Factors Influencing Sub-Contractors Selection in C
Factors Influencing Sub-Contractors Selection in C
Factors Influencing Sub-Contractors Selection in C
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HBRC Journal
http://ees.elsevier.com/hbrcj
a
Structural Engineering Department, Faculty of Engineering, Cairo University, Egypt
b
Construction and Building Engineering, College of Engineering & Technology, Arab Academy for Science,
Technology & Maritime Transport, Egypt
KEYWORDS Abstract Selection of the best sub-contractor is a vital process in construction projects. There are
Sub-contractors selection; many factors that must be taken into consideration when selecting sub-contractors. Improper selec-
Construction management; tion of sub-contractors might lead to many problems during work progress. These include bad qual-
Questionnaire surveys ity of work, and delay in project duration. This process is controlled by many factors. Forty six
factors are collected from previous studies that influence sub-contractor selection. This paper iden-
tifies the most important factors that influence the selection of sub-contractors. A questionnaire was
distributed to experts in the construction domain to determine the importance of factors that are
taken into consideration by the main contractor to select the most suitable sub-contractor. A survey
was carried out which was conducted with 29 experts in the construction field to determine the score
of each factor. Statistical analysis is carried out on the feedback of the respondents of the survey. By
using SPSS software, the frequency of the results of the questionnaire was determined. Examples of
crosstabs between some of the most important factors are presented to provide a comparison
between two factors. The mean score of each factor was determined and the p-value was calculated
using the SPSS software, the significance of each factor used in the questionnaire is determined. Any
factor that has a p-value less than 0.05 is considered a significant one.
ª 2013 Housing and Building National Research Center. Production and hosting by Elsevier B.V.
All rights reserved.
Introduction
1687-4048 ª 2013 Housing and Building National Research Center. Production and hosting by Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.hbrcj.2013.05.001
Factors influencing sub-contractors selection in construction projects 151
are merely interested in the lowest bidders. But there are other the subcontractor, such as; ‘‘prevention of vandalism’’ and
criteria that should be taken into consideration. In a study that ‘‘energy saving materials and installation.’’ These factors were
was performed by Turksis [1], 13 criteria for selecting the best grouped into eleven criteria. The second part is mainly a ques-
contractor are introduced such as: ‘‘history of reasonable bid tionnaire which was conducted with field experts. The third
price submissions’’; ‘‘a work history that indicates specializa- part represents the calculation of the relative weights of the
tion and quality of workmanship in a particular construction 34 sub-criteria. The fourth part states that ‘‘the value of a
skill; ‘‘contractor’s degree of quality control’’; ‘‘decorum, con- bid will be divided by the price resulting in the value-price ra-
duct and non-disruptiveness of contractor staff and subcon- tio; the higher the ratio the more value for money for the cli-
tractors ‘‘coordination of operations that will cause noise, ent.’’ The minimum value/requirements is the related set of
vibrations, dust, odors, safety concerns and other activities’’; minimum necessities, maximum price the client is ready to
‘‘responsiveness to warranty issues’’; ‘‘Flexibility and coopera- reimburse, minimum value-price ratio showing the difference
tion when resolving delays’’; and ‘‘ability to meet project sche- between the value and the price. Hartmann et al. [4] set four
dule’’. Abiding by such criteria, or on others depending on the essential criteria for choosing a subcontractor; ‘‘price, techni-
situation, leads to the right selection of the best alternative, cal know-how, quality and cooperation.’’ In order to deter-
which has many benefits for all parties in the construction pro- mine the relative importance of each criterion, the mean,
ject; such as high quality finishing, meeting deadlines based on median and standard deviation were calculated. The four crite-
the estimated time, as well as abiding by the estimated cost. ria are considered essential ones. Usually, maximizing profits
Consequently, there are many methods that can be used in and minimizing costs come as crucial objectives of a contrac-
the decision making process of selecting a contractor. These tor. Consequently, setting price as one of the criteria of choos-
methods include: ‘‘multi-criteria decision making (MCDM), ing a subcontractor is essential; in the real world a
bespoke approaches (BA), multi-attribute analysis (MAA), subcontractor who offers the lowest price is likely to be se-
multi-attribute utility theory (MAUT), and decision support lected. However, as previously highlighted, price cannot be
systems for contractor pre-qualification – an artificial neural the sole criteria based on which selection occurs. Another
network approach’’ (Darvish et al. [2]). In a study by Darvish important criterion is the ‘‘technical know-how’’ [4]. It was
et al. [2], multi-criteria decision making (MCDM) method is suggested that a subcontractor has to prove professionalism,
used, taking into consideration the following criteria of selec- experience and knowledge of specific technical issues; as a sub-
tion: technology and equipment, management, experience contractor is mainly ‘‘hired to perform specific tasks of a pro-
and knowledge of the technical staff, financial stability, qual- ject’’ which require technical knowledge [4].
