FACTORS AFFECTING PERFORMANCE

QUALITY OF SUBCONTRACTING
IN SRI LANKAN CONSTRUCTION INDUSTRY

ATTANAYAKE A.M.C
JULY 2012

FACTORS AFFECTING PERFORMANCE

QUALITY OF SUBCONTRACTING
IN SRI LANKAN CONSTRUCTION INDUSTRY

A Research Study Submitted

In Fulfilling of
Dissertation QS 446
&
For The Award of Bachelor
Of Science in Quantity Surveying
Honors Degree

By

Attanayake A.M.C
Department of Building Economics
University of Moratuwa
Sri Lanka

July 2012

DECLARATION

I hereby declare that this submission is my own work and that, to the best of my
knowledge and belief, it contains no material previously published or written by
another person nor material which to substantial extend, has been accepted for the
award of any other degree or diploma of a university or other institute of higher
learning, except where the references are mentioned.

..
(Attanayake A.M.C)
Department of Building Economics
University of Moratuwa

ACKNOWLEDGEMENT

This dissertation is not just a single effort of mine. This is a result of an immense
effort and support given by others to me. Thus it is my duty to acknowledge them all.
For this I would like to give my first sincere thanks to my supervisor Mr. Sadun
Fernando for all the guidance and support gave me throughout the research process
for a successful completion.
Another word of thanks must go to the Head of the Department Mr. Indunil
Senevirathne and Ms. Gayani Karunasena, Dissertation Coordinator for the effort
towards the achievement of this dissertation.
Further, I would like to express my sincere thanks to other academic and nonacademic staff of the Department of Building Economics for the success of my
dissertation.
My heartiest appreciation goes to the graduates of Department of Building
Economics for their guidance and advices given me on this study.
The final tribute and appreciation are reserved for my family members and my
colleagues for the help they gave me in the preparation of this document.

ii

TABLE OF CONTENTS
DECLARATION .......................................................................................................... i
ACKNOWLEDGEMENT ........................................................................................... ii
LIST OF FIGURES .................................................................................................... vi
LIST OF TABLES ..................................................................................................... vii
ABBREVIATION ..................................................................................................... viii
ABSTRACT ................................................................................................................ ix
1.0. INTRODUCTION ................................................................................................ 1
1.1. Background ........................................................................................................... 1
1.2. Research problem .................................................................................................. 3
1.3. Aim........................................................................................................................ 3
1.4. Objectives .............................................................................................................. 3
1.5. Methodology ......................................................................................................... 4
1.6. Scope and limitations ............................................................................................ 4
1.7. Structure of the Study............................................................................................ 5
2.0. LITERATURE SYNTHESIS ............................................................................... 6
2.1. Introduction ........................................................................................................... 6
2.2. The construction firm ............................................................................................ 7
2.3. Sub-contracting ..................................................................................................... 8
2.4. The Structure and Classification of Subcontracting.............................................. 8
2.5. Types of construction subcontractors.................................................................. 10
2.6. Purpose of subcontracting ................................................................................... 10
2.7. Efficiency and effectiveness of subcontracting................................................... 11
2.8. Factors affecting performance quality of subcontracting.................................... 12
2.8.1. Subcontractors workmanship .............................................................. 12
2.8.2. Subcontractors past experience in performing the work..................... 13
2.8.3. Subcontractors profit level .................................................................. 14
2.8.4. Subcontractors compliance to quality specifications .......................... 15
2.8.5. Usage of construction materials by subcontractors .............................. 16
2.8.6. Setting realistic contract time for subcontractors ................................. 16
2.8.7. Communications between main contractor and subcontractors ........... 17
2.8.8. Site co-ordination ................................................................................. 19

iii

2.8.9. Adequate site safety for subcontractors ............................................... 20

2.8.10. Management of subcontractor work ................................................... 20
2.9. Summary ............................................................................................................. 21
3.0. RESEARCH METHODOLOGY ........................................................................ 25
3.1. Introduction ......................................................................................................... 25
3.2. Research design ................................................................................................... 25
3.3. Phase One ............................................................................................................ 27
3.3.1 Background Study ................................................................................. 27
3.3.2. Research Problem Statement ................................................................ 27
3.3.3. Literature Review ................................................................................. 27
3.4. Phase Two ........................................................................................................... 27
3.4.1. Questionnaire survey ............................................................................ 27
3.4.2. Justification of survey approach ........................................................... 28
3.4.3. Sample selection ................................................................................... 28
3.5. Phase Three ......................................................................................................... 28
3.5.1 Data Analysis ........................................................................................ 28
3.6. Summary ............................................................................................................. 29
4.0. RESEARCH FINDINGS AND ANALYSIS ...................................................... 30
4.1. Introduction ......................................................................................................... 30
4.2. Response for questionnaire ................................................................................. 30
4.3. Factors affecting performance quality of subcontracting and current level of
each factor within Sri Lankan construction industry ................................................. 31
4.3.1. Subcontractors workmanship .............................................................. 33
4.3.2. Subcontractors past experience in performing the work..................... 33
4.3.3. Subcontractors profit level .................................................................. 33
4.3.4. Subcontractors compliance to quality specifications .......................... 34
4.3.5. Usage of construction materials by subcontractors .............................. 34
4.3.6. Setting realistic contract time for subcontractors ................................. 35
4.3.7. Communication between main contractor and subcontractors ............ 35
4.3.8 Site co-ordination .................................................................................. 35
4.3.9. Adequate site safety for subcontractors ............................................... 36
4.3.10. Management of subcontractor work ................................................... 36
4.4. Further analysis ................................................................................................... 37

iv

4.4.1. Comparison of Main contractors` perspective and Subcontractors

perspective in accordance with affecting level and current level ................... 37
4.7. Summary ............................................................................................................. 40
5.0. CONCLUSIONS ................................................................................................. 41
5.1. Introduction ......................................................................................................... 41
5.2. Conclusions ......................................................................................................... 41
5.3. Recommendations ............................................................................................... 42
5.4. Further research directions .................................................................................. 43
REFERENCE ............................................................................................................. 44
APPENDIXES ........................................................................................................... 48

LIST OF FIGURES
FIGURE 1: THE STAR-SHAPED AND TIERED STRUCTURES OF SUBCONTRACTING .......... 9
FIGURE 2 :- THE LOGICAL SEQUENCE OF THE RESEARCH DESIGN ................................. 26
FIGURE 3:- COMPARISON OF AFFECTING LEVEL AND CURRENT LEVEL......................... 32
FIGURE 4 :- COMPARISON OF AFFECTING LEVEL IN ACCORDANCE WITH THE AVERAGE
AND DIFFERENCE ................................................................................................. 38

FIGURE 5 :- COMPARISON OF CURRENT LEVEL IN ACCORDANCE WITH THE AVERAGE

AND DIFFERENCE ................................................................................................. 39

vi

LIST OF TABLES
TABLE 1: ADVANTAGES OF STAR-SHAPED STRUCTURE AND TIERED STRUCTURE
SUBCONTRACTING STRUCTURES ........................................................................... 9
TABLE 2 :- RATE OF RESPONSE TO QUESTIONNAIRES ................................................... 30
TABLE 3 :- AFFECTING LEVEL OF EACH FACTOR .......................................................... 31
TABLE 4 :- CURRENT LEVEL OF EACH FACTOR............................................................. 32
TABLE 5 :- COMPARISON OF AFFECTING LEVEL ........................................................... 37
TABLE 6 :- COMPARISON OF CURRENT LEVEL ............................................................. 39

vii

ABBREVIATION
MC : Main Contractor
SC

: Subcontractor

RII

: Relative Important Index

viii

ABSTRACT
There are certain particular characteristics of construction industry, which
makes it different from other industries .Principally, its final product is unique,
immobile and takes high variety. Since the construction industry involves a mixture
of different kind of complex activities, subcontracting practice comes out to help the
main builder with lighting the workload by sharing it among the subcontractors.
Although there are many advantages of subcontracting, excessive reliance on
this strategy can be creates difficulties for both employers and employees. Declining
standards of quality and falling productivity levels are main problems faced by
employers. Subcontracting is a double-edged sword. If managed effectively,
subcontractors help main contractors to achieve goals of the organization while
providing specialist construction services and absorbing contractors inconsistent
workloads.
In order to the survey findings it could be identified that subcontractors`
workmanship,

subcontractors`

past

experience

in

performing

the

work,

subcontractors` compliance to quality specifications, communication between main

contractor and subcontractors, adequate site safety for subcontractors and
management of subcontracting work are directly affect to the performance quality of
subcontracting in Sri Lankan construction industry and Setting realistic contract time
for subcontractors and site co-ordination are considerably affected to the
performance quality of subcontracting in Sri Lanka.

