1. Introduction
The construction industry (CI) stands as major contributor driving the essential infrastructure development and stimulating economic growth [
1,
2,
3]. The CI transforms the national economy by developing infrastructural facilities, including roads, buildings, housing, bridges, dams, transportation, and telecommunication [
3,
4,
5]. Moreover, the dynamic nature of the CI is also attributed to uncertainty in project delivery cost, time, safety, and quality [
6,
7,
8]. Likewise, the industry is highly competitive and characterised by an uncertain business environment, and construction projects’ clients, the major stakeholders, demand timely delivery [
9]. The complexity of construction projects’ design, planning, control, and performance in meeting clients’ goals has increased stakeholders’ mission to improve procurement systems [
10,
11,
12]. Thus, researchers have continued to investigate the roles of procurement systems in the CI to mitigate the problem of project performance [
13,
14].
Procurement is one of the procedures used to realise construction project objectives in the CI [
15]. Chanudha [
16] described procurement as acquiring products and services for construction project operations from investigation to delivery. Tiwari [
13] noted that the procurement system allows construction organisations to assign specific tasks and authorities to individuals, defining the interdependence of the various operations in the contractual arrangements. Chanudha [
16] opined that construction procurement is key to achieving strategic project goals and success. Procurement systems are essential in construction processes, ranging from various activities that provide knowledge, supplies, equipment, sourcing, manpower, purchasing, supervision, and managing services required to achieve project success [
17,
18]. Thus, the unique nature of the construction sector requires the project team to understand procurement policy and processes to achieve the construction project objectives [
19].
Globally, procurement policies have been part of the government’s reform of the public sector and improved effectiveness in service delivery in the construction sector [
15]. The preferential procurement policy in South Africa strengthens joint alliances between established and emerging firms to secure major construction contracts [
20]. Procurement policies inform the process of creating and managing construction contracts by identifying contract requirements as a flawless approach for integrating the best strategy for organisational directions [
17]. The procurement policy fosters transparency, integrity, efficiency, fair treatment of suppliers, and non-discrimination, enabling the attainment of the best value for public funds [
18]. In addition, the procurement policy ensures due process is followed in establishing competitive, transparent, fair procurement systems, integrity-driven contract awards, and meeting quality and standards delivery of projects within budgets [
21]. However, the intention of the South African procurement policy for the construction sector is not without inhibiting factors that affect its implementation in the construction processes [
22]. Jones [
9] noted that procurement policies are designed to ensure open and transparent government contracting; however, bid rigging or collusive tendering, corrupt public official practices, and insufficient data availability limit its effective implementation.
The Preferential Procurement Policy Framework Act (PPPFA) is one of the strategies employed by the South African government to reform public procurement systems to ensure inclusiveness, promote economic transformation, and address historical imbalances by favouring businesses owned by historically disadvantaged groups [
14]. The policy addresses historical inequalities, supports economic growth, and fosters sustainable development [
14]. Fourie [
14] added that the effectiveness of the PPPFA in South Africa is affected by the factors of the implementation system rather than the system itself. According to Jimoh [
19], many clients often engage in procurement systems by default without adequate knowledge of what is suitable for contracts and tenders. Thus, these inhibiting factors often affect the client–contractor contractual relationship. Addressing the inhibiting factors to preferential procurement policy implementation in the CI, few studies have examined government reform of public procurement policy and its impacts in developing countries, particularly South Africa [
14,
15]. Ezeh [
23,
24] affirmed the procurement policies reform implemented in various nations in developing countries, particularly Ghana, Kenya, Zambia, Lesotho, Liberia, Nigeria, and Sierra Leone, over the last two decades to strengthen their public procurement arrangements. Holistically identifying inhibiting factors to procurement policy implementation from the global lens of the extant literature and using the perspective of construction stakeholders to validate these factors create a knowledge gap in developing countries, particularly South Africa [
14,
22]. There is thus a need to provide an understanding of factors inhibiting preferential procurement policy implementation that creates unlawful and unfair procedures in public procurement systems among previously disadvantaged stakeholders in South Africa [
14,
22].
