Factors Affecting Effectiveness of Contract Management on the

Success of Irrigation Project: A Case Study of Buno Bedele Zone

A Research Paper Submitted to Jimma University Department of Accounting

and Finance to Undertake a Study in Partial Fulfillment of the Requirement for
MA Degree in Project Management and Finance

BY:
ABDUREHMAN NEGASH

JIMMA UNIVERSITY
COLLEGE OF BUSINESS & ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
MA IN PROJECT MANAGEMENT AND FINANCE

JUNE 18, 2021

JIMMA, ETHIOPIA
Factors Affecting Effectiveness of contract management on the
success of irrigation project: A Case Study Buno Bedele Zone

BY:
ABDUREHMAN NEGASH

Under the guidance of:

Main Advisor: Dr. Eshetu Yadecha
Co-Advisor:Haymanot Alemayehu

A Research Paper Submitted to Jimma University Department of Accounting

and Finance to Undertake a Study in Partial Fulfillment of the Requirement for
MA Degree in Project Management and Finance

JIMMA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
MA IN PROJECT MANAGEMENT AND FINANCE

JUNE 18, 2021

JIMMA, ETHIOPIA
 CERTIFICATE

This is to certify that the thesis entitles “Factors Affecting Effectiveness of contract
management on the success of irrigation project: A Case Study of Buno Bedele Zone‟‟, in
partial fulfillment of the requirements for the degree award of Master of Project Management
and Finance submitted to Jimma University that record of valuable research work carried out by
Mr. Abdurehman Negash Abbagisa, under our guidance and supervision.

Therefore, we hereby declare that no part of this thesis has been submitted to any university or
institution for the award of any degree or diploma.

Main Adviser„s Name Date Signature

Dr. Eshetu Yadecha _____________ ___________

Co-Adviser„s Name Date Signature

Haymanot Alemayehu ______________ ___________
 DECLARATION

I hereby declare that this thesis entitled “Factors Affecting Effectiveness of contract management
on the success of irrigation project: A Case Study of Buno Bedele Zone‟‟ has been carried out
by me under the guidance and supervision of Dr. Eshetu Yadecha and Haymanot Alemayehu

The thesis is original and has not been submitted for the award of any degree or diploma to any
university or any other institutions.

Researcher‘s Name Date Signature

Abdurehman Negash Abbagisa______________ ______________

i
 Acknowledgements

First and for most I would like to take this opportunity to extend my sincere gratitude to the
Almighty God. I thank him for provision of strength, health and seeing me through the entire
course and this study.
Next, I would like to express my respectful gratitude to my advisor Dr. Eshetu Yadecha for his
encouragement and intellectual advice and comments throughout the study.
I would also want to forward great thanks to my co-advisor Haymanot Alemayehu for her
precious advice and encouragement from the beginning of the proposal to the end.
I also wish to extend my heartfelt thanks to all my families and friends for they shared my
pains at my hardest time and for their all supports.

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 Table of Contents
DECLARATION ............................................................................................................................. i
Acknowledgements ......................................................................................................................... ii
List of Figures ................................................................................................................................ iv
LIST OF ACRONYMS .................................................................................................................. v
Abstract .......................................................................................................................................... vi
CHAPTER ONE ............................................................................................................................. 1
INTRODUCTION .......................................................................................................................... 1
1.1 Background of the study ........................................................................................................... 1
1.2 Statement of the problem .......................................................................................................... 3
1.3 Research Questions ................................................................................................................... 4
1.4 Objectives of the Study ............................................................................................................. 4
1.4.1 General Objective .................................................................................................................. 4
1.4.2 Specific Objectives ................................................................................................................ 4
1.5 Research Hypotheses ............................................................................................................... 5
1.6 Significance of the Study .......................................................................................................... 5
1.7 Scope of the study ..................................................................................................................... 6
1.8 Limitation of the study .............................................................................................................. 6
1.9 Organization of the study .......................................................................................................... 6
CHAPTER TWO ............................................................................................................................ 8
REVIEW OF RELATED LITERATURE ...................................................................................... 8
2.2 Definitions of key Terms and Overview of the Concepts......................................................... 8
2.2.1 Contract .................................................................................................................................. 8
2.2.2 Contract Management ............................................................................................................ 9
2.2.3 Contract Effectiveness ......................................................................................................... 11
2.2.4 Effective contract administration and management ............................................................. 11
2.2.5 Project .................................................................................................................................. 12
2.2.6 Project Contracts .................................................................................................................. 13
2.2.7 Project success ..................................................................................................................... 13
2.2.8 Factors Affecting Project Success ....................................................................................... 13
2.2.9 Irrigation projects ................................................................................................................. 14
2.2.10 Project Delivery ................................................................................................................. 14
2.2.11 Procurement ....................................................................................................................... 14
2.2.12 Service Level Agreement ................................................................................................... 14

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2.3 Theories Underlying Contract Management ........................................................................... 15
2.3.1 Contract Compliance Theory ............................................................................................... 15
2.3.2 Contract Management Theory ............................................................................................. 15
2.3.3 The Principal-Agency Theory.............................................................................................. 16
2.3.4 The Will Theory................................................................................................................... 16
2.4 Empirical Review.................................................................................................................... 16
2.5 Summary of Literature and Knowledge Gap .......................................................................... 18
2.6 Conceptual Framework of Study ............................................................................................ 18
CHAPTER THREE ...................................................................................................................... 21
RESEARCH DESIGN AND METHODOLOGY ........................................................................ 21
3.1 Introduction ............................................................................................................................. 21
3.2 Research Design...................................................................................................................... 21
3.3 Source and Type of Data......................................................................................................... 21
3.4 Target Population .................................................................................................................... 21
3.5 Sampling Procedure ................................................................................................................ 22
3.7 Method of Data Analysis ........................................................................................................ 22
3.8 Model Specification ................................................................................................................ 23
3.9 Reliability and validity of the variables .................................................................................. 23
3.9.1 Reliability of the variables ................................................................................................... 23
3.9.2 Validity of the Instrument .................................................................................................... 24
3.10 Ethical Considerations .......................................................................................................... 24
3.11 Hypotheses results ................................................................................................................ 24
3.12 Operational Definition of Variables...................................................................................... 26
CHAPTER FOUR ......................................................................................................................... 28
RESULTS AND DISCUSSIONS ................................................................................................. 28
4.1 The Response Rate .................................................................................................................. 28
4.2 Demographic Characteristics of Respondents ........................................................................ 28
4.2.1Distribution of Respondents by Sex ..................................................................................... 29
4.2.2 Distribution of Respondents by Education .......................................................................... 30
4.2.3 Distribution of Respondents by Age .................................................................................... 31
4.2.4 Distribution of Respondents by Work Experience .............................................................. 32
4.3 Descriptive statistics of the study variables ............................................................................ 32
4.3.1 Cost Related Factors ............................................................................................................ 33
4.3.2 Technical Capability ............................................................................................................ 34

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4.3.3 Monitoring during contract performance ............................................................................. 35
4.3.4 Compliance with terms and conditions ................................................................................ 36
4.3.5 Project Success..................................................................................................................... 37
4.4 Inferential result of the study .................................................................................................. 38
4.4.1 Correlation Analysis ............................................................................................................ 38
4.4.2 Tests for Multicollinearity ................................................................................................... 41
4.4.3 Normality ............................................................................................................................. 41
4.4.4 Linearity ............................................................................................................................... 43
4.4.5 Homoscedasticity ................................................................................................................. 44
4.4.6 Multiple regression analysis results and discussion............................................................. 45
4.4.7 Analysis of Variance ............................................................................................................ 46
4.5 Discussion of Findings ............................................................................................................ 48
4.5.1Technical capability related items that affect the project success. ....................................... 48
4.5.2 Contract Implementation as Per Terms and Conditions ...................................................... 49
4.5.3 Monitoring during contract for project performance ........................................................... 50
4.5.4 Cost related factors that affect project success .................................................................... 50
4.5.5 Project success ..................................................................................................................... 51
CHAPTER FIVE .......................................................................................................................... 52
SUMMARY, CONCLUSION ANDRECOMMENDATIONS .................................................... 52
5.2 Summary ................................................................................................................................. 52
5.4 Recommendations ................................................................................................................... 53
5.5 Future research direction......................................................................................................... 55
REFERENCE ................................................................................................................................ 56
Annex A ........................................................................................................................................ 62
ANNEX B ..................................................................................................................................... 68

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 List of Tables

Table 3.1 hypotheses results ......................................................................................................... 25

Table 3.2 operational definition of variables ................................................................................ 27
Table 4.3:summary of respondentsresponse rate .......................................................................... 28
Table 4.4:demographic characteristics of respondents ................................................................. 29
Table 4.5 cost related factors that affect the success of irrigation project .................................... 33
Table 4.6: technical capability factors that affect project success ................................................ 34
Table 4.7 monitoring during contract that affect project success ................................................. 35
Table 4.8 supplier's compliance with terms and conditions that affect project success ............... 36
Table 4.9 project success factor .................................................................................................... 37
Table 4.10 correlation coefficient ................................................................................................. 40
Table 4.11collinearity statistics result........................................................................................... 41
Table 4.12 normality test .............................................................................................................. 42
Table 4.13model summary for multiple regression model ........................................................... 45
Table 4.14 summary results of analysis of variance ..................................................................... 46
Table 4.15 multiple linear regressions .......................................................................................... 47

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 List of Figures

Figure 2.1: Conceptual Framework of the Study .......................................................................... 19

Figure 4.2:Educational status of the respondent ........................................................................... 30
Figure 4.3: age of respondents ...................................................................................................... 31
Figure 4.4: work experience of respondents ................................................................................. 32
Figure 4.5: Histogram ................................................................................................................... 43
Figure 4.6: Normal P-P Plot ......................................................................................................... 44
Figure 4.7: scatter plot ................................................................................................................. 45

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 LIST OF ACRONYMS
ANOVA Analysis of variance
Fig. Figure
SPSS Statistical package for social science
VIF Variance inflation factor

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 Abstract
The study sought to assess the factors that affect effectiveness of contract management on the
success of irrigation projects in Buno Bedele Zone. The specific objectives were to: determine
technical capability factors that affect the success of irrigation projects; assess cost related
factors that affect the success of irrigation project; examine supplier‟s compliance with terms
and conditions that affect the success of irrigation project and assess the influence of closely
monitoring on irrigation projects. The study adopted descriptive research design. Besides,
questionnaires and interviews were used to collect the data from contractors involved in project,
zone project team members, staff (employees) and zone office managers. Moreover, the census
sampling technique was adopted to identify the study‟s sample size which involved
selection of all members of population. For this reason, a total of 41 participants were
considered for the questionnaire. In addition seven participants were interviewed for additional
information. The data were analyzed using both descriptive and inferential statistics. The study
found that technical capability related factors such as work experience of the contractor and
poor site management are the major causes of project failure. The study also found that
monitoring during construction is critical to ensure quality products and delivery of projects.
They study found that poor utilization of mobilization advance has a negative effect on
construction projects‟ success. The study also found that availability and failure of equipment
was another factor that can adversely affect project success. Finally, the study recommends that
zonal team members have to place strong formal monthly inspections of supplier technical
evaluation with clear criteria depends on the control of Schedule, quality, compliance with
specification, risk, scope, dispute resolution and cost with regular reporting. The government
should adopt stringent measures which would arrest the cost related factors. The government
should also be consistent from contract creation through to tracking milestones and contract
renewal.

