Assessment of subcontracting effect on cost, time and quality performance of building project in Dire Dawa city

Abstract

The construction industry contributes significantly to the economic output of a country. Great numbers of participants from different specializations make the construction industry a complicated and unique industry. To overcome the requirement for specialized expertise advanced equipment, and huge investment costs, letting out work to subcontractors has become the norm in the construction industry. This research was conducted to assess the effect of subcontracting on building construction project performance in terms of cost, time and quality. To achieve the objectives of this study, a purposive sampling technique and a descriptive research design were used. Consequently, to collect data the study used a questionnaire survey and an interview with the respondents. The target populations for the study were public building construction projects, and the respondents were clients, contractors, and consultants that are involved in the public building projects in Dire Dawa city. A relative importance index (RII) was also used to rank the relevant information provided by the respondents. Then, the collected data were analyzed using Microsoft Excel and SPSS, and also presented as tables and charts. The findings of the study concluded that selection of subcontractor based on subcontractor’s previous experience with a similar type and scope of the project, Selection based on the subcontractor’s relationship with the main contractor, Selection of based on Number of skilled and unskilled labor in the subcontractor’s and their qualifications and experience as the top factors of selection that highly affect building performance. The study showed that a subcontractor’s productivity during the task implementation and their involvement in several projects at a time as the highest-ranked factors of subcontracting that affected cost and time performance in building projects, with an average RII value of 0.839 and 0.837 respectively. Results of the study also determined that use of substandard quality materials and shortage of skilled staff on the subcontractor’s side as the main problems of subcontracting on quality performance in public building projects with an average RII value of 0.84 and 0.83 respectively. Payment problems, Lack of Cooperation and team work and lack of proper communication was determined as the top three factors that affect subcontractor’s relationship with stakeholders with average RII value of 0.800, 0.792 and 0.792 respectively. Subcontracting is only effective when it is used for those tasks that need specialization. The study also highly recommends selection of subcontractors based on their technical qualification because the subcontractor’s technical capacity is the main indicator of their performance. A clear statement about the quality requirements should also be stated in the agreement without ambiguity. When there are more tasks to subcontract, they should be subcontracted to different subcontractors with very strict supervision, which will improve the productivity and reduce the overall project cost and time