Abstract

This study investigates the effect of procurement practices on project completion in private construction firms within Buea Municipality. The construction industry is critical to economic development, yet many projects face delays and budget overruns, often attributed to procurement inefficiencies. This research employs quantitative data by use of questionnaires that was administer to project managers, procurement officers, and stakeholders from various construction firms in the region. Key procurement practices examined include supplier selection, negotiation strategies and suppliers relationship.

The findings reveal that effective procurement practices significantly enhance project completion rates, improving timelines and budget adherence. Conversely, poor procurement practices contribute to delays and increased costs, highlighting the need for standardized procedures and training in procurement management. This study contributes to the existing body of knowledge by providing empirical evidence of the correlation between procurement practices and project outcomes in the construction sector.

The results underscore the importance of adopting best procurement practices to foster efficiency and effectiveness in project execution, ultimately supporting the growth and sustainability of the construction industry in Buea Municipality. Recommendations for policy and practice are discussed to guide future improvements in procurement processes within the region.

CHAPTER ONE

 INTRODUCTION

1.1 Background to the Study

Projects now a days have great practice in private, government, NGOs and other forms of organizations. We are doing projects all the time and also project is implementing on government, private and non-government organizations in order to get advantage from opportunities in the competitive market and to solve existing problems to the beneficiaries. What distinguishes project from routine, production work is that, a project is a temporary endeavor undertaken to achieve a unique product, service, or result.

Projects are a key way to create value and benefits in organizations. In today’s business environment, organizational leaders need to be able to manage with tighter budget, shorter timelines, scarcity of resources, and rapidly changing technology. The business environment is dynamic with an accelerating rate of change. To remain competitive in the world economy, companies are embracing project management to consistently deliver business value. Project management is the application of skill, knowledge, tools and techniques to project activities to achieve project goals and objectives (PMBOK, 2017).

According to Morris & Pinto (2007) procurement is management of a board range of processes that are associated with an organization desire to obtain the necessary goods and services needed for manufacturing a product, transforming inputs to outputs, or indirectly operating the organization. These processes involve identifying and analyzing user requirements and types of purchase, selecting suppliers, negotiating contracts, acting as liaison between the supplier and the user, and evaluating and forging strategic alliances with suppliers. Its function extends to acquisition of suppliers, pricing, purchasing, and administration of contracts.

According to project management book of knowledge (PMBOK, 2017) project procurement management includes the process necessary to purchase or acquire products, services or results needed from outside the project team. It includes the contract management and change control process required to develop and administer contract purchase orders issued by authorized project team members.

It also includes administering any contract issued by an outside organization that is acquiring the project from the performing organization. PMBOK’s project procurement management process includes four processes: Plan Procurements, Conduct Procurement, Administer, and Close Procurement.

According to Fleming (2003), the procurement of project scope whether it be done through teaming arrangements, contracting or sub-contracting, will be progressively taking a large share of business. Thus, we must perform this management process well, if we are successful on project.

According to research done by Yimam (2011), to assess the extent of use (maturity) of project management processes and practices in the construction industry of Ethiopia results shows majority of the contractors‟ procurement management process is incomplete. Kinyek (2012), states that the challenges facing procurement system area of implementation and practices, which is not only is a problematic for the case under his study but all nations.

Reflecting that mismanagements of procurement in developing nations exist more in developed nations. Thus, improvement in procurement management system as a whole is of great need in developing country like Ethiopia where, implementation of project procurement management processes and procedures is still at early stage.

Globally the construction industry huge influences the economy, the environment and the society. In 10 trillion USD revenue and added value 3.6 trillion, the sector is account for about 6 % of the GDP, according to World Economic Forum’s report (2017). Over the years, the construction sector has recorded robust growth, owning to public infrastructure expenditure. The sector expanded by an annual average of 30% for the past five years, predominantly driven by projects related to road, railway, dam and residential expansion. The sector has been performing well; it has however expanded by 16% in 2018, which is below the five years average of 30%.

The construction industry plays a significant role in socio-economic development as it provides the basis upon which other sectors can grow by constructing the physical facilities required for the production and distribution of goods and services. The most common criteria for measuring project success is based on the triple constraint model; time, cost, the scope with quality being the central theme.

Any change in one of the factors affects the other two. For instance, an increase in scope without a corresponding increase in time and cost leads to poor quality of work or decrease in time without a decrease in scope leads to poor quality if cost remains constant. According to Mbaluku and Bwisa (2013), a project is generally considered to be successfully implemented if it is on schedule, within budget, and achieves basically all the goals originally set for it and is accepted and used by the clients for whom it is intended.