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 CHAPTER ONE

INTRODUCTION
This chapter describes relevant information to address objectives of the study. Hence, it
discusses about the background of the study, statement of the problem, Research questions,
objectives of the study, significance of the study, and scope of the study.

1.1 Background of the study

Projects are becoming mainstreams in all types of organizations (Pellegrinelli& Murray-

Webster, 2011). For the past sixty years, organizations have increasingly been using projects
and programs to achieve their strategic objectives (Morris & Jamieson, 2004), while dealing
with increasing complexity, uncertainty, and ambiguity affecting organizations and the socio-
economic environment within which they operate (Gareis, 2005). Through projects, resources
and competencies are mobilized to bring about strategic change, and thereby create competitive
advantage and other sources ofvalue.

The construction industry is dynamic in nature due to the increasing uncertainties in technology,
budgets, and development processes. Nowadays, building projects are becoming much more
complex and difficult (Chan, A et al, (2004). Construction teaching material (2009) indicate that,
Construction industry can be described as the sum of all economic activities related to civil and
building works: their conception, planning, execution, and maintenance. Such works normally
include capital investment in the form of roads, railways, airports, ports and maritime structures,
dams, power generating stations, irrigation schemes, health centers and hospitals, educational
institutions, warehouses, factories, offices and residential premises.

Contract Administration processes and activities such as monitoring and measuring supplier
performance, managing contract change process, and managing contract payment process
should be integrated with other departmental core processes such as customer service, financial
management, risk management, schedule management, and performance management
(Hotterbeekx, 2013).

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A Green Point Global (2013) cited that 60-80% of business transactions are governed by
agreements or contracts and more than 10% of all executed contracts are lost. A number of
problems could be avoided if project contracts are managed well. These problems include;
among others are inappropriate clauses, unexpected costs, and legal delays, delays in delivering
orders and their consequences, getting inferior quality of goods/services/works,
misunderstanding between parties.

Organizations having established and mature contract management processes are able to generate
a great deal in additional savings and have a distinct competitive advantage over their
competitors (Rendon, 2007 as cited by Nguyen, 2013). On the other hand, inefficient
management of contracts will lead to poor operational control, low customer satisfaction, high
risks and unwanted costs (Saxena, 2008 as cited by Nguyen, 2013). On his study Hotterbeekx
(2013) developed a maturity model for contract management inclusive of the following category
contract management functions: relationship management, performance management and
risk management to assess contract management maturity level of the organization. While
mention, irrigation office of BunoBedele zone those are delays in delivering to order the contract
with terms and conditions, lack of experience in design, construction and supervision of quality
irrigation projects, lack of incapable technical employee were identified

Although there are a lot of other variables which can influence the supplier‟s performance, this
research will focus on the factor that affect effectiveness of contract management for the success
of irrigation project and the activities which have direct influence on performance outcome to the
project deliverables, particularly on risk management, suppliers‟ selection, procurement
contract management team competence and roles, and purchasing-supplier relationship. It has
not directly thought to cover the whole phases of procurement process, although some of the
activities like procurement contract management plan, contract specifications and
requirements, key performance indicators and performance outcomes will also be referred so
that to provide better understanding from the reader.

This study assesses the factors affecting the effectiveness of contract management in the project
success, specifically at irrigation project of Buno Bedele Zone irrigation office and

2
recommendations on how to manage different factors of contract management better so that the
projects are completed without legal delays and problems.

1.2 Statement of the problem

The goals of project management are to ensure that organizations invest in the optimal project
portfolios and help them realize business value by delivering projects on time and within budget
(PMI, 2004). Gaikwad (2011) stressed that effective project management serves as a blueprint to
safeguarding company‟s resources and mitigating risks for realizing productivity and
accomplishing predetermined goals.
Different studies have discussed the causes for poor contract management for goods including;
Aluonzi,Oluka&Nduhura (2016) examined the role of contract management on performance of
road maintenance projects. Dmaidi, Dwaikat&Shweiki (2013) examined construction
contracting management obstacles in Palestine while Marco (2013) examined contract
management process in Tanzania.

Germaine (2017), reviews on contract management is still a challenge in Sub Saharan Africa;
contractors are not performing as per the contract. Most of them are not fully equipped in terms
of personnel, equipment and financial capacity. Gebremedhin and Peden (2015) indicated that
lack of a pluralistic approach that encourages an active involvement of beneficiaries in the
design, implementation, and management of schemes limits the effectiveness of small scale
irrigation projects. And Shaival et.al, (2015) indicate that there are several reasons why
organizations fail to manage contract successfully, the chief reason for project delays is poor
contract administration, therefore need of proper contract administration is essential.

Although all these studies slightly touch on the subject of contract management, they do not
examine factors that affect the effectiveness of contract management in government entities
especially on irrigation project. To bridge gap on obstacles such as poor contract administration,
project delays and non-compliance as per the contract, this study investigated the factors that
affect the effectiveness of contract management on the success of irrigation project.

Moreover, in Ethiopian context, Oromia region, Buno Bedele zone, there were no previous
studies conducted by any researcher on the factors that affect effectiveness of contract

3
management on the success of irrigation projects. Thus, this study seeks to fill this gap in
knowledge by answering the research questions.

The level of development of irrigation in Buno Bedele Zone is low compared to its potential.
Buno Bedele Zone Irrigation office yearly (2012 E.C) report indicates that in Buno Bedele zone
from 18 irrigation projects only 14 projects were actively working, and from 2,104 hectare
irrigation land only 1,202 hectare land was irrigable. Out of these, ten (10) are on-going, four (4)
are stopped and four (4) are completed. This study intends to focus on the on-going and
completed projects. Therefore, this study chose to select projects from Buno Bedele Zone to
determine if or how technical capability factors, cost factors, suppliers compliance with terms
and conditions and contract monitoring factors influence on the success of irrigation projects
being implemented in the zone.

1.3 Research Questions

Based on the above ideas and the performance of effectiveness of contract management, the
research raised the following basic research questions:
 Does a technical capability affect project success?
 To what extent cost related factors affect project success?
 Does supplier‟s compliance with terms and conditions affect project success?
 To what extent closely monitoring of contract management affect project success?

1.4 Objectives of the Study

1.4.1 General Objective

The general objective of this study was to assess the factors affecting the effectiveness of
contract management on success of irrigation projects.

1.4.2 Specific Objectives

The specific objectives of this research were to:
 Determine technical capability related factors that affect project success.
 Assess cost related factors that affect project success.

4
 Examine the supplier‟s compliance with terms and conditions that affect the effectiveness of
project success.
 Assess the influence of closely monitoring on the success of irrigation projects.

1.5 Research Hypotheses

The following hypotheses are developed for testing the above relationships:
H1. Null hypothesis (Ho) Technical capability has no statically significant effect on project
success.
Alternative hypothesis (H1) Technical capability has statically significant effect on project
success.
H2.Null hypothesis (Ho) Cost related factors has no significant effect on project success.
Alternative hypothesis (H1) cost related factor has statically significant effect on project success.
H3.Null hypothesis (Ho) supplier‟s compliance with terms and conditions has no statically
significant effect on project success.
Alternative hypothesis (H1) supplier‟s compliance with terms and conditions has statically
significant effect on project success.
H4.Null hypothesis (Ho) closely monitoring has no statically significant effect on project
success.
Alternative hypothesis (H1) closely monitoring has statically significant effect on project
success.

1.6 Significance of the Study

The results of this study will have an importance for organizations to know the effectiveness of
contract management, to successfully achieve irrigation project, and to have significance for
policy and decision makers in the agricultural and construction sectors. The findings of the study
will help procuring entities to analyze the existing contract management processes, identify the
shortfalls and enable them to look for the ways to equip with legal tools for effectively governing
the procurement process. The study will further intend to help the procuring entities to ensure
effective preparation of contracts, monitoring and control, to reduce risks which might arise in
the course of performing the contract. The research will also add value to the body of knowledge
and understanding on the relationship between contract management/administration and its
contribution on the success of contract management. It will also assist to understand the extent to

5
which Buno Bedele zone irrigation office suppliers comply with terms and conditions of project
contracts and suggest the way forward to better management of project contracts.

1.7 Scope of the study

This study attempted to assess the factors that affect the effectiveness of contracts management
on the success of irrigation projects. Thus, among the objectives, the study focused on variables
to be included in the study are technical capability related that affect a contract management, cost
related factor, suppliers agreement with terms and conditions of the contract, and close
monitoring of contracts management are concentrating on the identified gaps and provided more
knowledge on how contract management are formulated, implemented and administered in order
to achieve the effectiveness of contract management on the success of irrigation projects.
Methodologically, combined empirical and theoretical studies were developed; this study also
used a descriptive research design. As the target population is small in size and manageable, the
study was based on a census survey.
Geographically, the study was carried out in Oromia Region, Buno Bedele Zone irrigation office
and focused on mainly Irrigation projects from February to June2021.

1.8 Limitation of the study

The major limitation for the study is the availability of information on factors affecting
effectiveness of contracts management on the success of irrigation projects completion of
irrigation projects in Kenya. There is evidence of research in other developing countries in Asia
but there is scarce material in Sub-Saharan Africa. This study conducted a thorough literature
review process to collect adequate information for the study.

1.9 Organization of the study

This study is organized in five chapters as follows:
Chapter one has presented the introduction and background to the study which covers
background information, statement of the research problems, research questions, research
objectives, significance of the study, scope of the study as well as organization of the study.
Chapter two is the presentation of relevant literatures both theoretical and empirical. This

6
chapter also presents conceptual framework to help researcher to clarify his research
questions and objectives.

Chapter three contains research design and methodology it includes describing research
methodology which consists of area of the study, research design, population under the study,
sample size and sampling techniques, data collection, data processing and data analysis.
Presentation and analysis of findings is the subject of the fourth chapter.
The findings are presented and the findings from questionnaires and interviews ware discussed in
chapter four as general and those as per study objectives. Finally, chapter five incorporates
summary, conclusions and recommendations with regard to the findings of the study. The last
pages of this research report are references and appendices.

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Introduction
This chapter was discussing literatures which are relevant to the study. It discusses the current
theories and practices that are relevant to the study. The chapter revealed the conceptual,
theoretical and empirical backgrounds done by different scholars and authors on issues of
contract management processes in works contracts. Areas covered in this chapter include the
definitions of key Terms, overview of concepts, theoretical perspective, Empirical reviews,
Conceptual Framework of Study

2.2 Definitions of key Terms and Overview of the Concepts

2.2.1 Contract
According to University of Adelaide contract management handbook, (2007) Contract
management define as a “contract” is a legally enforceable agreement – an exchange of promises
for which the law can provide a remedy if the promises are not kept. It may be an agreement to
pay something, to do something, to not do something, to give or receive something, or to warrant
something. A contract may be written down, or it may be verbally agreed; it may be a formal
document that is negotiated over many months, or it may arise via an exchange of emails or even
a handshake. There are specific legal principles that determine whether a promise or undertaking
will be legally enforceable, and those principles apply equally regardless of the name or label
given to the arrangement.

