Project cost estimation techniques used by most emerging building contractors of South Africa

This article investigates newly emerging building contractors of South Africa who are expected to survive by projects obtained mainly through tendering. Some of these contractors fail even before obtaining the first tender while many fail in the first three years of their formation. The research pop...

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Main Authors: Solly Seeletse, Watson Ladzani
Format: Article
Language:English
Published: University of the Free State 2012-06-01
Series:Acta Structilia
Subjects:
Online Access:http://journals.ufs.ac.za/index.php/as/article/view/124
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author Solly Seeletse
Watson Ladzani
author_facet Solly Seeletse
Watson Ladzani
author_sort Solly Seeletse
collection DOAJ
description This article investigates newly emerging building contractors of South Africa who are expected to survive by projects obtained mainly through tendering. Some of these contractors fail even before obtaining the first tender while many fail in the first three years of their formation. The research population used was restricted to formally registered businesses found at the time in the register of the Construction Industry Development Board (cidb). The population of 792 businesses, registered as Grade 5 class, consisted of five distinct types of contractors, general builders, civil engineers, electricians, mechanical builders and other sundry players. A sample of 160 was used which is approximately 20% of the population. The literature was reviewed on tendering and related aspects: competitive bidding, estimating activities, pricing a tender, and evaluating a tender. The research tool used was a questionnaire, which investigated biographical and company information, proposal management and estimation, programming and scheduling, estimating strategies, understanding of basic cost concepts, project risk management, pre-tender internal price evaluation, and tender submission. Findings of this research revealed that South African emerging contractors showed inadequacies and variations in cost concepts, scheduling tools, risk management and tender price estimation. They also lacked essential resources and skills for competing for tenders. Emerging contractors are advised to use consultants to assist them and/or subcontract to established contractors with a reputable history. They should use these opportunities to learn superior estimation methods (which are also more complex) and apply them to improve their own tendering practices.
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spelling doaj.art-07fbc9f003794cc5b5b11f8c1de41e8b2022-12-21T16:58:38ZengUniversity of the Free StateActa Structilia1023-05642415-04872012-06-01191106125Project cost estimation techniques used by most emerging building contractors of South AfricaSolly Seeletse0Watson Ladzani1University of LimpopoUniversity of South AfricaThis article investigates newly emerging building contractors of South Africa who are expected to survive by projects obtained mainly through tendering. Some of these contractors fail even before obtaining the first tender while many fail in the first three years of their formation. The research population used was restricted to formally registered businesses found at the time in the register of the Construction Industry Development Board (cidb). The population of 792 businesses, registered as Grade 5 class, consisted of five distinct types of contractors, general builders, civil engineers, electricians, mechanical builders and other sundry players. A sample of 160 was used which is approximately 20% of the population. The literature was reviewed on tendering and related aspects: competitive bidding, estimating activities, pricing a tender, and evaluating a tender. The research tool used was a questionnaire, which investigated biographical and company information, proposal management and estimation, programming and scheduling, estimating strategies, understanding of basic cost concepts, project risk management, pre-tender internal price evaluation, and tender submission. Findings of this research revealed that South African emerging contractors showed inadequacies and variations in cost concepts, scheduling tools, risk management and tender price estimation. They also lacked essential resources and skills for competing for tenders. Emerging contractors are advised to use consultants to assist them and/or subcontract to established contractors with a reputable history. They should use these opportunities to learn superior estimation methods (which are also more complex) and apply them to improve their own tendering practices.http://journals.ufs.ac.za/index.php/as/article/view/124Cost estimationEstimation methodsEmerging contractorsTender
spellingShingle Solly Seeletse
Watson Ladzani
Project cost estimation techniques used by most emerging building contractors of South Africa
Acta Structilia
Cost estimation
Estimation methods
Emerging contractors
Tender
title Project cost estimation techniques used by most emerging building contractors of South Africa
title_full Project cost estimation techniques used by most emerging building contractors of South Africa
title_fullStr Project cost estimation techniques used by most emerging building contractors of South Africa
title_full_unstemmed Project cost estimation techniques used by most emerging building contractors of South Africa
title_short Project cost estimation techniques used by most emerging building contractors of South Africa
title_sort project cost estimation techniques used by most emerging building contractors of south africa
topic Cost estimation
Estimation methods
Emerging contractors
Tender
url http://journals.ufs.ac.za/index.php/as/article/view/124
work_keys_str_mv AT sollyseeletse projectcostestimationtechniquesusedbymostemergingbuildingcontractorsofsouthafrica
AT watsonladzani projectcostestimationtechniquesusedbymostemergingbuildingcontractorsofsouthafrica