Civil Engineering Dimension, Vol. 12, No.

1, March 2010, 1-7

ISSN 1410-9530 print / ISSN 1979-570X online

An Appraisal of Project Procurement Methods in the Nigerian

Construction Industry
Babatunde, S.O.1), Opawole, A. 1), Ujaddughe, I.C. 1)
Abstract: The aim of every client at the beginning of any project is to have at the end of the day
a quality structure delivered on time and within budget. However, researches have shown that
in most cases this aim is not met. The aim of the study that formed the basis for this paper was
to identify and assess procurement methods in use in the Nigerian construction industry and
identify the factors that affect the choice of the variants under the traditional and the nonconventional procurement methods. Data were collected using well-structured questionnaires
administered to professionals in Lagos metropolis. Data collected were analyzed using
descriptive and inferential statistics. The study reveals that the variants of traditional method of
contract procurement are the most adopted in project execution in Nigeria. In making choice of
procurement method, the study reveals that project completion at estimated time ranks as the
highest factor considered for traditional method, while quality assurance ranks highest with
non-conventional method.
Keywords: project procurement, construction industry, project execution

This became the traditional sequence and it is now

referred to as Design-Bid-Build [1]. Other variants of
procurement method not following this format
became the non-conventional procurement method.
According to Daniel [1], new concepts of project
delivery have been developed to compress the time
required to realize a constructed facility which
focuses on simplifying the project delivery process,
with emphasis on optimizing the parameters (e.g.
quality, cost, time of completion, meeting market
needs, and safety among others) [1]. Researches
have also established that the major requirement of
time and cost reduction in project delivery have
resulted in the evolution of the several variants of
procurement method, and at present, there are more
than a handful of procurement methods, all with the
major aim of meeting a quality product delivery at
economical cost and time.

Introduction
The variants of procurement methods available
today metamorphosized from the need to improve
construction project delivery, that is, project
completion within budget and time. According to
Daniel [1], the emphasis of procurement methods is
on optimizing all parameters involved in project
delivery namely, time, cost and quality. Procurement
of projects within these constraints has continued to
be a challenge to the design team, the contractors,
and managers of investments [2]. Traditionally,
construction projects starts with the clients brief on
which designs are based. The Architect and
engineers prepare designs, in collaboration with
quantity surveyor who advises on the cost
implications of design variables. Tender process
afterwards produces the contractor for the execution
of the work. On the award, the successful contractor
executes the work as designed under the supervision
of the consultants. Thus, the approach separates the
design, tendering process and construction as
separate tasks. This separation of activities also led
to sequencing of activities in which design is
completed before construction commences.

In non-conventional procurement methods, the

grounds are gradually shifting from just meeting
clients needs into apportionment of risk, as the
contractors are gradually taking their stance as
business organizations with the aim of making
optimum profits at the minimum risk, and this has
led to the development of integrated methods of
procurement which are hybrids of both traditional
and non conventional procurement methods [3]. The
study identified the rationale behind the
development of an integrated process as to improve
project efficiency that has being constrained by
separated conventional processes, that is bringing
the teams of designers, contractors, and suppliers
together through series of projects; continuously
developing the product and supply chain;
eliminating waste in the delivery process; and
innovating and learning from experience.

1) Department of Quantity Surveying, Obafemi Awolowo University,

Ile-Ife, Nigeria.
Email: sholly_intl@yahoo.com

Note: Discussion is expected before June, 1st 2010, and will be

published in the Civil Engineering Dimension volume 12, number
2, September 2010.
Received 20 May 2009; revised 30 July 2009; accepted 19 August
2009

Babatunde, S.O., et al / Appraisal of Project Procurement Methods in the Nigerian / CED, Vol. 12, No. 1, March 2010, pp. 17

Brief Overview of Types of Procurement

Method

and construction. The contractor may re-employ the

original designers to complete the design.

Ogunsanmi and Bamisile [4]; and Ashwort and Hogg

[5] defined procurement method as the management
of the total process involved in construction project
delivery. According to Ashwort and Hogg [5],
different variants of procurement are available for
meeting different clients needs and projects
specifics. Researchers, however, often differ in these
classifications of procurement methods. Ramus [6],
showed that classification commonly used, in
practice, often combine the characteristics of two or
more types. Nonetheless, studies including Seeley
[7], Turner [8], and Ashwort and Hogg [5] among
others, classified construction procurement methods
into two broad categories as: traditional procurement
method, and non-conventional procurement method.
The traditional method as the name implies, is a
project procurement method where the three
sequential phases of design, bid and build are
identified as separate tasks. It is traditionally
referred to as the competitively bid contract. This
method allows for all contractors that fill competent
to bid for projects in a free and competitive
atmosphere similar to competitive market
environment.

