A framework for the performance assessment of construction contractors in Saudi Arabia

Abstract

PurposeIn this work, a framework for assessing construction contractors' performance in Saudi Arabia is developed. Usually, a contractor's assessment is based on financial aspects, which are lagging indicators in nature, and can ignore other nonfinancial aspects. Hence, a more detailed contractors' assessment framework is needed for the construction industry in Saudi Arabia. A framework that integrates financial and nonfinancial aspects in one model will enable contractors to better benchmark their performance to the rest of Saudi Arabia's construction industry.Design/methodology/approachInitially, the literature is reviewed and the most commonly used key performance indicators (KPIs) are identified and surveyed through contractors’ feedback to ensure their proper alignment with Saudi Arabia’s construction industry. The adopted set of KPIs will be further prioritized through the relative importance index (RII) method based on the surveyed contractors’ perceptions. Furthermore, the important set of KPIs will be factored into various groups using principle component analysis (PCA). Finally, the findings are validated through expert judgment.FindingsAll key performance indicators (KPIs) have proven to be significant, except for the environmental factor, which happens to be nonsignificant and hence has been omitted from further consideration. The remaining KPIs have been factored through the principle component analysis method. Five generic dimensions were identified: Performance, Satisfaction, Actual Metrics, Estimated Metrics and Compliance. The model has been validated by expert feedback, and it was found to be reliable.Originality/valueThe proposed model establishes an assessment framework to aid building construction contractors in assessing their performance in real time, in addition to postconstruction assessment for business development and retrofitting purposes.

Development of a Performance Assessment Model for Contractors in Saudi Arabian Construction Projects

“…Regarding the financial and cost categories, "cost control" and "financial stability" emerged as top priorities, reflecting the importance of effective cost management in construction projects. This finding corroborates the findings of Tuffaha et al [39], who emphasized the significance of financial factors in contractor evaluation. Furthermore, as noted by Radujković et al [41], the comparatively low weight given to "cost predictability" highlights the difficulties in precisely project cost forecasting.…”

“…A methodology for evaluating the performance of building contractors in Saudi Arabia was proposed by Tuffaha et al [39]. A contractor's evaluation was primarily centered on financial factors while overlooking other nonfinancial factors.…”

An Analysis of Factors for Increase in Financial Turnover Gap Between Construction Companies Established During Same Time Period in KSA

“…An analysis of the above literature by Jadid (2013), Assaf et al (2013), and has led the researcher to the conclusion that the studies identify the role of management-related factors as the most important factor in the success or failure of the Saudi Arabian construction companies. On the contrary, Ali et al (2013) ranked the financial success factor as the most important factor and manager's competency was ranked as less important while Tuffaha et al (2020) ranked the performance group (people, business performance, productivity) as highest indicator of the Construction Company's success.…”

“…Recently, Tuffaha et al (2020) conducted research to develop a framework for assessing construction contractors' performance in Saudi Arabia by using quantitative research methodology. The use of literature review was made for the identification of key performance indicators (KPIs) that are commonly used.…”