CHAPTER ONE
1.0 BACKGROUND OF STUDY
1.1 STATEMENT OF THE PROBLEM
1.2 AIMS AND OBJECTIVES OF THE STUDY
1.3 RESEARCH QUESTIONS
1.4 RESEARCH HYPOTHESIS
1.5 LIMITATION AND SCOPE OF THE STUDY
1.6 DEFINITION OF OPERATIONAL TERMS
1.7 SIGNIFICANCE OF THE STUDY
CHAPTER TWO
2.1 INTRODUCTION
2.2 CONCEPTS OF DIRECT LABOUR SYSTEM
2.2.1 CHARACTERISTICS OF DIRECT LABOUR SYSTEM
2.2.2 ADVANTAGES OF DIRECT LABOUR SYSTEM`
2.2.3 DISADVANTAGES OF DIRECT LABOUR SYSTEM
2.2.4 ROLES OF CLIENT IN DIRECT LABOUR PROJECT
2.3 CONCEPTS OF CONSTRUCTION PROCUREMENT SYSTEM
2.4 SELECTION CRITERIA OF PROCUREMENT SYSTEM
2.5 EFFECT OF PROCUREMENT SYSTEM ON CONSTRUCTION PERFORMANCE
2.6 PROBLEMS OF DIRECT LABOUR PROJECT
2.6.1 TIME OVERRUN
2.6.2 COST OVERRUN
2.6.3 QUALITY DEFECTS
2.6.4 FACTORS THAT CAUSES TIME AND COST OVERRUN
2.6.5 FACTORS THAT CAUSES QUALITY DEFECT
2.7 PROJECT PLANNING
2.7.1 PROJECT MONITORING
2.7.2 PROJECT EVALUATION
2.7.3 PROJECT COST CONTROL
2.8 PREVIOUS STUDIES
CHAPTER THREE
3.1 INTRODUCTION
3.2 RESEARCH AREA
3.3 POPULATION OF THE STUDY
3.4 SAMPLE SIZE
3.5 SAMPLING TECHNIQUES
3.6 METHOD OF DATA COLLECTION
3.6.1 DEFINATION OF THE QUESTIONNAIRE
3.6.2 CONSTRAINT IN DATA COLLECTION
3.6.3 DATA ANALYSIS
CHAPTER FOUR
4.1 INTRODUCTION
4.2 ANALYSIS AND PRESENTATION OF DESCRIPTIVE DATA
4.3 DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS IN RESPECT OF STATED OBJECTIVES
4.4 Summary
CHAPTER FIVE
5.1 INTRODUCTION
5.2 CONCLUSION
5.3 RECOMMENDATION
REFERENCES
Direct labour system is one of the several options of procurement used for project delivery process and records shows that it is the oldest procurement system and has been in use in Nigeria far back as the colonial era. It is very prominent in most countries and researchers described it as a system whereby a developer plans and organizes the project delivery process, carries out the design, the planning and procurement of resources and the construction of a project using client employed supervisory staff and labour. This type of system is regarded as in-house because client’s staffs as different from contractor’s staffs carry out the project delivery process and activities. Idoro, Iyagba and Odusami (2007) asserted that direct labour is mainly used for government projects. The use of the system is a good development in construction because it does not result in high staff strength and overhead costs in the Nigerian construction industry.
The term procurement system refers to a project execution and delivery process and it describes the responsibilities and/ or contractual obligations of the parties to carry out the numerous activities involved in delivering a project to the owner. According to Ojo (2009), Procurement involves the various combination of the design and construction phase to achieve the forms of organization to implement the project.
Maizon (2003), mention that the selection of a procurement method for a given project is a difficult task for the clients due to the various factors governing a construction project. He stated further that different client have differing needs and requirements whereby construction projects vary so considerably and in every respect, that no single method of procurement can be suitable for every project.
Construction Projects are very essential in the development of any community especially as seen in developed countries where projects are taken as a great priority because it is part of the determinant in knowing the level of development of any country. It evolves through the stages of conception, design, and the actual construction. A potential owner initiates the conception process by making clear is needs and requirements in form of a brief to a professional. At the design stage, the relevant professionals translate the primary concept into an expression of a spatial form to satisfy the owner’s requirements in an optimum and economic manner. At the construction phase, the conception and design are actualised in a practical terms to satisfy the brief.
Procurement system or method provides the framework for implementation and development of project. Time and serious attention are devoted towards the establishment of a procurement system that will be suitable for a particular project. A procurement method that is used for a particular project is expected to achieve the objectives of the project in terms of cost, time and quality but this has not been the case.
Time and cost overrun have been a major problem confronting the Nigerian construction industry and all attempts that have been made so far have not been able to yield the expected results.
