INFLUENCE OF TRANSACTIONAL CONTRACTS ON COMMUNITY STAKEHOLDERS’ ENGAGEMENT DURING CONSTRUCTION PROJECT IMPLEMENTATION

Purpose: Transactional contract is procedural, rigid and inhibits cooperative dealings based on definitive risk allocation. Parties are concerned about self-interest only, thereby exposing non-contractual parties such as the community stakeholders to combative engagement. This study assessed the scope of incentives within transactional-traditional procurement framework with a view to determine their appropriateness to address community stakeholders' needs towards curbing projects opposition during implementation. The objective was to determine whether transactional contractual characteristics in traditional procurement framework affect the outcome of firm's engagement with the community.

Design/methodology/approach: The study involved a questionnaire survey of 200 construction professionals and community leaders in Akwa Ibom and Imo State, Nigeria. The study data were analysed using the mean item score, and the test of hypothesis involved chi square.

Findings: The study revealed that fragmented practice, opportunism, moral hazards and adverse selection attributes inherent in traditional procurement framework inhibit progressive dialogue, inclusive progressive interaction, and open and transparent dealings with community stakeholders. Transactional contractual practice therefore hinders effective engagement with the community during project implementation.

Research Limitations/Implications: The finding of the study infers the need to modify transactional attributes to enhance flexibility, solidarity, mutuality and restrain of opportunism in traditional procurement framework. These adaptations will ensure synergistic engagement of external stakeholders towards improved efficiency.

Originality/value: The study espoused the relevance of effective contract design as a yardstick to mitigate project organisation/external stakeholders' interface management problems during construction project implementation.