Key words: Subcontracting, Construction Industry, Performance quality

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Chapter One

Introduction

1.0. INTRODUCTION
1.1. Background
There are certain particular characteristics of construction industry, which
makes it different from other industries (Gonzalez, 2000). Principally, its final
product is unique, immobile and takes high variety. The construction output is a
result of a construction production system, which varies with the particular buyers,
locations, and uses. The construction consists of building immobile structures from
small domestic buildings to huge industrial plants, those are established in a certain
location, and more resources needed to carry out work on the site such as labor,
material, and plant. According to Construction Industry Review Committee (2001),
construction projects involve a mixture of different kind of complex activities and
different skills at different construction stages. Usually a single main contractor
could not be able to handle all related project tasks.
Since the construction industry involves a mixture of different kind of complex
activities, subcontracting practice comes out to help the main builder with lighting
the workload by sharing it among the subcontractors. An important point identified
by Wang and Yung (2001 cited Chien, 2007) that, after a construction firm wins a
bid, it usually subdivide the workload and subcontract some portions of it to
subcontractors. An important fact should be stated that subcontractors play a
significant role in the success of construction projects as they fulfill lack of work
force, technical knowledge of main contractor (Limk, 2006). Ofori and Loh (2002)
mentioned that, subcontracting is needed due to different projects having different
features and requirements and as a result, it would be uneconomical for the main
contractor to keep all the required specialized skilled workers and equipment. Reason
for that is a lack of continuity in the work due to fluctuating demands in the
construction market. However, if the main contractor is established, he may retain a
group of general workers to assist the subcontractors as well as to carry out the minor
operations on sites.

Department of Building Economics

Chapter One

Introduction

Chiang (2009) defined subcontracting usually as a relationship between firms and it

is a contractual process, through which the main contractor sublets parts of the job to
another contractor. According to Vivian (2011), subcontractors take various forms
but there are two main categories. The first category is commonly called as trade
subcontractors. They consists of groups of tradesmen and workhands and are usually
employed by the main contractor to undertake labor intensive works such as
formwork construction and finishing work. The second category of subcontractors
performs specialist works on site such as the construction of sheet piles, installation
of the air-conditioning systems and lift systems. Subcontractors can be nominated
which is depending on requirement and willingness of the employer. Nominated
subcontractors are in trades such as piling, plumbing, air-conditioning, lifts,
firefighting and prevention and other specialized works (Limk, 2006).
A key point of view arisen in the Construction Industry Review Committee
(2001) is, during the construction boom, construction firms are offered too much
work and the level of subcontractor involvement is high. Chiang (2007) mentioned,
in 1983 about 47% of the total value of building and civil engineering contracts were
subcontracted out and when 2003 the proportion increased to almost 60%. The
benefits of using the subcontracting system have not effectively been gained due to
unmanageable condition of large number of subcontractor involvement. According to
the survey results of Vivian (2001), the impact factors to the poor performance
quality of multi-layer supply chain subcontracting are poor time management
performance and poor communication and coordination. On the other hand,
excessive reliance on this strategy creates difficulties for both employers and
employees. The main problem employers have to face that, declining standards of
quality (Debrah and Ofori, 2002).
If some defective work arises due to poor subcontracting practice, the main
contractor is responsible for making corrections to all this deviations and this will be
more complicated and sometimes almost impossible (Chien, 2007). Moreover,
Vivian (2011) stated, the work of subcontractors workers should be well
coordinated, supervised and monitored to achieve the better quality of work through
subcontracting.

Department of Building Economics

Chapter One

Introduction

1.2. Research problem

Subcontracting in construction projects gives lot of advantages to the main
contractor. However, improper application of subcontracting practice has caused lot
of poor performance quality issues in foreign construction projects and eventually
results more disadvantages than obtaining advantages and that is a one of severe
problems suffered by foreign construction industries. By the way, previous studies
have been carried out regarding problems faced by subcontractors in Sri Lankan
construction industry and due to those problems poor performance has been caused
in the industry. Since there have not been done any discussion about factors affecting
performance quality of subcontracting in Sri Lankan construction industry, this
research would be a further study of above mentioned research and

a timely

consideration.

1.3. Aim
The aim of this research is to explore factors affecting performance quality of
subcontracting in Sri Lankan construction industry.

1.4. Objectives
Identify factors affecting performance quality of subcontracting in foreign
construction industries.
Identify factors affecting performance quality of subcontracting in Sri Lankan
construction industry.
Identify current level of identified factors within Sri Lankan construction
industry.

Department of Building Economics

Chapter One

Introduction

1.5. Methodology
Literature survey and review
A comprehensive literature survey will be carried out through books, journals,
research papers, and articles to identify and obtain thorough knowledge about factors
affecting performance quality of subcontracting practice in construction industry.
Questionnaire survey
A comprehensive questionnaire survey was carried out to identify factors affecting
performance quality of subcontracting and current level of each factor within Sri
Lankan construction industry.
Analysis
A statistical test was carried out to analyze affecting factors and current level of each
factor applying Relative Importance Index (RII).

1.6. Scope and limitations

This report is limited to building projects in Sri Lankan construction industry. The
survey was carried out on views of main contractors as well as trade subcontractors.

Department of Building Economics

Chapter One

Introduction

1.7. Structure of the Study

Chapter One

This chapter consists of the background of the study, aim and

objectives, limitation of the study, a brief introduction to the
research methodology and organization of the report.

Chapter Two

This chapter explains about subcontracting types and

subcontracting arrangements, importance of subcontracting
and factors affecting performance quality of subcontracting.

Chapter Three :

Explains the research methodology and statistical analysis

methods adopted for the study.

Chapter Four

Consists of the results of the study.

Chapter Five

Concludes the study with the findings, recommendations and

with further research approaches.

Department of Building Economics

Chapter Two

Literature Synthesis

2.0. LITERATURE SYNTHESIS

2.1. Introduction
Construction industry consists of wide range of final products from small
domestic building projects to huge industrial construction projects and each one
involves a different kind of activities (Eccles, 1981). Mainly there are two main
stages in the construction production process. First stage is project design and second
stage is technical management and project implementation (Hagedoorn, 1993).
Construction firms getting other independent firms to get done portion of their
work, when construction firms involving different kind of complex construction
activities or demand for the particular kind of products is too high or the products are
too specialized. Those independent firms are called as subcontracting firms
(Construction Industry Review Committee, 2001).
There are mainly three types of construction sub-contracting, such as capacity
subcontracting, specialization subcontracting and supplier subcontracting (Limk,
2006). Subcontractors can be divided into two categories according to work carry out
by them. The first is commonly termed as trade subcontractor. The second
category is specialist subcontractors (Wong and Fung, 1997). Labor-only
subcontracting is very common in the construction industry. In the construction
industry, labor-intensive refers as economically efficient employment (Thomas and
Tang, 2009).
Although there are many advantages of subcontracting, excessive reliance on
this strategy can be creates difficulties for both employers and employees. Declining
standards of quality and falling productivity levels are main problems faced by
employers (Debrah and Ofori, 2002).Subcontracting is a double-edged sword. If
managed effectively, subcontractors help main contractors to achieve goals of the
organization while providing specialist construction services and absorbing
contractors inconsistent workloads. But when number of subcontractors is high,
there can be high level of poor performance quality caused due to unskilled workers.
Therefore there should be a well-established management plans to implement
subcontractor co-operation efficiently (Chiang, 2009).

Department of Building Economics

Chapter Two

Literature Synthesis

2.2. The construction firm

There are certain characteristics consist in construction products such as
uniqueness, immobility and high variety (Halim et al., 2010). Through those
characteristics the final product of construction industry can be distinguished from
products of other industries. Construction industry consists of wide range of final
products from small domestic building projects to huge industrial construction
projects and each one involves a different kind of activities (Eccles, 1981).Each
construction projects are specially constructed for particular buyer, in a specific
location and for a purpose of special facility (Gonzalez, 2000).
Mainly there are two stages in the construction production process. First stage
is project design and second stage is technical management and project
implementation. Each stage requires different capabilities. Design and management
focuses on preparing competitive bids for all kind of projects and the work carried
out by specially qualified technical teams, who are having design, supervisory and
problem solving capabilities (Hagedoorn, 1993). Project implementation involves
different kind of construction activities also requires cost controlling mechanisms,
operative controlling capabilities and knowledge of local labor markets (Masten,
1991).
Measuring the performance of any construction project in terms of success or
failure, though looks so simple, actually it is a very complex process (Iyer and Jha,
2005). Modern construction projects involve participation of designers, contractors,
subcontractors, specialists, construction managers, and consultants and every one
holds the responsibility of being success or failure of the project (Rubin and Seeling,
1967).