Therefore, this study assesses the factors inhibiting preferential procurement policy implementation through a quantitative research design using construction stakeholders’ perspectives specific to the South African construction industry (SACI). The objective of this study was determined through a review of the existing literature to identify the factors inhibiting the implementation of preferential procurement policies. This study adopted exploratory factor analysis (EFA) as a statistical tool, exploring the interrelatedness and correlation within the eight components of EFA using data obtained from the perspective of construction stakeholders in Northwest Province, South Africa. Therefore, this study’s theoretical and practical implications are expected to guide construction stakeholders, particularly in South Africa, against the inhibiting factors of preferential procurement policy implementation and improve the client–contractor contractual relationship. The study findings are necessary to identify inhibiting factors affecting the preferential procurement policy in South Africa and improve policy framework implementation supporting previously disadvantaged people and communities, creating greater opportunities for many historically disadvantaged contractors. Understanding these inhibiting factors among construction stakeholders would also promote small businesses empowerment, socio-economic transformation, and the advancement of local industrial development. Moreover, it is also crucial for the South African government to meet the objectives of the National Development Plan (NDP) by 2030, which include promoting inclusiveness, fostering skills development, ensuring an effective public sector, and supporting nation-building.
3. Methodology
This study explored construction stakeholders’ perspectives on identified inhibiting factors affecting procurement policy implementation in the SACI using a positivist philosophical position. According to Adekunle et al. [
44] and Owusu-Manu et al. [
45], the positivist philosophical position has been adopted in the built environment because it adds to the existing body of knowledge by focusing on observable, measurable, and recordable phenomena, similar to natural science. This study adopted a quantitative research design using a closed-ended survey questionnaire to ensure the findings are generalisable over a large population subject to an acceptable error limit. The target population includes construction stakeholders who play vital roles in the procurement process towards ensuring the successful execution of construction projects in the Northwest province, South Africa. The choice of Northwest Province for this study is because of the high number of ongoing government projects awarded through the provincial procurement system [
46]. Also, the province has the highest number of construction projects, construction organisations, and construction professionals across Potchefstroom, Klerksdorp, Brits, Rustenburg, Klerksdorp, and Lichtenburg, within the province in South Africa. These stakeholders’ distinct responsibilities and contributions collectively lead to effective procurement processes. These construction stakeholders include construction professionals, government officials (CIDB), clients, consultants, financial institutions, and contractors and suppliers directly involved in construction project procurement because of their key significant roles in the procurement system within the SACI. A non-probability sampling technique was used because it enables sample selection based on respondents’ willingness to participate, which is useful when a random sampling method is not feasible for the chosen representative sample size [
47,
48].
Moreover, a sample size of 200 construction stakeholders involved in construction activities within the study area based on a purposive sampling method was selected through the head of the service in the Northwest Province, South Africa (see
Table 2 for respondents’ demographic information). This study purposely selected 200 respondents to appropriately balance the need for sufficient data with the practicalities of data collection. The sample size is also sufficient to achieve reliable and valid results while balancing the constraints of time, budget, and resources for the study. A purposive sampling technique was employed to distribute questionnaires to the 200 selected respondents in the study area, and an 83.5% response rate was achieved for the 167 collected data. The high response rate is due to the relevance of and interest in the research topic, which addresses pressing issues in preferential procurement policy among construction stakeholders within the study area. It enables comprehensive data collection, robust statistical analysis, and credible policy recommendations, ultimately contributing to more effective and inclusive policymaking for future review of the preferential procurement policy for the SACI. This methodology is similar to the sample size method adopted in the study of Ogundipe et al. [
49,
50]. A structured questionnaire was adopted as a data collection instrument to survey respondents’ perspectives on the 31 identified inhibiting factors affecting procurement policy implementation using an online survey platform (Google Forms) to reach a wider group.
The survey questionnaire was divided into two sections. The first section obtained respondents’ background information, and the second section focused on the respondents’ perceptions of the identified inhibiting factors affecting procurement policy implementation in the Northwest Province, South Africa. This study adopted a 5-point Likert scale: 1 = strongly disagree (SD); 2 = disagree (D); 3 = neutral (N); 4 = agree (A); 5 = strongly agree (SA) to establish the rank of respondents’ scores.
