Dosumu, O (2018) Assessment of the likelihood of risk occurrence on tendering and procurement of construction projects. Journal of Construction Business and Management, 2(1), pp. 20-32. ISSN 2521-0165
Abstract
The construction industry is plagued by risks above other industries due to its unique features which include the complexity of building activities, extended period of construction, complicated processes, financial intensity and dynamic organisational structure. These risks are not adequately dealt with and result in increased cost, time and reduced quality. While many types of research have been conducted on construction risks, only a few types of research have investigated the impact of risk (at tendering and procurement stage) on construction projects before they commence. Meanwhile, risk issues are better solved at bidding and procurement phase than construction phase as the case has been. Therefore, this paper examines the likelihood, degree of impact and probability of risk occurrence on tendering and procurement of construction projects. It also investigates the significant sources of tendering and procurement risks, the level of awareness and adoption of risk management techniques in construction tendering and procurement. The questionnaire for the study was administered on building contractors and consultants. A total of 44 questionnaires were retrieved and used for the analysis of the study. The statistical tools used for analysis are frequencies, percentages, mean scores and t test. The findings of the study revealed 17 significant sources of risk among the 35 that were investigated. Risks with high likelihood of occurrence, the degree of impact and high probability of occurrence were also indicated in the study. Based on the findings, it was concluded that respondents are aware and adopt risk management techniques on construction projects, but their adoption is at response level rather than identification level. Therefore, the recommendation of the study is that awareness should be created on the need for risk identification before construction projects commence. This should be implemented at professional and organizational level. Construction stakeholders should guard against risks with a high degree of impact and probability of occurrence during tendering and procurement of construction projects. Therefore, this study contributes to the body of knowledge by investigating the significant sources of risks to tendering and procurement, likelihood of risk occurrence, impact of risks and probability of risk occurrence in tendering and procurement.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cost overrun; procurement; questionnaire survey; risk management; tendering |
| Index terms: | questionnaire, construction project, complexity, bidding, body of knowledge, organizational structure, survey, risk identification, risk management, construction industry, construction phase, building contractor, cost overrun |
| Subjects: | financial risk, production management, sociology, systems engineering, industry analysis, data collection methods, risk assessment, practitioner, project delivery, financial and cost management, bidding, knowledge management |
| Topics: | Organizational Design, Roles and Professions, Risk Management, Procurement, Cost Management, Project Management, Research Practice, Engineering Principles, Information Management |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here