An examination of the construction procurement challenges faced by small, micro and medium enterprises in the public sector : a case study of the department of Public Works in KwaZulu-Natal.

Abstract

The study investigated the procurement challenges faced by SMMEs in the public sector in the Department of Public Works within the eThekwini Metropolitan area in the Kwazulu-Natal province. The research objectives were: to identify challenges faced by SMMEs in accessing procurement opportunities; to establish how government seeks to enhance SMME participation in public procurement; to assess SMME perceptions of effectiveness of the current system of government targeted procurement in the public construction sector and to make recommendations pertaining to the most appropriate approach to assist SMMEs in accessing public procurement opportunities in the construction sector. The study adopted mixed methods approach to investigate the research phenomenon. Phenomenological approach was used as the research philosophy in the investigation of the research phenomenon. The target population was the government officials at Department of Public Works within the eThekwini Metropolitan area and emerging contractors, which were 215. A sample size of 138 respondents was selected using both systematic and purposive sampling techniques. Data collection instruments used were a close and open-ended questionnaires and a semi-structured interviews. A pilot study was conducted before the full-scale investigation took place. The reliability and validity of the research instrument were achieved through Cronbach’s alpha coefficient and factor analysis. The data gathered from the respondents were analysed using Statistical Package for the Social Sciences, version 25.0. The study found that the challenges confronting the construction SMMEs include government regulations (94.6%), financial related challenges, human resources management related challenges (91.3%), supply chain management related challenges (96.8%) and quality management related challenges (89.9%). The study further found that the construction SMMEs contribute to economic growth through job creation (95.2%), equity redress (93.7%), socio-economic development (89.7%), innovation (91.5%), poverty reduction (93.7%) and income generation (91.7%). The study recommends the following: access to more funding for the construction SMMEs, creation of enabling business environment, flexible government regulations, access to procurement opportunities, access to information, mentorship programmes for emerging contractors and provision of workshops and training and development for emerging contractors.