Hutchison et al. (2009) defined a contract as an agreement entered in to voluntarily by two or

more parties with an intention to create legally enforceable obligation(s). A contract entails
voluntary promises between competent parties to do or not to do something which is enforceable
by law. A contract may obligate a contracting party before receiving anything from the other side
or even after calling the deal off; for example, after the supplier acknowledges the receipt of the
purchase order, he is liable to deliver materials based on the delivery terms agreed. The same

8
applies to all parties after contract closures in confidentiality issues where the parties agree not to
disclose confidential matters for number of years after the contract closure.
Furthermore contract is important to keep the Contract Life Cycle in mind when assessing
contract management activities. Contract Management Guide (2010:21) indicates that the
contract life cycle as Planning, Creation, Collaboration, Execution, Administration, Closeout /
Renewal.

2.2.2 Contract Management

National Council for Construction Training Manual,(2003) define the Contract Management as
a multi-stage process that goes on through the entire duration of the contract and ensures that the
parties meet their contractual obligations in order to deliver the specific objectives provided in
the contract.

Contract administration includes overseeing the temporary worker relationship. Hansson and
Longva (2014) contend that this alludes to the activities and activities of the contracting
company to form and keep up a positive relationship with the temporary worker. This depends
on the mutual trust, understanding, regular communication and timely management of
possible problems in the contract. Contract management is the process that enables both
parties to a contract to meet their obligations in order to deliver the objectives required from the
contract. It also involves building a good working relationship between customer and provider. It
continues throughout the life of a contract and involves managing proactively to anticipate future
needs as well as reacting to situations that arise (PMBOK 2013). The central point of contract
administration is to get the administrations as concurred within the contract and accomplish
esteem for cash. This implies optimizing the effectiveness, viability and economy of the benefit
or relationship depicted by the contract, adjusting costs against dangers and effectively
overseeing the customer–provider relationship. Contract administration may moreover include
pointing for nonstop enhancement in execution over the life of the contract (Contract
administration rules 2002).

Contract management is a systematic practice for creation, execution, compliance, and analysis
of business contracts in order to maximize operational performance, reduce costs, and minimize
risks (Aberdeen 2006). A procurement contract is a legally binding agreement between a firm

9
(the buyer) and a supplier to fulfill a set of agreed terms and conditions. Contract management
involves building of good working relationship between the parties which continues through the
contract life time. According to procurement and Contract Administration Technique (2013-
2017), contract administration is the proactive observing; audit and administration of legally
binding terms secured through the obtainment prepare to guarantee that what is concurred is
really conveyed by providers or accomplices. Contract management includes:

 ensuring compliance with the terms and conditions agreed

 documenting and agreeing any changes or amendments that may arise during contract
implementation or execution in short, effective contract management ensures that:
 Strategic priorities agreed at the outset are delivered in a timely and cost effective manner
 Issues of non-compliance or variation are picked up early and either dealt with or
appropriately escalated for resolution
One of the key objects of contract management is to obtain goods or services as agreed in the
contract and achieve the best value for money through balancing costs against risks and
proactively managing the relationship. It also aims at continuous improvement in performance
over the contract life time.
The contract management framework provides a guide to the contract management process as
well as tools and templates to assist you in effectively managing contracts. This framework
describes the required responsibilities associated with the three phases of contract management
lifecycle: which are the contract set-up, contract management and contract close-out. Within
each phase, there are a number of key activities to be performed. Hence, According to Contract
Management Guide (2010), contract management has the following framework:

 Identification and classification of contracts

 Recognition, measurement and disclosure

 Planning, budgeting and reporting cycle

 Oversight of contract management

 Resourcing contract management activities

 Document and information management

10
  Relationship management

 Performance management

 Payment, collection, incentives and penalties

 Risk management

 Policies and procedures

2.2.3 Contract Effectiveness

Based on Ethiopian public procurement manual (2011), although the contract Form may have
been signed by both parties, the legal effectiveness of the contract may be dependent on one or
more of the following conditions: Receipt by the public body of the Performance Security;
Receipt by the public body of an Advance Payment Security; Receipt by the Supplier/Contractor
of the Advance Payment; or Receipt by the Supplier/Contractor of an acceptable Letter of Credit.
Furthermore, National Council for Construction Training Manual, (2003) demonstrate that “the
fundamental reason of contract administration is to form beyond any doubt that the destinations
of the contract (supply of merchandise, conveyance of administrations or execution of works) are
met in a opportune design and esteem for cash is accomplished. Therefore, the ultimate
objectives of contract management are: Effectiveness and Efficiency”

According to Uher & Davenport (2009), Successful contract administration is additionally

characterized by a contract administration group that has the fundamental important capabilities,
aptitudes, information and encounters for the work. It is also vital to clearly specify the roles
and competencies involved in the contract management process. The officials charged with
the responsibility should be selected based on objective criteria so as to ensure they have the
required technical knowledge as well as skills, such as, negotiation skills, cooperation skills, and
communication skills.

2.2.4 Effective contract administration and management

Increasingly, public sector organizations are moving away from traditional formal methods of
contract management (which tended to keep the provider at arm‟s length and can become
adversarial) and towards building constructive relationships with providers especially in the
11
procurement of goods. The management of such a contract requires a range of skills, knowledge
and resources for both the procurement entity and the provider.

Contract administration is concerned with the mechanics of the relationship between the
customer and the provider, the implementation of procedures defining the interface between
them, and the smooth operation of routine administrative and clerical functions. On the
other side, effective contract management goes much further than ensuring that the agreed terms
of the contract are being met – this is a vital step, but only the first of many (ANAO, 2007).
No matter what the scope of the contract, there will always be some tensions between
the different perspectives of customer and provider. Contract management is about
resolving or easing such tensions to build a relationship with the provider based on
mutual understanding, trust, open communications and benefits to both customer and provider a
„win/win‟ relationship. Hence, effective contract administration and management is defined as
existing when the arrangements for service delivery continue to be satisfactory to both customer
and provider, expected business benefits and value for money are being realized, the provider is
co-operative and responsive, the customer knows its obligations under the contract, disputes are
rare and there are no surprises for either party (ANAO, 2007).

2.2.5 Project
A Guide to the PMBOK (2013), define a project as temporary endeavor undertaken to create a
unique product, service, or result. The temporary nature of projects indicates that a project has a
definite beginning and end. The end is reached when the project‟s objectives have been achieved
or when the project is terminated because its objectives will not or cannot be met, or when the
need for the project no longer exists.

According to handbook construction project management, (2009) a project is made up of a group

of interrelated work activities constrained by a specific scope, budget, and schedule to deliver
capital assets needed to achieve the strategic goals of an Agency.

Projects differ from types of work. PMI (2004) defines project as a temporary endeavor
undertaken to produce a unique product, service or result. These unique and temporary
characteristics are the ones determining if a particular endeavor is a project. The temporary
nature of projects indicates a definite beginning and definite ending. The end is reached when the
12
project‟s objectives have been achieved, when the project is terminated, or the need for the
project no longer survives. The unique nature of projects means every project creates a specific
product, service, or result that differentials it from other products, services, or results. The
duration of a project is a finite; can range from a week to several years.

2.2.6 Project Contracts

These are contracts for construction, manufacturing and/or installation of equipment‟s. These
contracts are characterized by having a defined start date and end date, having a defined end
result to be achieved and involving a number of planned and interrelated activities (PMI, 2004).

2.2.7 Project success

PMI (2004) defines a project success as meets its objectives under budget and under schedule.
This evaluation criterion has remained as the most common measure in many industries. But for
a development project, success goes beyond meeting schedule and budget goals, it includes
delivering the benefits and meeting expectations of beneficiaries, stakeholders, donors or funding
agencies. But defining these dimensions of success is more difficult and some can only be
evaluated years after the project has been completed, and for many organizations these types of
evaluations are difficult to do due to lack of funding. Unidentified project status also limits
successful contract management in an organization. This usually experienced due to poor
communication among the contract parties. To solve this, it is valuable to integrate a
communication plan in the contract. (Rotich Joyce, 2014).

2.2.8 Factors Affecting Project Success

A number of variables influencing the success of project implementation were identified
following a thorough review of these articles. A careful study of previous literature suggests that
the critical success factors (CSFs) can be grouped under five main categories. These include
human-related factors, project-related factors, project procedures, project management actions,
and external environment. (Chan, A et.al, (2004).

13
2.2.9 Irrigation projects
These refer to construction of irrigation infrastructure in projects being implemented by
Ethiopian Government.

2.2.10 Project Delivery

Project Delivery is a system used by agency or owner for organizing and financing design,
construction, operations, and maintenance service for structure or facility by entering into legal
agreements with one or more entities or parties.(https://en.wikipedia.org), and Project delivery
refers to project execution or implementation (Adu, 2004).

2.2.11 Procurement
Procurement, mean obtaining goods, works, consultancy or other services through purchasing,
hiring or obtaining by any other contractual means (Ethiopian Proclamation No. 649/2009).
Lyson and Farrington (2006) defined procurement as the process of obtaining goods, works and
or services through buying, borrowing or leasing. It encompasses all activities involved in
establishing essential requirements, sourcing practices such as market research and vendor
evaluation as well as negotiation of contracts to ensure management of external resources to
fulfill organization strategic objectives. Van Weele (2006) characterizes procurement as getting
from outside sources all merchandise, administrations, capabilities and information which are
fundamental for running, keeping up and overseeing the company‟s essential and supporting
exercises at the foremost favorable conditions.

2.2.12 Service Level Agreement

A Service Level Agreement is an agreement between client and supplier that specifies, in
measurable terms, the services to be furnished by the supplier and what penalties the supplier
will pay if s/he cannot meet the committed goals (Lammanna et al., 2003).

14
2.3 Theories Underlying Contract Management
To understand the role of contract management in the effectiveness of project management, we
must first understand the underlying theories and concepts of contract management in the context
of project discipline; these include contract compliance theory, contract management theory, the
principal-agency theory, the will theory, and the reliance theory as explained here under.

2.3.1 Contract Compliance Theory

Contract compliance theory is the act of acclimating to contract agreements between buyers and
venders. For the most part the acquiring work is held mindful for all reasons of non-compliance.
According to Aberdeen (2006) compliance may be internal or external. Internal compliance can
be interpreted as either conforming to the rules in the agreement by purchasing organization such
as payment terms and minimum order requirements or in purchasing form agreement only, that
is, purchasing by using framework agreements for the entire company (Telgen, 2004).

According to Aberdeen (2006) the utilize of system agreements for the whole company can help
keeping up tall contract compliance and decrease in acquiring costs. This can in turn increase the
probability of project success. As far as the projects as concerned, external contract compliance
can take up several forms including unavailability of products, services or qualified personnel,
charging prices different from the contracted prices, or late delivery or delivering products that
do not meet the contracted specifications.

