An Investigation into Construction Tender-Price Inflation:

A Documentary Review

Abstract

The essentiality of public infrastructure delivery cannot be over-stressed. However, there is a need to challenge existing practices and poor performance and focus on the value of public infrastructure to attain sustainable improvement in the public construction sector. Like many developing countries, Zambia’s public construction sector experiences numerous challenges that create a vicious cycle. This research provides a base for conducting further investigations regarding construction tender-price inflation and highlights the urgent need to manage the phenomenon. The data generated by this baseline study is critical to measure the degree and extent of construction tender price change between 2008 and 2018. The multiple-case design allows the study to perform a documentary review and cross-case analysis regarding the tender-price phenomena. The study also adopts a pattern-matching analysis to identify behaviours and practices of case firms regarding construction project implementation. The paper finds inherent project management challenges associated with case firms, including late engagement of supervising consultants, delayed payments, poor contract or project management practices, poor quality of works, a lack of detailed engineering designs, questionable award of contracts, and delayed project implementation. By comparing the construction-project-management approaches of case firms, the study finds that construction tender prices increased by an average of 31.4% per annum for upgrading roads to bituminous standards between 2008 and 2018. In addition, the study finds areas requiring prioritization to address construction tender price inflation include late engagement of supervising consultants, delayed payments, and poor contract or project management practices. Other notable factors requiring attention include poor quality of work, lack of detailed engineering designs, delayed project implementation, and questionable contract awards. The study offers a practical implication: addressing tender price inflation adds economic value to public projects and enhances public institutions’ appetite for construction infrastructure development.

 Keywords: construction, public sector, road projects, tender-price inflation