Assessment of challenges faced by small and medium size construction firms in the procurement of construction services in Uganda.

Abstract

Several studies have identified the Construction Industry as one of the main engines of performance in any economy. On the supply side of the industry are Small and Medium Construction Enterprises (SMEs) which form an important sector of any construction economy. The need for efficient Construction SMEs is well documented and cannot be over emphasized. Construction SMEs are vital in their contribution to employment creation. There are a number of Construction SMEs in Uganda but much more important than their number is their current status, stage and pace of development. The process of performance of these enterprises needs to be well understood and addressed. The objective of this study was to assess the challenges faced by small and medium size construction firms in the procurement of construction services in Uganda. The target population was 60 Construction SMEs registered by Ministry of works and Transport with physical address in Kampala. The methodology used included an extensive literature review and field survey. The field survey used the questionnaire instrument and stratified random sampling. The findings from the literature are that there are binding constraints in the performance of SMEs in the procurement process. The field survey confirmed the issues raised in the literature and put forward as a basis for argument that the challenges to performance as lack of capital, technical skills and tendering procedures. Management skills were found not to have much influence on performance of Construction SMEs in the procurement process.The implication of the findings is that the challenges named above need to be addressed if the SMEs in Uganda will perform and become more competitive. The recommendations include developing training programmes for Construction SMEs, introduction of sector specific financing programmes and provision of appropriate regulatory framework.