Contractors’ Competitiveness in the Works Procurement of Federal Road Projects for International Competitive Bid


Hanna Moges Dereje, Wubishet Jekale Mengesha


In construction, a procurement system is an essential tool used to establish criteria and award projects for contractors that fulfill them. The competitiveness of contractors is among the many criteria used in the selection process. Despite the different capacity-building programs for domestic contractors' competitiveness to participate in and undertake, international competitive bids of road projects in Ethiopia, most of them are awarded to foreign bidders. Hence, this study set out to assess the challenges domestic road contractors face when bidding for international competitive bids of federal road projects to find improvement mechanisms. A broad review and desk study of the past five years' bids eligibility criteria under Ethiopian Road Authority and Works procurement information of international competitive bids was carried out to explore local contractors' stand in bidding and their competitiveness. Also, data were collected through questionnaires disseminated to grade one road contractors also procurement directorate staff; and interviews conducted with senior officials from Ethiopian Road Authority to give the study more depth. Procurement data collected from 2014/2015 to 2019/2020 years showed that less than 37% of international competitive bids invited were awarded to local bidders. The major challenges identified for this include, irresponsive bids, inadequate contract administration system, inadequate experience, lack of well-equipped staff, inability to meet the required annual turnover, low-performance evaluation as well as lack of access to foreign currency. Improvement mechanisms such as building core competency and improving competitive advantage were some of the results of the research.