2.3.2 Contract Management Theory

Contract management theory can be interpreted as category management, contract administration
and contracting processes (Knoester, 2005). While category management is about managing the
contracting processes initiation, contract management is addressed by Knoester (2005) who
speaks of contract management as the management of the engagement administration of all term
agreements by which means a contract is closed. He stressed that this is the contract management
process for ensuring that the right information is in the right place at the right time, to support the
whole of the contracting process. In project disciplines, this can be achieved by distributing
contract information to all primary project stakeholders to determine and assess an optimal
supply base. The contracting process is the third interpretation of contract management and is

15
where contract realization is managed. This process is connected to both the category
management process and the contract administration process. Contracting processes are initiated
by category management and are from there supported by the contract administration process.
This administration process is necessary during the whole contracting process in order to assure
quality, efficiency and effectiveness (Angelov, 2005).

2.3.3 The Principal-Agency Theory

The principal-agent theory can proudly be applied to this study with irrigation office as a
principal and project suppliers as agents. According to Chiappori and Salanie´ (2003) the
underlying principle of the contract theory is that there ought to be a clear understanding of the
wants of the central and capacity of the specialist to meet these needs competently. The theory
becomes significant to the study as it highlights the need for strategic planning in project contract
management. When a project contract is well defined and planned, the principal and agents will
find it easy to meet needs of each other in an efficient way resulting into timely execution of the
projects in predetermined service level

2.3.4 The Will Theory

The basis of contract is the meeting of the minds of the parties (that is the will of the parties).
Hutchison et al., (2009) described that on the off chance that one party is in blame as respect to
one of the critical components of the understanding there's no genuine understanding. The result
is neither party is bound nor each party may reclaim whatever it has performed. This theory
maintains that commitments in project contracts are enforceable because the promiser has
"willed" or chosen to be bound by his or her commitment(s). Classical theories of contract
protect the will of the parties, because the will is something naturally worthy of respect; the use
of force against a defaulting promisor in project contracts is ethically justified.

2.4 Empirical Review

According to Dmaidi, Dwaikat, &Shweiki (2013), there are two broad objectives of contract
management. The first is the definition of the parties‟ roles with a view of achieving the
contractual obligations while the second is the development of a mutually rewarding relationship
between parties involved in contract. Aluonzi et al.(2016) noted that contract management

16
involves three diverse aspects; achievement of product quality, delivery on time and within the
budget. In this context, indicated that contract management is divided into the upstream/pre
contract award activities and downstream/post contract award activities. Marco (2013) added that
contract management involves the proactive management of the relationship between the parties
in a contract with a view of anticipating future needs and managing arising risks with a view
of improving the performance over the lifecycle of the contract.

ShaivalV.Patel et.al (2015) conduct a research on „Need Of Contract Administration In

Construction Projects‟ and state that a Successful contract administrative organizations can
increase control, effectiveness and reduce cost and also provide strategic and competitive
advantages. And also Good preparation, the right contract, single business focus and service
delivery management and contract administration factors essential factors for good contract
management. He also indicate that there are several reasons why organizations fail to manage
contract successfully, the chief reason for project delays is poor contract administration,
therefore need of proper contract administration is essential.

Yegon B. (2018) concluded that compliance with contract terms and conditions as well as cost
management were metrics that on their own they could lead to a positive influence on
procurement contract management. The study recommends that in order for the state
corporations to improve on the effectiveness of the contract management, the state corporations
must place emphasis on contract documentation and contract monitoring of contract management

Silvana (2015) in a study on the contract management on private public partnership indicates that
the aim of contract management is the optimization of the efficiency, effectiveness and economy
of service in contractual relationship, balancing costs against risks and actively manages the
relationship between procurement parties. Furthermore, S. Kanchana1 et al.,(2018) conclude that
“Effective contract management has emerged as a crucial function to improve profitability,
support compliance and manage risk. It becomes necessary that the contracting activities should
be management by a procurement team as inefficient management leads to customer un-
satisfaction and unwanted cost overruns.”

On the other hand, the study by Kamotho (2014) used metrics such as costs management,
inventory levels, time taken to complete procurement process, delivery of best-value contracted

17
goods and service, stronger vendor-buyer relationship, and assured supply to measure the
effectiveness of contract management.

Additionally Rotich (2014) in a study on the contract management practice and operational
closure (Vatankhah, et al.,(2012). The contractor monitoring involves the examination that the
contractor is fulfilling the contractual obligation as agreed. This enables the identification of any
emergent issues and quick resolution of those issues. On the other hand, contract administration
involves the maintaining an updated form of the contract; controlling and managing contract
variations; paying the contractor; managing assets; drafting reports; and terminating the contract.
These factors include contractor monitoring and acceptance management; managing the
contractor relationship; contract administration; dispute resolution; and contract.

Wanjiku (2015) concludes that cost-related factors are the determinant factors influencing
completion of irrigation projects. He further states that project supervision is the second most
significant factor influencing the completion of irrigation projects and contractor-related factors
are the least significant factors influencing completion of irrigation projects in Kenya.

2.5 Summary of Literature and Knowledge Gap

The literature reviewed shows that there are handful of studies conducted on the subject of
contract management. Unfortunately, most of the studies in regards to contracts management of
public procurement and performance, factors affecting the success of projects in different sectors
of economy. However, there was less emphasis on factors influencing completion of irrigation
projects. Specially, on factors affecting effectiveness of contract management on the success of
irrigation project, in Ethiopia has not been addressed. Thus, the current study will attempt to
assess the factors affecting effectiveness of contract management on the success of irrigation
project with reference to Buno Bedele zone.

2.6 Conceptual Framework of Study

According to Mbogo et al., (2012) conceptual framework is a basic structure of a research
consisting of a certain abstract ideas and concepts that a researcher wants to observe, experiment
or analyze. This study involved four important variables to assess factors affecting the
effectiveness of contract management on the success of irrigation project; the following

18
conceptual frame work is built on the basis of some factors which contribute to successful
contract management on irrigation project from the above theoretical and empirical studies. The
independent variables in the proposed study include: Supplier‟s technical capability related
factors, cost related factors, supplier‟s compliance with terms and conditions of the contract and
closely monitoring of contracts of management team. Project success referred as Dependent
variable. Technical capability related factors refer to the contractors‟ experience, qualifications,
size and capacity to undertake the irrigation project requirements and these are assumed to affect
the success of irrigation projects. The cost related factors refer to the availability of funds, the
appropriate use of funds, disbursement of funds and the appropriate use of allocated funds for
project activities and equipment. The supplier‟s compliance with terms and conditions of the
contract related factors refer to the project inspection, record book to follow and standards
developed for contracting. Monitoring of irrigation projects is also perceived to influence
completion of projects. These includes the availability of supervisors, the adequate number of
supervisors, and timing of supervision activities are all aspects influencing the success of
projects. The conceptual framework below shows the relationship between independent and
dependent variables.
Independent Variable Dependent Variable

Technical
capability

Supplier’s
compliance with Project success
terms and

Monitoring during
contract for project
performance

Cost related
factor

Source: own source

Figure 2.1: Conceptual Framework of the Study

19
While the outcome/dependent variable of this study is the project success, independent variables
used to control the outcome variable are supplier‟s technical capability, cost related factors,
supplier‟s compliance with terms and conditions of the contract and closely monitoring of
contract management.

20
 CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction
This chapter describes the research methods to address objectives of the study. Therefore,
research methodology consists of research design, source and type of data, population under the
study, sampling procedure, data collection methods, data analysis and ethical consideration with
the aim of assessing the effectiveness of contract management in irrigation projects.

3.2 Research Design

The design of this research was descriptive survey. A descriptive research is designed to obtain
information concerning the current situation and other marvels and wherever possible to draw
valid conclusion from the facts discussed. Descriptive survey attempts to describe or define a
subject often by creating a profile of a group of problems, people or events through the collection
of data and tabulation of the frequencies on research variables or their interaction as indicated.
According to Paulin (2007), “descriptive research studies are based on some previous
understating of the nature of the research problem”. A descriptive study design is considered the
best design to fulfill the objectives of the study.

3.3 Source and Type of Data

To achieve the objectives of the study, this study used both primary and secondary
sources of data. Of the primary sources data, questionnaire and interview were applied.
Books, articles, theses and different publications were used as a secondary sources of
data. The casual relationship between hypothesized variables and the statistical
significance of the parameters have been examined with the help of data‟s from closed
ended questions. The study also employed both qualitative and quantitative data on factors
affecting effectiveness of contract management on the success of irrigation projects.

3.4 Target Population

The population of this study were all contractors, who are fourteen in number, involved on the
project contract, Zonal team members, staff (employees) and Zonal office Manager, and

21
management of procurement department of project management were considered as the target
population of the research.

3.5 Sampling Procedure

According to UNCE (2000) cited in Murungi. N. (2015), a census is a survey
conducted on the full set of observation objects belonging to a given population. It is the
complete enumeration for all units in the population with respect to well defined
characteristics. According to Kothari (2004) if the population is small, a census may be
preferable because in order to produce estimates with small sampling error it may be
necessary to sample a large fraction of the population. Moreover, when all items are
covered, no element of chance is left and highest accuracy will be obtained. Therefore, due
to the limited number of participants working on irrigation projects, census survey method were
administered in this study.
3.6 Methods of Data Collection
The study used both primary and secondary data. The secondary data were collected from
irrigation office. Primary data among the selected participants working on irrigation projects
were also gathered by using interview, open and close ended questionnaires qualitatively and
quantitatively. As (Sounders, 2003) cited in Annuda, (2016) questionnaires are less costly and
less of researcher„s time spent. so that close ended questionnaires with some open ended
questionnaires were administered to 41 respondents which were actively working in the project
by addressing the four research objectives. The questionnaires divided in to three sections,
general information which inquires about respondents and the variables targeted questions in the
form of free response and likert scale type that ranges from strongly disagree (1) to strongly
agree (5) were used

3.7 Method of Data Analysis

The collected data were analyzed by using both qualitative and quantitative methods, depending
on the type of data collected. The data were coded and entered according to the questionnaire so
processed in the SPSS (v.20). The SPSS software and Microsoft excel were used as tools to
analyze the coded data. The data were analyzed using both descriptive and inferential statistics.
Descriptive statistics was used to show the mean and standard deviation, of the questionnaire

22
items based on the Likert scale. On the other hand, inferential statistics was used to show the
strength of association between variables and the direction of the relationship between
independent and dependent variable by using inferential analysis.
Accordingly, the descriptive statics parts of the variables were analyzed using means, standard
deviation, and percentage and the inferential analysis were tested by using correlation and
multiple linear regressions that can be Linearity, Normality and Model fitness were employed.