Problems that have been established from various research work that have been carried out in past as result of the use of direct labour in execution of construction projects includes high staff strength, time and cost overrun, poor quality delivery e.t.c
These problems of direct labour and other procurement method adopted in Nigerian construction industry have raises serious concern to the project stakeholders and the construction industry as a whole. The purpose of the study is to investigate problems of direct labour procured project in Lagos state and it environs.
The aim of this project is to investigate the problems of direct labour projects and how it affects the project delivery process.
The objectives of the study include the following:
1. To identify the problems of Direct Labour procurement method used for project procurement.
2. To find out factors that results into these problems of Direct Labour Procurement method.
3. To examine the effects of this problems on project performance.
4. To find out Perceptions of the stakeholders as to how satisfied are they with the quality of Direct Labour Projects
1. What are the problems of Direct Labour procurement method used for project procurement?
2. What are the factors that results into these problems of Direct Labour procurement method?
3. What are the effects of these problems on the performance of the project?
4. What are the perceptions of the stakeholders on the quality of Direct Labour Projects?
H0-There is significant difference in occurrence of problems in Direct Labour project type
H1-There is no significant difference in occurrence of problems in Direct Labour project type
The limitation of this research are subjected to the information provided by the management of various relevant organisation, stakeholders and association in relation to Direct Labour procured project such as public clients and the private clients which includes construction firms, private developers, Government’s agencies and parastatals. More also the research is limited to the area were the researcher is allowed to investigate in the construction industry.
The categories considered in the study are heavy construction also called “Horizontal construction” and the highway/heavy construction and building construction also called “Vertical Construction”. Heavy construction project includes highways, bridges, tunnels, airport, railroad, dams, water supply and waste treatment facilities and all other major public project building. Construction project include residential, commercial, hospital, and other health care facilities, educational, governmental and other building type.
1. Procurement: an act of obtaining or acquiring goods and services from another for some considerations.
2. Project: an interrelated set of non-repetitive activities that has definite starting and ending points, which result in a unique product.
3. Project procurement: An organized methods or process for clients to obtain or acquire construction product.
4. Project delivery: The setting and communicating of project objectives and target using different plans, implementing and monitoring the plans, evaluating and lastly, controlling the achievement of the objectives.
5. D irect labour: A system whereby a developer plans and organizes the project delivery process, carries out the design , the planning and procurement of resources and the construction of a project using client-employed supervisory staff and labour.
6. Client: A person for whom a project is carried out, in the course or furtherance of a trade, business or undertaking, or who undertakes a project directly in the course or furtherance of such trade, business or undertaking
This research work will take an in-depth investigation on the problems of direct labour projects and the result of the result of this study will be of great importance to the aspect of project procurement, project delivery and project execution as a whole.
It will provide relevant and useful information that will be of importance to the client (both public and private organisations) for their activities and for future research on the subject matter.
The research will contribute to the body of knowledge in the construction industry by giving detailed insight into the purpose, importance and effectiveness direct labour procurement method.
The construction industry attracts a wide variety of clients all of whom will have their own objectives and priorities for their particular project. Consequently, when a client is considering the decision to build, a number of important decisions need to be made in order for the project to have a good chance of a successful outcome. The CIB (1997a) suggests developing a strategy for the project on the basis of the client’s needs and that the first priority is to decide how to procure skills and resources needed for the design and construction of the project. Turner (1997) suggests that an appropriate procurement method route will develop from an outstanding of the objectives and priorities of the client and that a number of procurement assessment criteria will be needed to be considered.
The procurement of construction project is vast in scope because it involves the gathering and organizing of myriads of separate individuals, firms and companies to design, manage and build construction products such as houses, office buildings, shopping complex, roads, bridges etc. for specific clients or “customers”. Procurement comes the word procure which literally means “to obtain by care or effort”; “to bring about” and “to acquire”. System is about “organized method, approach, technique, process or procedure”. In this context, project procurement is very much concerned with the organized methods or process and procedure of obtaining or acquiring a construction product such as a house, shopping complex or road and jetty. It also involves arranging and coordinating people to achieve prescribed goals or objectives. The Aqua Group (1999) described procurement as the process of obtaining or acquiring goods and services from another for some consideration. Masterman (1996) described project procurement as the organizational structure needed to design and build construction projects for a specific client. It is in a sense very true because the process of “obtaining” a building by a client involves a group of people who are brought together and organized systematically in term of their roles, duties, responsibilities and interrelationship between them.