Package Deal: Where the contractor provides an offthe-shelf building. The building type is often
modular so that its size can be adjusted.

Traditional Procurement Methods

Options

The main variants of traditional procurement

method as identified by Seeley [7]; and Kadiri and
Odusami [9] are: bills of firm quantities; bills of
approximate quantities; drawings and specification;
schedule of rates; cost reimbursement; and labour
only.

Different options of Public Private Partnership (PPP)

have continued to emerge in the recent. The
classifications that are common in literature are:

Management Contracting: According to Oyegoke

[10], in a management contract, the permanent
works are constructed under a series of construction
contracts placed by the management contractor after
approval by the client.
Construction Management: Contractors are contracted
directly to the client and the construction manager
manages the process for the client on a simple
consultancy basis. Construction Management requires
constant involvement by the client so it is really only
suitable for experienced clients.

Public Private Partnership (PPP)

The public private partnership is an attempt by
government to tap from the enormous private
resources by way of diversification and letting
private hands partake in the provision of fundamental government responsibility of providing basic
social and infrastructural amenities.

DBFT (Design , Build, Finance and Transfer): In this

system, the developer develops the structure using
his own generated finance, after construction and a
certain agreed period of ownership transfers the
whole facility back to the government.

Non Conventional Procurement Methods

These are identified by Turner [8], Ashwort and
Hogg [5] as:

BOT (Build, Operate and Transfer): This system

allows the developer a use of the project for a certain
period of time before transferring the project to the
government.

Design Build
The Design-Build approach gives the client a single
point of contact. However, the client commits to the
cost of construction, as well as the cost of design,
much earlier than with the traditional approach. In
this method, the contracting organization is
responsible for design and construction [8]

BOO (Build, Operate and Own): In this format the

ownership is not transferred.

Types of Design and Build

BRT (Build, Rent, and Transfer): This system allows

for the consortium to obtain payment from the
government before the actual transfer of the project.

DBFO (Design, Build, Finance and Operate): In this

system, the government owns the project but leases
it to the consortium.

The variants of design and build common in most

literatures include:

BOOST (Build, Own, Operate, Subsidize, and

Transfer): In this system, government provide
incentives to users of the completed project in other
to make it financially viable for the private consortium.

Develop and Construct: Where the client has the

design prepared to concept or scheme design stage
and the contractor takes on finishing off the design
2

Babatunde, S.O., et al / Appraisal of Project Procurement Methods in the Nigerian / CED, Vol. 12, No. 1, March 2010, pp. 17

asked to rank how these factors affect the choice of

the variants of both the traditional and the
conventional procurement methods. The respondents
were asked to rate on a 5-point Likert scale rating
with 5 being the highest of the rating, for example 1=
negligible, 2= very low, 3= low, 4= high 5= very
high. Out of total of 100 questionnaire administered,
52 (fifty two) representing 52% of the total were
returned and found appropriate for the analysis. The
data were presented in tables and analyzed using
percentage and relative importance index.

BTO (Build, Transfer, Own): This variation relieves

the consortium of the insurance cost for operation.
BOOT (Build, Own, Operate and Transfer): Under
this variation, the developer is allowed full unalloyed
ownership of the completed structure for a specific
period of time at the end of which he relinquishes his
full right to the actual owner, while the building is
still in completely functional state.
ROT (Renovate Operate and Transfer): Under this
variation, the developer renovates an a already
existing building which he is henceforth permitted to
operate so as to recoup his investment before
transferring it back to the original owner This
variant is relatively different from others in that the
structure in question is already in existence as
against other variants in which the structure is
developed by the developer.

Relative Importance Index, RII was calculated from

the formula given below:
5

RII =

ni ki

(1)

N Rh

Where,
Ni is the number of respondents choosing ki = 1- 5
on the Likert scale
N is the total of questionnaire collected, and
Rh is the highest value in ranking order.

