The limitations of the South African procurement policies and practices in relation to contractor selection criteria: the importance of technical qualifications and experience of established construction companies
No Thumbnail Available
Date
2020
Authors
Muzondo, Fate Tharullo
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
In the 2017 budget, the South African government indicated plans to invest over R940 billion
in public infrastructure as part of the medium-term strategic framework. This investment
indicates future growth in the construction industry. The construction industry also plays a
significant role in the creation of employment and in economic growth. To achieve this, the
government will most likely be reliant on contractors for the implementation of its plan. In
addition, Small, Medium and Micro Enterprises (SMMEs) currently contribute 70 to 80% of
employment. Given that another goal of the government is to develop emerging contractors,
SMME civil engineering and building contractors will most likely play a significant role in this
projected growth. Studies on the skills profiles of CIDB grades 1 to 6 contractors in South
Africa, however, have shown that these emerging contractors lack the necessary skills to
competently complete infrastructure projects. In developing this theme further, the primary
objective of this study was to show that the required skills or competencies include technical
qualifications and construction related experience, and that these needs are often neglected
when contractors are evaluated as part of the pre-appointment or procurement processes.
Furthermore, this thesis proposed that technical skills may be the distinguishing factors between
the SMMEs and the larger enterprises. This thesis also argues that competency assessment
should form a vital part of procurement practices, especially in relation to the selection of
contractors. To demonstrate this, the thesis provided evidence from previous studies of the
qualifications and experience of grades 1 to 6 contractors. Empirical data was used to compare
these results with the technical competencies of grades 7 to 9 local contractors as well as their
international equivalents. Evidence of procurement and contractor selection practices was also
collected on these groups of contractors through the analysis of tender documents. This research
found that clients generally do not expect grades 1 to 6 contractors to have technical
qualifications, and as such, do not evaluate them against these criteria during the selection
process. Government agencies procuring grades 7 to 9 contractors, who generally have technical
skills, however, seem to hold them to a higher standard. This non-uniformity in the procurement
strategies, as this study found, is because construction regulations and policies place the onus
of defining contractor selection criteria on the client. This study, therefore recommended that
construction related technical competencies be at the forefront of contractor selection criteria,
and that policy should take these factors into consideration. Additionally, contractor
development programmes should focus on developing these skills in order to reduce SMME
contractor failure, and as a result, contribute to the reduction of unemployment in South Africa.
Description
A thesis submitted to the Faculty of Engineering and the Built Environment, University of the
Witwatersrand, Johannesburg, in fulfilment of the requirements for the degree of Doctor of
Philosophy, Johannesburg 2020