Department of Building Economics

Chapter Two

Literature Synthesis

2.3. Sub-contracting
Meaning of the term Subcontracting is, that portion of work in a contract
letting to another contractor by main contractor (Taghi Zadeh, 2010). The firm
Subcontracted by main contractor called as subcontractor and that can be an
independent firm to undertake construction process according to specification or
plans provided by the main contractor (Xayphone and Yoshi, 2009).
There are mainly three types of construction sub-contracting, such as capacity
subcontracting, specialization subcontracting and supplier subcontracting. Capacity
subcontracting is involved when the demand is high and the main contractor wants to
keep constant production capabilities and the part of the work is sublet to the
subcontractor by the main contractors work due to an excess in demand (UNIDO,
2003). Specialization subcontracting is involved in the situations of lack of necessary
technologies or equipment (Harvey, 2010).Supplier subcontracting is involved in
when the subcontractor willing enters to a subcontracting arrangement as an
independent supplier with full control over the development, design and method of
production (Taymaz and kilicaslan, 2000).

2.4. The Structure and Classification of Subcontracting

There are basically two types of subcontracting structures, as star-shaped
structure and tiered or clustered structure (Figure1). In the star shaped structure
subcontractors are directly contacted by the main contractor and number of indirect
subcontractors is limited. As main contractor act as a central role flow of information
and material make very convenient (Lehtinen, 2001). In the tiered structure, number
of indirectly subcontracted subcontractors is increased. Also subcontractor working
capacity is increased when the relationship between the main contractor and the
subcontractor becomes more integrated. Then the main contractor can be able to
assign more complex operations and more administrative tasks to subcontractor
(Taghi Zadeh, 2010).

Department of Building Economics

Chapter Two

Literature Synthesis

Figure 1: The Star-Shaped and Tiered Structures of Subcontracting

Source: Taghi Zadeh (2010, p.19)

Table 1: Advantages of Star-Shaped Structure and Tiered Structure Subcontracting Structures

Star-Shaped Structure

Tiered Structure

More adaptable to change

Higher confidentiality

More creating opportunities

Collaborative innovation

Act against uncertainty

Rigid and strong

Cost competitive

Dense flows of information

Source: Taghi Zadeh (2010, p.19)

The subcontracting system is usually described as the contractual process in

which a main contractor subcontracts part of the job to another contractor and who
may also subcontract to another firm or further subcontract. For example, a
contractor can subcontract work to a concreter, a steelworker, a mechanic and an
electronic installation firm, or a plumber. The concrete subcontractor or the
steelworker further subcontracts to a third -party and this party can also further
subcontract work. This is the forming process of multi-layer supply chain
arrangement (Chiang, 2009).

Department of Building Economics

Chapter Two

Literature Synthesis

2.5. Types of construction subcontractors

Subcontractors can be divided into two categories according to work carry out
by them. The first is commonly termed as trade subcontractor. They are normally
groups of tradesmen and workhands and are usually employed by the main
contractor to undertake labor intensive works such as excavation, tiling, formwork
and finishing work (Wong and Fung, 1997). The second category is specialist
subcontractors who perform specialist work on site, such as the construction of
sheet piles and installation of the air-conditioning or lift systems (Limk, 2006).
Labor-only subcontracting is very common in the construction industry. In the
construction industry, labor-intensive refers as economically efficient employment
(Thomas and Tang, 2009). This system involves supplying general laborers by laboronly subcontractors for the main contractor to complete part of a project.
Limk (2006) mentioned those subcontractors provide labor to perform
particular trade under the supervision of a main contractor. According to the
employer selection rights, subcontractors can be nominated or named. Normally
nominated subcontractors are carried out work such as piling, plumbing, airconditioning, lifts, firefighting and prevention, and other specialized works (Taghi
Zadeh, 2010)

2.6. Purpose of subcontracting

Construction firms getting other independent firms to get done portion of their
work, when construction firms involving different kind of complex construction
activities or demand for the particular kind of products is too high or the products are
too specialized ( Construction Industry Review Committee, 2001).
Different projects involving different kind of works, and as a result, it would be
uneconomical for the main contractor to keep all the required specialized skilled
workers and equipment. Because those special works are involved in certain projects
only and those projects are not found frequently. Also there is a lack of continuity in
construction work due to feature of fluctuating demands in the construction market
(Chiang, 2009).There for labor requirement differ from time to time due to
uncertainty of workload (Andy, 2010).

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Chapter Two

Literature Synthesis

Moreover, subcontractors play a very important role in a construction project

as they fulfill technical knowledge, need for special expertise, shortage of resources
and equipment (Taghi Zadeh, 2010).

2.7. Efficiency and effectiveness of subcontracting

Chiang (2009) find out that around 80% of the value of building works is
undertaken by small subcontractors in Hong Kong. The proportion of subcontracted
works increased steadily throughout past 21 years between 1983 and 2003.
In 1983 which was about 47% of the total value of building and civil
engineering contracts and in 2003, the proportion increased to almost 60%.
Subcontracting is a double-edged sword. If managed effectively, subcontractors help
main contractors to achieve goals of the organization while providing specialist
construction services and absorbing contractors inconsistent workloads. But when
number of subcontractors is high, there can be high level of construction wastage
caused due to unskilled workers. Therefore there should be a well-established
management plans to implement subcontractor co-operation efficiently (Chiang,
2009).
Multi-layer chain subcontracting system is widely used within construction
industry as it is considered advantageous in many aspects. However, poor quality
products in construction practice raise the doubt about the effectiveness of the chain
system. The reason why the applications of the system contribute to poor project
performance is due to employment of unskilled labors. Based on the survey results,
application of multi-layer chain subcontracting system contributes largely poor
performance across the all major aspects including quality and time management,
cost control, and communication and coordination performance (Zeng et al., 2005).
Although subcontracting allows the main contractor to transfer some of the
risks and construction responsibilities of large construction projects, on the other
hand, there is a high possibility to main contractor let goes some degree of control
over the work carrying out by subcontractors. A main issue is, even though faults
caused by the subcontractors the responsibility of make those corrections and
deviations bear the main contractor. The making correction process could be more
complicated, time consuming and almost impossible. Normally this inefficient

Department of Building Economics

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Chapter Two

Literature Synthesis

working process caused due to the lack of direct control on multilevel subcontracting
(Limk, 2006).
Although there are many advantages of subcontracting, excessive reliance on
this strategy can be creates difficulties for both employers and employees. Declining
standards of quality and falling productivity levels are main problems faced by
employers (Debrah and Ofori, 2002). Also temporary and insecure relationship
between main contractor and subcontractor usually results difficulties to coordinate,
supervise and monitor the subcontractors work (Taghi Zadeh, 2010).

2.8. Factors affecting performance quality of subcontracting

2.8.1. Subcontractors workmanship
Subcontractors` workmanship is measured in accordance with skill level of
labors employed by subcontractors. Subcontractors should be consisted with large
number of skillful labors to complete the work in high quality manner. In Hong
Kong, government has enforced, that skillful subcontracting firm should be
maintained 50% of skillful labors (Works Bureau, 2002).
As contracting firms rely heavily on the specialized skills and expertise of
subcontractors, maintaining a high level workmanship standard of subcontractors`
labors is very important (Alan et al., 2008). Therefore every subcontracting firm is
focusing on recruiting skillful labors to become skillful subcontracting firm and to
make a good reputation. But skilled workers may be unavailable because of when the
construction industry in boom situation. Each worker then has extensive
opportunities to work on numerous projects. Therefore most subcontractors have to
rely on newcomers, whose workmanship is uncertain (Wei-Chih and Jang-Jeng,
2005). To eliminate this uncertainty of workmanship, Gokhan et al. (2008)
introduced evaluation of workmanship of subcontractors, when recruiting new
subcontractors.
But most of subcontractors are unable to recruit skillful labors. That result
improper workmanship of subcontractors and caused numerous problems during
construction process. Aynur and Serdar (2007) stated, that labors improper
workmanship is one of the major reasons for poor performance quality of
subcontracting and lack of qualified labor forces always finish the assigned work
Department of Building Economics

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Chapter Two

Literature Synthesis

with low quality. High quality and correctness of the work are the main features
expected by main contractor through subcontracting and if the expected quality and
correctness of the work is not according to the specifications provided by the
employer, the main contractor is liable for the making of corrections. Therefore there
is a possibility of rework due to the poor quality and incorrect work done by the
subcontractors. This is due to subcontractors` incompetence in performing quality
work and lack of proper workmanship. The incidence of rework increases the
likelihood of project time and cost overruns, and ultimately leads to client
dissatisfaction (Limk, 2006).
There is an example stated by Kong (2001) to illustrate how improper
workmanship

of

subcontractor`s

can

impact

on

performance

quality of

subcontracting. There was a three housing estate projects in Hong Kong and the
piling work was done by a subcontractor. But after the work is completed, site
supervisory staff identified that only 67% of the driven piles reached the design
specification and other were shortened. Then had to demolish those false piles and
rebuild again as the length of the piles shortages would substantially weaken the
structural stability. This caused high wastage and excessive cost overrun putting the
project in to massive trouble.

