Inhibiting Factors to the Implementation of Preferential Procurement Policy in the South African Construction Industry

Abstract

The South African preferential procurement policy emerged from the demand for transparency, fair competition, value-for-money, standardised and benchmark pricing, and regulation of public procurement arrangements in the construction industry. The policy aims to address historical inequalities, support economic growth, and foster sustainable development. The effectiveness of the preferential procurement policy in South Africa is affected by the inhibiting factors of its implementation system. Given this, this study assesses the factors inhibiting preferential procurement policy implementation in the South African construction industry. This study reviewed the extant literature from online databases as a secondary data source to identify and understand the factors inhibiting procurement policy implementation. A quantitative research design using a closed-ended survey questionnaire surveyed 31 identified inhibiting factors affecting procurement policy implementation from the literature review. One hundred sixty-seven (167) questionnaires were retrieved from two hundred (200) distributed, representing an 83.5 per cent response rate, distributed through Google Forms to the respondents in Northwest Province, South Africa. The reliability of the data collection instrument was determined using Bartlett’s sphericity, Cronbach’s alpha, and Kaiser–Meyer–Olkin tests. The exploratory factor analysis findings established eight components from the 31 identified inhibiting factors affecting procurement policy implementation, which are the absence of due diligence in procurement screening, corruption and political interference in procurement systems, an ineffective regulatory framework supporting public procurement policy, discrepancies in award of contracts and the absence of dispute resolution, ambiguity in procurement selection criteria, poor enforcement mechanisms, cost discrepancies in advance payment, and excessive bureaucracy in procurement documentation. This study’s practical implications provide an understanding of establishing and prioritising procurement selection criteria, such as project requalification requirements, cost performance requirements, technology integration in the prequalification process, and contract change order requirements, which would improve procurement systems in the South African construction industry.