Builders' Perceptions of Lowest Cost Procurement and Its Impact on Quality

Abstract

to the degree to which it meets the customer’s needs andexpectations. Dissatisfaction with the quality of building projectshas been widely reported in recent times. There are indicationsthat there may be some relationship between the procurementmethod used and customer satisfaction with the delivered product.In particular, traditional competitive bid contracting may havean adverse impact on quality in some circumstances. To shedsome light on reported industry attitudes, a survey of constructionprofessionals in the Sydney metropolitan area was undertaken.The respondents demonstrate mixed views on the effectivenessof the competitive tender system on quality project outcomes. Tosome extent contractors’ attitudes may be determined by theirpreferred current mode of operation. However, some supportis expressed for the contention that quality of outcome can bereduced by an overly cost driven contractor selection process. Inparticular, when economic pressures cause bidders to reduce thetime allocated for the tender process, an inaccurate and unreliablebid may win. This makes it very diffi cult for the reliable contractorto remain profi table. A move to value-based rather than cost-basedprocurement may assist industry performance and customersatisfaction.