Effect of Sub-Contractor Selection on Construction Project Success in Turkey

Abstract

The construction industry leads the national economy in developing countries. It involves industrial requirements, such as developing technologies, related expertise, demand variability, high production speed and progress. Firms in the industry use subcontractors to produce fast, effective solutions. Therefore, projects’ success varies depending on subcontractors’ rather than general contractors’ performance. This study aimed to develop a model of selection criteria for subcontractors and measure their impact on project success. Construction firms using subcontractors were chosen as the target group. Data on the selection of subcontractors from 93 construction firms that employ subcontractors in their projects were collected through a survey. The impact of the subcontracting selection factor on projects’ overall performance was presented with five hypotheses and modeled using a structural equation model. The weight of each selection factor in the subcontracting selection and the impact on the overall project were designated in the model by determining the standardized regression weights (β). Four hypotheses were accepted and one rejected. This study may contribute to the prequalification conditions in the process of selecting subcontractors in the future.

Keywords

• Subcontracting
• subcontractor selection factors
• subcontractor project performance

References

1. Doloi, H., Iyer, K.C. and Sawhney, A., Structural equation model for assessing impacts of contractor’s performance on project success, International Journal of Project Management, Vol. 29, pp. 687-695, 2011.
2. El-Mashaleh, M. S., A construction subcontractor selection model, Jordan Journal of Civil Engineering, Vol. 3., No.4, pp. 375-378, 2009.
3. Ng, S. T.; Luu, C. D. T., Modelling subcontractor registration decisions through case-based reasoning approach, Automation in Construction Vol. 17, No. 7, pp. 873–881, 2008.
4. Benjaoran, V., A cost control system development: A collaborative approach for small and medium-sized contractors, International Journal of Project Management, Vol. 27, pp. 270–277, 2009.
5. Albino V and Garavelli A.C., A neural network application to subcontractor rating in construction firms, International Journal of Project Management, Vol. 16, pp. 9–14, 1998.
6. Mbachu, J., Conceptual framework for the assessment of subcontractors’ eligibility and performance in the construction industry, Construction Management and Economics Vol.26, pp. 471–484, 2008.
7. Marzouk M. M., El-Kherbawy A. A. and Khalifa M., Factors influencing sub-contractors selection in construction projects, HBRC Journal, Vol. 9, No.2, pp. 150–158, 2013.
8. Hinze J. and Tracey A.2 Contractor-subcontractor relationship: the subcontractor's view, Journal of Construction Engineering and Management, Vol. 120, No. 2, pp. 274–287, 1994.

