FACTORS AFFECTING THE COMPETENCE AND PROJECT DELIVERY OF SMALL INDEGENIOUS CONSTRUCTION FIRMS

CHAPTER ONE

INTRODUCTION

1.1 Background Of Study

Building construction is the process of assembling materials to form a building; it is generally performed by labourers and craft people engaged by an individual or organization called a contractor (Chudley and Greeno, 2010). The construction industry is made up of an organised formal sector of foreign   companies and unorganised sector which comprises indigenous companies. They are classified into small, medium and large scale according to their levels of capitalization and annual turnover. Indigenous construction firm is one that is established under the Nigerian decree and has no other home base but Nigeria. According to McGarvey, Booker and Stafford (2013), the size of building construction firm is determined by the number of employees. The small building firms have employees less than 10, while medium sized contractors have workers ranging between 10 and 499 while large sized contractors have above 500 workers on their payroll. Foci Report (2012) defined performance as the execution or accomplishment of work, acts or feats. Project performance is a critical issue for the construction industry and success of construction projects depends mainly on success of performance. Performance is related to many topics and factors. It is important to recognize the factors that affect performance in the construction industry particularly small indigenous companies. There are several factors from financial management to material and equipment and so on.. A lot of small indigenous companies have been subject to these factors in terms of cost, inadequate infrastructure, absence of motivation, and so on. It is shown from previous studies (Karim and Marosszeky, 1999; DETR     (Key    Performance Indicators Report),2000; Lehtonen, 2001; Samson and Lema, 2002; Kuprenas, 2003; Cheung etal, 2004; Iyer and Jha, 2005; Navon, 2005.

1.2 Statement Of Problem

The indigenous contractor is faced with the problems of working capital, poor management and lack of good Organisation.

Finance is very important in the Building and Construction Industry. The contractor has to invest on plant which is expensive in the case of civil engineering Jobs, and requires cash for payment of workers salaries, purchase of materials, etc. Inadequate finance can severely limit the scope of activities of a contrac¬ tor. In recent years the problem of finance has become soluble. The commercial banks are under considerable pressure from the Government to assist indigenous companies and any contractor who has demonstrated a good sense of responsibility and shows some creditable construction record should not have much problem in attracting funds from the banks. Nigerian labour is extensively used by both expatriate and indigenous construction companies even though the industry is capital intensive. By European Standards, the Output of labour on building and civil engineering sites is very low. Labour wages are relatively low and for civil engineering projects, the overall labour cost is small in relation to the total Output. One interesting point is that expatriate contractors always get better productivity out of Nigerian work¬ ers, this can only be ascribed to better supervision. The question of Organisation is rather more serious. The most common complaint against Nigerian contractors is that they do-not complete Jobs on schedule. Most of the problems that arise come from bad planning and inefficient Organisation. It is the efficient Organisation of men and equipment that makes for good results in terms of Job quality, completion time and profit margin. People often assumed that labour is cheap and they put workers on site without proper supervision that ensures productivity. This is wasteful; when one talks of cheap labour, it is in relation to labour costs elsewhere. The lesson here for the indigenous construction Company is that contracting is not a field in which one-man enterprise can succeed. Contractors should form proper companies with trained technical personnel and managers.

1.3 Objectives Of The Study

The main objective of this study is to examine the factors affecting the competence and project delivery of small indegenious construction firms. Specifically, other aims of this study are:

1.        To determine the factors affecting competencies and project delivery of small-sized construction firms in Lagos state.

2.        To determine how the factors affect project cost, time and quality of small-sized construction firms in Lagos state.

3.        To highlight the challenges small-sized indigenous construction firms are facing in Lagos state

4.        To show the relevance importance of management in construction project and recommended solutions

1.4 Research Questions

a)        What are the factors affecting thee competencies and project delivery of small-sized construction firms in Lagos state?

b)        Is there any factors that may affect the project cost, time and quality of constructions firms in Lagos?

c)        What challenges do small-sized indigenous construction firms are facing in Lagos state?

1.5 Research Hypotheses

The following research hypotheses were formulated by the researcher to aid the completion of the study:

H0: There are no factors that may affect the project cost, time and quality of constructions firms in Lagos.

H1: There are factors that may affect the project cost, time and quality of constructions firms in Lagos

H0: there are no factors likely to affect competencies and project delivery of small-sized construction firms in Lagos state

H2: there are factors likely to affect competencies and project delivery of small-sized construction firms in Lagos state

1.6 Significance Of Study

This study will add to the existing body of knowledge. Lastly the study also acts as a guide for further and more detailed studies on the subject matter.

1.7 Scope Of The Study

The scope of this research is limited to identification of essential factors affecting performance of indigenous construction firms in Lagos. Indigenous construction firms can be classified as small, medium and large scale. This study focused on small scale because most times studies were carried out on the medium and large scale firms and the small scale firms seemed neglected. The study is limited to only construction firms in Lagos state. Lagos state is chosen because a lot of construction is taking place in Lagos state presently. therefore conducting this research now gives a better understanding on the factors affecting competencies and project delivery of small indigenous construction firms and also because there is easy access to information.

1.8 Limitation Of The Study

(a) Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study.

(b) Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c) Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.

1.9 Definition of terms

Indigenous firm

Indigenous firms are companies set up in their country (if the entrepreneur sets up in their home town).

Construction firm

Construction is a general term meaning the art and science to form objects, systems, or organizations, and comes from Latin construction and Old French construction. To construct is the verb: the act of building, and the noun is construction: how something is built, the nature of its structure.

Project completion

Project Completion means the date of completion of all improvements necessary for the start-up, location, or expansion of the business within the community.

Project delivery

A project delivery method is a system used by an agency or owner for organizing and financing design, construction, operations, and maintenance services for a structure or facility by entering into legal agreements with one or more entities or parties.