2.8.2. Subcontractors past experience in performing the work

The performance of relevant previous projects is considered very important in
selecting a subcontractor. In determining whom to invite to submit a quotation for a
subcontract, the main contractor would either consider those who have previous
work relationship or include subcontractors who have satisfactorily completed works
of similar nature, size and complexity for other contractors before. The consultant
group also believed that only those who with a good track record will have a greater
opportunity to complete the required subcontract work in high quality manner.
Without a proven track record on the type of work applying for a subcontractor
would have cause difficulty in the industry and most of the main contractors
nowadays have to change subcontractors due to poor performance quality. Alan et al.
(2008)
The wasteful practices are common issue in construction sites. This occurs
mainly due to lack of proper technical knowledge and experience of subcontractors`
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Chapter Two

Literature Synthesis

labors about less wasteful practices and convenient ways of dealing with waste. But
subcontractor should develop a production strategy to reduce wasteful practices to
complete the work efficiently (Ander et al. 2007) .Therefore Shiu-tong and Chris
(2008) emphasized evaluation of subcontractors past experiences to ensure the
technical knowledge of subcontractors, because it is directly affect to the quality of
the work and Gokhan et al. (2008) mentioned that evaluating past experience of
subcontractor is a must to ensure the performance quality of subcontracting.

2.8.3. Subcontractors profit level

In adopting subcontracting system, main contractor usually sublet part of the
work to subcontractors and who will do the work for less than the amount client pays
to the main contractor. This payment difference results in that subcontractor adopts a
cheap and poor quality work practice to generate certain profits and applicable
amount of profit sharing between main contractor and subcontractors is a key
element of better performance quality of subcontracting. Normally main contractor
claims the amount from the client, which is necessary to complete the work
according to the specification. When it is reduced, there would be no way the
subcontractor to complete the particular work according to the specification (Gary
Packham et al., 2003).
An example is highlighted in Vivian`s report (2011), which caused poor
performance quality due to lack of enough profit level for subcontractor. That is in an
office building project, a client offered $500,000 for tiling work to the nominated
subcontractor A. Contractor A subcontracted the work to Subcontractor B for
$450,000, thus gaining a $50,000 profit for contractor A. Subcontractor B
further subcontracted the work to subcontractor C for $400,000 with the
expectation of gaining a $45,000 profit for doing limited amount of work and passing
the job to other. Unfortunately, subcontractor C also sublet the work to
Subcontractor D for $370,000. The Subcontractor D who actually would do the
work, but the payment was not sufficient to complete the work in accordance with
the specification due to payment from the client for the work was so significantly
reduced to the level that could not cover the necessary materials and labor cost. But
the ambition of doing the work somehow, the Subcontractor D employed cheap
laborers and poor materials, resulting in the poor quality of the work. After the

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Literature Synthesis

completion of the work, the client found that over 45% of the work was not
acceptable.
Furthermore, bottom-layer subcontractors in multi-layer supply chain
arrangement are less efficient as they are less motivated. In the bottom-layer
subcontractors are not only under-paid but often receive delayed interim or final
payments. In particular, final payments are usually delayed, often exceeding 1 year
after project completion. In return, subcontractors will delay to correct any defects
identified, and they normally will hold a wait-and-see attitude, hoping that the
main contractor or the upper layer subcontractors will correct the problems. The
wait-and-see practice is common in the construction, which significantly delaying
handover time and causing poor performance quality (Thomas and Tang, 2009).

2.8.4. Subcontractors compliance to quality specifications

Another

significant

factor

is

subcontractors

compliance

to

quality

specifications. It is identified during the survey done by Vivian (2011), which

subcontractors non-compliance with specification is a major reason contributing to
poor performance quality. According to a project surveyed done by Vivian (2011),
the main contractor employed two subcontractors for the tiling work. Subcontractor
A was responsible for blocks 610 while Subcontractor B was responsible for
blocks 15, plus a car park and a kindergarten. Prior to the commencement of the
construction, both subcontractors visited sample flats and agreed to the workmanship
standard set by the client. However, upon the completion of the work, the clients
engineers inspected the site and found damaged wall tiles, misaligned tiling joint,
uneven surfaces and poor cement grouting in the work by Subcontractor A.
Investigation revealed that subcontractor A had subcontracted the work to a thirdlayer subcontractor who further subcontracted to a fourth-layer subcontractor. The
bottom-layer subcontractor was oblivious to the clients expectations, did not visit
the sample flats, and employed low skilled workers, resulting in poor performance
quality. A further point is noted that the main contractor did not provide adequate
supervision on its subcontractors work, so that the defect work was not detected
until work had been completed. On the other hand, the work done by Subcontractor
B was acceptable level the subcontractor B did not subcontract the work and
employed directly hired workmen with regularly visited the sample flats for ensuring

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Literature Synthesis

that the clients specifications were met. This example indicates that the possibility
of committing poor performance quality increases when subcontractors are noncompliance with specification.

2.8.5. Usage of construction materials by subcontractors

The main contractors have to depend on labor subcontractors who employ a
large pool of unskilled labor due to scarcity of skilled labor in the construction
industry. Inefficient use of construction materials by subcontractors is one of the
main causes of inefficiency in the construction site and this practice tend to reduce
quality of the work and result poor performance quality, since subcontractors labors
trying to cover wasted material quantity by reducing quality of the work (Ang yee
and Ofori, 2001).Unskilled workers employed tend to use construction material in
inefficient ways due to lack of knowledge about efficient ways of working methods.
Their main concern is producing work on reasonable standard and completes the
maximum quantity of construction work within the shortest time possible without
considering quality of the work. They are not interested in finding or adopting the
most efficient ways of using materials to do their work (Ekanayake, 2000).
Also poor concern about waste and lack of appreciation on the value of the
work, results to raise wasteful practice among subcontractors as well as poor
performance quality. Chien-Ho et al.(2007) stated, that material wastage is a major
problem in construction industry. Often, the main contractor supplies construction
material. Therefore, if the subcontractors adopt a wasteful practice, there would
likely be an increase the construction material waste and cost (Limk, 2006). To
ensure the efficient usage of material, Min-Yuan et al. (2011) emphasized that, when
evaluating subcontractor performance it is necessary to evaluate amount of material
wastage.

2.8.6. Setting realistic contract time for subcontractors

Vivian (2011) identified, that setting unrealistic contract time in subcontracting
arrangements is considerably significant to affect to the subcontractors` performance
quality. As the main contractor subcontracts the work to the first layer of
subcontractor, the main contractor will try to shorten the contract period for the first
layer of subcontractor to ensure the work can be finished within their timeframe. The
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Literature Synthesis

first layer of subcontractor will also shorten the contract period if they subcontract
the work to the second layer of subcontractor. Therefore, the numbers of
subcontracting arrangement will directly affect the real contract time for the
activities. If the layer of subcontracting arrangement is high, it is common that
remedial work and disputes may be happened. This can also result to time consuming
on remedial work and time consuming on solving disputes among various layers of
subcontractors.

2.8.7. Communications between main contractor and subcontractors

2.8.7.1 Long communication channel between main contractor and subcontractors
Communication among project parties is critical to the success of
implementing a construction project. However, communication is poor when the
number of subcontracting layers increases as misinterpretation happens during
information transfer between subcontracting layers (Tam and Tong, 1996). When
main contractor conveys decision information to the bottom-layer subcontractors,
communication errors often occur as middle layer subcontractors misunderstand the
information, this is finally result to poor performance quality. Thus the information
becomes ambiguous when it approaches to the bottom-layer subcontractors. Vivian
(2011) stated, that the reasons for increasing communication errors, when increasing
layers of subcontractors and lack of communications between multi-layers. An
interview discussion reveals a case where a main contractor provided comprehensive
drawings and written instructions to the second layer subcontractor and when the
information approached to the bottom-layers, detailed instructions became brief
notes and simple verbal instructions.
In general, the main contractor often relies on middle-layer subcontractors for
passing information and coordinate work, thus the bottom- layer subcontractors will
not be able to receive correct instructions if middle-layer subcontractors misinterpret
the information. Furthermore, the use of various languages in the local construction
industry is also considered as contributable to the miscommunication along
subcontracting chains. The interpretation among different languages carries the
possibility of misunderstanding. When instructions becomes misunderstanding, there
always caused poor performance quality (Loosemore and Andonakis, 2007).

