Influence Of Procurement Procedures On Construction Project Performance: A Case Of Power Plant Construction At Kenya Petroleum Refineries Limited, Mombasa.

Abstract

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 research project aimed to investigate, the influence of procurement procedure on construction project performance. The problem of procurement method adopted in Kenyan construction industry have raises serious concern to the project stakeholders and the construction industry as a whole. The aim of the study is to explore the influence of procurement procedures on construction project in Mombasa and its environs. Design/methodology/approach – The study adopted a questionnaire survey approach to achieve its purpose. The survey was conducted using purposive sampling techniques. Four categories of variables namely: project design choice, bid invitation and evaluation, Compensation forms and project outcome evaluation were used. Data were collected with the aid of structured questionnaires and analysed to establish the influence of project design choice, bid invitation and evaluation, compensation form on construction project performance, and then evaluate the project outcome using percentage, mean and t-test. Empirical data were collected through a survey of 45 respondents where 30 were engineers and 15 procurement department personnel. Findings/conclusions/recommendation – The results reveals that a number of procurement approaches were used at the same time. It was found that the project was structured to have multiple bids for sections of the project as opposed to the norm where the bid is done for the whole project. Most of the bidders had less than 5 years experience and both compensation methods were used. The cost of the project increased by 17% while completion time increased by 58.3%. It was also found that the client was satisfied with the service and quality of the project and they were not satisfied with the cost and time taken. The study concludes that the procurement procedure has a big influence to the construction project performance. It recommends that one procurement method to be used, contractors/bidders must have over 10 years experience, client have to evaluate the contractors/bidders “technical and financial performance ” before engaging them on a project, cost reimbursement payment method should be used and personnel involved in projects should be taken for project management and contract management training. Research limitations/implications – The study can serve as a learning opportunity for construction project stakeholders internationally, and clients in particularly Kenya Petroleum Refineries limited, to take procurement procedures seriously while undertaking a construction project, now that they are planning for the upgrade of the plant. Since the empirical results are based on data collected from only KPRL employees, international generalizations should be made cautiously.