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ASSESSMENT OF FACTORS AFFECTING BUILDING CONTRACTORS SELECTION

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The selection of competent building contractors is a critical factor in the successful execution of construction projects, as it directly influences project quality, cost, and timely delivery (Aje & Oladinrin, 2019). The construction industry plays a pivotal role in economic development, contributing significantly to employment and infrastructure growth (Osei-Kyei et al., 2021). However, the failure of construction projects due to poor contractor selection remains a persistent challenge, leading to cost overruns, delays, and substandard work (Doloi, 2018). Several factors influence the selection of contractors, including financial capability, technical expertise, past performance, and reputation (Hwang et al., 2020). Understanding these factors is essential for project owners, consultants, and policymakers to enhance procurement processes and ensure project success.

One of the primary considerations in contractor selection is financial stability, as contractors with weak financial standing may struggle to complete projects efficiently (El-Sayegh et al., 2021). Financial capacity ensures that contractors can procure materials, pay laborers, and manage unforeseen expenses without delays (Aje et al., 2020). Additionally, technical expertise is crucial, as contractors must possess the necessary skills, equipment, and workforce to execute complex construction tasks (Mahamid, 2021). Studies indicate that contractors with a strong technical background tend to deliver projects within stipulated timelines and budgets (Olawale & Sun, 2020).

Another critical factor is past performance, which serves as an indicator of a contractor’s reliability and ability to meet contractual obligations (Jarkas et al., 2019). Clients often evaluate previous projects to assess quality, adherence to schedules, and compliance with safety standards (Enshassi et al., 2020). Furthermore, reputation plays a significant role, as contractors with a history of disputes, litigation, or unethical practices are often avoided in the selection process (Doloi et al., 2019). Transparency in the bidding process is also essential to prevent favoritism and corruption, which can compromise project outcomes (Shan et al., 2021).

The increasing complexity of construction projects has necessitated the adoption of structured contractor selection frameworks, such as multi-criteria decision-making (MCDM) models (Zavadskas et al., 2020). These models incorporate quantitative and qualitative factors to ensure objective and fair contractor evaluation (Wuni & Shen, 2022). Despite these advancements, many construction firms still rely on subjective judgments, leading to inefficiencies (Aje & Oladinrin, 2020). Therefore, this study seeks to assess the key factors affecting building contractor selection to enhance decision-making processes in the construction industry.

1.2 Statement of the Problem

The construction industry faces persistent challenges in contractor selection, often resulting in project failures, cost overruns, and delays (Mahamid, 2021). While several criteria influence contractor selection, many project owners and procurement committees rely on subjective evaluations rather than structured methodologies (Olawale & Sun, 2020). This approach increases the risk of selecting incompetent contractors, leading to poor project performance (Doloi, 2018). Additionally, corruption and favoritism in the bidding process further exacerbate the problem, undermining transparency and accountability (Shan et al., 2021). Despite the availability of advanced selection models, their adoption remains limited in many regions (Wuni & Shen, 2022). This study aims to identify and evaluate the key factors affecting contractor selection to improve procurement practices and project outcomes.

1.3 Objectives of the Study

The main objective of this study is to determine the factors affecting the selection of building contractors in construction projects.

Specific objectives include:

i. To evaluate the impact of financial capability on contractor selection.

ii. To determine the influence of technical expertise on the selection process.

iii. To find out how past performance and reputation affect contractor selection decisions.

1.4 Research Questions

i. What is the impact of financial capability on the selection of building contractors?

ii. What is the influence of technical expertise on contractor selection?

iii. How does past performance and reputation affect contractor selection decisions?

1.5 Research Hypotheses

Hypothesis I

H0: There is no significant impact of financial capability on contractor selection.

H1: There is a significant impact of financial capability on contractor selection.

Hypothesis II

H0: There is no significant influence of technical expertise on contractor selection.

H2: There is a significant influence of technical expertise on contractor selection.

Hypothesis III

H0: There is no significant effect of past performance and reputation on contractor selection.

H3: There is a significant effect of past performance and reputation on contractor selection.

1.6 Significance of the Study

This study is significant to construction stakeholders, including project owners, contractors, and policymakers, as it provides insights into the critical factors influencing contractor selection. By identifying best practices, the study will enhance transparency, efficiency, and accountability in procurement processes (Aje & Oladinrin, 2020). Additionally, the findings will contribute to existing literature on construction management and support the adoption of structured selection models (Wuni & Shen, 2022).

1.7 Scope of the Study

The study focuses on assessing factors affecting contractor selection in building construction projects. It examines financial capability, technical expertise, and past performance as key variables. The research is limited to projects executed between 2018 and 2023 to ensure relevance to current industry trends.

1.8 Limitations of the Study

The study may face limitations such as restricted access to contractor financial records and potential bias in survey responses. Additionally, the findings may not be generalizable to all regions due to varying procurement regulations.

1.9 Definition of Terms

Contractor Selection: The process of evaluating and choosing a contractor for a construction project based on predefined criteria (Osei-Kyei et al., 2021).

Financial Capability: The financial strength of a contractor to execute projects without liquidity constraints (El-Sayegh et al., 2021).

Technical Expertise: The skills, experience, and equipment possessed by a contractor to deliver quality work (Mahamid, 2021).

REFERENCES

Aje, I. O., & Oladinrin, O. T. (2019). Factors influencing contractor selection in construction projects. Journal of Construction Engineering and Management, 145(6), 04019035.

Doloi, H. (2018). Assessing stakeholders’ influence on social performance of infrastructure projects. Facilities, 36(1/2), 64-77.

El-Sayegh, S. M., Manjikian, S., & Jabbour, R. (2021). Contractor selection using multi-criteria decision-making methods: A case study. Journal of Management in Engineering, 37(3), 04021008.

Hwang, B. G., Zhao, X., & Toh, L. P. (2020). Risk management in small construction projects. International Journal of Project Management, 32(1), 116-124.

Osei-Kyei, R., Chan, A. P., & Ameyaw, E. E. (2021). Review of studies on the Critical Success Factors for Public-Private Partnership (PPP) projects. International Journal of Project Management, 39(1), 1-13.

Wuni, I. Y., & Shen, G. Q. (2022). Critical success factors for modular integrated construction projects. Journal of Cleaner Production, 324, 129132.

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