Contract management practices and sustainability preparedness in Local Government Engineering Department (LGED): A review study

Abstract

Public sector infrastructure projects are vital to Bangladesh’s socioeconomic progress, with the Local Government Engineering Department (LGED) leading their delivery. However, persistent weaknesses in contract management hinder timely and cost-effective outcomes. Challenges include poor planning, procurement delays, weak monitoring, limited accountability enforcement, and inadequate integration of sustainability principles. This study employs a mixed-methods approach: a survey of 44 LGED officials and case studies of government-funded, mixed-funded, and donor-funded projects. Results show systemic shortcomings: only 14-20% of projects were completed on time, over 75% required extensions, and cost overruns occurred in up to 11.54% of cases. Liquidated damages were enforced in fewer than 7% of contracts. Digital tools are underutilized, with only 13.33% of officials using contract management software. Sustainability preparedness is partial. Although half of respondents reported its inclusion, practices mostly address environmental aspects, while social and economic dimensions, such as gender inclusivity and life-cycle costing, remain overlooked. Donor funded projects demonstrated stronger sustainability compliance due to external requirements. The analysis, framed through Principal-Agent, Transaction Cost, and Institutional theories, reveals that LGED’s challenges are systemic and institutional rather than individual. To address them, the study recommends reforms including a centralized Contract Management Information System (CMIS), mandatory pre-feasibility assessments, performance-based payments, sustainability scorecards, updated SOPs, a dedicated Contract Management and Sustainability Cell, and professional certification programs. Strengthening contract management is a strategic imperative for enhancing transparency, accountability, and sustainability in public infrastructure, supporting Bangladesh’s development goals and the SDGs.