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Literature Synthesis

Typical consequences of poor communication among various layers of

subcontractors are delaying project, overrunning cost and degrading quality. Because
of the poor communication amongst various layers, contractors at bottom-layer are
given the opportunity of delaying to address defects or even hide defects. As a result,
the main contractor cannot promptly respond to the defects as their subcontractors
often disappear as soon as payments are settled. In many cases, even if the
subcontractors committing poor quality work are caught, they cannot afford for the
high repair cost. It can be highlighted from the above discussion done by Vivian
(2011), that lack of communication and communication errors are obvious from
increasing layers of subcontractors. As the number of subcontracting layer is high, it
will take longer time for transferring and sharing information, which often affected in
transferring timely and important information to the subcontractor who actually does
the work. Thus poor performance quality can be happened.
2.8.7.2 Arrangement of the Communication channel
In general, there are ineffective communication channels between a main
contractor and its multi-layer supply chain subcontractors in the construction
industry. As a main contractor does not have contractual relationship with other
subcontractors apart from its immediate subcontractors, the main contractor normally
does not communicate and exchange information with further layers of
subcontractors. This is considered the major reason that a main contractor usually
cannot detect the disputes happening amongst other multi-layer supply chain
subcontractors as well as poor quality work. On the other hand, the weak
communication results in those subcontractors at different layers are unable to timely
share project information. Therefore they will not be able to respond to any new
changes or instructions in a consistent way. This can also explain why difficult in
sharing timely information among multi-layer supply chain subcontractors (Vivian,
2011).
Contractors would like their subcontractors to have a regular and effective
communication channel to ensure that high performance quality. Through regular
communication with contractors, subcontractors could establish a better relationship
with their upper stream such that the chance of success may increase. The
subcontractor, however, considered negotiation with the main contractor before

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Chapter Two

Literature Synthesis

construction more important as they could prepare a more accurate quotation and get
a more reasonable return as well as to provide better performance (Alan et al., 2008).

2.8.8. Site co-ordination

According to government statistics, in Hong Kong construction industry laboronly subcontractors contributed 24 per cent of the gross value of construction work
performed in 2008. However, increase of the level of subcontractor involvement
creates problems, such as highly increase in coordination of subcontractors work in
the site. Recently, most subcontractors in Hong Kong complain that they are unable
to perform their site works in a quality way due to main contractors poor site
coordination (Andy, 2010). According to the findings by Andy (2010) that
subcontractors in the Hong Kong building projects were only able to achieve on
average 70 per cent of their planned performance quality targets. Only about 10 per
cent of them could complete their work according to specifications.
Some of the major site co-ordination problems as follow.
Work not accurately planed
Working sequence not practical
Short notice for commencing site work
Late change of working program
Inadequate or insufficient temporary work support such as scaffolding, water &
power supply
Access routing not convenient
Type of plant provided not appropriate
Type of material provided not appropriate
Some interface problems may arise during construction. Wei-Chih and JangJeng (2005) mentioned that field coordination meetings must be called to solve these
identified problems to ensure performance quality of subcontracting. Also Korb and
Sherif (2003) stated that site coordination directly involved with quality of work and
Roger et al. (2009) identified that, there should be proper coordination method in
construction site to increase the performance quality of subcontractors.

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Literature Synthesis

2.8.9. Adequate site safety for subcontractors

Labor-intensive operations are usually the cheapest option in the short term for
main contractor. There for many main contractors are relied on heavy on
subcontracting. There are many number of subcontractors are working in Hong Kong
contraction sites. But main contractors are not much concern on site labor safety.
This resulted number of accidents in site to increase alarming rate. When considering
all industries, construction reported most accidents. Over a period of 10 years
between 1993 to 2002, the average number of accidents per thousand construction
workers has been increased in four times (CIDB, 1992). Also Loosemore and
Andonakis (2007) mentioned that number of injuries reported in Australian
Construction Industry during 2002/2003 takes second place with the rate of 35.2
while average is 18.5. Main cause of that high incident rate is lack of proper usage of
safety features. Usually subcontractors and their workers are the front-line operators
on site. It is the main responsibility of main contractor to provide better safety for the
labors around the site.
However the poor in safety management results low productivity by site labors
as well as poor quality work, since they are not willing to take additional risks to do
the work (Matthews and Rowlinson, 1999). Chien-Ho et al. (2007) stated that safety
and protection directly evolved with subcontractors` performance.

2.8.10. Management of subcontractor work

It is responsibility of management to direct their labor resources to meet the
schedule of a series of sub-contracts simultaneously. A lack of managerial
performance is one of the important causes leading to subcontractor failure and poor
quality work (Shaikh, 1999). Any poor performance quality on the sub-contractors
part would disrupt the overall project program and may lead to cost overrun (Thomas
et al., 2003). Efficient resource planning could improve the project delivery time by
as much as 45% and save up on project costs by up to 7%. Hence, labor-intensive
sub-contractors must possess adequate leadership and managerial skills to manage
and plan for projects in the most efficient and economical way in order to achieve the
better quality of work (Cox et al., 2006). Furthermore, as labor performance is a key
determinant of success for labor intensive sub-contractors, good leadership at

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Chapter Two

Literature Synthesis

management level can certainly improve their labors performance by smoothing the
work flow, influencing workers attitude and motivating workers (Thomas and Tang,
2009)

2.9. Summary
Since Subcontracting is a double-edged sword and, if managed effectively
efficiently, subcontractors help main contractors to achieve goals of the organization
while providing specialist construction services and absorbing contractors
inconsistent workloads. But when number of subcontractors is high and when it is
not managed in a proper manner, expected level of performance quality of
subcontracting could not be achieved.
Therefore it is necessary for knowing about factors affecting performance
quality of subcontracting. There are factors those are directly affect to performance
quality of subcontracting as follows.
Subcontractors workmanship
As contracting firms rely heavily on the specialized skills and expertise of
subcontractors, maintaining a high level workmanship standard of subcontractors`
labors is very important. Improper workmanship is one of the major reasons for poor
construction quality and lack of qualified labor forces always lead the poor
performance quality. Therefore there is a possibility of rework due to the poor
quality and incorrect work done by the subcontractors. The incidence of rework
increases the likelihood of project time and cost overruns, and ultimately leads to
client dissatisfaction.
Subcontractors past experience in performing the work
The performance of relevant previous projects is considered very important in
selecting a subcontractor. The poor performance quality is a common issue in
construction sites. This occurs mainly due to lack of proper technical knowledge and
experience of subcontractors` labors about implementing the work in high quality
and proper manner. There for, when selecting a subcontractor, evaluating past
experience of subcontractor is a must to achieve high performance quality of
subcontracting.

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Literature Synthesis

Subcontractors profit level

In adopting subcontracting system, main contractor usually sublet part or full
amount of the work to subcontractors and who will do the work for less than the
amount client pays to the main contractor, because of main contractor`s expectation
to make profit. This payment difference results in that subcontractor adopts a cheap
and poor quality work practice to generate certain profits. Normally client pays the
main contractor, the amount necessary for completing the work in accordance with
specifications. So that this is directly affect to performance quality of subcontracting.
Subcontractors compliance to quality specifications
Subcontractors should be well compliance to quality specifications to complete
the work in expected quality level. But some problems are caused in multi-layer
subcontracting due to bottom layer subcontractors do not find necessary instructions.
This is also due to poor communication and coordination system among
subcontractors. Therefore this is ultimately resulting for rework and affect to the
performance quality.
Usage of construction materials by subcontractors
The main contractors have to depend on labor subcontractors who employ a
large pool of unskilled labor due to scarcity of skilled labors in the construction
industry. Unskilled workers employed tend to use construction material in inefficient
ways due to lack of knowledge about efficient ways of working methods. As they are
not concern themselves with new working methods to reduce wastage of construction
materials, which is affect to the performance quality of subcontracting.
Setting realistic contract time for subcontractors
Main contractor is the person who assigns the work for subcontractors.
Therefore, main contractor should set realistic time duration to complete the work for
subcontractors. But most of the time main contractors tend to subcontract in the
expectation of complete the work as soon as possible. This is result subcontractor to
complete the work on inadequate time and tend to complete the work with poor
quality and reworks. Therefor setting realistic contract time for subcontractors is a
significant factor in improving of performance quality of subcontracting.

