CHAPTER ONE
1.0 Introduction
The construction industry is categorized as being an information-intensive industry and described as one of the most important industries in any developed country, facing a period of rapid and unparalleled change (industry science resources 1999) (Love and Tucker et al. 1996). Project communications are becoming increasingly complex, with a growing need and fundamental drive to collaborate electronically at project level and beyond (Olesen and Myers 1999; Thorpe and Mead s. 2001; Murray 2003). yet, the industry is also identified as having a considerable lack of knowledge and awareness about innovative information and communication technology (ICT) and web-based communication processes, systems and solutions which may prove beneficial in the procurement, delivery and life cycle of projects (NSW Government 1998; Kajewski and Weippert, 2000). a significant number, and in many cases similar e-tender benefits were identified during this investigation, with industry and government participants generally stating that an e- tendering process is cheaper and faster than the previous paper-based process (B&C Watch 2001). the primary benefit government agencies, service providers, and industry seek to achieve from implementing electronic procurement (e.g. e-Tender) is to reduce the cost of doing business and to deliver services that are more efficient to the community.
E-tendering is a key strategy in the development of various electronic procurement programs and initiatives, offering additional opportunities for industry businesses, contributing to a globally competitive economy, and helping secure a sustained economic growth. according to the NSW government (NSW Government 2002) and department of commerce (NSW Government 2003), the construction industry and government agencies / departments can achieve numerous benefits from introducing an e-tendering system towards the end of the 1980’s most disciplines within the industry had access to basic software to assist in carrying out relatively complex designs and calculations. During the 1990’s the use of e-mail (as an electronic communication device) and the World Wide Web (as an electronic communication device and source of knowledge) was introduced to the industry.
Today’s construction industry sectors (both public and private) are following a definite and increasing trend towards adapting traditional business methods and processes to the ‘new’ electronic ways of doing business (e-business), resulting in many ‘divides’ being created: paper to electronic media; local to global commerce; management to a leadership focus; and reactive to a more proactive state (Russell, 2000; NOIE 2002; Murray 2003). International predictions, relating to the amount of business conducted electronically have reached hundreds of billions of dollars, with little doubt that the emergence of the internet is ‘revolutionising’ business access to communication and information. Web-based business activities within Australia, for example, are envisaged to increase significantly throughout the decade (NSW Government 2001; Anumba and Ruikar, 2002). these ‘e-activities’ can generally be described as being about eliminating inefficiencies in traditional processes, communications, etc. and finding ‘smarter’ ways of undertaking these activities in an electronic environment, and generally requires industry organisational commitment, change and investment (NSW Government 2002). unfortunately, there still exists within today’s construction industry a considerable lack of knowledge and awareness about innovative information and communication technology (ICT) and web-based communication processes, systems and solutions, which may prove beneficial in the procurement, delivery and life cycle of projects (NSW Government 1998; Kajewski s. and Weippert, 2000). consequently, through increased knowledge, awareness and successful implementation of innovative systems and processes - such as electronic / internet-based tendering (e- tendering) - raises great expectations regarding their contribution towards ‘stimulating’ the globalisation of electronic procurement activities, and improving overall business and project performances throughout the construction industry sectors and overall marketplace (NSW Government 2002; Harty, 2003; Murray, 2003; Pietroforte, 2003).
1.1 Statement of the Problem
Whilst there are undoubtedly many barriers challenging the successful implementation and adoption of an e-tendering system or process, researchers have identified the following range of challenges and perceptions that seem to hinder the uptake of this innovative approach to tendering electronically. whilst the electronic exchange of data within the construction industry is becoming increasingly more common, certain contractors and consultants see the use of an E- tendering process as ‘unfair practice’ if they are not in a position to take advantage of receiving or sending tender documents electronically. This issue can easily be resolved by offering tenderers the option of receiving their tender documentation in either paper or electronic format. A further two principal barriers to tendering electronically have also been identified. Firstly, certain consultants perceive e-tendering as being of more use to contractors than to themselves. Secondly, even though increasing number of contractors are capable of, and encouraged to return their tender bids electronically (even when the initial tender documents were received in paper format) the majority of contractors and consultants have yet to adopt the e-tendering process. Both these barriers can be overcome through increased efforts in highlighting the potential benefits and opportunities available to contractors, consultants and clients, when adopting an e-tender process. Therefore, to help achieve this increased knowledge and awareness within the construction industry, researchers suggest the developers, owners and managers of these e-tendering systems and processes need to hold regular public e-tender information dissemination programs, which in turn will help fuel their uptake. The perceived impact an e-tendering process may have on existing contractor and consultant employment prospects could raise some level of concern. However, it is believed that the electronic exchange of tender documentation allows staff to use more of their valuable skills on ‘profitable’ tasks and less time on administration work. This has affected the ‘empowering’ employees, providing increased value to their employers and projects, thereby improving the overall service to their clients. Research indicates that 43% of Nigerian government organisations with access to the internet identify ‘security’ as a major limitation to the greater use of the internet (Abs 1999). Yet in reality, according to cite, the electronic exchange of information and data is probably more secure. Legal & security issues group, for example, are currently piloting and evaluating the use of electronic signatures and various data encryption technologies, in an attempt to offer maximum security to project partners when exchanging data electronically.
