Study of Strategies for Improving Tendering and Contract Management in the

Construction Industry in Uganda

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In partial fulfilment of bachelor’s degree in ____________

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 Study of Strategies for Improving Tendering and Contract Management in the

Construction Industry in Uganda

Introduction

The construction industry is a crucial driver of economic growth in Uganda, contributing

over 12% to the country's GDP which has seen continuous growth for the last 30 years. With the

government's focus on infrastructure development to support economic progress, an efficient

procurement process is critical for the success of construction projects ( Alinaitwe et al., 2013). This

research proposal focuses on examining tendering and contract management strategies that can

enhance procurement performance in Uganda's construction sector. The tendering stage is key in

selecting the right contractors at competitive rates, while contract administration ensures

contractors deliver according to specifications, within budget and on schedule.

However, prior evidence indicates ineffective practices in these areas often lead to poor

project outcomes. There is a need to identify context-specific strategies to improve tendering and

contract management in order to boost construction procurement efficiency, project delivery and

industry growth. This proposal provides an overview of the research aims, background,

significance and scope for investigating this pertinent issue. The findings will provide practical

recommendations to construction industry stakeholders on reforming procurement processes,

contributing to knowledge on suitable strategies for developing countries like Uganda.

Background

Efficient procurement is generally acknowledged as having a significant influence on the

success of construction projects in terms of cost, schedule, and quality. Prior scholarly research

provides extensive evidence that ineffective procurement processes lead to poor outcomes in

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construction projects globally. Common issues highlighted include lack of transparency and

competition in tendering, poor contract documentation, inadequate contract management and

monitoring of contractor performance, and ineffective handling of changes and claims during

project execution (Gadisa & Zhou, 2021). These challenges are especially prevalent in developing

nations like Uganda, whose procurement rules, methods, and organizational capabilities are still

relatively underdeveloped.

Prior research in Uganda has found inadequacies in procurement methods in the building

sector. For example, Kakwezi and Nyeko (2019) discovered inadequacies in the prequalification

and assessment criteria used to pick contractors, resulting in bids being awarded to incompetent

businesses. Alinaitwe et al. (2013) discovered severe delays and cost overruns as a consequence

of inadequate contract management and contractor performance. These highlight deeper flaws in

bidding and contract administration procedures, indicating the need for procurement

performance improvement methods.

While the studies described above have offered important insights, there is still a lack in

researching and finding appropriate techniques for improving bidding and contract management,

particularly in the Ugandan construction sector setting. This research intends to close this

knowledge gap by investigating the practices, difficulties, and possible solutions that might boost

procurement procedures and lead to better project results. The results will also contribute to a

better understanding of appropriate procurement practices for poor nations.

Statement of the Problem

In Uganda's construction sector, ineffective bidding and contract management practices

are harming procurement performance. As proven by previous research, this leads to poor project

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results such as delays, cost overruns, and quality difficulties. The magnitude and negative

consequences of these procurement inadequacies on the construction industry and the wider

economy highlight the critical need to research and create methods to reform and enhance

bidding and contract administration procedures. This will enable enhanced procurement practices

resulting in improved construction project delivery.

General Objective

To examine tendering and contract management strategies that can enhance procurement

performance in construction projects in the Uganda.

Specific Objectives

1. To assess the current practices relating to tendering and contract management in the

construction industry in Uganda

2. To identify the challenges experienced in tendering and contract administration in the

industry.

3. To determine strategies that can lead to improved tendering and contract management in

construction projects in Uganda.

Research Questions

1. What are the current practices relating to tendering and contract management in

Uganda's construction industry?

2. What are the main challenges experienced in tendering and contract administration in

the industry?

3. What strategies can be implemented to enhance tendering and contract management in

construction projects in Uganda?

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 Significance of Study

This study is important as it will provide recommendations to reform tendering and

contract management, which are critical processes impacting procurement efficiency in Uganda's

construction industry. The findings will guide construction sector stakeholders including

government agencies, project owners, contractors and consultants on strategies to enhance

procurement practices to enable successful project delivery. With improved procurement, project

outcomes will be boosted supporting infrastructure development and economic growth.

Additionally, the study contributes to academic knowledge on suitable public procurement

strategies in developing countries. The research will also inform policymakers on reforms

needed in procurement laws and institutions to strengthen the construction industry, which is

vital to Uganda’s progress.

Theoretical Framework

This study will utilize agency theory, transaction cost economics (TCE) and relational

contracting theory to investigate optimal strategies for improving tendering and contract

management in construction procurement. Agency theory examines issues that arise when

principals delegate work to agents with differing interests, providing a perspective on developing

governance mechanisms that motivate contractor performance. TCE focuses on managing

transaction costs in exchanges and aids in assessing suitable contractual and relational

approaches. Relational contracting theory highlights the role of relationships in exchange,

providing a lens for collaboratively managing contracts. These complementary theories provide

an established framework to analyze principal-agent relationships, governance mechanisms, and

relational approaches critical to enhancing procurement processes. They will guide the

methodology in assessing current practices, identifying challenges, and determining appropriate

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reforms to tendering, contract administration, and contractor management – the key areas

impacting procurement outcomes. The selected theoretical perspectives have been widely

applied in studying construction procurement issues and will provide useful theoretical

grounding for this research.

Scope

This study focuses on tendering and contract management aspects of construction

procurement processes in Uganda. It examines practices and challenges across the tendering

stage including prequalification, bid evaluation, and award; as well as contract administration

issues encompassing contractor management, performance monitoring, and claims management.

The geographical scope covers the construction industry across Uganda. The research will assess

current practices to identify strategies for improvement. The scope does not extend to a broader

investigation of the country's public procurement system. The theoretical scope utilizes agency

theory, transaction cost economics and relational contracting theory to analyze procurement

relationships, governance, costs and relational dynamics in identifying suitable strategies for the

context. The sample will comprise key stakeholders in Uganda’s construction sector involved in

procurement processes including government agencies, project owners, contractors and

consultants.

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 References

Kakwezi, P., & Nyeko, S. (2019). Procurement processes and performance: Efficiency and effectiveness

of the procurement function. International Journal of Social Sciences Management and

Entrepreneurship (IJSSME), 3(1).

Alinaitwe, H., Apolot, R., & Tindiwensi, D. (2013). Investigation into the causes of delays and cost

overruns in Uganda's public sector construction projects. Journal of Construction in Developing

Countries, 18(2), 33.

Gadisa, B., & Zhou, H. (2021). Exploring influential factors leading to the poor performance of public

construction project in Ethiopia using structural equation modelling. Engineering, Construction

and Architectural Management, 28(6), 1683-1712.

Alinaitwe, H., Apolot, R., & Tindiwensi, D. (2013). Investigation into the causes of delays and cost

overruns in Uganda's public sector construction projects. Journal of Construction in Developing

Countries, 18(2), 33.