English: This article investigates newly emerging building contractors of South Africa
who are expected to survive by projects obtained mainly through tendering.
Some of these contractors fail even before obtaining the first tender while many
fail in the first three years of their formation.
The research population used was restricted to formally registered businesses
found at the time in the register of the Construction Industry Development
Board (cidb). The population of 792 businesses, registered as Grade 5 class,
consisted of five distinct types of contractors, general builders, civil engineers,
electricians, mechanical builders and other sundry players. A sample of 160
was used which is approximately 20% of the population. The literature was
reviewed on tendering and related aspects: competitive bidding, estimating
activities, pricing a tender, and evaluating a tender. The research tool used was
a questionnaire, which investigated biographical and company information,
proposal management and estimation, programming and scheduling,
estimating strategies, understanding of basic cost concepts, project risk
management, pre-tender internal price evaluation, and tender submission.
Findings of this research revealed that South African emerging contractors
showed inadequacies and variations in cost concepts, scheduling tools, risk
management and tender price estimation. They also lacked essential resources
and skills for competing for tenders. Emerging contractors are advised to
use consultants to assist them and/or subcontract to established contractors
with a reputable history. They should use these opportunities to learn superior
estimation methods (which are also more complex) and apply them to improve
their own tendering practices.