Does regulation have an impact on project success? An empirical study in the construction industry in South Africa

Abstract

South Africa’s administration of construction procurement has changed drastically since 2000 when the Construction Industry Development Board (CIDB) was established. Contractor selection in the past was mainly based on the lowest priced tender only, which often led to project failure due to tender under pricing as the contractors did not have the required experience. However, the CIDB regulations ensure that a contractor is only awarded a tender for which they qualify for according to their grading. The CIDB regulations evaluate a contractor according to their work and financial capability. It has, however, not been investigated if there is a relationship between CIDB regulations and project performance. Research results indicate that contractors who are not registered with the CIDB tend to complete projects over budget. This investigation also revealed that the years of experience of the respondent has more impact on project success than CIDB registration. This investigation indicates that the current requirement for CIDB registration is ineffective in ensuring a successful project therefore, public sector clients need to re-assess the necessity of having such a requirement and perhaps explore other requirements for the procurement of contractors.