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Literature Synthesis

Long communication channel between main contractor and subcontractors

Communication among project parties is critical to the success of
implementing a construction project. However, communication is poor when the
number of subcontracting layers increases as misinterpretation happens during
information transfer between subcontracting layers. Delay in communicating
decision to subcontractors due to long chain is another significant factor for poor
performance. Typical consequences of poor communication among various layers of
subcontractors are delaying project, overrunning cost and degrading quality.
Therefore it is necessity for establishing a proper communication between main
contractor

and

subcontractors

to

establish

high

performance

quality of

subcontracting.
Arrangement of the communication channel
As a main contractor does not have contractual relationship with other
subcontractors apart from its immediate subcontractors, the main contractor normally
does not communicate and exchange information with further layers of
subcontractors. It creates ineffective communication channels between a main
contractor and its multi-layer supply chain subcontractors. The weak communication
results in those subcontractors at different layers are unable to timely share project
information. Therefore subcontractors will not be able to respond to any new changes
or instructions in a consistent way finally results poor quality work. There for it
seems that proper arrangement of the communication channel is a must in high level
of performance quality of subcontracting.
Site co-ordination
Increase of the level of subcontractor involvement creates problems, such as
highly increase in coordination of subcontractors work in the site. Most
subcontractors complain that they are unable to perform their works due to main
contractors poor site coordination. Some of the major site co-ordination problems
are Short notice for commencing site work, late change of working program,
Inadequate or insufficient temporary work support such as scaffolding, water &
power supply, and which is directly affects to the performance quality.

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Literature Synthesis

Adequate site safety for subcontractors

Main contractors are relied on heavy on subcontracting. But main contractors
are not much concern on site labor safety. This resulted number of accidents in site to
increase alarming rate. However the poor in safety management results low
productivity by site labors and produces low quality work, since they are not willing
to take additional risks to do a work in high quality manner. Though safety is the
direct responsibility of site safety officers and project managers to install adequate
safety infrastructure and is a necessity for improvement of performance quality.
Management of subcontractor work
It is the responsibility of the management to direct their labor resources to meet
the schedule of a series of sub-contracts simultaneously. A lack of managerial
performance is one of the important causes leading to subcontractor failure. Any
delay on the sub-contractors part would disrupt the overall project program and may
lead to cost escalation as well as poor performance of subcontracting. Hence, laborintensive sub-contractors must possess adequate leadership and managerial skills to
manage and plan for projects in the most efficient and economical way in order to
achieve the project and organizational goals.

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Chapter Three

Research Methodology

3.0. RESEARCH METHODOLOGY

3.1. Introduction
Chapter two analyzed and synthesized the literature review on factors affecting
efficiency and effectiveness of subcontracting. This chapter describes the research
process of this study. The aim of this study is to identify and evaluate factors
affecting performance quality of subcontracting in Sri Lankan construction projects.
Proper data collection and methods to analyse data are very important to achieve this
aim. This chapter describes research design, sampling technique, data collection and
data analysis techniques used for this research.

3.2. Research design

Before collecting data and analyzing the research needs to be designed
according to proper structure. The data collecting and analyzing method directly
depend on the nature of the research problem (Noor, 2008). Since empirical data,
research problem and final conclusions are connecting each and other, there is a
logical sequence in the research design. Further Yin, (2003) explained, that research
is a plan, which guides the investigator, the process of data collecting, analyzing and
making ultimate conclusions in a logical manner.
The following figure 3.1 illustrates the logical sequence of the research design.

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Chapter Three

Research Methodology

Phase One

Identifying Research Area

Identification of Research Problem

Background Study
Research Problem Statement

Literature Review

Phase Two

Field Survey

Questionnaire Survey

Phase Three

Data Analysis

Suggestions for Improvements

Figure 2 :- The logical sequence of the research design

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Research Methodology

3.3. Phase One

3.3.1 Background Study
As a research area Factors affecting performance quality of subcontracting in
Sri Lankan construction industry was selected and background study was carried out
through journals, articles and publications to identify, what the factors are affecting
performance quality of subcontracting in foreign construction industry. Further it was
identified that poor performance quality is a one of the major problems in foreign
construction industry. Therefore, through background study, it could be clearly
understand that, how the aim and objectives are achieved through establishing
research problem and limitations of the study.

3.3.2. Research Problem Statement

According to research problem could be able to ascertained, what the factors
are affecting performance quality of subcontracting and the base to carry out the
compressive literature synthesis.

3.3.3. Literature Review

Literature review was carried out through books, journals, articles and
publications and identified factors affecting performance quality of subcontracting in
foreign construction industry. Further, broader knowledge about subcontracting and
factors affecting performance quality of subcontracting could be gained through
comprehensive literature review.

3.4. Phase Two

3.4.1. Questionnaire survey
Before launch the field survey, well-structured questionnaires were prepared
through literature review. Two questionnaires were developed and distributed it
among main contractors and trade subcontractors. Each questionnaire consist two
sections, purpose of the section A to investigate that existence of factors identified

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Chapter Three

Research Methodology

through literature review and section B to investigate current position of the

identified factors within Sri Lankan construction industry.

3.4.2. Justification of survey approach

Patton and Applbaum (2003), stated that case studies are carried out for
qualitative data phenomenon. It applies for the studies needed for qualitative
approach rather than quantitative. Therefore these reasons justified that the above
selected questionnaire survey approach was the suitable for this research.

3.4.3. Sample selection

To achieve success of the questionnaire survey, there should be selected the
expert panel very carefully when distributing questionnaires. The experts should
have much more working experience in the Sri Lankan construction industry.
Therefore, questionnaires were distributed to Project Managers, Civil Engineers and
Quantity Surveyors to investigate the main contractors` perspective while
distributing questionnaires to owners of the subcontracting firms to investigate
subcontractors` perspective.
According to chan et al. (2001), mentioned that when carrying out a
questionnaire survey the panel size should be between 10 to 50. Therefore sample of
30 professionals was decided to be reasonable sample and a random sample size of
35 prominent professionals in the industry was selected to distribute in the purpose of
receiving targeted 30 in main contractors` perspective, as well as 35 number of
subcontractors was selected to receive targeted 30.

3.5. Phase Three

3.5.1 Data Analysis
Questionnaire data was analyzed by using the Relative Importance Index
method. Thus a ranking is expected relatively to the importance of each factors, here
Relative Important Index (RII) was used as the tool for the analysis. The same tool
has been used by the Dissanayaka D.M.P.S. (2006), Jeyamathan J. (2005), Nkado

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Research Methodology

(2001), for the analysis. The following formula was used to calculate the RII for the
skills and roles of Quantity Surveyor.
RII = (W. n) x 100
A.N
Where,
W: Constant expressing the weighting given to each response
A: The highest weighting
n: The frequency of responses
N: Total number in the responses

3.6. Summary
This chapter has described and justified the research process and the
methodology adopted for the purpose of the research. Questionnaire survey method
was used for the survey Further Relative Importance Index was used to identify
impact of each factor in Sri Lankan construction industry.

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Chapter Four

Research Findings and Analysis

4.0. RESEARCH FINDINGS AND ANALYSIS

4.1. Introduction
The preceding chapter discussed the research methodology of this study while
this chapter describes research findings on the factors affecting performance quality
of subcontracting in Sri Lankan construction industry and the current level of each
factor.

4.2. Response for questionnaire

A comprehensive questionnaire survey was conducted in order to identify
factors affecting performance quality of subcontracting and current level of each
factor within Sri Lankan construction industry. Seventy questionnaires were
distributed among the main contractors and subcontractors in the construction
industry and sixty questionnaires were able to collect during the data collection phase
of the study.
Thus the rate of response by the main contractors and subcontractors for the
given questionnaires can be identified as mentioned in the following table.

Table 2 :- Rate of response to questionnaires

Category

Number of
distributors

Number of
returned

Rate of Return

Main Contractor

35

30

86%

Subcontractor

35

30

86%

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Research Findings and Analysis

4.3. Factors affecting performance quality of subcontracting

and current level of each factor within Sri Lankan
construction industry
The below table (table 3) is illustrated the RII of each factor and rank in
accordance with the affecting level. Factors those contains over 75% (RII)
considered as directly affect to the performance quality of subcontracting.
Table 3 :- Affecting level of each factor

Affecting Level
Factor

RII

Rank

Subcontractors workmanship

82.7%

Subcontractors past experience in performing the work

79.3%

Subcontractors profit level

61.0%

Subcontractors compliance to quality specifications

78.7%

Usage of construction materials by subcontractors

60.3%

10

Setting realistic contract time for subcontractors

72.3%

Communication between main contractor and

subcontractors

77.3%

Site co-ordination

69.3%

Adequate site safety for subcontractors

77.7%

10

Management of subcontractor work

74.3%

The below table (table 3) is illustrated the RII of each factor and rank in
accordance with the current level. Factors those contains blow 70% (RII) considered
as factors those are in poor current level.

