Labour-only procurement: A veritable surviving strategy for contractors in a challenging economy
Journal of Engineering, Design and Technology
ISSN: 1726-0531
Article publication date: 14 January 2019
Issue publication date: 20 March 2019
Abstract
Purpose
Due to its cost savings nature and ability to ensure constant jobs for contractors, this study aims to assess the capability of the labour-only procurement system to serve as a surviving strategy for construction contractors in a challenging economy.
Design/methodology/approach
The study adopted a mixed-methods design. An interview and questionnaire were used to harness information from 98 construction participants who have been involved in labour-only procured projects. These respondents were identified through snowballing. Frequency, percentage, mean item score, Mann–Whitney u-test and content analysis were used in analysing the data gathered.
Findings
Result revealed that participants are willing to execute more projects through this system because it gives considerable cost savings for clients and provides reduction in contractor’s risk and allows them to maintain healthy cash flow. The main factors influencing its usage are the client’s decision to procure materials, need for job at hand for contractors and the need for referrals from clients for subsequent jobs.
Practical implications
Findings of this study will assist contractors to understand the potential of this procurement system as a surviving option in a harsh economy. Small and medium contractors can make use of this available opportunity of having projects at hand at reduced risk to ensure continuous cash flow to keep their organisations afloat.
Originality/value
The contribution of this study to the body of knowledge lies in its provision of a reasonable insight on the inherent nature of a procurement system as a surviving strategy for contractors unlike the usual assessment of the generic survival strategies adopted in other studies.
Keywords
Citation
Awodele, O.A., Aghimien, D.O., Akinkunmi, O.G. and Aigbavboa, C.O. (2019), "Labour-only procurement: A veritable surviving strategy for contractors in a challenging economy", Journal of Engineering, Design and Technology, Vol. 17 No. 2, pp. 347-361. https://doi.org/10.1108/JEDT-06-2017-0060
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited