Analysing The Effectiveness Of The Lowest Evaluated Tender Award System In Road Construction: A Case Study Of Roads Authority (Malawi)

Abstract

The aim of the study was to analyse the effectiveness of the lowest evaluated tender award system in road construction, a case study of Roads Authority of Malawi. This was important because the procurement function helps in selection of service providers, hence needs to be given ultimate attention. Literature review highlighted many challenges from this system that have led other countries and organisations to start using alternative methods in order to realise value for money. The methodology used included an extensive literature review and a field survey conducted on Roads Authority, contractors and consultants. The research used a questionnaire for data collection and the respondents were identified randomly. Data was analysed using descriptive statistics, cross tabulation and content analysis through SPSS and Microsoft Excel software. The main findings were that the advantages of the method included promotion of competition and ensuring transparency during tendering while there were many disadvantages including unreasonably low bids, contractors struggling to fund projects, poor quality of works, time overruns and adversarial relationships between project parties. The disadvantages result in project objectives not being achieved and inhibiting contractors’ growth. Professionals in the industry prefer a lowest evaluated bid system whose price is evaluated against an engineers’ estimate. The implication of the findings is that unless price is evaluated against an engineers’ estimate or other responsive bids, the construction industry will continue to suffer under this method. The study recommends that clients should ensure that price is evaluated and that they should procure for value rather than price. In addition, clients should invest in research and lobby for amendment of procurement laws to allow for use of other contractor selection methods. On the other hand, contractors should price according to market prices. By establishing that lowest evaluated tender method enhances the integrity of the procurement process, negatively affects the project implementation stage, and does not promote contractors’ growth in Malawi, the research has contributed to the enhancement of understanding of this subject.