A Contractor-Centric Construction Performance Model Using Non-Price Measures

Abstract

Selecting a better performing contractor at the procurement stage is crucial in achieving a successful outcome for a construction project. The construction industry lacks a systematic and purpose driven method to assess performance of contractors using objective metrics. There are many approaches to measuring construction performance, but most are complicated and have high dependency on data that is difficult to attain. This paper aims to create a model for evaluating construction contractors’ performance based on directly attributable measures that are quantitative and easy to gather. This makes such a model more attractive and easier to use. Initially, a detailed literature review revealed different categories of measures of performance (MoP) and corresponding critical measures of performance (CMoP). Through a series of Delphi-based expert forums, the set of measures were fine-tuned and shortlisted. Fuzzy analytic hierarchy process-based comparisons were then used for developing a contractors’ performance model to quantify their level of performance based on a limited set of organisation-specific and project-specific measures. The results indicate a shift from traditional measures and a higher preference towards non-price measures. The performance model can be further developed to systematically rank the prospective contractors at the procurement stage based on seven non-price measures.

Impact of External Environmental Factors on Construction Firms' Performance, Mediated By Institutional Pressures

“…Furthermore, construction firms' performance as a discipline, is growing in depth [20]. More than traditional performance metrics can deliver, today's construction enterprise require feasible information across a greater breadth of activities; besides this, decision-makers are required to select the policy that maximizes their expected utility among all conceivable outcomes [21]. Therefore, owning a detailed portfolio of performance metrics with the provision of an advance indication of the construction firm's business position and an enhanced prediction of performance outcomes becomes essential.…”

Ranked generic criteria for EPC contractor selection

“…Increasingly used in construction management research, the Delphi method is a structured communication technique originally developed as a systematic, interactive forecasting method that relies on a panel of experts answering questionnaires in consecutive Rounds until convergence, with the facilitator providing a summary of their judgments to the group in the form of the mean or median response in each Round: as uncertainties arise from the judgments of decision makers, this method accounts for interpersonal uncertainty and variability in one's opinion (Martin & Ramjarrie, 2021). Of particular relevance here is the increasing use of the Delphi method in such construction management research as graduate education (Pathuri et al, 2020), company performance (Mansour et al, 2020) and contract administration (Gunduz & Elsherbeny, 2020), as well as contractor selection (Mahdi et al, 2002), in terms of performance criteria (Gunasekara et al, 2021), safety criteria (Gharedaghi & Omidvari, 2019), public contract criteria (Hajek et al, 2017), effectiveness factors (criteria) (Lajimi et al, 2018), construction supply chain pre-qualification and selection criteria (Mahamadu et al, 2017), and project source criteria (Faraji et al, 2020).…”

Correlation of Construction Performance Indicators and Project Success in a Portfolio of Building Projects

“…Pace [3] recognized that project success factors are important to the overall successful outcome of a project, examining a number of studies in an attempt to correlate reported project success with the chosen project management methodology, but recognizing only a weak correlation at best. Determining project success is dependent on the stakeholder's role in the project [4][5][6][7][8][9][10][11][12][13][14][15][16]. Pinto and Slevin [10] discussed the criteria for a project consisting of the following characteristics: a specified time for completion (schedule), a limited or defined budget (budget), performance expectations and a series of activities (performance), and issues dealing with the client (client satisfaction).…”

“…The Project Management Institute identifies the knowledge areas essential in meeting construction project requirements as: integration; scope; schedule; cost; quality; resource; communication; risk; procurement; stakeholder; health, safety, security, and environment; and financial management [18]. Self-assessing performance is crucial for a contractor to drive individual performance improvement [13]. Gunasekara et al [13] found that the key areas of performance included the categories of health and safety, quality, experience, financial, environmental, human resources, and productivity.…”

“…Self-assessing performance is crucial for a contractor to drive individual performance improvement [13]. Gunasekara et al [13] found that the key areas of performance included the categories of health and safety, quality, experience, financial, environmental, human resources, and productivity. Although construction managers and contractors may define project success by a number of factors for their organization, including keeping their workforce employed, developing a new client or market, strengthening reputation or capabilities, and growing experience, in the financial category, project success can be quantified in terms of return on investment, realized profit, and debt ratio [8,11,13].…”