Flexible multi-criteria integrated performance-based decision model for contractor selection

Abstract

Contractors are one of the important team members in a construction project, they translate design and specifications into reality. Involvement of contractors in a project begins after they successfully make it through the preliminary screening process and win the bid for the project tender. Statistics released by construction industry agencies showed that the overall level of contractor performance are low. Researchers and professionals within the construction industry often relate the contractor performance with weaknesses within the current contractor selection system. The current contractor selection system is usually based on the lowest bid price, subjective assessment, neglecting performance criteria and does not act as a flexible decision making tool. Hence, this study aims to develop an integrated multi criteria decision making model based on performance for contractor selection. Mixed mode research methodology was used in identifying performance criteria and ensuring accuracy of the model developed. Interviews with six experts were conducted to identify weaknesses of the current system, the assessment method for performance criteria and integration of the model into the current assessment system. Whereas online questionnaires responded by 40 experienced quantity surveyors were used to determine the weighting factor for the determined performance criteria. Content analysis was used to interpret interview data and descriptive statistics method was used to determine relative importance of performance criteria. This research identified 22 contractor performance criteria divided into two groups; those of past performance (11 criteria) and potential performance (11 criteria). Quality of work in past projects and rate of failure to complete past contracts satisfactorily or failure to complete projects within the pre-determined time frame are the main past performance criteria. Whereas the main potential performance criteria are depth of experience in similar projects and labour resources. The Analytical Hierarchy Process (AHP) method is used to develop a multi criteria contractor selection system to assist in decision making when faced with multiple subjective criteria which are often contradictory. A web based prototype of the flexible multi criteria contractor selection model based on performance has been developed in conjunction with the objective of this research. The developed prototype is integrated into the current contractor selection system to be tested and validated by quantity surveyors in the public sector. Test results showed significantly similar opinions among all experts, towards the use of the proposed flexible multi criteria contractor selection model based on performance. The resulting model in this research succeeded in choosing the most capable contractor and produced consistent results. Feedback from contractors also validated that the resulting model is practical enough to be applied in the construction industry.