Evaluation of contractor performance for pre-selection in the Kingdom of Saudi Arabia

235 Pages·2017·2.5 MB·English

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Evaluation of contractor
performance for
pre-selection in the Kingdom
of Saudi Arabia
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• A Doctoral Thesis. Submitted in partial fulfillment of the requirements
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EVALUATION OF CONTRACTOR PERFORMANCE
FOR PRE-SELECTION IN THE KINGDOM OF SAUDI
ARABIA

By
MOHAMMED ALOTAIBI

This research is submitted in partial fulfilment of the
requirements for the award of the Philosophy Doctoral degree
in Construction Management in Loughborough University

copyright by Mohammed Alotaibi (2011)
CERTIFICATE OF ORIGINALITY

This is to certify that I am responsible for the work submitted in this thesis, that the
original work is my own except as specified in acknowledgments or in footnotes, and
that neither the thesis nor the original work contained therein has been submitted to
this or any other institution for a degree.

……………………………………………. ( Signed )
……………………………………………. ( Date)
Acknowledgement

In the name of God, the Most Merciful and the Most Gracious, I give praise
and thanks to Him for supporting me with the strength to complete this
research, and for providing me with knowledgeable and caring individuals
during the study process.
The researcher would like to express his deepest appreciation and gratitude
to the research supervisor, Professor A.D. Price, for his dedicated help,
time and valuable guidance through all the stages of this research project.
I owe special thanks to my father, my mother and lovely wife and my kids for
their endless support, encouragement and prayers and, more importantly,
their patience.
i
Abstract
The construction industry in the Kingdom of Saudi Arabia (KSA) is
experiencing rapid development and sharp expansion due to recent changes
in socio-economic development policies. The performance of construction
contractors is an essential and critical part of project success; however, there
is a lack of skilled manpower and lack of experience in managing major
projects within KSA. Appropriate tools to evaluate, measure and monitor
construction contractor performance are also required. As a result of the
changes in the KSA construction market needs, the nature of the
competition, the cost of failing public construction projects and the
importance of the quality of product in the final project, awareness of the
need to select an appropriate though effective contractor performance
selection framework has been highlighted.
This doctoral research project analyzes and evaluates current techniques for
monitoring contractor performance, and identifies the most appropriate
techniques that could be adopted in KSA. This was achieved by performing
critical analyses of literature and conducting preliminary interviews with
practitioners in KSA. The main outcome of the literature review and
preliminary interviews was used to articulate a number of questions which
were subsequently posed in a questionnaire and in interviews with a number
of Saudi professionals working within the public sector.
The findings of this initial research have been used to establish a novel
framework to help in measuring contractor performance prior to selection.
The framework was tested through focus group workshops resulting in
positive feedback and some alterations. The main findings of the study
include the lack of an appropriate construction contractor performance
evaluation framework in SA, and the identification and exploration of criteria
and sub-criteria for a selection framework. The research provides
recommendations for best practices in the construction industry, as well as
for further research in the field.
Keywords: contractor performance - evaluation technique – Saudi Arabia
ii
Table of Contents