BLT (Build, Lease and Transfer): Under this

variation, the developing firm or consortium is
allowed to lease out the completed facility out and
recoup her money before transferring the completed
facility to the owner at an agreed time.

Table 1. Type of Organization of Respondents

Type of organization
Public institutions
Consulting firms
Contracting firms

IM/IS (Investment Management and Investment

Services): - This variation allows a development firm
to complete the construction of the facility while
independent investment management firm manages
the facility on behalf of both parties for the period of
occupancy by the developer for the purpose of
recouping the capital invested by the developer and
for ensuring that the facility is in good standing by
the time of handing over to the owner at the
expiration of the lease.

Total

Frequency Percentage (%)

22
42.3
20
38.5
10
19.2
52

100

Table 1 shows the percentage representation of the

respondents organization as 42.3%, 38.5%, and
19.2% for public institutions, consulting and
contracting firms respectively. The authors are with
this result convinced of the adequate representation
of every stakeholder of the construction industry in
the study area.

Data and Methodology

Table 2. Designation of Respondent

Data for this study were collected with the aid of

structured questionnaires which were administered
to actors in the construction industry in Lagos state,
Nigeria. Lagos state was chosen for the study
because of its characteristic as the major hub of
construction activities in Nigeria [11]. The
questionnaires were administered to 100 randomly
selected construction practitioners including
architects, builders, engineers and quantity
surveyors from construction companies, consulting
firms, government establishment/public institutions.
The questionnaires were of two parts: the first part
identified the demographic features of the
respondents, and the second part related to the
variants of procurement methods available in the
Nigerian construction industry and factors that
affect the choice of the procurement methods. Fifteen
major factors relating to projects delivery were
identified from literatures and the respondents were

Respondent
Frequency Percentage (%)
Quantity surveyors
28
53.84
Architect
9
17.31
Builders
3
5.76
Service engineers
4
7.69
Civil/structural engineer
6
11.54
Combination of two or more
2
3.80
Total

52

100

Table 2 shows the percentage representation of the

respondent as 53.84% for quantity surveyors, 17.31%
for architects, 5.76% builders, 7.69% service
engineers, 11.54% civil/structural engineer, and 3.8%
of the respondents have two or more disciplines
combined together. The result expressed the
generation of adequate opinion of the construction
industry in the study area as the entire construction
professionals are represented.
3

Babatunde, S.O., et al / Appraisal of Project Procurement Methods in the Nigerian / CED, Vol. 12, No. 1, March 2010, pp. 17

Table 3. Respondents Academic Qualification

Academic
qualification
HND
PDG
B.Sc/B.Tech
M.Sc
Total

Table 6. Nature of projects undertaking by respondents

23
3
16
10

Percentage
(%)
44.2
5.8
30.8
19.2

52

100

Frequency

Type of project
undertaking by
respondents
Office buildings
Residential buildings
Industrial buildings
Civil engineering projects
Combination of above
Total

Table 3 shows that 44.2% of the respondents are

holders of Higher National Diploma (HND); 5.8%
obtained Post Graduate Diploma; 30% holds a
Bachelor of Science or a Bachelor of Technology; and
19.2% holds Master of Science. The result shows that
all the respondents possess the minimum registration
requirement of their various professional bodies in
Nigeria and adequate academic training to supply
reliable data for the study.

Professional
Frequency Percentage (%)
Qualification
Nigerian Institute of
Quantity Surveyors (NIQS)
24
46.15
Nigerian Institute of
Building (NIOB)
3
5.77
Nigerian Institute of
Architects (NIA)
9
17.31
Nigerian Society of
7
13.46
Engineers (NSE)
Non-Professionally
Qualified
9
17.31
52

Table 5. Respondents Years of Experience

Total

52

52

100

Type of procurement
Frequency Percentage (%)
method
Traditional method
25
48.08
Design and build variants
Design and construct
5
9.62
Package deal
3
5.77
Management contracting
Construction management
2
3.85
Public Private Partnership variants
DBFT
1
1.92
BOT
9
17.30
BOO
2
3.85
DBFO
BOOT
3
5.77
ROT
2
3.85
BLT
-

100

Mid value (X) Frequency (F)

2.5
21
8
17
13
5
18
6
20
3

11.5
15.4
3.8
13.5
55.7

Table 7. Variants of Procurement Methods used by

Respondents

Table 4 shows the professional qualifications of the

respondents. The result shows the respondents as
either associate or corporate members of their
various professional bodies or possess some other
professional qualifications, thus expressing their
position as able to supply reliable data for the study.

