‘Price favoured over quality in South African construction’

10 February 2016

Public sector organisations in South Africa should assess functionality and quality more when evaluating construction tenders, the country’s Construction Industry Development Board (cidb) has said.

The South African public body, which has responsibility for promoting a regulatory framework for the construction sector, called on public sector buyers to appoint contractors based on the quality and functionality of projects and take risk assessments into account during the procurement process.

This comes as its latest Construction Industry Indicators Report found a steady growth in the level of client dissatisfaction with the performance of contractors on construction projects over the past three years.

The report stated that 18% of work carried out by contractors in 2014 was considered “unsatisfactory”, marking a steady increase from 13% in 2012 and 16% in 2013. In addition, 13% of projects surveyed had levels of defects regarded as “inappropriate” – also an increase on the previous two years.

Quality or functionality was not taken into account in the adjudication on 12% of tenders evaluated, the report found, and the recommendations of the tender committee were overruled in the award of 9% of public sector projects.

The cidb points to a mismatch of projects with contractors as a significant contributing factor in the declining performance of contractors.

In contrast, contractors rated the quality of tender documents and specifications of clients as satisfactory on 83% of the projects surveyed in 2015, up from 75% in 2012. 

“Functionality empowers the client [public sector organisation] to weigh carefully the capabilities and track record of the contractor during the tender evaluation process, enabling them to manage risk early on in the appointment of a contractor,” said the cidb. 

The cidb’s call comes as the president of Consulting Engineers South Africa said that inefficiencies in the supply chain management processes for public infrastructure projects mean that price is favoured over functionality and quality in procurement.

In her presidential address for 2016, Lynne Pretorius also said the private sector in South Africa should increase its investment in public sector infrastructure development from the current level of 26% of total capital investment. The remaining 74% of investment comes from the public purse.

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