Acknowledgement ..................................................................................................... i
Abstract .................................................................................................................... ii
Table of Contents .................................................................................................... 3
List of Figures .......................................................................................................... 9
List of Tables ..........................................................................................................11
1 CHAPTER ONE: INTRODUCTION .................................................................... 1
1.1 Background ............................................................................................... 1
1.2 Research Aims and Objectives .................................................................. 2
1.2.1 Research Aim ..................................................................................... 2
1.2.2 Research Objectives .......................................................................... 2
1.2.3 Research Methodology ....................................................................... 3
1.3 Importance of the Research ....................................................................... 3
1.4 Research Issues and Subjects .................................................................. 4
1.5 Research Process ..................................................................................... 6
1.6 Research Key Findings .............................................................................. 7
1.7 Thesis Structure ........................................................................................ 9
2 CHAPTER TWO: PROJECT PERFORMANCE MEASUREMENT ...................11
2.1 Overview ..................................................................................................11
2.3 Performance Measurement in Construction...................................................20
Delay in the Construction Project .....................................................................22
4.1 Overview .......................................................................................................35
4.2 Contractor Safety Performance .....................................................................36
4.3 Politics, Society and Culture .....................................................................37
4.4 Contractors Risk Management .....................................................................37
4.5 Subcontractor Evaluation Criteria .................................................................38
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4.6 Criteria for Contractor Evaluation and Measurement in KSA ......................40
4.7 Summary .....................................................................................................45
5 CHAPTER FIVE: RESEARCH DESIGN AND METHODOLOGY .....................37
5.1 Overview ..................................................................................................37
5.2 Research Strategy ....................................................................................38
5.2.1 Case study strategy ...........................................................................38
5.2.2 Experimental Strategy .......................................................................39
5.2.3 Archival research ...............................................................................39
5.2.4 Historical strategy ..............................................................................39
5.2.5 Survey strategy..................................................................................39
5.3 Quantitative and Qualitative Research Methods .......................................39
5.4 Research Design ......................................................................................43
5.4.1 Data Collection Tools.........................................................................46
5.4.2 Research Sampling ...........................................................................57
5.5 Research Limitations ................................................................................59
5.6 Summary ..................................................................................................59
6 CHAPTER FOUR: QUANTITATIVE DATA ANALYSIS ....................................58
6.1 Overview ..................................................................................................58
6.2 Classification of Sample Respondents ......................................................58
6.2.1 Respondents Age ..............................................................................58
6.2.2 Respondents Work Position...............................................................59
6.2.3 Classification of the sample by years of experience ...........................59
6.2.4 Classification of Sample by Organisation ...........................................60
6.2.5 Nature of the Activities .......................................................................61
6.2.6 Type of Guidelines Used in Selecting Contractors .............................62
6.2.7 Criteria Evaluation .............................................................................63
6.3 Pre-selection Contractor Performance ......................................................63
6.3.1 Technical Capability of the Contractor ...............................................63
``
6.3.2 Financial Capability of the Contractor ................................................65
6.3.3 Health and Safety Record ..................................................................67
6.3.4 Reputation of the Contractor ..............................................................68
6.3.5 Management Ability ...........................................................................70
6.3.6 Culture of the Construction Industry ...................................................72
6.4 Summary ..................................................................................................74
7 CHAPTER FIVE: CONTRACTOR PRE-SELECTION IN KSA ..........................73
7.1 Introduction ...............................................................................................73
7.2 Expert Interviews ......................................................................................73
7.3 Current situation of the pre-selection process ...........................................75
7.4 Pre-selection Criteria and Measurement Process .....................................78
7.4.1 Contractor Financial Ability ................................................................79
7.4.2 Contractor technical ability .................................................................79
7.4.3 Contractor Reputation........................................................................80
7.4.4 Contractor Culture .............................................................................81
7.4.5 Role of construction equipment .........................................................82
7.4.6 Contractor Communication system ....................................................83
7.4.7 Contractor Health and Safety Records and Procedures .....................83
7.4.8 Contractor Management Ability ..........................................................84
7.5 Pre-selection Models/framework ...............................................................85
7.6 Challenges and Strategies ........................................................................86
7.7 Quantitative Feedback ..............................................................................87
7.8 Summary ..................................................................................................87
8 CHAPTER SIX: FRAMEWORK DEVELOPMENT ............................................88
8.1 Overview ..................................................................................................88
8.2 Financial Capability ..................................................................................88
8.2.1 Contractor Commercial Status ...........................................................89
8.2.2 Bank Arrangement .............................................................................90
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8.2.3 Credit Rating .....................................................................................91
8.2.4 Bank Statement .................................................................................92
8.2.5 Working capital ..................................................................................93
8.2.6 Current and fixed assets ....................................................................94
8.2.7 Turnover ............................................................................................94
8.3 Health and Safety Criteria .........................................................................95
8.3.1 Number of reported accidents in the last five years ...........................97
8.3.2 Number of previous accidents ...........................................................98
8.3.3 Number of fatal accident at your company .........................................99
8.3.4 Employee H&S Training ....................................................................99
8.3.5 Contractor Induction Plan ................................................................ 100
8.3.6 H&S Resources ............................................................................... 101
8.3.7 Clear H&S Policy ............................................................................. 102
8.4 Previous Project Performance ................................................................ 102
8.4.1 Previous Project Failure ................................................................... 103
8.4.2 Length of Time in Business ............................................................. 104
8.4.3 Past client/contractor relationship .................................................... 105
8.4.4 Number of court disputes ................................................................. 105
8.4.5 Number of similar size projects completed ....................................... 106
8.4.6 Subcontractors to be used for the project ........................................ 107
8.5 Management Process Criteria ................................................................ 107
8.5.1 Number of projects completed on time ............................................ 109
8.5.2 Previous number of projects delayed ............................................... 110
8.5.3 Scheduling growth ........................................................................... 110
8.5.4 Pre-planning .................................................................................... 111
8.5.5 Present workload and capability to support the new project ............. 111
8.5.6 Contractor‟s External Internal communication systems sub-criteria . 112
8.5.7 Management structure ..................................................................... 113
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