The Impact of Lowballing on Procurement Outcomes in Ghana's Construction Sector

Abstract

This study explores the impact of lowballing on procurement outcomes within Ghana’s construction sector. Lowballing, a practice where contractors submit unrealistically low bids to secure contracts, is a common strategy in competitive tendering processes. While this practice may initially appear cost-effective, it often leads to various challenges, including compromised project quality, cost overruns, and delays. The research adopts a mixed-methods approach, combining qualitative interviews with key stakeholders in the construction industry and quantitative analysis of procurement data. The findings reveal that lowballing has a detrimental impact on the overall success of construction projects in Ghana, with significant repercussions for contractors, clients, and the broader economy. Factors such as inadequate financial resources, poor project management, and strained contractor relationships were identified as key consequences of lowballing. The study concludes by offering recommendations for policy reforms aimed at mitigating the adverse effects of lowballing, including more stringent bidding regulations and better oversight of procurement practices. This research contributes to a deeper understanding of procurement dynamics in Ghana's construction sector, offering practical insights for improving procurement outcomes and enhancing project delivery.