Inability to complete projects on time is among the challenges faced in the course of executing construction projects (Kikwasi, 2012). Choge and Muturi (2014) explained that achieving project completion on time, within budget, at specified quality standards, and most importantly without unprecedented cost escalations is a major criterion of success of a project. This research focused on completion of projects in terms of quality (satisfying client specifications), time and cost.

There are many factors that affect project completion. Sambasivan and Soon (2007), studied factors that influenced completion time in Malaysian construction projects and categorized them into four categories as client related, contractor related, contract relationship related and external factors. They also identified major effects of delays in completion of projects as time overrun, cost overrun, dispute, arbitration, litigation, and total abandonment.

Various studies have been carried out to investigate the factors affecting completion of projects. Kaliba, Muya, and Mumba (2009), found that the major factors that inhibited completion of road construction projects in Zambia were delayed payments, financial deficiencies on the part of the client or the contractor, contract modifications, economic problems, material procurement problems, changes in design drawings, staffing problems, unavailability of equipment, poor supervision, construction mistakes, poor coordination on site, changes in specifications, labour disputes and strikes.

A study by Abd El-Razek, Bassioni, and Mobarak (2008) found that delayed payments, slow delivery of payments, coordination problems, and poor communication hindered completion of construction projects in Egypt. Motaleb and Kishk (2010), found that change orders, financial and other client-related factors are the most significant causes of delay in project completion time in the United Arab Emirates. This indicates that there are various factors that influence completion of projects and it seems to vary from country to country but there is convergence on financial constraints as a major factor.

1.2 Statement of the problem

Project procurement practices is distinguished from other forms of procurement in that it is not a onetime action taken rather it is a series of procurement activities carried out during the execution of a project. Based on this, Procurement can be seen as a fundamental part of project management because it is crucial to the success of the project that procurement activities are appropriately planned and executed (Jarocki,2014).

Effective procurement is critical for execution of project success. Depending upon the specific type of project being managed, over 50 per cent of the total project cost can be attributed to parts, supplies, and for many high- technology projects, this procurement can approach 90 per cent (Morris & Pinto, 2007).

Many procurement activities suffer from neglect, lack of proper direction, poor co-ordination, bureaucracy, lack of open competition and transparency, differing levels of corruption and not having a trained and qualified procurement specialists who are competent to conduct and manage the procurement process in a professional, timely and cost-effective manner. Week project procurement in Ethiopia resulted from insufficient planning, shortage of funds, and timely inaccurateness of large procurement (Karlsson, 2012).

According to Barasa (2014) the choice of procurement process contributes significantly to the successful completion of construction projects. Jeptepkeny(2015) in her study on the effects of procurement procedures (specification definition, bid invitation, bid evaluation and contract negotiation) on project performance at Kenya Ports Authority, Mombasa, concluded that procurement processes have a strong and positive correlation with successful project completion. Stephen(2014) opines that procurement processes have moderately positive influence on successful completion of projects. This mixed results in these studies together with the recommendations by Jeptepkeny (2015) that further research be undertaken to investigate the effect of procurement processes on project performance purposely to ascertain how these other factors also contribute to project overall performance in public procurement entities, besides the low number of respondents used in that study compromises on its generalization to other public entities.

This is the motivation behind the current study to fill in the existing gap in literature .The procurement processes affecting successful completion of projects are diverse but in the current study the specific variables which will be considered include planning procurement, negotiation, supplier selection and supplier relation and their effect on successful completion of contraction projects in Buea municipality.

Project completion on the other hand refers to the final stage of a project, where all objectives have been achieved, and the project is formally closed. However, for a project to be “term” successful, the project from the onset must have clear goals and objectives (Kerzner, 2013).

According to the project management book of knowledge (PMBOK, 2017) a project must be effectively planned and scheduled for it to be successful, resources should also be allocated adequately (Dinsmore& Cabanis-Brewin, 2014), full stakeholder engagement (Freeman, 2010) that is, in the execution of the project, stakeholders should be actively involved in order to ensure the project is on the right track.

While executing the project, the project manager should be very careful not to go out of scope or changes in requirement according to the project management book of knowledge (PMBOK, 2017). To add, strong team leadership and communication, adequate risk management plan, adequate resource allocation plan, clear project objectives, effective stakeholder engagement and management, continuous monitoring and evaluation, should be taken into consideration in order to ensure a project is successful and meet project requirement.

1.3 Research Question

1.3.1 Main research questions

How does procurement practices affect project completion of private construction firms in Buea municipality?

1.3.2 Specific Research Questions

1. To what extend does supplier selection affect project completion of private construction firms in Buea municipality?
2. What is the effect of negotiation strategies on project completion of private construction firms in Buea municipality?
3. How does supplier relationship affect project completion of private construction firms in Buea municipality?

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