BUDGET APPROPRIATION RISKS IN PROCUREMENT OF CONSTRUCTION PROJECTS OF PUBLIC TERTIARY INSTITUTIONS IN NIGERIA

Abstract

In Nigeria, the construction budget stage is regarded as one of the most important phases of the public procurement procedure.  Construction clients' top priorities are projects that are completed on schedule, within budget, with the desired level of quality, and without compromising.  However, there are numerous hazards at this stage that affect the parties to the contract and the goals of the project.  In order to guarantee the successful completion of construction projects, this article sought to evaluate budget risk management strategies for tertiary institutions' construction procurement in Nigeria.  150 structured questionnaires were distributed to purposively selected construction professionals from procurement and physical planning departments of tertiary institutions in three states and the Federal Capital Territory as part of the study's survey design approach. To determine the most significant risk factors in the budgeting stage of the procurement process, the gathered data was analysed using the Relative Importance Index (RII).  To ascertain how the identified construction budget risk factors affected the parties involved and the project's goals, regression analysis was utilized. According to the study, the key budget risk factors in construction procurement are an unprecedented increase in material prices (RII=0.97), delays in budgetary approval (RII=0.87), and an inadequate market price forecast (RII=0.88). The study also discovered that, with p-values below the 0.05 significance level, the budget risks have a statistically significant effect on the project's goals in terms of time, cost, quality, safety, and the environment, as well as the contract's parties.  It came to the conclusion that if the budget risk factors changed, the project objectives would also change. The study further recommended that Government should do its best at passing and implementing the nation’s budget without delays to prevent the effect of inflation.