Price Tendering in the South African Consulting Engineering Industry

Neil Govender (), Samuel Laryea () and Ron Watermeyer ()
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Neil Govender: University of the Witwatersrand
Samuel Laryea: University of the Witwatersrand
Ron Watermeyer: University of the Witwatersrand

Chapter Chapter 24 in SDGs in Construction Economics and Organization, 2023, pp 343-357 from Springer

Abstract: Abstract Competitive tenderingTendering has led to consulting engineering organisations reducing their fees. However, discounted or low fees have often been cited as one of the primary reasons for the declining quality of professional servicesProfessional services in the South African construction industryConstruction industries. Since competitive tenderingTendering is a key process in the provision of consulting engineering services, this paper examined the impact of competitive tenderingTendering on pricing and services provided by consulting engineers. A survey with open-ended questions was conducted with ten experienced professionals in the consulting engineering industry. This study found that fees are still being determined using fee guidelines despite their publication being suspended in 2016. Participants in this study suggested that clients should stipulate minimum fees in tendered projects as a mechanism to address unsustainably low fees in the industry. Low levels of professional fees cause consulting engineering organisations to reduce services wherever possible and only spend time commensurate with the level of fees on projects. Reduced services may have downstream impacts on project outcomes during and post construction. Poor project outcomes adversely affect the provision of services related to several of the Sustainable DevelopmentSustainable developments Goals (SDGs). Therefore, clients in South Africa should assess the implications of competitive tenderingTendering and determine if the current approach is appropriate to ensure successful outcomes on infrastructure projects. This will assist in the attainment of the SDGs.

Keywords: Tendering; Professional Services; Consulting Engineering & Pricing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-25498-7_24

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DOI: 10.1007/978-3-031-25498-7_24

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