CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Shash (1993) explains that a construction company can either negotiate with the client or use a competitive tendering process to obtain a contract. Fu and Drew (2002) suggest that competitive tendering is the most common method used for contractor selection. In competitive tendering process, a client selects a numbers of contractors to tender for the proposed project. The selected contractors must to decide whether to tender or not tender. The contractors need to submit an estimated cost to execute the project at hand, if they intend to tender. The client would select the contractor who submitted the best cost for executing the project. (Shash 1993, p.111). Therefore the decision to tender is the first step that contractors need to consider.

There are various factors that need to be considered by the contractors in order to make the decision to tender or not. The decision is highly related to the specific project and macro environment. It is hard to make a decision in a limited time by the management team. The decision generally is made on the basis of experience, intuition and guesses. (Egemen and Mohamed 2007, p.1373)

There are many researchers that have discovered the factors that affect the tender/ no tender process. Unfortunately, there has not been any similar research projects carried out in Nigeria. Furthermore, during the global economic recession, construction related activities are decreased significantly. Construction contractors‟ original tender/ no tender decision making criteria may be changed.

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