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. Factors from the internal environment were further classified into client characteristics and project characteristics, with client characteristics comprising variables such as: client’s level of knowledge and control, political and social consideration, familiarity of procurement systems, competition, funding arrangements, government (public/private sector projects) and risk allocation; whereas project characteristics comprise factors (variables) such as: size and technical complexity of the project, influence of the project life cycle, expedited project delivery, time, quality and price certainty. Factors from the external environment include variables such as market competition, information technology, regulatory environment, natural causes and globalization. After factor analysis had been performed on variables obtained from the literature review, five newly established factors were identified and are considered to be the most significant factors that influence the selection of a procurement system for the South African construction industry. These 5 factors are: socio-economic consideration, client requirements, capital cost/cash flow, procurement policy and project characteristics. In terms of its scope, this study focused on both national and international literature reviews and the empirical survey of this study was conducted within South Africa. However, its target participants were limited to civil engineers, quantity surveyors, construction/project managers, architects and contractors located in three provinces of South Africa, namely: Gauteng, Mpumalanga and Limpopo. This study investigates factors that influence the selection of procurement systems in South Africa for the purpose of assisting and guiding construction practitioners in selecting suitable procurement systems for their planned projects. Key words: Procurement systems, traditional, non-traditional, construction projects, South Africa, internal and external factors.