ity, being familiar with the area or being domestic, Reputation, As explained, a subcontractor who maximizes profits,
and creativity and innovation. Despite setting several contrac- through high quality work backed with strong technical
tor selection criteria, the final decision should consider both; know-how and a cooperative attitude is considered among
the criteria set and the competitiveness of the price. In that the best options. In that sense, a study by Doloi [5] supported
sense, different countries vary in the approach they follow in this conclusion through introducing 43 sub-criteria to deter-
order to take the final decision. Countries such as Denmark, mine the best alternative. The study concluded that the low
Italy, Portugal, South Korea, France, Australia, Saudi-Arabia, tender price alone is not an indicator of the alternative/con-
Turkey, Canada, the United States of America, Lithuania and tractor’s trustiness. The research has three objectives; first, to
Iran, have different approaches as shown in Table 1. determine the essential criteria related to the selection of a con-
A study by Walraven and De Vries [3] applied the process tractor; second, to examine and evaluate the extent to which
of selecting the best contractor. The research method of this these criteria are essential to a successful ‘‘project delivery’’;
study is divided into four parts. The first part determines 34 and third, to set up ‘‘the predictive models’’ on the contractor
sub-criteria of contractor selection driven from other studies. selection criteria ‘‘influencing target performance and overall
Some of these factors resemble those required for choosing success in projects’’ [5]. In order to get a comprehensive idea
about the effect of the different criteria on the contractor selec- frequencies of importance level and the mean score for the dif-
tion process, a survey was conducted, which is considered an ferent factors are listed in Table 3.
important tool to identify the significance of each criterion.
A questionnaire is also considered the best method to use in Identification of significant factors
cases of non-accessibility to ‘‘documented data’’. This paper
presents a study on the factors that influence the selection of Using the mean score of each factor and calculating the p-va-
sub-contractors in construction projects. Forty six factors are lue by using the SPSS software, the significance of each factor
collected from previous studies that influence sub-contractor used in the questionnaire is determined. Any factor that has a
selection. This paper identifies the most important factors that p-value less than 0.05 is considered a significant one. As per
influence the selection of sub-contractors. A survey was carried Table 4, the significant factors are determined based on the
out which was conducted with 29 experts in the construction p-value and the mean score. Any factor that has a p-value less
field to determine the score of each factor. The size of the sam- than 0.05 has a mean score of more than 3.00. There are thir-
ple required from the targeted population is the total number teen factors with a p-value more than 0.05, so they are not sig-
of contractors registered by the Egyptian Federation for Con- nificant factors. Although some of the non-significant factors
struction and Building Contractors (EFCBC). The minimum have a mean score more than 3.00 this is not an indicator that
size of the sample required from the targeted population was these factors can be significant. The p-value result is a crucial
determined statistically according to Kish [6] as per Eqs. (1) indicator to the significance of factors. In this table, determin-
and (2). ing the significant factors occurs through identifying their
mean scores and p-value. The mean score which acts as an
pq
n0 ¼ ð1Þ identifier of the most important versus the least important fac-
V2 tor is 3.00. This mean score can be identified as an average
n0 mean score; since a mean score less than 3.00 has no signifi-
n¼ ð2Þ cance and more than 3.00 is significant. Therefore, each signif-
1 þ nN0
icant factor is considered of high importance when its mean
where: n0, is first estimate of sample size; p, the proportion of score is more than 3.00, and has a p-value less than 0.05.
the characteristic being measured in the target population; q,
complement of p or 1-p; V, the maximum standard error al- Cross-tabulation calculations
lowed; N, the population size; and n, the sample size.
