Nudging contracting firms rivals within municipal road projects in Saudi Arabia to bid competitively

Student thesis: Doctoral Thesis

Abstract

Several preventive measures have been proposed to tackle bid-rigging practices in public procurement, which are based on reducing opportunities for such illicit arrangements. Maximising the number of market players is one of the most prevalent measures suggested in previous studies. However, there has been little empirical examination of strategies to ensure this increase, particularly in the Saudi Arabian public procurement context. Accordingly, this research aims to develop an institutional framework which will be adopted by relevant stakeholders to reduce risk of bid-rigging by targeting an increase in the number of potential bidders.Accordingly, the research consisted of two main stage, each of them with two data collection steps. The exploratory stage began by investigating the nature of local contractors' engagement in bidding. More than 500 sets of minutes were studied, recording the opening of sealed bids in five major municipalities over a five-year period. Based on a proposed framework developed according to four market screening tools (market concentration, members number, participation rate, and prices volatility), the scarcity of contractors' participation in these tenders was demonstrated, especially the contractors in lower classifications. It was found that a few contractors suspiciously monopolised these contracts.Integratively, the key factors that local contractors believed were contributing to their failure to engage in this market were identified through a desk study, which included reviewing literature concerning the rationale for contractors' participation in the same context and reviewing barriers to delivering public construction projects in Saudi Arabia associated with the tendering phase. Consequently, the attributes which might encourage decision-makers in contracting firms to bid were proposed, and were subsequently examined in the second stage.The second stage adopted a sequential explanatory mixed method approach. First, a 5-point Likert questionnaires were distributed to local contractors in order to examine the influence of each attribute on their desire to participate in bidding. The majority of contractors agreed on the potential influence of these attributes on future participation, although there were slight differences in influence assessment by contractors according to their classification or success in previous bids. The three most influenced attributes were: accurate and detailed terms and technical specifications, technical advice to tackle bidders' problems in electronic bidding, publishing the contractors'€™ classification criteria and their weighting scores.Then, standardised open-ended interviews were conducted with both contractors and relevant government authorities, to assess current performance level of these attributes. The customer satisfaction was employed when interviewing contractors, while the self-assessment was the base of the government authorities' interviews. A different level of performance of the relevant stakeholders in these attributes has recorded, which supported prioritising the proposed institutional framework.Therefore, an Importance-Performance Analysis grid, with a zero gap diagonal line, was adopted. Interestingly, most of these attributes have a performance gap, and consequently, need the concentration of the relevant stakeholders' efforts. This research provides a useful reference for other public construction authorities in similar contexts to adopt requisite managerial actions achieving the same aim, yet further investigation on rivals' assessments of importance and performance are needed to reprioritize those actions.
Date of Award1 Oct 2017
LanguageEnglish
Awarding Institution
  • University Of Strathclyde
SupervisorAndrew Agapiou (Supervisor) & David Grierson (Supervisor)

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