Rethinking the challenges to the pricing of projects in the Ghanaian construction industry

Abstract

Purpose The aim of the paper is to examine the challenges to the pricing of construction projects in the Ghanaian industry. This remains a persistent problem among construction stakeholders because price is the basis for which offers are made. Project stakeholders are always faced with challenges relating to effective and efficient pricing system making it difficult to achieve value for money. Design/methodology/approach Research data were collected through a questionnaire survey involving quantity surveyors in the Ghanaian construction industry. Data collected were analyzed using exploratory factor analysis which helped to reduce the factors into six components. Confirmatory factor analysis (CFA) was further carried out to explore whether these six observed variables would form a latent variable called challenges to pricing of construction projects. Findings The paper highlighted six underlying challenges which were cost-related, managerial-related, quality-related, variation of works, poor understanding of the terms of contract and time-related. Strong and significant relationships were found between all six of the observed variables. A CFA confirmed that they formed a latent variable the authors called challenges to pricing of construction projects. Research limitations/implications The findings clearly can serve as a reference for both developed and developing countries in the quest for finding an antidote to pricing challenges. In addition, use of CFA improves measurement of the constructs and thus enhances understanding of the underlying components of a construct and their individual relationship with pricing. The paper is particularly useful for policy making and industry regulation because it identifies some of the factors that need attention. Originality/value This paper presents an exceptional contribution to the construction management literature by concentrating on the factors that challenge effective and efficient pricing system in the construction industry.

Critical success factors for implementing design-build: analysing Malaysian public projects

“…This suggests that the design team's successful briefing is a key factor for the effective completion and success of D-B projects in the construction industry in Malaysia and other countries like Vietnam, Ghana, Lebanon and China. According to Kissi et al (2017) and Jiang et al (2018), project client briefing is the most commonly recognised CSF in D-B infrastructure projects in the construction industry of both developed and developing nations. This was then followed by “Construction leader was capable of promptly making authoritative decisions” and “project team members exhibited high organisational skills” among the top five factors influencing the successful completion of D-B projects in Malaysia, Vietnam, Ghana and Lebanon.…”

“…Notably, construction clients' capability to successfully brief the design team for D-B projects was the only CSF present in the Malaysian construction industry, though highly rated in all selected countries. This suggests that the design team's successful briefing is a key factor for the effective completion and success of D-B projects in the construction Kissi et al (2017) and Jiang et al (2018), project client briefing is the most commonly recognised CSF in D-B infrastructure projects in the construction industry of both developed and developing nations. This was then followed by "Construction leader was capable of promptly making authoritative decisions" and "project team members exhibited high organisational skills" among the top five factors influencing the successful completion of D-B projects in Malaysia, Vietnam, Ghana and Lebanon.…”

“…Demirkesen and Ozorhon (2017),Kissi et al (2017),Shrestha and Fernane (2017),Jiang et al (2018),Ogunlana (2018), Antoine et al (2019) CSF_8 Project team members demonstrate high satisfaction from the involvement of the project Shen et al (2017), Sinesilassie et al (2017), Trigunarsyah (2017), Hashem et al (2018), Safapour and Kermanshachi (2019), Nawari (2020) CSF_9 Good pre-planning efforts by project team members during the pre-construction stage Hwang et al (2017), Kissi et al (2017), Saaidin et al (2017), Shen et al (2017), Jiang et al (2018), Safapour and Kermanshachi (2019), Lee et al (2020), Olawale et al (2020) CSF_10 D-B contractor has a strong financial capability Mao et al (2015), Demirkesen and Ozorhon (2017), Shrestha and Fernane (2017), Tran et al (2017), Olawale et al (2020) CSF_11 Project team members have good technical skills Mao et al (2015), Mohamad Ramly et al (2015), Demirkesen and Ozorhon (2017), Shen et al (2017), Ogunlana (2018), Antoine et al (2019), Gransberg and Molenaar (2019), Safapour and Kermanshachi (2019), Lee et al (2020) CSF_12 Effective method to control the material and labour costs Mao et al (2015), Alashwal et al (2017), Demirkesen and Ozorhon (2017), Saaidin et al (2017), Lee et al. (2020), Nawari (2020) CSF_13 Project team with effective leadership skills Mao et al (2015), Demirkesen and Ozorhon (2017), Saaidin et al (2017), Sinesilassie et al (2017), Gransberg and Molenaar (2019) CSF_14 Effective safety and health standard procedures have been developed Saaidin et al (2017), Bogus et al (2018), Jiang et al et al (2017), Saaidin et al (2017), Jiang et al (2018), Nawari (2020) CSF_16 Construction leader has a high commitment to achieving the project's goals Mohamad Ramly et al (2015), Adamu et al (2017), Alashwal et al (2017), Darko et al (2017), Demirkesen and Ozorhon (2017), Shrestha and Fernane (2017), (continued)…”

Critical Factors Influencing Bid Mark-up Decision in Public Street Project – A Review

“…The practice can impact disputes and adversarial relationships between parties during construction. It also provides additional risk to the project delay, cost overrun (Awwad & Ammoury, 2019), quality compromise and failure to complete the project (Kissi et al, 2017). Empirical findings from an earlier study by Hanák & Muchová (2015) emphasised that infrastructure projects have greater competition than building projects, thus greater competition leading to a higher risk of the projects having abnormally low bids.…”

“…Contractors must submit their lowest offer through the competitive bidding system, often leading to unrealistically low bid prices and inferior project quality (Lo et al, 2007). The effect of awarding projects to the lowest bidder permits the unrealistic submission of a low bid price, which raises the risks of delay in completion, cost overruns (Awwad & Ammoury, 2019), lack of quality, failure to complete the project (Kissi et al, 2017), claims for variations, and disputes between construction parties that may lead to a court of law for adjudication (Awwad, 2010).…”