Years
05
610
1115
1620
Over 20

6
8
2
7
29

Table 6 indicates that at least 55.7% of the

respondents have undertaken a combination of
building (office, and residential among others)
industrial and civil engineering works. The results
indicate that the respondents have accumulated
experience on all classes of construction projects
where the different variants of the procurement
methods would have being employed. This would
guarantee the supply of adequate data on the
frequencies of use of each of the variants of the
procurement methods on different categories of
projects which this study intends to investigate.

Table 4. Professional Qualification of Respondents

Total

Frequency Percentage (%)

Fx
52.5
136
65
108
60

Total

52

100

Table 7 shows that 48.08% of the respondents are

familiar with the variants of traditional procurement
method, and a total of 19.24% are familiar with
design and build method. Among the design and
build variants, design and construct option has the
highest percentage of 9.62% followed by package
deal with 5.77%. The construction management has
the lowest percentage of 3.85% while none of the
respondents had adopted management contracting
option. A total of 32.69% of respondents are familiar
with public private partnership. Under public
private partnership, build-operate and transfer

421.5

Mean = 8

Table 5 shows the respondents mean year of

experience estimated at approximately eight years.
With this average working experience of eight years,
respondents are deemed experienced enough to
supply reliable data for the research.
4

Babatunde, S.O., et al / Appraisal of Project Procurement Methods in the Nigerian / CED, Vol. 12, No. 1, March 2010, pp. 17

Table 8. Factors Generally Considered in Making Choice of Traditional Procurement Method

Factors
Project completion at estimated cost
Project completion at estimated time
Quality assurance
Minimization of construction time
Minimization of design time
Cheapest cost
Financial arrangement
High degree of control
Complexity of design
Flexibility to entertain change for clients requirement
Consultancy service offered
Technical complexity of construction
Availability of information at project inception
Risk avoidance
Nature of the project
Nature of the client

Freq

RII

Rank

2
2
0
2
3
4
4
3
6
4
6
3
1
1
1
2

7
4
11
9
7
12
10
7
8
5
5
6
3
8
5
2

7
8
9
10
13
15
10
12
14
20
20
14
14
18
21
18

19
21
16
20
21
11
20
23
12
18
14
19
23
18
20
22

17
17
16
11
8
11
7
7
12
5
7
10
11
7
5
6

52
52
52
52
52
52
52
52
52
52
52
52
52
52
52
52

0.76
0.78
0.74
0.71
0.69
0.66
0.65
0.69
0.66
0.66
0.64
0.70
0.75
0.68
0.69
0.68

2
1
4
4
6
11
14
6
11
13
15
5
3
10
8
9

Table 9. Factors Generally Considered in Making Choice of Non conventional Procurement Method
Factors
Project completion at estimated cost
Project completion at estimated time
Quality assurance
Minimization of construction time
Minimization of design time
Cheapest cost
Financial arrangement
High degree of control
Complexity of design
Flexibility to entertain change for clients requirement
Consultancy service offered
Technical complexity of construction
Availability of information project inception
Risk avoidance
Nature of the project
Nature of the client

1
1
1
0
2
2
6
3
5
5
6
4
4
3
5
2
4

option (BOT) has the highest percentage of 17.30%,

followed by build- own- operate and transfer option
(BOOT) with 5.77%. The design- build- finance and
transfer option (DBFT) has the lowest percentage of
1.92%. The table generally shows that traditional
procurement method has the highest percentage of
48.08%, followed by public private partnership of
32.69% while design and build method has the
lowest percentage of 19.24%. The results give a
general indication that the variants of both the
traditional and non-conventional procurement
methods are embraced in Nigeria. The results,
however, show that the variants of procurement
methods in use are still much of traditional method.
This may be presumably due to long age existence of