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Research Findings and Analysis

Table 4 :- Current level of each factor

Current Level
Factor

RII

Rank

Subcontractors workmanship

75.3%

Subcontractors past experience in performing the work

64.3%

Subcontractors profit level

60.0%

10

Subcontractors compliance to quality specifications

68.3%

Usage of construction materials by subcontractors

61.3%

Setting realistic contract time for subcontractors

65.0%

Communication between main contractor and

subcontractors

67.0%

Site co-ordination

67.0%

Adequate site safety for subcontractors

75.0%

10

Management of subcontractor work

71.7%

Figure 3:- Comparison of affecting level and current level

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Research Findings and Analysis

4.3.1. Subcontractors workmanship

In according to the table 3, affecting level of Subcontractors workmanship is
82.7% (RII). Therefor Subcontractors workmanship directly affect to the
performance quality subcontracting. Most Main contractors and Subcontractors
commented that Subcontractors workmanship directly affect to the performance
quality of subcontracting. Proper knowledge on workmanship always leads the
performance quality to the higher standard.
In according to the table 4, current level of Subcontractors workmanship is
75.3% (RII). The result confirms that the current level of Subcontractors
workmanship is at a high level. Despite of above result most Main contractors are not
considerably satisfy with the workmanship of the subcontractors.

4.3.2. Subcontractors past experience in performing the work

In according to the table 3, affecting level of Subcontractors past experience in
performing the work is 79.3% (RII). Thus subcontractors past experience in
performing the work directly affect to the performance quality of subcontracting.
But in according to the table 4, current level of Subcontractors past experience
in performing the work is 64.3% (RII). There is a considerable difference in affecting
level and current level (fig. 3). Most subcontracting firm owner stated that when
recruiting new labors, they are much more concern about the past experience because
is it directly affect to the workmanship too, but when there is a lack of resources then
they have to depend on new comers whose past experience is not in a considerable
level. This can be result to decreasing of level of past experience in performing the
work.

4.3.3. Subcontractors profit level

In according to the table 3, affecting level of Subcontractors profit level is
61% (RII). Most of main contractors commented that profit level is not directly
related to the performance level of subcontracting. The result of this study also
confirms above mentioned statement.

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Research Findings and Analysis

Most subcontractors stated that since lack of good profit level many skilled
labors are tend to leave the subcontracting firms. This can be ultimately resulting to
poor quality work since subcontracting firms have to carry out work committing low
skilled labors. In according to the table 4, current level of Subcontractors profit level
is 60% (RII). This result also confirms that profit level of subcontractors at a low
level.

4.3.4. Subcontractors compliance to quality specifications

Most main contractors are strictly said that it is a necessity in well compliance
in quality specifications when performing the work in high quality manner by subcontractors. In according to the table 3, affecting level of Subcontractors compliance
to quality specifications is 78.7% (RII). This result indicates that Subcontractors
compliance to quality specifications directly affect to the performance quality of
subcontracting.
In according to the table 4, current level of Subcontractors compliance to
quality specifications is 68.3% (RII). According to this result, it confirms that
Subcontractors compliance to quality specifications is at a lower level, when
comparing affecting level with current level. Also most sub contactors argued that
they are not in well signified about quality specifications before the work is
commenced, after completing the work only main contractors are concerned about
quality level and tend to provide quality specifications. Many sub-contractors assured
that this routine always result to end up with high level of wastage.

4.3.5. Usage of construction materials by subcontractors

In according to the table 3, affecting level of Usage of construction materials
by subcontractors is 60.3% (RII). Therefore it seems like usage of construction
materials by subcontractors does not directly affect to the performance quality of
subcontracting.
In according to the table 4, current level of Usage of construction materials by
subcontractors is 61.3% (RII). According to this result it seems like there a
considerable level of poor usage of construction materials by subcontractors in
construction industry.

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Research Findings and Analysis

4.3.6. Setting realistic contract time for subcontractors

In according to the table 3, affecting level of setting realistic contract time for
subcontractors is 72.3% (RII). Therefore it seems like setting realistic contract time
for subcontractors does not directly affect to the performance quality of
subcontracting. Main contractors always argued that sub-contractors should be able
to compete the task within the given time period in high quality manner and if the
time duration is not enough sub-contractors should be able to increase they resources
and complete the work.
In according to the table 4, current level of setting realistic contract time for
subcontractors is 65% (RII). According this result it confirms that subcontractors are
not getting adequate time duration to complete the work.

4.3.7. Communication between main contractor and subcontractors

In according to the table 3, affecting level of Communication between main
contractor and subcontractors is 77.3% (RII). The result of the study indicates that
Communication between main contractor and subcontractors directly affect to the
performance quality of subcontracting. Most main contractors convinced that proper
communication between main contractor and sub-contractor lead to complete the
work in high quality manner.
In according to the table 4, current level of Communication between main
contractor and subcontractors is 67% (RII). In order to this result it seems like level
of Communication between main contractor and subcontractors is not in an adequate
level.

4.3.8 Site co-ordination

In according to the table 3, affecting level of Site co-ordination is 69.3% (RII).
Therefor it seems like site co-coordination is not directly affect to the performance
quality.
In according to the table 4, current level of Site co-ordination is 67% (RII).
Most sub-contractors argued that their works falls usually due to constraints of other

Department of Building Economics

35

Chapter Four

Research Findings and Analysis

sub-contractors performance in the site. They alleged that main contractors do not
consider about site working constraints and it is directly affect to the performance.

4.3.9. Adequate site safety for subcontractors

In according to the table 3, affecting level of adequate site safety for
subcontractors is 77.7% (RII). It seems like it is directly affect to the performance
quality. Subcontractors especially mentioned that site safety is a necessity when
carrying out external works due difficulties of the work.
In according to the table 4, current level of adequate site safety for
subcontractors is 75% (RII). According to this result it seems like main contractors
are maintaining high level of site safety at construction sites. But most subcontractors
are convinced that main contractors are not much concern about site safety of
subcontractors.

4.3.10. Management of subcontractor work

In according to the table 3, affecting level of Management of subcontractor
work is 74.3% (RII). It seems that management of sub-contractor work is a necessity
to achieve high quality work. Most of main contractors are convinced that without
proper supervision of subcontractors performance cannot be able to achieve high
level of performance quality through subcontracting.
In according to the table 4, current level of Management of subcontractor work
is 71.7% (RII). It confirms that main contractors are maintaining a high level of
management system for subcontractors work.

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Chapter Four

Research Findings and Analysis

4.4. Further analysis

4.4.1.

Comparison

of

Main

contractors`

perspective

and

Subcontractors perspective in accordance with affecting level and

current level
Comparison of factor affecting level
As a further analysis main contractors perspective and subcontractors
perspective separately analyzed separately in accordance with the affecting level of
each factor. Below table (table 5) is shown the difference of RII in affecting level
between main contractors (MC) and subcontractors (SB), also the average of RII.
Table 5 :- Comparison of affecting level

Factor
1
2
3
4
5
6
7
8
9
10

Subcontractors workmanship
Subcontractors past
experience in performing the
work
Subcontractors profit level
Subcontractors compliance
to quality specifications
Usage of construction
materials by subcontractors
Setting realistic contract time
for subcontractors
Communication between
main contractor and
subcontractors
Site co-ordination
Adequate site safety for
subcontractors
Management of subcontractor
work

Department of Building Economics

Affecting Level
RII(MC) RII(SB) Difference Average
90%

75%

15%

83%

84%

75%

9%

79%

44%

78%

34%

61%

78%

79%

1%

79%

68%

53%

15%

60%

64%

81%

17%

72%

76%

79%

3%

77%

62%

77%

15%

69%

70%

85%

15%

78%

77%

71%

6%

74%

37

Chapter Four

Research Findings and Analysis

Figure 4 :- Comparison of affecting level in accordance with the average and difference

According to the table 5 and figure 4, it seems like there is a contradictory

perspective between main contractors and subcontractors against affecting level for
the performance quality of subcontracting. Even though the average is high there is a
considerable difference in RII when considering Main contractors perspective and
Subcontractors perspective. Therefore it is intended to discover reasons for above
contradictory situation through a further research.
Comparison of factor current level
As a further analysis main contractors perspective and subcontractors
perspective separately analyzed in accordance with the current level of each factor.
Below table (table 6) is shown the difference of RII in current level between main
contractors (MC) and subcontractors (SB), also the average of RII by both the
parties.

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Chapter Four

Research Findings and Analysis

Table 6 :- Comparison of Current level

Current Level
Factor

RII(MC) RII(SB) Difference Average

Subcontractors workmanship

61%

90%

29%

75%

Subcontractors past
experience in performing the
work

50%

79%

29%

64%

Subcontractors profit level

72%

48%

24%

60%

67%

69%

2%

68%

45%

78%

33%

61%

79%

51%

27%

65%

73%

61%

13%

67%

79%

55%

23%

67%

87%

63%

23%

75%

81%

62%

19%

72%

4
5
6
7
8
9
10

Subcontractors compliance to
quality specifications
Usage of construction
materials by subcontractors
Setting realistic contract time
for subcontractors
Communication between
main contractor and
subcontractors
Site co-ordination
Adequate site safety for
subcontractors
Management of subcontractor
work

Figure 5 :- Comparison of current level in accordance with the average and difference

Department of Building Economics

39

Chapter Four

Research Findings and Analysis

Also according to the table 6 and figure 5, it seems like there is a contradictory
perspective between main contractors and subcontractors against current level of
each factor. Even though the factors containing high level of average in order to
current level, there is a high level of contradictory point of view between Main
contractors and Subcontractors against current level of each factor. Therefore it is
intended to discover reasons for above contradictory situation through a further
research.