3.8 Model Specification

The equation of multiple linear regression on this study were generally build around two sets of
variables, namely dependent variable (project success) and independent variables technical
capability, cost, supplier‟s compliance with terms and conditions of the contract, closely
monitoring of contracts management). The basic objective of using multiple linear regression
equation on this study was to make the study more effective at describing, understanding and
predicting the stated variables.
Y = β0+ β1X1 + β2X2 + β3X3 + β4X4 +€
Where: Y is the outcome or dependent variable project success
X1= technical capability,
X2= supplier‟s compliance with terms and conditions of the contract,
X3= closely monitoring of contracts management,.
X4 =Cost related factors and €= standard error.
β0 is the intercept/Y-Intercept term- constant which would be equal to the mean if all slope
coefficients are 0.
β1, β2, β3,β4 are the coefficients associated with each independent variable which measures the
change in the mean value of Y, per unit change in their respective independent variables

3.9 Reliability and validity of the variables

3.9.1 Reliability of the variables

Reliability is defined by Vogt (2007) as the consistency of either measurement or design to give
the same conclusions if used at different times or by different scholars. A pilot study was carried
out in Buno Bedele zone Gachi and Dambi weredas of irrigation project, which were not

23
included in the main study. The pilot-test was conducted to test the reliability of the content. It
was administered to selected respondents of 2 contractors and process owners and 5 employees
of irrigation office. Cronbach‟s alpha reliability test was calculated after the pilot test was
conducted. All items were carefully put in to SPSS version 20, and the average result found was
(0.770).

3.9.2 Validity of the Instrument

Content validity involves the degree to which the study is measuring what it is supposed to
measure. More simply, it focuses on the accuracy of the measurement (John et.al, 2007). All
measures used to construct the instruments have shown acceptable level of construct and content
validity in previous studies and are used in this study with slight modification. Checking the
validity of data collecting instruments before providing for the actual study subject was the core
to assured the quality of the data. To ensure validity of instruments, the instruments were
developed under close guidance of the advisors and also a pilot study was carried out in Buno
Bedele zone Gachi and Dambi weredas of irrigation project which was not included in the
sample of the study. The pilot test provides an advance opportunity for the investigator to check
the questionnaires and to minimize errors due to improper design of instruments, such as
problems of wording or sequence (Adams et al., 2007).

3.10 Ethical Considerations

This study ensured that the information which was collected were handled and treated with
utmost confidentiality. The research questionnaire provided freedom for respondents to not
indicate the identity of the respondent. This study explained the intention of carrying out the
research before beginning the process of data collection and thus the participation in the study
had been taken place through voluntary and informed consent. All the respondents had been
treated with great respect and courtesy. This study informed the respondents that no
compensation would accrue from participating in the study and further that the results of the
study would be shared upon completion of the study.

3.11 Hypotheses results

Since the regression equation is:

24
Y = β0+ β1X1 + β2X2 - β3 X3 + β4 X4+E

1.323 + (0.549 closely monitoring) + 0.333(technical capability) - 0.442(cost related factor) +

0.322(supplier‟s compliance with terms and conditions) + €

H0: β1 = β2 = β3 = β4 = 0 vs H1: βj ≠ 0 j = 1,2,3,4

The researcher rejects the null hypothesis, concluding that at least one of β1, β2, β3 or β4 is not
equal to 0.

In the hypothesis testing, the item that should be noticed is the probability (p) value. If p>0.05, it
means that independent variable does not influence the dependent variable. If p<0.05 it means
that independent variable influences the dependent variable (Pallant, 2010).

No Alternative Hypothesis Significance Result

Beta Sig
H1 Technical capability has significant effect on project success .333 .001 Accepted
H2 Cost related factor has significant effect on project success -.442 .000 Accepted
H3 Supplier‟s compliance with terms and condition has significant Accepted
effect on project success .332 .001

H4 Closely monitoring has significant effect on project success Accepted

.549 .000

Table3.1: hypotheses results

Source: own survey, 2021

As shown in table above the first Hypothesis results “Technical capability has significant effect
on project success.” the analysis result show that (β=.333, p=.001) which means that technical
capability has highly significant and highly affect project success. Therefore, this hypothesis is
accepted.
While, we came to the second hypothesis, “Cost related factor has significant effect on project
success.” regression analysis result show that (β=-442, p=.000,) which reveals that cost related
factor has significant effect on project success. Therefore, this hypothesis is accepted
In case of third hypothesis “Supplier‟s compliance with terms and condition has significant
effect on project success.” regression output show that, (β=.332, p=.001,) Supplier‟s compliance

25
 with terms and condition has significant effect on project success. Due to this hypothesis is
accepted.

In case of the last hypothesis “Closely monitoring has significant effect on project success.”
regression analysis result show that (β=.549, p=.000,) Closely monitoring has significant effect
on project success. Therefore, this hypothesis is accepted.

3.12 Operational Definition of Variables

The main variables of this study were factors related to technical capability, cost, supplier‟s
compliance with terms and conditions of the contract, and closely monitoring of contracts
management are independent variable and Project success referred as dependent variable.
Objective Types of Indicators Measureme Data Data analysis
variables nt Scale collection
To determine Dependent -With delivery in budget 5 point Question Descriptive
factors affecting variables -With delivery in time Likert scale naire analysis
project success: The -Delivery with quality Correlation
case of Buno Project success -Achieve the intended Multiple linear
Bedele zone scope Regression
- Achieve the customer
satisfaction
To determine the Independent -work experience of the 5 point Question Descriptive
extent to which variables contractor Likert scale naire analysis
technical capability -proper use of the work Correlation
affect project Technical schedule Multiple linear
success. capability -effective communication Regression
between stakeholders of
the project
To assess the cost related -Late bill payments by 5 point Question Descriptive
influence of cost factors employer Likert scale naire analysis
related factors that -poor contractor bidding Correlation
affect project processes and procedures analysis Multiple
success. -price fluctuations of linear Regression
building materials.
To assess the extent supplier‟s -Irrigation office follow 5 point Question Descriptive
to which supplier‟s compliance standards developed for Likert scale naire analysis
compliance with with terms and their methods of Correlation
terms and condition contracting
condition Multiple linear
affect project - Formal monthly
inspections Regression

26
success
.
To assess the extent Closely -Availability of 5 point Question Descriptive
to which closely monitoring supervising staff Likert scale naire analysis
monitoring affects -project management Correlation
capacity of the project
project success Multiple linear
team
Regression

Table 3.2 operational definition of variables

Source: own survey, 2021

27
 CHAPTER FOUR

RESULTS AND DISCUSSIONS

4.1 The Response Rate

This study managed to collect 41 fully completed questionnaires which were used in the data
analysis from the sample size of 45 respondents. This means that the study had a response rate of
91.1%,which is acceptable in research.
Table 4.3:summary of respondents response rate
S.no Respondent Copies of Returned Percentage of
Questionnaire questionnaire Returned
Administered Questionnaire
1 Contractors 14 12 85.7
2 Zonal team members 16 14 87.5
3 Staff (employees) 10 10 100
4 Zonal office managers 5 5 100
Total 45 41 91.1

Source: -own source, 2021

4.2 Demographic Characteristics of Respondents

This descriptive analysis is used to look at the data collected and to describe data captured
through the questionnaire. It was used to describe the demographic factors for more
clarification. It is mainly important to make some general observations about the data
gathered for general or demographic questions. The demographic factors used in this
research were sex, age, educational qualification, and work experience of respondents.

28
Table 4.4: demographic characteristics of respondents

Variables Category Frequency Percent

Sex Female 11 26.8
Male 30 73.2

Total 41 100

Age Less than 25 4 9.8

25-35 10 24.4

35-45 22 53.7

Above 45 5 12.2

Total 41 100

Educational level Secondary and preparatory 7 17.1

First degree and above 34 82.9

Total 41 100

Work experience 1-5 years 15 36.6

5-15 22 53.7

Above 15 4 9.8

Total 41 100

Source: -own source, 2021

4.2.1Distribution of Respondents by Sex

Percentage
Male
Female

26.80%

73.20%

Figure 1Figure 4.1: Distribution of respondents by Sex

Source: SPSS output from survey data, 2021.

29
As far as the above table is concerned 73.2 percent of the respondents were male while the
remaining 26.8 percent of the respondents were female. This indicates that majority of the
respondents were male. From this we can infer that female participation in the sector was low
relative to male.

4.2.2 Distribution of Respondents by Education

educational level
82.10%

35

30

25

20 34

15 17.10%
10
7
5

0
secondary and peparatory first degree and above

frequency percentage f

Figure 4.2: Educational status of the respondent

Source: -own source, 2021

Figure above presented respondents‟ Educational status in professional management, irrigation,

construction projects, finance and procurement. Accordingly, 7 (17.1%) of the respondents had a
secondary and preparatory level of Education, while 34 (82.9%) of the respondents had first
degree and above level of education. This indicates that majority of the respondents had 1st
degree and above. It attributed to the professional nature of management, irrigation construction
projects, finance and procurement.

30
4.2.3 Distribution of Respondents by Age

Age of Respondents

25 22

20

15
10
10 2.8
5
4 9.80% 24.40% 53.70%
5 percentage

frequency
0
less than 25 25-35 35-45 above 45

frequency percentage

Figure 4.3: age of respondents

Source: -own source, 2021

As the table 4.3 also depicts, 9.8% of the respondents were found under the age of 25 years. And
12.2% of the respondents were people aged above 45 years. In addition to this, 24.4% of the
respondents were found in the age interval of 25 to 35 years. The remaining 53.7% of the
respondents were found in the age interval of 35 to 45 years. This indicates that
the majority of the respondents were young and middle aged.

31
4.2.4 Distribution of Respondents by Work Experience

Work Expreince of respondents

25
22
20
15
15

10

5
36.60% 4
0 53.70%
9.80%
1-5 years
5-15 years
above 15

frequency percentage

Figure 4.4: work experience of respondents

Source: -own source, 2021

As far as work experience of the respondents is concerned in table 4.5, 36.6% percent of the
respondents have 1 to 5 years of working experience, 53.7% percent of the
respondents have 5 to 15 of years working experience and the remaining 9.8% percent have
above 15 years of working experience. This indicates that majority of the respondents have an
averagely higher working experiences..

4.3 Descriptive statistics of the study variables

This study has four independent and one dependent variable. The dependent variable
was project success and the independent variables were technical capability, cost related factors,
supplier‟s compliance with terms and conditions and project monitoring. The descriptive

32
summary of variables have been computed by using SPSS (statistical package for social
science)
4.3.1 Cost Related Factors
Table4.5: cost related factors that affect the success of irrigation project

Cost Related Factors

Item description N Mean Std. Deviation
Poor contractor Bidding processes and 41 4.05 .498
procedures
Late bill payments by employer 41 4.37 .662

Price fluctuations of building materials 41 4.20 .641

Misappropriated use of mobilization 41 4.15 .573

advance
Appropriate equipment availability 41 4.05 .631
through project life
Cost of employees 41 4.37 .698
Losses and inefficiency are taken into 41 4.20 .715
consideration in order to reduce costs
of irrigation projects.
Implementation of new strategy and 41 4.37 .581
techniques to the operation of
irrigation projects
Average mean and standard deviation 41 4.22 0.624

Source: Researcher‟s SPSS V-20 Result 2021

The findings as contained in table above shows that the cost related factors affect the success
of the irrigation projects. A variable ranges from a mean of 4.05 to 4.37. An item „Price
fluctuations of building materials‟ has a mean of 4.20, Late bill payments by employer has a
mean of 4.37 and Poor contractor Bidding processes and procedures has a mean of 4.05.
Further, Misappropriated use of mobilization advance has a mean of 4.15, appropriate

33
equipment availability through project life has a mean of 4.05, Cost of employees were a
mean of 4.37 and Losses and inefficiency are taken into consideration in order to reduce costs
of irrigation projects has a mean of 4.20. In addition to this, an item „Implementation of new
strategy and techniques to the operation of irrigation projects‟ has a mean of 4.37 And an item
„Misappropriated use of mobilization advance‟ has a mean of 4.15. The findings revealed that
the cost related factors can highly affect the success of the project.

4.3.2 Technical Capability

Table4.6: technical capability factors that affect project success

Technical Capability related factors

Item description N Mean Std. Deviation
Qualified Supplier‟s based on technical capability, for 41 4.05 .444
the success of contracts.
Proper planning in procurement of material 41 3.78 .571

Work Experience of the contractor 41 3.95 .545

Use of Modern Construction Equipment in Projects 41 3.78 .525

Size of the contractors 41 3.73 .593

Lack of skills on procurement professionals to 41 3.76 .538
implement procurement laws and contract
management.
Effective communication between stakeholders of the 41 3.88 .640
project is vital for the successful implementation of
the project
Proper use of the work schedule 41 3.95 .669
Site Management influence on Project Completion 41 3.78 .690

Good mobilization 41 3.78 .725

Average mean and standard deviation 41 3.844 0.594

Source: Researcher‟s SPSS V-20 Result 2021

34
Table 4.6 represents those items that measure technical capability variable. A mean score
ranging from 3.73 to 4.05, indicates a high technical capability factors. A mean of 4.05 shows
that qualified Supplier‟s based on technical capability for the success of the project highly affects
the project success. Respondents agree that Work Experience of the contractor affects the project
success; this is represented by a mean of 3.95. Proper planning in procurement of materials has a
mean of 3.78, Effective communication between stakeholders of the project is vital for the
successful implementation of the project scored a mean of 3.88, use of modern construction
equipment in project scored a mean of 3.78 and site management influence on project
completion has a mean of 3.78.The overall average mean score of technical capability related
factors has a mean of 3.84. This indicates that a high technical capability for the success of
contract management. Thus, it implies that majority of the respondents agree with the factors that
affect technical capability related factors.
4.3.3 Monitoring during contract performance
Table 4.7 monitoring during contract that affect project success

Monitoring during contract performance

Item description N Mean Std. Deviation
Timing of inspections during the project life cycle 41 3.78 .613
Project management capacity of the project team 41 3.68 .650
Availability of supervising staff during project 41 3.66 .656
implementation
Number of supervising engineering staff during 41 3.85 .615
project
Project teams‟ focus on key functions of project 41 3.88 .872
supervision

Use of work schedules/plans to monitor project 41 3.88 .640

implementation

Use dispute resolution mechanism to monitor the 41 3.85 .691

project.

Average mean and standard deviation 41 3.79 0.67

Source: Researcher‟s SPSS V-20 Result 2021

35
Based on table above, the descriptive statistics result shows the results of monitoring during
contract management. A variable ranges from a mean score of 3.66 to 3.88. The average mean of
the variable were 3.79. Majority of the respondents were agreeing with the monitoring related
factors. For instance, the use of work schedules or plans to monitor project implementation
scored a mean of 3.88 and availability of supervising staff during project implementation has a
mean of 3.66. Respondents agree that Timing of inspections during the project life cycle affects
the project success; this is represented by a mean of 3.78. This implies that monitoring during
contract performance can highly affect the success of the project.
4.3.4 Compliance with terms and conditions
Table 4.8 supplier's compliance with terms and conditions that affect project success

Compliance with terms and conditions related factor

Item description N Mean Std. Deviation
The irrigation office follow standards developed for 41 3.76 .830
their methods of contracting
The contractors comply with the service quality 41 3.80 .782
level which has been specified in the bidding
document
Contractors do the required amount of work during 41 3.66 .794
the project implementation

The contractor undertakes his duties and fulfills his 41 3.78 .725
obligations in compliance with the contract

The contractors used the stipulated amount of 41 4.07 .818

materials while constructing irrigation as per bills
of quantities (BOQs)
Formal monthly inspections are carried out by the 41 3.95 .773
irrigation project zonal committee
Supervisors on the irrigation projects carry out the 41 3.98 .851
necessary inspection

36
Project managers carry out the necessary irrigation 41 3.90 .768
project inspection to meet the required standards
There is a well maintained record book to follow 41 4.00 .894
the complaints of the irrigation users
Always funds are allocated only for the fulfillment 41 4.10 .917
of project objectives
Average mean and standard deviation 41 3.90 0.81

Source: Researcher‟s SPSS V-20 Result 2021

The results in table above contain the results of supplier‟s compliance with terms and conditions.
A variable ranges from a mean score of 3.66 to 4.10 and the average mean was 3.90.The item
„The contractor undertakes his duties and fulfills his obligations in compliance with the contract‟
has a mean of 3.78, Formal monthly inspections are carried out by the irrigation project zonal
committee has a mean of 3.95 and Funds are allocated only for the fulfillment of project
objectives score a mean of 4.10. The irrigation office followed standards developed for their
methods of contracting scored a mean of 3.76 and Supervisors on the irrigation projects carry out
the necessary inspections and this was represented by a mean of 3.98. This implies that majority
of the respondents agree with the suppliers compliance with terms and conditions. Thus,
supplier‟s compliance with terms and conditions can highly affect the success of the irrigation
projects.
4.3.5 Project Success
Table4.9: project success factor
Project success related factors

Item description N Mean Std. Deviation

The projects were completed within 41 3.93 .648
the budget estimates

The projects were completed within 41 4.00 .548

scope
Irrigation project is safe for the 41 4.22 .725
users

37
The projects meet the expected 41 4.10 .625
quality specifications
The projects are completed in the 41 4.10 .625
scheduled time frame
Average Mean and standard 41 4.07 0.63
deviation

Source: Researcher‟s SPSS V-20 Result 2021

The descriptive statics for project success in table above showed that, where the items „The
Project Was Completed within scope‟ and „The projects are completed in the scheduled time
frame‟ scored a mean of 4.00 and 4.10 respectively. Respondents agree with the item „The
projects were completed within the budget estimates‟ and „the projects meet the expected quality
specifications scored a mean of 3.93 and 4.10 respectively. Hence, the zonal Agricultural office
follows the budget to complete the projects within the budget estimates.

4.4 Inferential result of the study

This sort of analysis shows the effect on one variable in respect of another one variable
(described as unidimensional analysis), or in respect of two variables (described as
bivariate analysis) or in respect of more than two variables (described as multivariate
analysis). In this context this study work out various measures that show the size and
shape of a distribution(s) along with the study of measuring relationships between two or
more variables. For his study regression and correlation have been used to examine the
effect of technical capability factors, cost related factors, compliance with terms and conditions,
and project monitoring on project success.
4.4.1 Correlation Analysis
Correlation analysis shows the strength of the relationship between two ranked or
quantifiable variables. The coefficient of correlation usually represented by the letter r
and can take on any value between -1 and 1. A value of 1 represents a perfect positive
correlation. This means that the two variables are precisely related and that, as values of
one variable increase, values of the other variable will increase. By contrast, a value of -1
represents a perfect negative correlation. Again this means that the two variables are

38
precisely related; however, as the values of one variable increase those of the other
decrease. Correlation coefficient with value of 0 meaning the variables is perfectly
independent. In addition correlation is an effect size and so it can verbally describe the
strength of the correlation using the guide that Evans (1996) suggests for the absolute
value of r: 0.00-0.19 is “very weak”, 0.20-0.39 is “weak”, 0.40-0.59 is “moderate”, 0.60-
0.79 is “strong” and 0.80-1.0 is “very strong”. Correlation does not imply causation
because there is a strong positive or strong negative correlation between two variables,
this does not mean that one variable is caused by the other variable
The correlation coefficient of for each pair of study variable have been calculated. The
correlation value and its significance have been shown in the table below.

39
Table 4.10 correlation coefficient

Correlations
V1 V2 V3 V4 V5
V1 Pearson Correlation 1

Sig. (2-tailed)
N 41
V2 Pearson Correlation .833** 1

Sig. (2-tailed) .000

N 41 41
V3 Pearson Correlation .769** .719** 1

Sig. (2-tailed) .000 .000

N 41 41 41
**
V4 Pearson Correlation -.412 -.074 -.060 1

Sig. (2-tailed) .007 .644 .710

N 41 41 41 41
V5 Pearson Correlation .791** .732** .650** -.114 1

Sig. (2-tailed) .000 .000 .000 .478

N 41 41 41 41 41
**. Correlation is significant at the 0.01 level (2-tailed).

Source: Researcher‟s SPSS V-20 Result 2021

40
 4.4.2 Tests for Multicollinearity
Correlation among independent variables may pose problems in interpreting regression
coefficients. This is not a problem of model specification, but of data (Hair et al., 2006).
Although the magnitude of correlation coefficients is moderate, a lack of high correlation values
does not ensure absence of collinearityas the combined effect of two or more independent
variables may cause multicollinearity. The conventional measures for multicollinearity are
Tolerance and the Variance Inflation factor (VIF). The tolerance value is the amount of an
independent variable‟s predictive ability that is not predicted by the other independent variables
in the equation (Hair et al, 2006). A Tolerance value of 1.00 indicates that a variable is totally
unaffected by other independent variables. Theoretically, Rule of thumb states a VIF greater than
10 may suggest that the concerned variable is multicollinear with others in the model and may
need to be excluded from the model.
Table 4.11collinearity statistics result

Standard. Coefficient CollinearityStatictics

Variables Beta Tolerance VIF

(Constant)

Project Monitoring .409 .362 2.765

Technical Capability .277 .450 2.224

Cost -.334 .987 1.014
Compliance with terms and conditions .273 .429 2.331

Source: Researcher‟s SPSS V-20 Result 2021

The result of the Tolerance values and VIFs test for multi collinearity displayed in Table (x)
above showed that multicollinearity problem does not exist.

4.4.3 Normality
Another important diagnostics test conducted in this study is the normality assumption (i.e. the
normally distributed errors). The normality assumption is about the mean of the residuals is zero.
Moreover, Normality tests are used to determine whether a data set is well-modeled by a normal
distribution or not, or to compute how likely an underlying random variable is to be normally

41
distributed (Gujarati, 2009). it can be noted that the data conforms to the normality assumption
(Bolker, et al.,2009). As we can understand from the table depicted below, the residuals seem
normally distributed and the residuals are distributed with a mean of 0 and standard deviation of
0.949 which is approximately 1. Thus, the model fulfills the assumption of being normally
distributed.
Table 4.12 normality test
Normality Test Residuals Statisticsa

Minimu Maximu Mean Std. N

m m Deviation
Predicted Value 3.1342 4.9533 4.0783 .49764 41
Std. Predicted Value -1.897 1.758 .000 1.000 41
Standard Error of .038 .080 .058 .011 41
Predicted Value
Adjusted Predicted 3.1372 4.9783 4.0785 .49855 41
Value
Residual -.32560 .39047 .00000 .15969 41
Std. Residual -1.934 2.320 .000 .949 41
Stud. Residual -2.051 2.387 -.001 .998 41
Deleted Residual -.36608 .41333 -.00016 .17676 41
Stud. Deleted Residual -2.152 2.565 .006 1.030 41
Mahal. Distance 1.092 7.948 3.902 1.778 41
Cook's Distance .000 .105 .021 .026 41
Centered Leverage .027 .199 .098 .044 41
Value
a. Dependent Variable: Project success (PS)

Source: Researcher‟s SPSS V-20 Result 2021

42
Figure 4.5: Histogram
Source: Researcher‟s SPSS V-20 Result 2021

4.4.4 Linearity
According to Stevens (2009), linearity can be best cheeked by normal p-plot residual. As shown
in the figure below, the relationship between the dependent and independent variables is linear.
Hence, there was no linearity problems on the data used for this study. This can be best checked
by scattered plot residual as shown in the appendixes. When, scattered plot comes in between
3.3 to -3.3, the relationship between the dependent and independent variables is linear.
Therefore, there is no linearity problem on the data used for this study.