The total number of contractor companies (N), registered Crosstab is the comparison between two factors which is done
in Egyptian Federation for Construction and Building Con- by using the SPSSsoftware. The crosstabulation is defined as
tractors (EFCBC), in the year 2007 is 58,991, and the first class ‘‘Across-tabulation’’ and is a two (or more) dimensional table
contractor’s companies are 1716. Hence, p is estimated to be that records the number (frequency) of respondents that have
the ratio between the first class of contractor’s companies to the specific characteristics described in the cells of the table.
the total number of contractor companies which is 0.029. To Cross-tabulation tables provide a wealth of information about
account for possible error in the qualitative answers from the the relationship between the variables’’ [11]. This section pre-
questionnaire, the maximum standard error V was set at sents examples of crosstabs between some of the most impor-
10%. Substituting in Eqs. (1) and (2), the minimum sample re- tant factors only. These factors are: tender price, contractor’s
quired was calculated to be 2.816. This means that the mini- difficulty in reimbursement, Failure to complete contract,
mum sample size is approximately 3.0. quality, experience of technical personnel, Suppliers incompe-
tency to deliver materials on time, disputes, and arbitration,
Factors identification and statistics Failure to comply with the quality specifications, flexibility,
and cooperation when resolving delays, delay, flexibility in
Forty six factors that are clustered in ten criteria are consid- critical activities, Reputation, knowledge of construction regu-
ered in the survey to determine the most important factors in lations and physical resources. Table 3 compares between two
selecting sub-contractors. These criteria and their factors are of the most important factors which are quality and failure to
listed in Table 2. These factors were gathered from the litera- comply with the quality specifications. When the Quality fac-
ture [7–10]. This section presents the statistics and mathemat- tor has moderate importance, two of the responses said that
ical calculations which were carried out using SPSS software to the Failure to comply with the quality specifications factor
provide the crosstabs and the frequencies. Then, at the end of has the highest importance. Also when the Quality factor has
this section, there is a table for determining the significant fac- weak importance, one response gave the failure to comply with
tors. Three types of statistical analyses are performed on the the quality specifications factor moderate importance. The to-
data: frequency calculations, cross-tabulation calculations, tal number of responses of both factors is 29, which is the total
and identification of significant factors. responses number of the questionnaire survey. Table 5 clearly
sets a comparison between two factors.
Frequency calculations The Quality factor has 13 responses with the highest impor-
tance while the Failure to comply with the quality specifica-
By using the SPSS software, the frequency of the results of the tions factor has different importance rates. On the opposite
questionnaire was determined. This section consists of tables side there are 18 responses that gave the Failure to comply
of some of the most important factors and determines the with the quality specifications factor the highest importance
number of the responses for each score, ranging from 1 being while the Quality factor has different importance rates.
the least important to 5 being the most important. The This shows that the Failure to comply with the quality
Factors influencing sub-contractors selection in construction projects 153
Table 2 (continued)
Criterion Factor Definition
specifications factor dominates the Quality factor. Table 6 difference of eighteen responses. On the opposite side, at dif-
shows the relationship between the Supplier’s incompetency ferent importance rates of the Failure to comply with the qual-
to deliver materials on time and Failure to comply with the ity specifications factor, the Flexibility and cooperation when
quality specifications factors. As shown in the table there is resolving the delay factor has the highest importance by a dif-
no response when the Supplier’s incompetency to deliver mate- ference of fifteen responses. This means that the Failure to
rials on time has the highest importance and the Failure to comply with the quality specifications is more significant than
comply with the quality specifications has moderate impor- the Flexibility and cooperation when resolving delays.
tance. Also at different importance rates of the Supplier’s Table 8 shows the relationship between the Failure to com-
incompetency to deliver materials on time, the Failure to com- ply with the quality specifications and the delay factors. As
ply with the quality specifications has the highest importance shown in the table there is no response when the Failure to
by a difference of 18 responses. On the opposite side, at differ- comply with the quality specifications has the highest impor-
ent importance rates of the Failure to comply with the quality tance and the delay has moderate importance. Also at different
specifications, the Supplier’s incompetency to deliver materials importance rates of the delay factor, the Failure to comply
on time has a highest importance by a difference of seventeen with the quality specifications factor has the highest impor-
responses. This means that the Failure to comply with the tance by a difference of 18 responses. On the opposite side,
quality specifications factor is more significant than the Sup- at different importance rates of the Failure to comply with
plier’s incompetency to deliver materials on time. the quality specifications, the delay has the highest importance
Table 7 shows the relationship between the Failure to com- by a difference of 15 responses. This means that the Failure to
ply with the quality specifications and the Flexibility and coop- comply with the quality specifications is more significant than
eration when resolving delays factors. As shown in the table, the delay.