1.2 Research Question
a. What are the benefits of e-tendering in the construction industry?
b. What is the level of acceptance and adoption of e-tendering in the Nigeria construction industry?
c. What is problems facing the adoption of e-tendering in the Nigerian construction industry?
1.3 Aim of the Study
The aim of this project is to investigate the adoption of e-tendering in Nigeria construction industry. This is with the view to identify the benefits and challenges to the adoption of e-tender systems and consider future industry trends and recommendations in the construction industry.
1.4 Objectives of the Study
a. To identify the benefits of e-tendering in the construction industry.
b. To investigate the level of acceptance and adoption of e-tendering in the Nigerian construction industry.
c. To investigate the problems facing the adoption of e-tendering in the Nigerian construction industry.
1.5. Hypotheses
H0: Adoption of e-tendering is low in the Nigeria construction industry.
H1: Adoption of e-tendering is not low in the Nigeria construction industry.
1.6. Significance of the Study
According to Thorpe & Bailey, (1996), tendering is a method of entering into a sales contract. It is a long and complex business process and generates a series of contractually related legal liabilities. Substantial construction and engineering contracts are entered into through the tendering process. Tendering process here can be defined as an invitation to those relevant parties to make an offer to the principal, which must be capable of accepting the offer, thereby creating a legally binding contract. Traditional process of tendering starts when the owner of the tender published the notification of tender through print media such as newspapers within a period of time. Then, the contractor will respond to the tender advertisement by purchasing the documentation, filling the requirement and submitting before the closing date. E-Procurement is the process wherein the physical tendering activity is carried out online using the Internet and associated technologies. E-Procurement enables the user to introduce ease and efficiency without compromising the required procedures of the organization. E-Procurement provides transparency, results in savings of time and money, shortening of procurement cycle, ease of operation to the implementing organization and to the vendors. In the initial phase, complete e-Tendering Module will be implemented. While other supporting modules like catalogue management, contract management, e-payment and MIS will be implemented in the subsequent phases. These are no doubt similar to the barriers identified in the existing literature. The implication of this is that several factors related to the basic infrastructure that facilitates e-procurement uptake, security and legal issues and the knowledge level and perception of the people on e-procurement systems and applications constitute barriers to effective use of e-procurement in the South African construction industry. Therefore, the good prospects of e-procurement use in the construction sector of the country can only manifest if these barriers are effectively mitigated. A significant number, and in many cases similar e-tender benefits were identified during this investigation, with industry and government participants generally stating that an e-tendering process is cheaper and faster than the previous paper-based process. the primary benefit government agencies, service providers, and industry seek to achieve from implementing electronic procurement (e.g. e-tender) is to reduce the cost of doing business and to deliver services that are more efficient to the community. E-tendering is a key strategy in the development of various electronic procurement programs and initiatives, offering additional opportunities for industry businesses, contributing to a globally competitive economy, and helping secure a sustained economic growth. according to the NSW government (NSW government 2002) and department of commerce (NSW government 2003), the construction industry and government agencies / departments can achieve numerous benefits from introducing an e-tendering system; streamlines the whole tendering process; provides improved and secure access to tender information; brings about innovative business processes; initiates greater opportunities for small and regionally based businesses; allows downloading of electronically submitted tenders in a form suitable for evaluation purposes without having to manually re-enter data; and makes it easier for businesses to obtain tender documentation and to submit an offer on time.
1.7 SCOPE OF THE STUDY
The scope of this project is to investigate the adoption of e-tendering in Nigeria construction industry. For the purpose of this study the project will cover some construction industry in Oyo State where the target of the project can be met to know how adequacy of the e-tendering are being used and the challenges facing the construction industry. The targeted respondents are the professionals (Architect, Builders, Engineers, Quantity Surveyor) Contractors and consultants in the built environment.
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