External Market Conditions that Affect Cost of Tendering in Public Institutions: Evidence from Ghana

The study examined the external factors or low visibility factors that affect the accuracy of pre-tender estimate among building contractors of public institutions in the Brong and Ashanti Regions of Ghana. The study was structured within the framework of descriptive research approach. The study was conducted between August, 2016 and March, 2017. Building contractors who had registered with the various public institutions within the Ashanti and Brong Ahafo Regions of Ghana constituted the population of the study. The public institutions randomly selected for the study included: Tertiary Institutions, District, Municipal and Metropolitan Assemblies, Hospitals and other Ministries, Departments and Agencies (MDAs). Twenty (20) public institutions and sixty (60) registered construction firms were randomly chosen for the study. Self-administered questionnaire was used to obtain data from the respondents. The study found that the five most important factors that affect the accuracy of cost of tendering are: Material (prices, availability, supply, quality etc.); Currency exchange fluctuations, prevailing economy conditions, labour cost and availability and cost, availbility and supply of equipment. The study thus concludes that external factors affect the accuracy of tender estimates among construction firms. It is recommended that the performance of estimate staff in terms of accuracy should be monitored and a qualified technical staff  should be hired in order to obtain an accurate estimate. Further, training, seminars, and     workshops must be organised for the construction firms and should aim to improve the local  practice in cost estimation and increase the capabilities of estimators in using estimating software packages.