9. Dainty, A, Briscoe. G, and Millet. O., Subcontractor perspective on supply chain alliances, Construction management and Economics, Vol.19, No. 2, pp. 841-848, 2010.
10. Eccles,R., Bureaucratic versus craft administration: the relationships of market structure to the construction firm, Administrative Science Quarterly, Vol. 26, No. 3, pp. 449-469, 1981.
11. Miller,C.; Packham, G. and Thomas, B., Harmonisation between main contractors and subcontractors: prerequisite for lean construction, Journal of Management in Engineering, Vol. 16, No. 3, pp. 47-57, 2002.
12. Kumaraswamy, M. and Matthews, J., Improved subcontractor selection employing, Journal of Construction Research Partnering Principles, Vol. 16, No. 3: pp. 47-57, 2000.
13. Brook, M., Estimating and tendering for construction work, Oxford: Butterworth Heinemann, 2008.
14. Shiau, Y., Tsai, T., Wang, W. and Huang, M., Use questionnaire and AHP techniques to develop subcontractor selection system, Construction Management and Economics, Vol. 33, No. 2, pp. 1-6, 2002.
15. Ulubeyli, S., Uluslararası inşaat projelerinde alt yüklenici seçimi için bulanık çok ölçütlü karar verme modeli, PhD Thesis (in Turkish), İstanbul University, 2008.
16. Arslan, G., Kıvrak, S., Birgönül, M. T. and Dikmen, İ., Improving sub-contractor selection process in construction projects: web-based sub-contractor evaluation system (WEBSES), Automation in Construction, Vpl. 17, No. 4, s.480-488, 2008.
17. Topcu, İ., A decision model proposal for construction contractor selection in Turkey, Building and Environment, vol. 39, no. 4, pp. 469–481, 2004.
18. Ulubeyli, S., Kazaz, A., Arslan, V., Decision Criteria for Subcontractor Selection in International Construction Projects. International Conference on Civil and Environmental Engineering (ICOCEE), At Nevsehir, Turkey, 2017.
19. Polat G., Kaplan B, Bingol B.N., Subcontractor selection using genetic algorithm, Procedia Engineering 123: 432-440, 2015.
20. Hatush, Z. and Skitmore, M., Contractor selection using multicriteria utility theory: An additive model, Building and Environment, Vol.33, No. 2-3, pp. 105-115, 1998.
21. Okoroh, M. I. and Torrance, V. B., A model for subcontractor selection in refurbishment projects, Construction Management and Economics, Vol. 17, No. 3, pp. 315-327, 2010.
22. Abbasianjahromi H., Rajaie H. and Shakeri E., A framework for subcontractor selection in the construction industry, Journal of Civil Engineering and Management, Vol. 19, No. 2, pp. 158-168, 2013.
23. Piasny, J. and Paslawski, J., Selection of subcontractors as the quality improvement tool in housing construction, Procedia Engineering, Vol. 122, pp. 274-28, 2015.
24. Bingöl, B.N., Polat G., Risk analysis in the subcontractor selection process for international construction projects, International Conference on Construction and Real Estate Management, pp. 1285-1292, 2017.
25. Lew YL, Hassim S, Muniandy R, Hua L.T., Structural equation modelling for subcontracting practice: Malaysia chapter, Engineering, Construction and Architectural Management, Vol. 25, No. 7, pp. 835-860, 2018.
26. Yu W.D., Chang H.K., Hsu Y.Y., Cheng S.T., Wang K.W., Pretendering decision model for contractor selection of public procurement projects, Journal of Construction Engineering and Management – ASCE, Vol. 146, Issue 11, 2020.
27. Çiftçioğlu, B., Contractor selection by AHP method in construction sector. Application in a housing project. ITU Master Thesis., 2013.
28. Acar, Y. (2014). Choosing sub-contractor by ANP (Analytic Network Process) method in contstruction sector. Osmangazi University Master Thesis., 2014.
29. Polat G., Damci A., Subcontracting practices in international construction projects evidence from Turkish contractors, Creative Construction Conference, Prague, 2014.
30. Aydın, H., Okul, B., Ayvaz, B., Kuşakçı, A. O., Kağıtçıoğlu, S., Çok kriterli karar verme teknikleri ile alt yüklenici seçimi: İnşaat sektöründe bir uygulama, Bartın Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 7(14), 29-44, 2016.
31. Ulubeyli S., Manisali E., Kazaz A.,“Subcontractor selection practices in international construction projects”Journal of Civil Engineering and Management,16, 47-56, 2010.
