Association Between Delay, Project Size and Low Bid Percentage

Abstract

Purpose: The aim of this study was to assess the effects of some prominent factors like low bid amount, contract size and geographical locations of the projects on causing delayed completion in road and bridge projects carried out by the Road Division Offices under the Department of Roads (DoR) of Nepal.

Design/Methodology/Approach: Fifteen construction contracts from each of the seven provinces of the country were selected for the study. The projects were completed in three Nepali fiscal years starting from 2074/75 till 2076/77 irrespective of their starting date. The contracts were grouped under various categories like stipulated project duration, percentage of contract amount bid below estimate amount, contract amount and the project locations including the mountains, hills and terai. Projects from mountain districts like Sankhuwasabha and Baitadi; Kathmandu, Kaski and Surkhet in the hills and Siraha and Rupandehi in terai were selected. The research approach included both qualitative and quantitative methods of information collection. Secondary data sources comprised of the DOR office documents including the work completion reports, IPCs, time extension documents, work variation orders and other pertinent records. SPSS software has been used for processing the input data and thus relationships between different variables such as delay, size of contract; percent below estimate amount, initial contract duration, project geographical location etc. have been checked.  Correlation and regression analysis have been carried out between delay of contracts (dependent variable), and independent variables like size of contract, percent below estimate amount and geography.

Findings/Result: Spearman rank correlation value between delay category and estimate amount category was 0.210 with p value of 0.031 (< 0.05) thus suggesting weak correlation but significant relationship between these two variables. Further, Pearson correlation value between delay and percent below estimate was 0.243 with p value of 0.013 (< 0.05) thus suggesting weak correlation but significant relationship between these two variables too. Binary logistic regression analysis showed Nagelkerke R square value of 0.139 which provides an indication that the amount of variation in the dependent variable (project delay) which is only around 14% of variance was due to the effects of independent variables (size of contract, percentage below estimate amount and geography). This suggests that remaining 86% variance was caused by some other factors which were not considered under the scope of this study. Also, p value of 0.013 which was less than 0.05 suggested there was statistically significant relation between dependent and independent variables.

Originality/Value: The paper assesses the effects and association of some prominent factors for timely performance of projects.

Paper Type: Review paper