Subsequently, IBM SPSS V28 was utilised to analyse the data collected from the survey questionnaire. The collected data were analysed using descriptive statistics (including frequency, percentage, mean, and standard deviation) as well as exploratory factor analysis, which involved Cronbach’s alpha test, the Kaiser–Meyer–Olkin (KMO) measure, and Bartlett’s test of sphericity. According to Tabachnick and Fidell [
51], exploratory factor analysis identified and established the correlation patterns within the dataset and extracted variables into the different component factors. Likewise, the KMO test of sampling adequacy suggesting a KMO value above 0.7 and a Bartlett’s sphericity test value (α < 0.05) were considered significant and satisfactory factor analysis [
52,
53]. The reliability of the variables tested by the questionnaire survey was checked using Cronbach’s alpha test, in which a 0.917 value was obtained for the 31 identified inhibiting factors affecting procurement policy implementation in the SACI. An acceptable value was obtained for Cronbach’s alpha test above the recommended 0.7 [
48,
52,
53,
54].
5. Conclusions and Recommendation
This study assesses the factors inhibiting preferential procurement policy implementation in the SACI. The study adopted a quantitative research design, using a purposive sampling technique to administer the closed-ended questionnaire survey to the selected construction stakeholders in Northwest Province, South Africa. The descriptive statistics findings revealed that the inhibiting factors affecting preferential procurement policy implementation in the SACI with high-significance factors comprise poor enforcement of procurement guidelines, absence of a rationale for awards, ambiguity in the qualification criteria, corruption in the procurement process, poor screening of technical bids, poor technology application, preference for larger bidders (putting price before quality), absence of methods of dispute resolution, political interference, lack of quality personnel, abuse of the procurement process, and lack of capability on the procurers’ part. These factors with high significance limit the success of procurement processes and systems in the construction sector in the SACI. In addition, eight components were identified from the exploratory factor analysis about the relationship between the variables within the components, which are the absence of due diligence in procurement screening, corruption and political interference in procurement systems, ineffective regulatory framework supporting public procurement policy, discrepancies in award of contracts and absence of dispute resolution, ambiguity in procurement selection criteria, poor enforcement mechanisms, cost discrepancies in advance payment, and excessive bureaucracy in procurement documentation.
The theoretical and practical implications of this study provide knowledge among construction stakeholders to improve the procurement system in South Africa. Empirically, this study emphasises the need to understand the inhibiting factors affecting preferential procurement policy implementation in the SACI. The eight components identified from the exploratory factor analysis could assist construction stakeholders and policymakers in developing strategies to improve procurement systems within the construction sector. This study’s practical implications provide an understanding of how establishing and prioritising procurement selection criteria, such as project requalification requirements, cost performance requirements, technology integration in the prequalification process, and contract change order requirements, would improve procurement systems in the SACI. It also provides guidance for the South African government to achieve the objectives of the national development plan (NDP) by 2030 in promoting inclusiveness, promoting skills development, an effective public sector, and nation-building among construction stakeholders.
Thus, there is a need for more collaboration between government agencies, private and public construction stakeholders, and academic scholars to develop implementation strategies for the procurement system that foster a culture of due diligence in procurement screening processes and will improve the acceptance of the preferential procurement policy in the SACI. Therefore, this study concludes that understanding and guiding against factors such as the absence of due diligence in procurement screening, corruption and political interference in procurement systems, an ineffective regulatory framework supporting public procurement, discrepancies in the award of contracts and the absence of dispute resolution would improve procurement systems in the SACI.
This study focused on the challenges of implementing a preferential procurement policy, and the data analysed were based on the perspective of selected construction stakeholders in Northwest Province, one of the Republic of South Africa’s twelve provinces (as explained in the Methodology Section). Nonetheless, the respondents who participated in this study fairly represent professionals involved in procurement processes within the CI across various sectors in South Africa. Hence, in addressing these weaknesses, future research can provide more robust, reliable, and comprehensive insights into the impacts of preferential procurement policies in the CI by including more provinces in their study. Also, future research should adopt a sequential exploratory mixed method to overcome the weakness of using only quantitative data collection for the study. Further research can also be carried out to examine the satisfaction and success factors of the preferential procurement policy on public contractual arrangements in South Africa.