Today, there are several types or variations of project procurement systems being widely used in the construction industry. They range from the traditional system to the many variations of “fast-tracking” systems such as turnkey, design and build, direct labour, build-operate-transfer, management contracting, cost-plus contracting etc. The introduction of many variations of project procurement system was induced by the quest for more efficient and speedier project delivery system and better project performance. They are innovations to the traditional delivery method aimed at meeting the changing demand of clients or customers. The different procurement systems present have brought changes not only to the process and procedure of project delivery but also the aspects of management and organization.
Construction Agency Coordination Committee defined Direct labour system as where the agency directly hires and supervises trades-persons, labourers and/or plant, and directly purchases materials or equipment to carry out the project works, and possibly also uses some trade or small work packages, usually also involving consultant engagements.
Ojo (2009) also described Direct Labour system as a system where the client engages tradesmen directly to execute projects by either using in-house personnel to design and construct or directly employ operatives to construct. By this method, the services of a contractor are dispensed with and this elimination makes the direct labour system distinct from other procurement methods. The World Bank also described direct labour system as the construction by the use of the borrower's own personnel and equipment and that it may have be the only practical method for constructing some kinds of project.
As cited in Achuenu and Shinkut (2006), Ogunsemi defined this method as procurement method for acquiring new unit of housing in which the client selects architect and other consultant or no consultant at all is used but the main contractor or sub-contractor is employed to completion. Achuenu et al. (2006) further explained that in this method of project delivery, the client purchases all necessary materials and other facilities that may be necessary for executing the project to completion. They said that the distinct difference between Direct Labour and Labour-Only and other methods of procurement is that in Direct Labour procurement, client organizes and mobilizes all necessary resources either in-house or procured to execute a construction project using the required and professional and paid on a scale of fee directly.
Ojo and Adeyemi (2006), opined that Direct labour system was the primarily procurement method used in Nigeria for executing construction projects from the colonial era through to 1960s. As cited in (Idoro, Iyagba and Odusami, 2007), authors said that Government and its agencies in Nigeria in the recent past opted to promote DL system because the cost of construction contracts was higher in Nigeria than in other countries. The result was that organized structures in the form of DL units and agencies were set up at both federal and state government levels. Idoro et al. (2007) Discovered that publics client favours the use of Direct labour system more than the private and in Nigeria, little or nothing is reported on the use of Direct Labour system by organized private sector. They confirmed that the method is mainly used for government projects.
Also cited in Idoro et.al (2007), critics of the development maintained that the system is wasteful because it involves high staff strength which translate into high overhead expenditure and that it is mainly used for government construction while advocates of the system claimed that it has economy
According to CACC (2005), Direct labour system possesses all the following characteristics which includes:
- With direct labour delivery, the project works (or a part thereof) such as a building may be divided into trade packages and trades-persons and labourers employed and/or plant hired and supervised, and materials or equipment directly purchased to carry out the project works. Trade and small work package contracts may also be used. The system may also be used in conjunction with other delivery systems.
- All direct labour work is usually interrelated with each part being highly dependent on performance with the other parts. The system relies on a highly developed and detailed work program for construction, requires a tight schedule for the design and documentation to support the construction timing, and needs more detailed expert construction management.
- With the system, the agency is directly responsible for carrying out the work involved using its own or hired resources. Much more management, particularly intensive construction management, is needed with the system. A project/construction manager would normally be engaged and an agency project director appointed to manage the work.
It further stated that the direct labour system is mostly used where; smaller projects are involved and 'in-house' resources have the required capacity, direct control with extra flexibility is required where the work cannot be accurately defined for a contract, uncertain and complex interface works between contracts are involved, where it is inappropriate to use another contract the required speed of implementation and coordination with other dependent activities prohibits using a single contract or other work packages, there is a potential for the rapid development of technology or other change in a work/trade/special equipment area, that must be addressed independently of other concurrent work more time is required for design and to confirmed details, requiring some work areas to be addressed earlier and separately and lastly, the work in a trade/equipment/other area is an experiment or a trial for new processes or technologies.
The world bank also noted that the use of direct labour system can only be justified where: quantities of work involved cannot be defined in advance, works are small and scattered or in remote locations for which qualified construction firms are unlikely to bid at reasonable prices, work are is required to be carried out without disrupting ongoing operations, risks of unavoidable work interruption are better borne by the borrower than by a contractor and lastly, there are emergencies needing prompt attention.
All Procurement methods have different advantages over each other. The selection of a particular procurement route comes after the client must have critically look at its benefits and select it with the hope that it will satisfy his needs.
According to Ojo (2009), Direct labour system is simpler, cost-effective (the contractor’s profit is eliminated) prudent, corruption free and provides jobs for the populace. Idoro (2007), agreed with this, he further said that the system has greater economy than the other contract systems used in Nigeria construction industry. He finally concluded that the achievement of the Nigerian construction programmes as greatly depends on this method. CACC (2005) identified three benefits of using direct labour system for project delivery and these benefits are highlighted below:
- Where absolutely essential for compelling reasons, helps to resolve special coordination, scope uncertainty, interface or other problems, and address special procurement needs, not able to be met otherwise.
