The impact of contractors' management capability on cost and time performance of construction projects in Nigeria

Purpose – Management capability is one of the major criteria for evaluating construction contractors during prequalification and tender evaluation This paper aims to investigate the impact of contractors' management capability as a prequalification criterion on cost and time performance of selected building projects. Design/methodology/approach – Prequalification assessments of management capability of wining contractors as well as cost data relating to 77 completed building projects executed between 2004 and 2007 are obtained. The data obtained from a questionnaire and archival data are analyzed using one‐way analysis of variance and multiple regression. Findings – The results reveal that contractors' management capability has significant impact on cost and time performance of building projects as evidenced by p ‐values of 0.042 and 0.039, respectively. Practical implications – The research could be of significant benefit at the research implementation stage of public procurement practice especially in relation to the construction industry in Nigeria. Construction practitioners involved in prequalification and tender evaluation should continue to seek relevant information relating to management capability from the candidate contractors during prequalification and tender evaluation. Originality/value – Models capable of predicting the final cost and duration of building projects are eventually derived based on prequalification assessment of contractors on management capability, proposed contract duration and the initial contract figure. The goodness of fit of the models as defined by the value of R 2 is found to be 96.2 percent and 90.01 percent for cost and time, respectively; thus signifying high predictive efficacy of the models.