THE IMPACT OF LEAST-BIDDERS
BID AWARDING SYSTEM ON
PROJECT PERFORMANCE: CASE
STUDY ON WOLISO TOWN
CONTENTS
1. Introduction 2. Review of Related Literature
3. Research Methodology 4. Results and Discussion
5. Conclusions and Recommendations
01
Introduction
Background of the Study
1 Construction Challenges 2 Performance Criteria
Numerous researches have outlined the issue Any construction projects could satisfy the
of poor time and cost performance of three famous performance criteria: completing
construction projects worldwide. projects on time, within budgeted cost and
quality standard.
3 Successful Project 4 Management Tools
A successful project is the only project which Project management tools and techniques play
has accomplished its technical performance, an important role in the effective management
maintained its schedule, and remained within of a project.
budgetary costs.
5 Fundamental Considerations 6 Performance Issues
Construction time, cost and quality are
Poor performance of time and cost can lead to
fundamental considerations in project
a significant amount of time and cost overrun
management and regarded as most important
which is a global phenomenon (Aftab et al.,
parameters for measuring success of any
2012).
Statement of the Problem
In a study of 8,000 projects (Frame, 2007), it was found that only 16% of projects could satisfy the three
famous performance criteria.
Cost overrun issues in transport infrastructure projects covering 258 projects in 20 nations concluded
that 9 out of 10 projects face cost overruns (Flybjerg, et al., 2003).
Construction organizations will submit abnormally low tenders to win work.
Poor performance is particularly pronounced in Ethiopian public construction works contracts (Laychluh
and Abebe, 2012).
This thesis investigates the performance (time, cost, quality and safety) of contractors awarded by the
lowest bidder bidding system in Woliso town building projects.
Justification of the Study
Previous studies on performance measurement in This study will contribute to pre-existing
construction industry are mostly conducted in knowledge of effective usage of bidding system in
developed countries. developing countries like Ethiopia.
Objectives of the Study
General Objective
The main aim of the study is to assess the performance of least bidder contractors in Woliso town
building projects.
Objectives of the Study
Specific Objectives
1 Time Impact 2 Cost Impact 3 Quality and Safety
To investigate the cost Impact
To investigate the time
impact of least bidder bid To investigate the quality
impact of least bidder bid
award. and safety performance
award.
impact of least bidder bid
award.
Research Questions
Time Impacts Cost Impacts Quality and
What are the What are the Safety
time impacts of cost impacts of
the least bidder the least bidder What are the
bid award under bid award under quality and
Woliso town Woliso town safety impacts
building building of least bidder
projects? projects? contractors
under Woliso
town building
projects?
Significance of the Study
This research may contribute to the construction industry by
assessing the performance of public construction projects
awarded on the least bidder evaluation and contract award
system.
Findings can help improve contractor performance.
Scope and Limitation of
the Study
The study focuses on assessing the performance of least
bidder contractors limited to Woliso town building projects.
02
Review of Related Literature
Introduction
The construction industry A standard practice for
has continuously been organizations interested in
developing over decades, using competitive bidding is
marked by an increase of to keep procurement costs
investors and local low.
contractors in international
tenders.
Definition of Lowest Bidder
Bid
The lowest bidder bid selection technique is a competitive,
closed bid system where selection is based only on the price
presented to the owner (Molenaar et al., 2001).
Drawback and Opportunity
of Lowest Bid Award
System
The low bid award system fosters competition amongst
contractors, compelling them to lower costs, but has been
criticized for leading to disputes, claims, quality control issues,
and project duration delays (Ahmed, 2013).
Legal Aspects
Federal Government of Ethiopia has statutes requiring
submission of competitive bids for construction projects,
requiring public organizations to award contracts to the “lowest
responsive bidder”.
Evaluation of Bids
Successful Bid Selection Price Compliance Procurement Methods
•The Public Body selects the Examination •Alternative methods include
successful bid by applying
•Criteria to confirm open bidding, restricted
substantially responsive
compliance with qualifications tendering, request for
criteria (Herbsman and Ellis,
are examined based on quotation, and direct
1992).
mandatory documentary procurement.
evidence (Public Procurement
Proclamation no. 649/2009).
03
Research Methodology
Research Methodology
Study Area
•The research is conducted in Woliso town, which is the
administrative center of Southwest Shewa Zone in Oromia
Region, Ethiopia.
Study Period
•The research duration is within four months, from February
2025 to May 2025.
Research Design
•The type of research design is descriptive, aimed at
determining the frequency of events or relationships between
variables (Kothari, 2004).
Study Variables
1 Dependent Variable
•Performance of least bidder on building project.
2 Independent Variable
•Time, cost, quality and safety.
Research Methodology
Population Source Collection Process Permissions
•Data sources include •Data collection includes •Ethical considerations include
representative contractors, literature review, variable obtaining permissions and
consultants, and clients. Both identification, and analysis ensuring confidentiality.
primary and secondary data leading to conclusion and
are used for analysis. recommendation.
04
Results and Discussion
Results and Discussion
Bid-award Methods for Woliso Town Building Construction Projects
Factors of Cost on Underperformance of Construction Projects
Time-related Impact of Lowest Bidder Bid Awarding System
Impact of LBBAS on Cost-related Parameters
Quality-related Impact of Lowest Bidder Bid Awarding System
Results and Discussion
Introduction
•The chapter presents data analysis and findings from an interview, site observation, and survey.
Demography and Respondents’ Profiles
•Academic Qualification of Respondents
Demography and Respondents’ Profiles
Respondent Information
A total of 70 questionnaires were returned from distributed 130, constituting a response rate of 53.85%.
05
Conclusions and
Recommendations
Conclusions and
Recommendations
Conclusions
•Poor performance indicators related to time and cost were
identified within the framework of the lowest bidder award
system in Woliso town construction projects.
Recommendations
•Contractors should assess market conditions and be wary of
unanticipated cost variations.
•Clients should expedite payments for completed work.
References
•List of references would go here in the relevant format.
Appendices
•Include questionnaires and other relevant supplementary
information.
Thank You
