CHAPTER ONE
1.0 Introduction 1.1 Background to the Study
Construction estimation is an experience-based process (Elhag et al., 2005). The code of estimating practice produced by the Chartered Institute of Building (CIOB, 1997) defined estimating as “the technical process or function undertaken to assess and predict the total cost of executing an item(s) of work in a given time using all available project information and resources. Based on this definition, estimators‟ estimated cost is based on the time of construction or project duration, cost of material, method of construction etc. and estimators are aware that most of these factors can be readily estimated.
The estimators in the construction team are usually the Quantity surveyors. The Quantity surveyor as an expert is employed early enough in the project so as to advice the client/Architect on the probable cost implications of the design decisions and to assist in obtaining economical and efficient design (Seeley, 1996)
However, experts in construction estimation are aware of uncertainty, incompleteness and unknown circumstances of factors affecting cost of construction. As a result of various studies, several estimating techniques have been exploited and several models
have been developed (Elinwa and Buba 1993; Elhag and Baussabaine,
1998;Dissanayaka and Kumaraswamy, 1999; Munns and Al-Haimus, 19992000; Ashworth, 2002;Ganiyu and Zubairu, 2010) but the limitation of these techniques and models is that they failto account for the effects of the factors that are more qualitative in nature.
The cost of construction in Nigeria has been reported to be high(Olatunji, 2010), and this has been attributed to several cost determinant variables.Olatunji (2010) reportedthat construction cost in Nigeria are often high and unpredictable and the pattern of the variability is not explained by inflationary indices of common goods and services but rather it is reactive to boom-and-burst shocks that are triggered by the oil price regimes. Elhaget al. (2005) identified and evaluated cost determinant variables within the UK construction industry among Quantity surveyors. Prior to the study carried out by Elhaget al. (2005), Okpala and Anekwu (1988) argued that underdeveloped economies tend to exert different influences on construction cost compared to developed economies such as the UK. This has a major impact upon critical factors affecting construction Tender. Windapo and Iyagba (2007) stated that the Nigerian construction industry need to map out efficient strategy for determining efficient factors affecting construction cost in Nigeria, given the peculiar dynamics of the cost of finance.
1.2 Statement of the Problem
The identification of cost – determinant variables and evaluation of the degree of influence of these factorson construction cost estimates play an essential role in the building up of reliable cost estimates and enhance the competitive edge of quantity surveyors as well as the contracting organization. Elhaget al. (2005) identifiedand evaluated cost determinant variablesto ascertain the degree of their influence on construction cost in the UK construction industry. Although,the research evaluated the degree of influence of some cost determinants variables, the results may not be applicable to the Nigerian Construction industry based on the argument that Nigeria as a developing country has distinct behaviour and should have distinct set of cost determinants that affect construction costs (Okpala and Anekwu, 1988;Windapo and Iyagba, 2007;Olatunji, 2010). Similarly, several other factors not considered by the previous research(Elhaget al., 2005) were also identified by Olatunji(2010). Olatunji (2010) argued that the oil regime in Nigeria has a way of making the factors affecting sectors in the nation differently than the way it would have normally affected other countries especially developed country. This is because Nigeria‟s majar source of revenue is from the export of crude oil. This makes the nation‟s economy unstable since the nation cannot control the demand of the crude oil.Therefore, although there have been several studies on Tender in Nigeria, there has not been any dedicated to outline the critical factors affecting construction Tender. This is the gap that this study aims to fill.
1.3 Need for the Research
The purpose of tender estimation is to provide an indication of the probable cost of construction. The estimate will be an important factor in the clients overall strategy of the decision to build. It will also provide a basis for the clients budgeting and control of the construction cost. The single most important criterion of the estimate is its accuracy (Ashworth, 2002). Thus outlining the critical factors affecting construction Tender will help in building reliable cost models that will help estimators come up with more accurate cost estimates.
1.4 Aim and Objectives of the Study
The aim of the research is to assess the critical factors affecting construction tendersum with the view of articulating the critical determinants.
The following are the objectives;
i. To identify factors affectingconstructionTender.
ii. To assess the level of significance offactors determining affecting Tender.
iii. To articulate determine the critical factors and eliminate redundant
factors
Scope and Limitations
1.5.1 SCOPE
1.5.1 Scope
Construction Tender has been seen to be influenced by several factors. This research focused on assessing the factors that influence Tender.This research was limited to Quantity surveyors both in public and private practice in Abuja (FCT), Kaduna State and Plateau state of Nigeria. Abuja (FCT) and Kaduna state were chosen as study area because these places are amongst major cities in Nigeria where construction firms have their headquarters while Plateau State was chosen because of the massive construction projects going on in the state at the time of the study, thus the presence of a good number of quantity surveyors. Quantity surveyors were considered since they play a measure role in the preparation of tenders.der sums.
1.5.2 LimitationsThis research was limited to Quantity surveyors both in public and private practice in Abuja (FCT), Kaduna State and Plateau state of Nigeria. Abuja(FCT) and Kaduna state were chosen as study area because these places are amongst major cities in Nigeria were construction firms have their headquarters while Plateau State was chosen because of the massive construction projects going on in the state thus the presence of a good number of quantity surveyors while Quantity surveyors were considered since they play a measure role in the preparation of tenders.
This research was limited to the fact that the Quantity Surveyors that responded were not necessarily registered but were the ones available at the time of research.
.