there is no response when the Failure to comply with the qual- Table 9 shows the relationship between the Failure to com-
ity specifications has the highest importance and the Flexibility ply with the quality specifications and the Reputation factors.
and cooperation when resolving delays has moderate impor- As shown in the table there is no response when the Failure to
tance. Also at different importance rates of Flexibility and comply with the quality specifications has the lowest impor-
cooperation when resolving delays factor, the Failure to com- tance and the Reputation has a moderate importance. Also
ply with the quality specifications has highest importance by a at different importance rates of the Reputation, the Failure
Factors influencing sub-contractors selection in construction projects 155
to comply with the quality specifications has the highest by the 29 experts, then dividing it by the total number of
importance by a difference of 18 responses. On the opposite the respondents which is 29. Any factor that has a mean
side, at different importance rates of the Failure to comply score greater than 4.00 is deemed important (see Fig. 1). So
with the quality specifications, the Reputation has the highest this study has 12 factors which are more important than
importance by a difference of 15 responses. This means that the other 34 factors. These 12 factors, arranged from the
the Failure to comply with the quality specifications is more most important to the least important are: Flexibility and
significant than the Reputation. cooperation when resolving delays (TC1) and Reputation
As per Table 3, the mean score is calculated for each fac- (EC1) with the same score, followed by delay (TC2); then
tor to determine the most important factors according to the Failure to comply with the quality specifications (DR3) and
expert’s opinion. Each factor was given a score by the experts Quality (QC1) with the same score; Suppliers incompetency
through the surveys, as this survey has 29 responds. Conse- to deliver materials on time (DR1) and Failure to complete
quently, the mean score is calculated through getting the contract (CC5) with the same score; Physical resources
summation of the scores of each factor which were ranked (OC3); Tender price (CC3); Contractor’s difficulty in
156 M.M. Marzouk et al.
reimbursement (CC4) and Flexibility in critical activities The order of these factors is an indicator to the current
(TC4) with the same score; and Safety consciousness on the trend of the sub-contractor selection process in the construc-
job site (SF3). tion field. Since several factors have equal scores, there are
Factors influencing sub-contractors selection in construction projects 157
Table 6 Failure to comply with the quality specifications vs Supplier’s incompetency to deliver materials on time crosstab.
Failure to comply with the quality specifications Total
1 2 3 4 5
Suppliers incompetency to deliver materials on time 1 1 0 0 0 0 1
2 0 2 0 0 0 2
3 0 0 0 1 1 2
4 0 0 2 2 3 7
5 0 0 0 3 14 17
Total 1 2 2 6 18 29
Table 7 Flexibility and cooperation when resolving delays vs Failure to comply with the quality specifications crosstab.
Flexibility and cooperation when resolving delays Total
1 2 3 4 5
Failure to comply with the quality specifications 1 0 0 0 1 0 1
2 0 0 1 0 1 2
3 0 0 0 1 1 2
4 0 0 3 1 2 6
5 0 0 0 7 11 18
Total 0 0 4 10 15 29
eight levels of ranking of the 12 factors. Among the two most a highly significant factor, on which other selection factors
important factors is Reputation. This factor is one that many can be based according to the expert’s opinion.
contractors highly depend on when deciding whether or not a Same applies to Flexibility and cooperation when resolving
sub-contractor will be chosen. For instance, as highlighted by delays factor; as it also came as the first most important factor
Hartmann et al. [4], Reputation counts as a significant of twelve factors. A sub-contractor’s attitude in a project is
indicator of the sub-contractor’s future work. This occurs crucial especially because he gets to deal with several parties.
through looking at a sub-contractor’s past experience in order Therefore, cooperation and flexibility are essential for the pro-
to determine the degree of professionalism and experience in ject’s success; according to Hartmann et al. [4] the extent to
matters such as quality, cooperation and general attitude in which sub-contractors ‘‘fulfill agreements’’ and the extent to
a project besides the technical know-how [4]. Consequently, which they ‘‘proactively solve and prevent problems’’ has its
this was supported by this study; as Reputation is considered direct impact on the project’s ‘‘operational efficiency’’ [4]
158 M.M. Marzouk et al.