Builders' perceptions of lowest cost procurement and its impact on quality

The concept of quality in relation to a product or service refers to the degree to which it meets the Customer's needs and expectations. Dissatisfaction with the quality of building projects has been widely reported in recent times. There are Indications that there may be some relationship between the procurement method used and customer satisfaction with the delivered product. In particular, traditional competitive bid contracting may have an adverse impact on quality in some circumstances. To shoo some right on reported industry attitudes, a survey of construction professionals In the Sydney metropolitan area was undertaken. The respondents demonstrate mixed views on the effectiveness of the competitive tender system on quality project outcomes. To some extent contractors' attitudes may be determined by their preferred current mode of operation. However, some support is expressed for the contention that quality of outcome can be reduced by an overly cost driven contractor selection process. In particular, when economic pressures cause bidders to reduce the time allocated for the tender process, an inaccurate and unreliable bid may win. This makes it very difficult for the reliable contractor to remain profitable. A move to value-based rather than cost-based procurement may assist industry performance and customer satisfaction.