2
9
5
2
5
5
10
3
10
5
16
8
7
9
9
6
7

3
16
14
9
17
17
12
18
15
15
15
17
8
8
14
10
12

4
11
16
25
17
17
17
21
11
17
13
15
23
24
15
24
25

5
15
15
16
11
11
7
6
11
10
2
8
10
8
9
10
4

Freq
52
52
52
52
52
52
52
52
52
52
52
52
52
52
52
52

RII
0.71
0.73
0.81
0.71
0.71
0.63
0.68
0.65
0.68
0.55
0.65
0.70
0.69
0.65
0.73
0.66

Rank
4
2
1
4
4
15
10
15
9
17
12
7
8
13
3
11

the traditional procurement systems. It could be

noted that despite the fact that almost all variants of
the non-conventional methods have been applied to
construction contracts (except management contracting, DBFO and BLT), the percentages of the use of
design and build are still significantly low, indicating
that stakeholders are still not well familiar with the
method or are yet to appreciate their advantages.
Table 8 shows the factors that influence the choice
among the variants of traditional procurement
method. Project completion at estimated time ranks
highest with RII of 0.78, followed by project
completion at estimated cost with RII of 0.76.
Availability of information at project inception was

Babatunde, S.O., et al / Appraisal of Project Procurement Methods in the Nigerian / CED, Vol. 12, No. 1, March 2010, pp. 17

method is still significantly low, indicating that

stakeholders are still not well familiar with this
variant of non-conventional procurement system, or
are yet to appreciate their advantages. The
results of the study further indicate that the
choice of variants of the traditional procurement
system is made in order of consideration of
project completion at estimated time; project
completion at estimated cost; and availability of
information at project inception. The choice of
variants of the non-conventional procurement
system is made in order of consideration of
quality assurance; and a consideration of either
project completion at estimated time or the
consideration of the nature of the project. Project
completion at estimated cost; minimization of
construction time; minimization of design time
are also considered as major factors in making
choice of the variants of the non-conventional
procurement method, indicating that much
more factors are considered in making choice of
the variants of the non conventional procurement
method than the variants of traditional procurement methods in Nigeria.

ranked third with RII of 0.75. Both the consultancy

service offered and financial arrangement were
ranked low with RII of 0.64, and 0.65 respectively.
This results indicate that the variants of the
traditional procurement system is made in order of
consideration of project completion at estimated time
(ranked highest); project completion at estimated
cost; and availability of information at project
inception. The fact that consultancy service offered
and finance arrangement were ranked low does not,
however, implied that stakeholders do not consider
these as important factors affecting projects delivery.
Table 9 reveals the factors that influence the
choice among the variants of non conventional
procurement method. Quality assurance ranks
highest with RII of 0.81, followed by project
completion at estimated time and nature of the
project with both having RII of 0.73. Project
completion at estimated cost; minimization of
construction time; and minimization of design
time were also all ranked equal with RII of 0.71.
Flexibility to entertain the clients to change his
requirement ranked lowest with RII of 0.55,
followed by cheapest cost with RII of 0.63. These
results indicate the variants of the nonconventional procurement system are majorly
made in consideration of quality assurance; and
a consideration of either project completion at
estimated time or the consideration of the
nature of the project. Project completion at
estimated cost; minimization of construction
time; minimization of design time were also all
ranked high by the respondents. This results
show that much more factors are considered in
making choice of the variants of the non
conventional procurement method.

References
1

Daniel, W.H., Construction Management.

USA, John Wiley & sons Inc., 2006.

2. Adesanya, O., Project Procurement Paths,

The Journal of the Federation of Construction
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1998.

Conclusion

4. Ogunsanmi, O.E. and Bamisele, A., Factors

Affecting the Selection of Project Procurement Methods, Builder Magazine, Vol.12,
No.1 April/May 1997, pp. 11-16.

This study reveals approximately half (48.08%)

of construction projects are executed using
variants of traditional procurement method;
32.69% are through variants of public private
partnership (PPP); and 19.24% are executed
through design and build method in Nigeria.
The results give a general indication that both
the traditional and non conventional procurement methods are currently embraced in
Nigeria. The results, however, show that the
procurement methods in use are still much of
variants of traditional method. This may be
presumably due to long age existence of the
traditional procurement systems. It could be
noted that despite the fact that almost all
variants of the non-conventional method have
been applied to construction contracts (except
management contracting, DBFO and BLT), the
percentages of the use of design and build

5. Ashworth, A. and Hogg, K., Williss Practice

and Procedure for Quantity Surveyor,
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Ramus, J. and Birchall S., Contract Practice

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6

Babatunde, S.O., et al / Appraisal of Project Procurement Methods in the Nigerian / CED, Vol. 12, No. 1, March 2010, pp. 17

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