Abstract
The procurement process for construction projects is a difficult one and demands a policy to manage all procurement processes in the construction industry effectively. The implementation of preferential procurement sub-contracting policies in the construction industry has become increasingly important for improving the completion of public construction projects in South Africa. The procurement process for construction projects is often complex and demands a well-structured policy to manage all phases effectively. This complexity is largely due to the industry’s inherent issues—such as its fragmented structure and the traditional separation of design and construction—which contribute to delivery delays and inefficiencies Therefore, this dissertation assessed the preferential procurement sub-constructing policy on completing construction projects in the South African construction industry. It sought to determine the impacts of the preferential procurement policy in the South African construction industry and identify the selection criteria for this policy in the South African construction industry. The study examined the challenges faced by the implementation of preferential procurement in the South African construction industry. It also investigated the benefits of implementing the preferential procurement policy in the South African construction industry. Hence, the study explores strategies that can be used to ensure the policy is implemented effectively in the South African construction industry.
The study reviewed extant literature from online databases as a secondary data source to establish variables to answer the research questions. Likewise, primary data was obtained using a structured questionnaire as a data collection instrument to survey construction professionals within the construction industry in Northwest Province, South Africa. One hundred sixty-four
(164) questionnaires were retrieved from two hundred (200) distributed, representing an 83.5 per cent response rate, distributed through Google Forms to the respondents willing to respond to the questionnaires. The reliability of the data collection instrument was then determined using Cronbach's alpha test, followed by descriptive statistics and exploratory factor analysis (EFA). The findings showed that the impact of a preferential procurement policy on the South African construction industry would enable transparency in public procurement systems, procurement process integrity and accountability, promotion of international trade and value for money practices, standardisation of procurement process, and procurement process
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regulation policies. It is also revealed the preferential procurement policy selection criteria comprising procurement logistic requirements, project requalification requirements, contract change order requirements, quality and price performance requirements, project funding and payment requirements, client demands and regulatory, cost performance requirements, technology integration in the prequalification process and review of fiscal policy. Consequently, the challenges attributed to implementing a preferential procurement policy in South Africa are the absence of due diligence in procurement screening, corruption and political interference in procurement systems, and ineffective regulatory framework supporting public procurement. However, the study's findings recommended strategies for implementing a preferential procurement policy in the South African construction industry, including the enforcement of ethical compliance in procurement systems, transparent procurement systems, transparent and competitive procurement selection methods, personnel training and Future studies are recommended to explore the long-term outcomes of the 30% preferential procurement sub-contracting policy across other provinces in South Africa, as well as its impact on SME sustainability, project delivery timelines, and capacity building in the construction sector.