Linking Clients, Contractors, Project Management and Transaction Costs Magnitude in Construction Procurement in Nigeria

Abstract

Project stakeholdersand management efficiency have been regarded as the main variables responsible for high transaction costs in construction project procurement in Nigeria. Additionally, investigations of their effects on transaction costs are relatively few in North-Western, Nigeria. This paper attempts to determine the impact of clients, contractors’ attitudes and the effectiveness of project management on the magnitude of transaction costs (TC) and to determine the significance of such impacts on TC. In order to achieve the objectives, a field survey involving a sample size of 100 procurement expert participants drawn from contracting public and private for procurement of works, services, and goods were employed, using structured questionnaires. Partial least square structural equation modeling (PLS-SEM) was used in analysing the information gathered. The research shows that both client and contractor unethical attitudes towards building procurement influence the transaction costs of each party. Similarly, the effectiveness of project management was useful, but not significant for the TCs. The research concludes that parts of the responsibility of the owners in the transaction are to strengthen mutual knowledge, collaboration and amicable dispute resolution, and mutual relationship with other procurement stakeholders.