Assessing the cost of competitive tendering in Ghana using transaction cost theory (original) (raw)

2021

Abstract

PurposeThe purpose of this study was to determine the transaction cost (TC) contractors incur when tendering for a project as well as establish a correlation between the TC of tender and tender amount of projects procured through the national competitive bidding procurement method.Design/methodology/approachThe research draws extensively documentary analysis, observation and interviews to collect cost data on 14 different tenders submitted by a D1/K1 contractor. Using TC theory, the data are analyzed and the actual cost is determined. Further, Spearman rank correlation is employed to establish a relationship between tender price (TP) and the cost of tender by the aid of Statistical Package for Social Sciences.FindingsThe research developed a tender preparation conceptual framework highlighting the components of TC in competitive tendering in Ghana and also revealed that, apart from the emotional and psychological costs, contractors in Ghana incur approximately Gh₵ 4,625 (US$ 925)–Gh...

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