Olaniran, O J (2015) The effects of cost-based contractor selection on construction project performance. Journal of Financial Management of Property and Construction, 20(3), pp. 235-251. ISSN 1366-4387
Abstract
Purpose – This paper aims to present the outcome of a study conducted on the impact that cost-based contractor selection (CBCS) might have on construction project performance. Several criteria are normally used to select construction contractors, competitiveness of the quoted prices of the prospective contractors is one such important criterion. However, choosing contractors solely on the basis of the quoted price may cause poor performance in the construction project. Design/methodology/approach – A quantitative approach was adopted. A critical review of the literature was conducted to develop 50 survey questions relating to the problems that CBCS might have on construction project performance. Findings – Analysis of close data obtained from the survey of construction experts showed the nature of project performance problems associated with the CBCS to be project time delays and non-compliance with construction standards. The major reason they occurred was found to be the reduced profit margin for contractors. Research limitations/implications – The research sample size is small and restricted to construction professionals in Brunei. Practical implications – The study findings present updated information to construction professionals about the inherent impacts of choosing contractors based on cost. Furthermore, this study enhances the approach of selecting contractors within the construction industry. Originality/value – The study made strong and unique arguments about the problems associated with choosing construction contractors based on cost. This study contributes to the body of knowledge relevant to the management of construction projects.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | costs; construction management; contractors; project performance |
| Index terms: | compliance, survey, profit, methodology, construction project, body of knowledge, construction contractor, construction standard, contractor selection, sample size, competitiveness, project performance, construction professional, Brunei, time delay, construction industry |
| Subjects: | knowledge management, standards, economic analysis, practitioner, data collection methods, research design and methodology, industry analysis, project controls, market analysis, health safety and environment, Geography, production management, project management theory and practice, professional development, tendering, research methods |
| Topics: | Legal Issues, Time Control, Information Management, Geographical Context, Project Management, Research Practice, Health and Safety, Business Strategy, Procurement, Roles and Professions |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here