43
Figure 4.6: Normal P-P Plot
Source: Researcher‟s SPSS V-20 Result 2021
4.4.5 Homoscedasticity
The assumption of homoscedasticity refers to equal variance of errors across all levels of the
independent variables (Osborne & Waters, 2002). This means that researchers assume that errors
are spread out consistently between the variables. Statistical software scatter plots of residuals
with independent variables are the method for examining this assumption (Keith, 2006).Ideally,
residuals are haphazardly scattered around zero giving indeed conveyance (Osborne & Waters,
2002). To check this assumption scatter plot was generated for the model. As shown in the figure
below, the error variance is constant since most scattered plot attributes are around zero and near
to the horizontal line.

44
Figure 4.7: scatter plot
Source: Researcher‟s SPSS V-20 Result 2021

4.4.6 Multiple regression analysis results and discussion

Table 4.13model summary for multiple regression model
Model Summary

Model R R Adjusted Std. Error of Change

Square R Square the Estimate Statistics
R Square F df1 df2 Sig F
Change Change change
1 .952A .907 .896 .16832 .907 87.404 4 36 .000

a. Predictors: (Constant), WTC, CO, TC, MO

b. Dependent Variable: PS

The above table depicted the results of Multiple regression analysis model. It summarizes an
independent variables of (technical capability, Effectiveness of contract implementation as per
terms and conditions, Monitoring during contract for project performance and Cost) and the
dependent variable (Project success). It also presented R-value: .952, R2: .907, Adjusted R-
square: .896.

45
These findings show that the independent variables in this study affect the dependent variables
(Project success) up to 89.6 percent as indicated by the adjusted R Square. The remaining 10.4
percent was changed due to other factors which did not incorporated in this model. As revealed
in Table above This model significantly determined core factors which affect project success.
4.4.7 Analysis of Variance
Table 4.14 summary results of analysis of variance
ANOVAa

Model Sum of df Mean Square F Sig.

Squares
Regression 9.906 4 2.476 87.404 .000b

1 Residual 1.020 36 .028

Total 10.926 40
a. Dependent Variable: PS
b. Predictors: (Constant), WTC, CO, TC, MO

Source: Researcher‟s SPSS V-20 Result 2021

The above table presented the summary results of analysis of variance and F- tests statistics for
multiple regression analysis data processed by SPSS V-20. It shows mean square value of 2.476,
F-statistics with value of F: 87.404 which is significant at 0.000 or at 1 percent significance
level. The value of F is large enough to conclude that the set of independent variables as a whole
were contributing to the variance of the dependent variable by those factors and further it
revealed the significance of the multiple regression model employed for this study.

46
Table 4.15 multiple linear regressions
Coefficients

Model Unstandardized Standardized t Sig.

Coefficients Coefficients
B Std. Error Beta
(Constant) 1.323 .415 3.186 .003
Monitoring of contracts
.549 .114 .409 4.832 .000
management
Technical capability .333 .091 .277 3.644 .001
1
Cost -.442 .068 -.334 -6.506 .000
Supplier‟s compliance
with terms and .322 .092 .273 3.511 .001
conditions
a. Dependent Variable: PS

Source: Researcher‟s SPSS V-20 Result 2021

Therefore, from the equation of liner regression:

Y = β0+ β1X1 + β2X2 - β3X3 + β4X4 + €

1.323 + 0.549 + 0.333 - 0.442 + 0.322 + €

Where: Y is the dependent variable (project success)

X1= Monitoring of contracts management,

X2= Technical capability,

X3= Cost,

X4= Supplier‟s compliance with terms and conditions and €= standard error.

β0 is the intercept/Y-Intercept term- constant which would be equal to the mean if all slope
coefficients are 0.

47
β1, β2, β3, β4 are the coefficients associated with each independent variable which measures the
change in the mean value of Y, per percentage change in their respective independent variables
project success.

The above multiple linear regressions revealed that, the correlation between the observed value
of Project success and the optimal linear combination of the independent variables (Monitoring,
Technical capability, Cost and Supplier‟s compliance with terms and conditions). The findings
from the study showed that all variables were significant as their significance values were less
than 0.05. From the model, taking all independent variables/factors constant at zero, project
success had an autonomous of 1.323.The data findings also showed that a percentage increase in
project monitoring leads to increase in the project successes by 0.549. A percentage improved in
technical capability leads to an increase in the project success by 0.333. A percentage increased
in cost related factor would lead to 0.442 decrease in project success. A percentge improved in
contract implementation as per terms and conditions leads to an increase in project success by
0.322. Generally, this regression model shows how much each predictor variables contributed to
the outcome value.

The multiple linear regression analysis revealed in table above showed that out of four variables.
Those variables project monitoring factor affect a project success at significance of 0.000 level
of probability and was found highly significant. The next influencing on project success was cost
and 0.000 level of probability and was found statistically significant at 5% level of significance
(p=0.000),In addition to this, technical capability for project success was also found important
factor in influencing Project Success. With a p-value of 0.001, it was found statistically
significant at 5% level. And supplier‟s compliance with terms and conditions for project success
was found critical factor in influencing project success. With a p-value of 0.001, it was found
statistically significant at 5% level.

4.5 Discussion of Findings

4.5.1Technical capability related items that affect the project success.

The descriptive statics result of the technical capability related factors influence on the project
success has a greater mean value. This indicates that the variable can highly affect the success of
the project. For instance, work experience of the contractor can affect the success of the project:

48
this can be represented by a mean of 3.73 and standard deviation of 0.59. This finding supports
Olowabi (2014) study findings which concur that in spite of the critical part that little and
medium venture temporary workers they are incapable to meet extend victory targets particularly
in low-income nations. In terms of the experience of the contractor influence on the success of
the irrigation project: the finding shows a greater mean value. Thus, the findings support the
perception that the experience of the contractor affects the success of irrigation projects. This
finding agrees with Choge and Muturi (2014) that completion of infrastructural projects on the
experience of the contractor. Contractors are selected on the basis of price, experience in
undertaking particular types of construction project and their reputation or track record in
producing high quality work within budget and on time. The study also founds site management
influence on project success. These findings corroborate Walker and Shen (2002) suggestion that
technical related factors such as poor site management and supervision are major causes of
delays in project delivery. „

Thus, the study confirms that from the above technical capability related factors; the most
common that affects contract management with the high Mean value were: work experience of
the contractor, inadequate qualified supplier‟s based on technical capability for the success of
contracts, site management and size of the contractor were high factors affecting the irrigation
projects in Buno Bedele Zone

4.5.2 Contract Implementation as Per Terms and Conditions

Project success can also be influenced by Contract implementation as per terms and conditions.
The finding of this study related with the role of supervisors on the irrigation projects carry out
the necessary inspection scored a greater mean value. This finding implies that there is need for
quality management during the life cycle of the project. This findings support Olatunji (2010)
conclusions that the quality of management during construction does significantly influence
project delivery time. Owolabi et al. (2014) agree that supervision in infrastructural projects is a
significant determinant to timely completion of the project. Austin et al (2000) found out that
when there's insufficient supervision/inspection of work it might result in revamp, expanded
extend fetched, destitute time completion and abandonment. In terms of formal monthly
inspections that are carried out by the irrigation project zonal committee, the respondents scored

49
a greater mean value. This agrees with Jacobides (2007) who concluded that that fruitful
completion of projects have to be have satisfactory number of administering building staff, its
groups ought to utilize work plans and plans to screen project execution and venture groups
ought to concentrate on key capacities of project supervision. Therefore, the study confirms that
from the above contract implementation as per terms and conditions related factors the most
common that affects contract management with a high value were: supervisors on the irrigation
projects carry out the necessary inspection and formal monthly inspections that are carried out by
the irrigation project zonal committee were high factors affecting the irrigation projects in Buno
Bedele Zone.

4.5.3 Monitoring during contract for project performance

The specific objectives of this research study were to assess contract management closely
monitored during project implementation for the effectiveness of project management. Based on
the findings, project management capacity of the project team scored a high mean value. As in
any organization, irrigation construction projects need an effective management and supervision
for completion. There is need for the management of the project to have capacity to deliver.
Ondari and Gekara (2013) supports that in terms of administration, supervision capacity was the
foremost noteworthy calculate taken after by contractor‟s capacity. In terms of availability of
supervising staff on completion on irrigation projects, respondents scored a greater mean value.
Supervision during construction is critical to ensure quality products and delivery of project.
Supervision is required to thrust specialists to meet scheduled targets (Griffith & Watson, 2004).
Wambugu (2013) study on determinant of fruitful completion of country charge ventures in
Kenya found that larger part of the respondents demonstrated that compelling administration
influenced the convenient completion of rural electrification ventures in Kenya which lacking
supervision/inspection of work brought about n revamp Hence, the above factors were highly
affecting the success of irrigation projects in the zone.

4.5.4 Cost related factors that affect project success

Projects can highly be affected by cost related factors. For instance, in terms of fluctuations in
the price of building materials, this finding suggests that changes in the pricing of commodities
affects the completion of projects. According to Sloaman (2008) argues that when there's

50
inflation we have to be watch out in surveying by how much national yield, utilization and
compensation are expanding. This means an increase in inflation value will result in the
necessity to review wages and prices of items to arrest the inflation. Mobilization advance was
another factor with greater mean which affects project success. Thus, the finding supports
Acharya et al. (2006), these are factors associated with project participants (contractors). They
found that poor utilization of mobilization advance has a negative effect on construction
projects‟ completion. Availability and failure of equipment was another factor that can adversely
affect project success. This finding support Haseeb (2011) study on issues of projects and
impacts of delays within the development industry of Pakistan which concludes that deficiency
and insufficiency of the hardware utilized by the temporary worker had a negative impact on the
completion of the extend.

4.5.5 Project success

The findings for project success in terms of the project scope, the project in the scheduled time
frame, in terms of budget, the project expected quality and irrigation project is safe for the users
have a greater mean value.

51
 CHAPTER FIVE

SUMMARY, CONCLUSION ANDRECOMMENDATIONS

5.1 Introduction

This chapter presents the Summary, conclusion and recommendations of the study based on
the study findings.