32. Erdoğan, O., Topraklı Y., Türkiye inşaat endüstrisinde risk tabanlı alt yüklenici seçiminde TOPSIS metodolojisi ve değerlendirmesi. Bayburt Üniversitesi Fen Bilimleri Dergisi, Cilt 2, Sayı 1, 2019.
33. Bagozzi R. P., Fornell C., Theoretical Concepts, Measurement, and Meaning, Vol. 2, C. Fornell (Ed.) A Second Generation of Mulivariate Analysis, Praeger, ss. 5-23, 1982.
34. Anderson J. C., Gerbing D. W., Structural equation modeling in practice: A review and recommended two-step approach”, Psychological Bulletin, 103, ss. 411-423, 1988.
35. Yin, H.; Wang, Z.; Yu, J.; Ji, Z.; Ni, H., Application of DEA cross evaluation model in project dynamic alliance subcontractors selection, International Workshop on “Intelligent Systems and Applications”, 23–24 May, Wuhan, 1–4, 2009.
36. Wang, D.; Yung, K. L.; Ip, W. H., A heuristic genetic algorithm for subcontractor selection in a global manufacturing environment, IEEE Transactions on Systems, Man and Cybernetics. Part C. Applications and Reviews, Vol. 31, No. 2, pp. 189–198, 2001.
37. Hartmann, A.; Caerteling, J., Subcontractor procurement in construction: the interplay of price and trust, Supply Chain Management: An International Journal of Project Management, Vol.15, pp. 354–362, 2010.
38. Kozlovská, M., and Struková, Z., Integration of occupational safety to contractors` or subcontractors` performance evaluation in construction projects, Journal of Civil Engineering, Vol. 8, No. 1, pp. 13-24, 2013.
39. Subramaniam C., Shamsudin F.M., Alshuaibi, A., Investigating employee perceptions of workplace safety and safety compliance using pls-sem among technical employees in Malaysia, Journal of Applied Structural Equation Modeling: 1(1), 44-61, 2017.
40. Tam, V.W.Y., Shen, L. and Kong, J.S.Y., Impacts of multi-layer chain subcontracting on project management performance. International Journal of Project Management, 29, 108-116, 2011.
41. Kinnear, T.C. and Taylor, J.R., Marketing research: an applied approach, fourth edition, McGraw-Hill, Singapore, 2012.
42. Kar S., Jha K., Examining the effect of material management issues on the schedule and cost performance of construction projects based on a structural equation model: survey of indian experiences. Journal of Construction Engineering and Management. 146. 10.1061/(ASCE)CO.1943-7862.0001906, 2020.
43. Budayan C., Çeli̇k T., Determination of important building construction nuisances in residential areas on neighbouring community, Teknik Dergi, 32 (2), DOI: 10.18400/tekderg.486628, 2021.
44. Demi̇rdöğen G., Işık Z., Structural equation model of the factors affecting construction industry innovation success. Teknik Dergi, 32 (2), 0-0 . DOI: 10.18400/tekderg.567272, 2021.
45. Arbuckle, J.L., Amos 4.0 Users Guide, Chicago,Ill: SPSS Inc., 1999.
46. Dong, L., Neufeld, D. and Higgins, C., Testing Klein and Sorra's innovation implementation model: An empirical examination, Academy of management conference, Vol. 25, No:4, pp. 237-255, 2008.
47. Peterson, I., Pick a sample, Science News, Vol.140, pp. 56-57, 1991.
48. Nunally J. C., Psychometric theory (2nd edition). McGraw-Hill, New York, 1978.
49. Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E., Multivariate data analysis (7th edition), New York: Pearson, 2010.
50. Tawalare, A., Laishram, B., & Thottathil, F. (2020). “Relational partnership in public construction organizations: front-line employee perspective.” Journal of Construction Engineering and Management, Vol. 146, No. 1, DOI: 10.1061/(ASCE)CO.1943-7862.0001723.
51. Durdyev, S., & Ihtiyar, A. (2019). “Structural equation model of factors influencing students to major in architecture, engineering, and construction.” Journal of Professional Issues in Engineering Education and Practice, Vol. 145, No. 2, pp. 1-8, DOI: 10.1061/(ASCE)EI.1943-5541.0000402.
52. Zhao L., Wang B., Mbachu J. and Liu Z. (2019). “New Zealand building project cost and its influential factors: A structural equation modelling approach.” Advances in Civil Engineering, Vol. 2019, pp. 1-15, DOI: 10.1155/2019/1362730.
53. Çi̇vi̇ci̇, T . (2017). Mimari tasarım firmalarında müşteri yönlülük: Bir yapısal denklem modeli . Balıkesir Üniversitesi Fen Bilimleri Enstitüsü Dergisi , 19 (2) , 87-98 . DOI: 10.25092/baunfbed.340543.