Using construction procurement strategy to achieve socioeconomic development objectives

Abstract

The procurement strategy for a construction project should provide the framework to achieve secondary procurement and socio-economic development objectives [2]. However, little attention has been focused on this in theory and practice. This paper addresses that gap by presenting a case study of the innovative targeting strategy developed and successfully implemented on a New Universities Project in South Africa to promote specified socioeconomic development objectives. Document analysis was used to examine how four socioeconomic development targets or key performance indicators, namely: local employment, skills development, local expenditure, and B-BBEE, were contractually integrated into the main works contracts. Four out of five framework contractors achieved the development targets, with low-performance damages applied in one case where the contractor failed to achieve all the development targets. The findings demonstrate how an appropriate construction procurement strategy that effectively integrates the packaging, targeting, and contracting strategies with effective systems for monitoring performance-based specifications, can play an essential role in promoting and realising socio-economic development objectives and social value through infrastructure projects.

Keywords

• Construction procurement strategy
• Document analysis
• Secondary procurement objectives
• Social value
• Socioeconomic development outcomes
• South Africa