Cost Estimation Practices of Emerging Contractors of Ethiopia: The Case of Addis Ababa Based Local Contractors
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Date
2017-02
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Addis Ababa University
Abstract
The construction sector in Ethiopia is one of the critical economic institutions in the economic
development of the country. However, some firms, in this sector seem to fail quickly. And
many have faced difficulty in winning tenders in bidding stage. Consequently this research
has the objectives of analyzing tender cost estimation practice, identifying deficiencies
requiring remedial actions and recommending solutions that can enhance the performance
of local emerging construction firms. The population used was restricted to Addis Ababa
based emerging construction firms. The population of 412 firms registered as Grade 5 and
above, from the different category of contractors is studied. To address the research
objective 135 samples are selected based on snowball sampling method and questionnaire is
distributed from which 98 sample respondents replied appropriately to the questionnaire.
The literature was reviewed on cost estimation and related aspects. The research tool used
was a questionnaire. Data gathered are analyzed using statistical tools. As a result the study
revealed that: cost estimation is one of the major causes that aggravate emerging
contractors deprived success in tendering. Likewise with regard to leading practices related
to quality cost estimates, the study found out that the performance of emerging contractors
towards cost estimation requirements is low. Emerging firms are advised to make internal
policy or guidelines for developing high quality cost estimates, to practice/ adopt a method
that utilizes risk identification and uncertainty analysis techniques and to implement a
system of integrated cost estimating practice via utilization of the twelve cost estimating
tasks in order to ensure a high quality estimate.
Keywords: Cost estimation, Quality estimates, estimation methods, tendering
Description
Keywords
Cost estimation, Quality estimates, estimation methods, tendering