Selection criteria used by construction contractors for selecting a subcontractor.
Criterion
Weight
Organization characteristics
Company reputation
Company age
Responsiveness
Personnel qualifications
Related degree or certificate
Relevant experience in building construction
Technical abilities
Financial performance
Bank references
Profitability history
Current workload
Relevant experience
Similar type of projects to the proposed work
Similar size ($) of projects to the proposed work
Source: Dulung & Pheng, 2005, p. 94.
The respective weights were then sorted in ascending order using Excel (see copy of data table at Appendix a) and are illustrated graphically in Figure 2 below for ease of comparison as to their relative importance in the subcontractor-selection process.
Figure 2. Selection criteria used by construction contractors for selecting a subcontractor.
Source: Based on tabular data in Dulung & Pheng, 2005 at p. 94.
Although the construction is fundamentally different from other manufacturing enterprises as noted above and by these authors, based on their findings, Dulung and Pheng applied a similar assumption in the subcontractor selection process that suggested the main contractors (as buyers) typically select subcontractors (as services provider) based on three primary factors:
Project specifications and subcontractors' proposal;
Subcontractor profiles; and,
Main contractor's objectives that include qualitative aspects.
Whatever subcontractor is selected for a given project, it is important that such subcontractors and their employees "walk the same walk" and "talk the same talk" as the contractor to ensure effective communications and mutual rapport on the worksite. For example, Dulung and Pheng (2005) determined that, "trust" was a common variable that affected the decision-making process of the main contractor when selecting a subcontractor; the authors add that "trust" and "communication" were not only able to reduce the transaction costs, which make possible the sharing of sensitive information and permit joint projects of various kinds, but also provide a basis for expanding moral relations in businesses (Dulung & Pheng, 2005).
In this regard, Applebaum (1999) reports that the following traits are characteristic of those employed in the construction industry today:
The culture of construction workers is based on their control of their own work process through their ownership of their tools and their knowledge of their craft;
Construction proceeds through an informal, face-to-face organization of work;
Construction technology is largely a handicraft technology. This is modified somewhat by the use of machines like cranes and hoists for heavy lifting, and excavation, grading, and loading machines for site work, foundations, on-grade slabs, street utilities, and roadwork;
Construction work is dangerous and arduous; indeed, construction has one of the highest accident and death rates of any industry;
Uncertainty is the norm in the construction industry. Construction workers are employed for the limited time of a project and most do not work a full year. Uncertainty is also the result of weather conditions that can suspend construction;
Field management of construction work is loose, informal, and nonbureaucratic; the nature of the industry tends to encourage informality, personal relations, and the establishment of community-like networks within the local and decentralized construction industry that exist in every locale today;
Job satisfaction among construction workers is relatively high because of high wages, worker autonomy, loose supervision, and pride in craft and product;
Construction workers can be said to constitute an occupational community through their lifelong commitment to craft, merging of their work and nonwork lives, and their sense of identity and self-image stemming from their work (Applebaum, 1999, p. 3).
Beyond these similarities among the trade, construction workers can also be regarded as distinct occupational groups because they tend to identify more with their occupation than with a specific employer or specific job (Applebaum, 1999). Moreover, Finkel (1997) also points out that while a number of large and small construction companies are involved with a wide variety of types of jobs, there are also specialty companies that have developed an enormous amount of expertise in a given area. For example, "One concrete firm may focus almost exclusively on sidewalk installations while others will become associated with block work or foundations. A particular plumbing contractor will consistently be a subcontractor to a particular architect/interior designer while another may only install and maintain hospital plumbing systems" (Finkel, 1997, p. 34).
Smaller subcontractors in particular may use this approach to doing business because such highly skilled specialists are in big demand and smaller concerns are in a better position to monitor those factors that contribute to a quality job. For example, "Repetition, personal relationships, and quality control are important features of successful competitors. By carving out a defined piece of the marketplace, smaller firms...
For example, in their study, "Nawkaw, Inc.: Changing the Color of Masonry," Amason and Ciavarella (2001) report that, "Commercial jobs usually were won through competitive bidding by general contractors, who then hired subcontractors. Sometimes general contractors did not seek bids, instead choosing subcontractors on the basis of their past performance" (p. 77). Other factors involved that will likely influence which subcontractor will be selected relate to the organizational structure of
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If rejected, the subcontractor can at least feel that the choice was a fair one - that her or his organization was not perfectly suited to the job at hand. If selected; however, a potentially long-lasting relationship is created, one that is based on mutual trust, shared goals, and a feeling of true partnership. Methodology Numerous potential problems exist in the main contractor/subcontractor relationship. These problems range from subcontractors' lack of
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The last century has seen an increase in the level of international purchases which has been supported by the developments in transportation and technology. Goods can move faster than before with developments in logistics. The negotiation and forming contracts for purchase with companies and communicate with potential suppliers in distant countries is also easier than in the past with the internet and tools such as video conferencing and emails.
Affirmative Action in Procurement/Contracting Affirmative action programs in procurement are amongst the more significant government programs proposed to progress self-employment prospects for minorities as well as women. In essence, the policy on affirmative action with regard to procurement or contracting necessitates that business concerns owned by women or the minorities, shall have the utmost gaining prospect to take part as supplies for goods and services. This also takes into account construction,
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