technology are just some of the changes that have been
taking place. These changes had led to the development
of alternative procurement systems other than the
famous traditional one. Although the development of nontraditional
procurement systems seemed to be the
favourite to most clients of the construction industry, It
must, however, be emphasised that there is not yet a
specific method used to select the most appropriate
procurement system. Masterman (2002) defines a nontraditional
procurement system as a diversified contemporary
procurement system(s) that not only considers
design and construction, but also considers financing,
operating and facility management.
SOUTH AFRICAN PERSPECTIVES
Although the forerunner of procurement systems in South
Africa is based on the British model, post-1994, the South
African government and all other stakeholders of the
construction industry through the Department of Public
Works initiated and co-ordinated the development of a
comprehensive CIDB as part of their contribution to
national project for Reconstruction, Growth and
Development typified in the white paper “Creating an
Enabling Environment for Reconstruction, Growth and
Development in the Construction Industry (DPW, 1999).
Construction procurement policy in South Africa
Procurement is defined as the process which creates,
manages and fulfils construction contracts, and it is
further described as a succession of logically related
actions occurring or performed in a definite manner and
which is culminated by methods (i.e. documented
systematically), and procedures which are performed and
shaped by policy of an organization (Draft International
Standard ISO/DIS 10845-1, 2008). Within the South
African Government context, policy is often translated
into rules and regulations; policy also relates to choices
made in the use of generic procedures, methods and
circumstances under which a certain procedure should
be used (SANS 294).