- There are more certain quality outcomes where direct agency control is needed.
- The client/agency has more control of design and construction outcomes.
Al-hammad and Al-Quaibi (2005), discovered in their research on maintenance efficiency through direct labour that the system is of major advantages in providing full control of work, providing better cost control, providing more control on security risk, providing better control of quality, familiarity with the work. Monigha (2011) was of the view that by using Direct Labour for project execution, there will be a reduction in project management costs, that the client will be fully involved in project controls, it will lead to elimination of profit due to the contractor on labour, material and plant, administrative costs for bidding process will also be eliminated and lastly, the pre-execution phase will be drastically reduced in schedule.
With all said and done, It can be concluded that Direct labour system is of advantageous to client and agencies seeking to have full supervision of project and work, cost effectiveness and economical approach to project delivery.
According to CACC (2005), in direct Labour project, the client carries all the work co-ordination interface risks and risk with possible work gang, hired plant or trade/small contractor inefficiency. There is also no tender price competition thereby making it difficult to ascertain the cost and time outcome/output and determine if the project is worth the value. The client is also faced with risks of design and management and exposed to greater extra cost risks.
Al-hammad and Al-Quaibi (2005) asserted that the disadvantages of Direct Labour includes, lack of skilled labour, More expensive and lastly, hard to recall people in emergency cases.
Elshakour (ND) in his study on organizational structure for engineering projects was of the view that the roles of the client in a direct labour engineering projects includes:
1. The owner-builders perform both their own design and some or all of the actual construction with their own forces.
2. In some cases they retain many of the management and conceptual design responsibilities, utilize consultants for some or all of the detailed design and depend upon construction contractors for hiring and supervision of the labour force.
illustration not visible in this excerpt
Fig. 2.2.4 Organizational arrangement for Direct Labour System
CACC (2005) defined procurement as the collection of activities performed by and for an agency to acquire services, products and other assets, beginning with the identification or detailing of requirements and concluding with the acceptance (and where applicable, disposal) of the products and other assets.
Achuenu et al. (2006) described construction procurement as a method used by housing associations, property developers, private individuals, public and corporate clients to acquire new units of housing with reference to method of design, construction, parties to be involved in carryout these functions, and contractual arrangement.
Rashid, Taib, Basiron, Nasid, Wan Ahmad and Zainordin (2006) mentioned that the procurement of construction project is vast in scope and involves the gathering and organizing of myriads of separate individuals, firms and companies to design, manage and build construction products such as houses, office buildings, shopping complex, roads, and bridges.
Idoro (2011) described procurement method or systems as the chain of process in which a construction project is procured. He asserted that the process is interrelated and sequential and that the procurement processes have a considerable impact or the success or failure of a project.
McDermott (1999) acknowledged that there have been several debates over the right definition of procurement and after analysing those debate, he came to the conclusion that an accepted definition is that procurement is a strategy to satisfy a client’s development and/or operational needs with respect to the provision of constructed facilities for a discrete life cycle. He further said that this sought to emphasise that the procurement strategy must cover all the processes in which the client has an interest, perhaps the whole lifespan of the building.
According to Love and Skitmore and Earl (1998), Building procurement has become a fashionable term with industry practitioners and researchers. It determines the overall framework and structure of responsibilities and authorities for participants within the building process. It is a key factor contributing to overall client satisfaction and project success. The selection of the most appropriate procurement method is consequently critical for both clients and project participants, and is becoming an important and contemporary issue with the building industry.
Hibberd and Djebarni (ND) observed that the review of current practices in the UK shows different approaches to the procurement of building projects. They further stated that the classification of these approaches is extremely complex because there are not clear and universally accepted definitions of what a particular procurement method is and that this has raises a major issue.
Achuenu et al (2006) also mentioned that the building industry has various methods of procurement ranging from the very popular methods such as traditional, design and building, management contracts (construction management and management contracting), direct labour contracts, to the rare methods such as project management, package deal, turnkey, build-operate and transfer and partnering methods. All these methods have their various advantages over each other in the area of time completion, speed of construction, cost and quality among others.
In basic terms Procurement is the process used to obtain construction projects. It involves the selection of a contractual framework that clearly identifies the structure of responsibilities and authorities for participants within the building process. It is a key factor contributing to overall client satisfaction and project success. The selection of the most appropriate procurement method is consequently critical for both clients and project participants, and is becoming an important and contemporary issue with the building industry.
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