Evaluation of Risk Factors in Public Sector Construction Projects and Their Criticality to the Government and Its Contractors in Nigeria

Accomplishment of the project on time and to specifications is an objective which is mutual to both government and the contractor in public construction project. But the two of them do not have mutuality in interest when it comes to cost of the project. While the government is desirous of completing the project within estimated budget, the contractor aspires to deliver the project under budget to improve his profit margin. This study seeks to enhance the achievement of objectives on both sides of the coin, by overviewing construction project risks and evaluating them in public sector construction environment. Twenty critical construction risks were identified in literature to serve as linchpin for field data collection and subsequent analysis. Structured questionnaires were used for field data collection. Even though analysis using paired t-test indicates no significance difference in the criticality of the identified construction risks to both the government and its contractors, some data in the study proved that some risks which the contractor views as ‘very risky’, are not actually of ‘serious concern’ to the government. It is concluded that, ‘Traditional Contract’ system, the predominant type of contract agreement used in public construction projects, which divorces the government from most financial and site risks, is responsible for this variation of interest between the government and its contractors. Recommendations include among others, government to borne all reasonably substantiated hike in price and to give prominence to capabilities of contractors in bidding processes, rather than selection of the lowest bidder.