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The Impact Of Effective Contract Planning On Contractors Profit
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1.2 PROBLEM STATEMENT
The general low usage of formal contract
planning and management techniques by Contractors globally often
culminates into project failures, incessant claims for variations, huge
financial losses and sometimes results in bankruptcy of Contractors
(Allan et al, 2007). This situation is more prevalent in redevelopment
projects due to the inevitable problems of unexpected additional work,
excessive requirements and scope management issues, project funding not
aligned with project plans, delay, structural failure, cost overrun, etc
(Naaranoja and Uden, 2007). These problems or uncertainties, among
others, increase the project risk and make their management crucial if
success is desired. For the Eket-Ona 20km dual road project, billions of
Naira wasexpended and the overall aim of the project was not achieved.
This hugeexpenditure and apparent failure in the primary objectives of
the project led tocomplaints, probe panels and subsequent abandonment of
the project. Research has shown that financial, political and physical
risks are the mostsignificant to Nigerian Contractors (Dada, 2010).
However, of the differentlevels of risk (country, market or project),
there is shortage of research as tohow Contractors approach project
planning at organisational level.
1.3 RESEARCH OBJECTIVES
1. To explore contract planning practices applied by Julius Berger at various project levels.
2. To assess awareness and usage of formal and informal contract planning practices by Julius Berger, Uyo office.
3.
To examine the success or failure of the contract planning approach
used by Julius Berger Contractors on Eket-Ona dual road project.
4. To evaluate the impact of the applied contract planning approach to the attainment of project profits.
1.4 RESEARCH QUESTIONS
1. What contract planning guidelines and practices exist in Julius Berger Nigeria Plc, Uyo?
2. How do you gather information about newer contract planning strategies to be applied in your on-going projects?
3. What are the effects of contract planning on contractor’s profit?
1.5 HYPOTHESIS FORMULATION
Hypothesis for this study include:
Ho: There is no significant relationship between effective contract planning and contractor’s profit.
Hi: There is significant relationship between effective planning and contractor’s profit.
1.5 SIGNIFICANCE OF THE STUDY
This
study gives a clear insight into the various ways in which contractors
in the construction companies in Nigeria can maximise profits through
effective and efficient contract planning and management. The study also
gives a clear insight into the various effects of contract planning on
risk level, cost and timing of a project. The findings and
recommendations of the researcher will help in building a strong and
better contract policy and guideline in Julius Berger Nigeria Plc as
well as other construction companies in Nigeria, if taken seriously by
government and the general public. The effects of contract planning on
cost and time are outlined in-order for drastic measures to be taken to
tackle any challenge employers may face when developing and implementing
contracts with other organizations.
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