Selection of procurement systems in the South African construction industry: An exploratory study

• Main Authors: W. D. Thwala, M. D. Mathonsi
• Format: Article
• Language: English
• Published: AOSIS 2012-12-01
• Series: Acta Commercii
• Online Access: https://actacommercii.co.za/index.php/acta/article/view/127

Purpose of this paper: Procurement systems are vital in ensuring the successful implementation of construction projects precisely in all the 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. Research methodology: An extensive theory and literature review of procurement systems was conducted. The literature reviewed included a sample of case studies of procurement systems successfully implemented in completed building and civil engineering projects in South Africa. A questionnaire using a four-round Delphi survey method was used to conduct the empirical study in order to obtain participants' opinions about factors influencing 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). Findings: After qualitative analysis, findings of the literature reviewed suggest that factors that influence the selection of procurement systems 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 of variables such as clients' level of knowledge and control, political and social consideration, familiarity of procurement systems, competition, funding arrangement, government public/private sector projects and risk allocation whereas project characteristics comprise of 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 globalisation. Research limitations: 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. 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 Provinces. Value: 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. Conclusion: This study demonstrated that due to changes in the construction industry both factors from the internal and external environments such as size and complexity of construction projects, macro and micro economic conditions, political and social and information technology prevailing, traditional procurement method need to be supplemented with contemporary procurement systems in order to meet the new demands of the industry.