5.2 Summary

The study aimed to investigate the factors influencing the successful completion of irrigation
projects taking a case of Buno Bedele zone. The study was guided by four specific objectives
which were, to assess the influence of technical capability related factors on the success of
irrigation projects; analyze the influence of cost-related factors to success of irrigation projects,
to assess the influence of project Monitoring on irrigation projects and to assess contract
implementation as per terms and conditions being implemented in Buno Bedele Zone. In chapter
two, the study presented the reviewed literature which was presented in section which were in
tandem with the research objectives. The theoretical framework and conceptual framework for
the study was also presented in chapter two of the study. This study adopted the contract
compliance theory, contract management theory, the principal-agency theory, the will theory,
and the reliance theory to guide the study. The study adopted the descriptive research design as it
involved the accurate description of the features of the population for the study in relation to the
variables of the study. The target populations for the study were contractors, zonal team
members, staff or employees and zonal office managers of Buno Bedele zone. This study
adopted the census sampling technique to identify the study‟s sample size which involved
selection of all members of population. The study adopted the questionnaire as the quantitative
data collection technique and the key informant interview as the qualitative technique. The data
was analyzed using both descriptive and inferential statistics. Descriptive statistics were used to
show the mean and standard deviation of the questionnaire items based on the Likert scale.
Inferential statistics were used to show the strength of association between variables and to show
the direction of the relationship between independent and dependent variable.

52
5.3 Conclusion

The study concludes that cost-related factors are the determinant factors influencing the success
of irrigation projects. These costs are associated with late bill payments by employer, price
escalations and appropriate equipment availability through project life which affect the project
budget and may cause poor implementation of projects which may lead to failure of project. The
study also concludes that the bidding processes and procedures also influence the success of
irrigation projects. This was due to delays in payments which delayed the implementation of
projects. The study concludes that contract implementation as per terms and a condition was the
second most significant factor influencing the success of irrigation projects. The study findings
agreed with past studies that the contract implementation as per terms and conditions was an
important factor in irrigation projects. Further, the study also concludes that formal monthly
inspections are carried out by the irrigation project zonal committee and Supervisors on the
irrigation projects carry out the necessary inspection were a factor that influenced the success of
irrigation projects. The study concludes that the technical capability related factors the third
significant factors influencing the success of irrigation projects. These are associated with work
experience, size of the contractor and proper use of the work schedule. Contract monitoring was
the remaining factor which affect project success. Availability of supervising staff and timing of
inspections during the project life cycle were among a significant factor which affects the
success of irrigation projects.

5.4 Recommendations
In order to assess the effectiveness of contracts management on irrigation project success at
Buno Bedele Zone, reliable and valid instruments were developed, the results were analyzed
and thoroughly discussed, conclusion was reached and the following are recommendations
arising from the study objectives.
 The study recommends that the government should adopt stringent
measures which would arrest the cost related factors. This should include less
bureaucratic procedures and processes in disbursement of both material and financial
resources required by contractors to implement irrigation projects.

53
 The study recommends that strong technical supplier evaluation is highly recommended to
ensure that suppliers deliver projects at excellent standards. Select suppliers‟ based
previous experience in similar field and with same type of requirements technical
capability associated with quality, price and time.

 The study recommends that effective project management should be consistent from
contract creation through to tracking milestones and contract renewal. This solution
should be designed to provide alerts and reporting systems for all project contracts.
Moreover, due to growth of business and increasing risks associated with the increase in
supplier base, Irrigation project has to recruit and retain more experienced and
qualified staff for contract management function to cope with increased demand of
project management. This would increase the likelihood of close monitoring of project
contracts during projects implementation.

 The study recommends that the supervisors (contract managers) should be knowledgeable
in contract management. Organizations must, therefore, assign experienced staff to
supervise the consultant and contractors. It should strengthen the capacity of supervisor and
staff involved in projects to avoid lack of knowledge/awareness, skills on procurement
professionals.

 The study recommends that zonal team member must place strong formal monthly
inspections of supplier technical evaluation with clear criteria depends on the control of
Schedule, quality, compliance with specification, risk, scope, dispute resolution and cost
with regular reporting. And should carry out the project success tools, planning by
pointing down clear mission, core value and with clear objectives and with all
project initiation & planning matters within the organizations

54
5.5 Future research direction
The study suggests that further research should be conducted on contract management on
irrigation projects in Ethiopia. For further researchers it is better to choose other research design
rather than the descriptive research design as well as to analyze and compare changes in variable.
Additionally, future researcher will investigate and identify the Cost and technical capabilities
that affect contract management related to organization and suppliers. So, future research can
further investigate:
Also, due to certain limitations, this study was restricted to Buno Bedele Zone. It is therefore, not
known to what extent one can generalize the findings from this study to other zone or through
country. Moreover, the current study employed four elements as independent variables under
project success. This implies that other variables may affect the project performance. Hence, it is
suggested that in future, other researchers should feature in other variables and assess their
impact on project success.

55
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 Annex A
Jimma University
College of Business and Economics
Department of Accounting and Finance
A Questionnaire to Be Filled By the Respondents of the Study
Dear Respondent,
The main objective of this questionnaire is to collect data for conducting research on the Factors
affecting effectiveness of contract management on the success of irrigation project: A case
study of Buno Bedele zone, to undertake a study in Partial Fulfillment of the Requirements for
MA Degree in Project Management and Finance. Therefore, all the information collected from
this questionnaire will be treated for academic purposes only and not otherwise.
Thank you in advance for your cooperation!
General Direction: This questionnaire has two parts: respondents‟ background information and
questions to be answered by the respondents.

Part I: Respondents’ Background Information

Please mark (√) for yes and (x) for no answer.
1. Respondent‟s General Information
1.1.Sex: male female
1.2.Age: a) <25 b) 25-35 c) 35-45 d) above 45
1.3.Education status
a) none b) primary education
c) secondary and Preparatory d) First degree and above
1.4.For how long have you been working in this office?
1. Less than 1 year
2. from 1 to 5 years
3. from 6 to 15 years
4. above 15 years

Part II: Questions for Respondents

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2Have you ever been involved in contract management at your organization unit? Tick where
appropriate. 1. Yes 2. No
 If “YES” above, how many works have you ever took part to manage their contacts or
supervising works contract in your organization? State the number of projects
2.1.How many years‟ experience in contract management for works do you have?

3. Technical capability related factors

Rate the following contract management factors related to technical capability of contracts in
irrigation project. SA (5) = Strongly agree, A (4) = Agree, ND (3) = Neither agree nor
disagree, D(2) = Disagree, SD(1) = Strongly Disagree)
S/ Factors Rating
N 1 2 3 4 5
1 Use of modern construction equipment in projects

2 Adequate qualified Supplier‟s based on technical

capability, for the success of contracts
3 Supplier‟s closely monitoring of contracts
management team,
4 Work experience of the contractor
5 Lack of knowledge/awareness, skills on
procurement professionals to implement
procurement laws and contract management.
6 Effective communication between stakeholders of
the project is vital for the successful of the
implementation of project

7 Adequate qualified contract management specialist

to ensure contract process
8 Size of the contractor
9 Site management influence on project completion
10 Good mobilization

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3.1.May you give an outline of other factors known to you that affects the implementation of
contract management on irrigation project?
(i)
(ii)
(iii)
4. Contract Implementation As Per Terms And Conditions
You are required to respond to each item in subsequent sections using the following scale by
ticking the appropriate option. SA (5) = Strongly agree, A (4) = Agree, ND (3) = Neither agree
nor disagree, D(2) = Disagree, SD(1) = Strongly Disagree)
S/N Indicators 1 2 3 4 5

2 The irrigation office follow standards developed for their

methods of contracting?
3 The contractors comply with the service quality level which
has been specified in the bidding document
4 Contractors do the required amount of work during the
project implementation
5 The contractor undertakes his duties and fulfills his
obligations in compliance with the contract
6 The contractors used the stipulated amount of materials
while constructing irrigation as per bills of quantities
(BOQs)
7 Formal monthly inspections are carried out by the irrigation
project zonal committee
8 Supervisors on the irrigation projects carry out the
necessary inspection
9 Project managers carry out the necessary irrigation project
inspection to meet the required standards
10 There is a well maintained record book to follow the
complaints of the irrigation users

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 11 Always funds are allocated only for the fulfillment of
project objectives
4.1Mention tools and techniques used in contract management
-
-
-
4.2After the award of the contract, does your organization prepare a project plan execution
documents (project management plan)? Tick where appropriate

YES NO
4.3If No. to 3.1 above how does you manage the relationship with the contractor?
Please explain
5. The following statements refer to the influence of project Monitoring on
the success of irrigation projects. Rate the following factors by ticking (SA (5) = Strongly agree
A (4) = Agree UD (3) = moderate D (2) = Disagree, SD (1) = Strongly disagree)

S/N Factors Rating

1 2 3 4 5
1 Timing of inspections during the project life cycle

2 Project management capacity of the project team

3 Availability of supervising staff during project

implementation

4 Number of supervisory engineering staff

5 Project teams‟ focus on key functions of project

supervision

6 Use of work schedules/plans to monitor project

implementation

7 Use dispute resolution mechanism to monitor the

project.

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 5.4. If any of the items mentioned in Para 4.3. Above is not monitored, what are the shortfalls or
the implication to project?
(i)
(ii)
(iii)
6. Do cost related factors affect the success of irrigation projects?

1. Yes 2. No 3. Undecided

6.1 The following statements refer to the influence of cost related factors on the success
of irrigation projects.

cost related factors

S/N Factors Rating

1 2 3 4 5
1 Poor contractor Bidding processes and procedures

2 Late bill payments by employer

3 Price fluctuations of building materials

4 Misappropriated use of mobilization advance

5 Appropriate equipment availability through project

life

6 Cost of employee

7. Losses and inefficiency are taken into consideration

in order to reduce costs of irrigation projects.
8. Implementation of new strategy and techniques to
the operation of irrigation projects

7.Is Project performance/ project success on contract management? You are required to respond
to each item in subsequent sections using the following scale by ticking the appropriate option.

66
SA (5) = Strongly agree, A (4) = Agree, ND (3) = Neither agree nor disagree, D(2) =
Disagree, SD(1) = Strongly Disagree)
Factors Rating
1 2 3 4 5

The contractors complete the

projects within the budget
estimates
The projects were completed within
scope
Irrigation project is safe for the
users
The projects meet the expected
quality specifications
The projects are completed in the
scheduled time frame

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 ANNEX B
Jimma University
College of Business and Economics
Department of Accounting and Finance

Interview Questions
The following interview questions are prepared for contractors, office managers and zonal team
leaders of project
Dear Respondent,
The main objective of this interview is to collect data for conducting research on the Factors
affecting effectiveness of contract management on the success of irrigation project: A case
study of Buno Bedele zone, to undertake a study in Partial Fulfillment of the Requirement for
MA Degree in Project Management and Finance.
Therefore, all the information collected from this interview will be treated for academic purposes
only and not otherwise.
Thank you so much for your willingness!
1. How important do you consider the Contract Management function in the effective delivery
of project contracts?

2. Was there effective communication among project manager, project contractors, team
leaders‟ team members and other stakeholders? How?

3. What are the key reasons for contract variations and how are they approved?

68