4.7. Summary
In this chapter describes research findings on the factors affecting performance
quality of subcontracting in Sri Lankan construction industry. A comprehensive
questionnaire survey was conducted in order to identify factor affecting performance
quality of subcontracting and current level of each factor within Sri Lankan
construction industry.
In according to the findings it can be identified that subcontractors`
workmanship,

subcontractors`

past

experience

in

performing

the

work,

subcontractors` compliance to quality specifications, communication between main

contractor and subcontractors, adequate site safety for subcontractors and
management of subcontracting work are directly affect to the performance quality of
subcontracting. Also setting realistic contract time for subcontractors and site coordination are considerably affecting performance quality of subcontracting.
When consider about the current level of each factor within the construction
sites, it can be identified that sub contractors` profit level, Subcontractors
compliance to quality specifications, Communication between main contractor and
subcontractors and site co-ordination are in considerably low level and main
contactors should take necessary action to improve the current level of those factors
to achieve high performance quality through subcontracting.
According to further analysis it could be found out that there is a contradictory
point of view between Main contractors and Subcontractors. Especially when
consider about current level of each factor. Therefor it is intended to carry out further
research to find out reasons for above mentioned contradictory situation.

Department of Building Economics

40

Conclusions

5.0. CONCLUSIONS
5.1. Introduction
This chapter discusses and summaries survey finding in order to draw
conclusion and recommendations. First the conclusions on overall research problem
are presented. Subsequently, recommendations are provided based on the survey
finding of this study. Finally, the new research directions emerging from this study
are elaborated.

5.2. Conclusions
There are certain particular characteristics of construction industry, which
makes it different from other industries .Principally, its final product is unique,
immobile and takes high variety. Since the construction industry involves a mixture
of different kind of complex activities, subcontracting practice comes out to help the
main builder with lighting the workload by sharing it among the subcontractors.
Although there are many advantages of subcontracting, excessive reliance on
this strategy can be creates difficulties for both employers and employees. Declining
standards of quality and falling productivity levels are main problems faced by
employers. Subcontracting is a double-edged sword. If managed effectively,
subcontractors help main contractors to achieve goals of the organization while
providing specialist construction services and absorbing contractors inconsistent
workloads.
Through this study it can be identified that foreign construction industries are
suffering with poor performance quality of subcontracting and facing lot of conflicts
due to this poor performance of subcontractors`. Therefore the aim of this study was
to find out factors affecting performance quality of subcontracting in foreign
construction industry. So there can be identified ten main factors those are direct
affect for the poor performance quality in foreign construction industries by trade
subcontractors who are providing labors only such as structural and finishes
subcontractors.

Department of Building Economics

41

Conclusions

In accordance with the literature review it can be identified that

Subcontractors workmanship, Subcontractors past experience in performing the
work, Subcontractors profit level, Subcontractors compliance to quality
specifications, Usage of construction materials by subcontractors, Setting realistic
contract time for subcontractors, Communications between main contractor and
subcontractors,Site co-ordination, Adequate site safety for subcontractors and
Management of subcontractor work are direcly affect to the performance quality of
subcontracting in foreign construction industries. Therefor a comprehensive
questionnaire survey was conducted in order to identify factor affecting performance
quality of subcontracting and current level of each factor with in the Sri Lankan
construction industry.
In order to the survey
workmanship,

subcontractors`

findings it can be identified that subcontractors`

past

experience

in

performing

the

work,

subcontractors` compliance to quality specifications, communication between main

contractor and subcontractors, adequate site safety for subcontractors and
management of subcontracting work are directly affect to the performance quality of
subcontracting in Sri Lankan construction industry and Setting realistic contract time
for subcontractors and site co-ordination are considerably affected to the
performance quality of subcontracting in Sri Lanka.
According to the research findings and analysis, the current level of each factor
within the Sri Lankan construction sites evaluated and it can be identified that sub
contractors` profit level, Subcontractors compliance to quality specifications,
Communication between main contractor and subcontractors and site co-ordination
are in considerably low level and main contactors should take necessary action to
improve the current level of those factors to achieve high performance quality
through subcontracting.

5.3. Recommendations
In according to the research finding the result proved the current level of
Subcontractors compliance to quality specifications is in a considerably lower
situation. Also this study confirms that Subcontractors compliance to quality
specifications directly affect to the performance quality of subcontracting. Through
the survey most subcontractors are arisen with the comment as most main contractors
Department of Building Economics

42

Conclusions

do not provide required quality specifications before the work is commenced and
after completion of the work only they come across with quality requirements. There
for main contractors are responsible to prove enough quality specifications to the
subcontractors before the work is commenced. Also those would direct not only to
achieve quality standards, but also to minimize both time and money wastage.
Another factor came up with the survey result which consist poor current level
standard, which is Communication between main contractor and subcontractors. This
factor also directly affect to the performance quality of subcontracting. Therefor
main contractors have to take necessary actions to develop the communication
system with the subcontractor to achieve high level of performance quality through
subcontracting.

5.4. Further research directions

Through the further analysis of this study, it could be found out that there is a
contradictory point of view in current level of most factors, when comparing
Main contractors perspective and Subcontractors perspective separately.
Therefore it is better to carry out a further research on current level of factors
affecting performance quality in Sri Lankan construction industry to find out
reason for the encountered contradictory situation.
This study only is focused on factors affecting performance quality of trade
subcontractors who are providing only labors. There for better to carry out
same study with specialist subcontractors who are providing specialized
services.

Department of Building Economics

43

Reference

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Appendixes

APPENDIXES
Questionnaire 01 (Main Contractors` perspective)
Dear Sir / Madam,
Re: Dissertation B.Sc (Hons) Degree in Quantity Surveying.
I am an undergraduate student of Department of Building Economics, University of
Moratuwa and undertaking the Bachelor of Science Honors Degree in Quantity
Surveying. In fulfillment of this degree program, it is required to conduct a research
and produce a dissertation.
Research Topic: Factors affecting performance quality of subcontracting in Sri
Lankan construction industry
Aim of the research
The aim of this research is to explore and identify factors affecting performance
quality of subcontracting current level of each factor within Sri Lankan construction
industry.
I would be grateful if you could complete this questionnaire. The information
gathered through this survey will be only used for this particular research.

Yours faithfully,

Dissertation Supervisor

Attanayake A.M.C.

Mr. Sandun Fernando

Final year undergraduate

Lecturer

Department of Building Economics

Department of Building Economics

Faculty of Architecture

Faculty of Architecture

University of Moratuwa

University of Moratuwa

T.P: 071-9138390
Department of Building Economics

48

Appendixes

Section A (Main contractors` perspective)

Please mark as (x) for degree of affecting rate for each factor mentioned in the table according to given scale, as how often following factors are
affected to performance quality of subcontracting.
Never (1)

Rare (2)

Sometimes (3)

Often (4)

Always (5)

Factors
1

Subcontractors workmanship

Subcontractors past experience in performing the work

Subcontractors profit level

Subcontractors compliance to quality specifications

Usage of construction materials by subcontractors

Setting realistic contract time for subcontractors

Communication between main contractor and subcontractors

Site co-ordination

Adequate site safety for subcontractors

10 Management of subcontractor work

Department of Building Economics

49

Appendixes

Section B (Main contractors` perspective)

Please mark as (x) for the degree of current level of each factor mentioned in the table according to given scale as, what is the current level of the
each factor.
Very low/poor (1)

Low/poor (2)

Medium (3)

High/Good (4)

Very high/good (5)

Factor
1

What is the level of Subcontractors workmanship?

What is the level of Subcontractors past experience in performing the work?

How about the subcontractors profit level, within the construction site?

What is the level of subcontractors compliance to quality specifications?

What is the efficient level of construction materials usage by subcontractors?

What is the frequency level of setting realistic contract time for subcontractors?

What is the efficient level of construction materials usage by subcontractors?

What is the level of site co-ordination for subcontractors work?

What is the level of site safety for subcontractors work?

10 What is the management level of subcontractors work?

Department of Building Economics

50

Appendixes

Questionnaire 02 (Subcontractors` perspective)

Dear Sir / Madam,
Re: Dissertation B.Sc (Hons) Degree in Quantity Surveying.
I am an undergraduate student of Department of Building Economics, University of
Moratuwa and undertaking the Bachelor of Science Honors Degree in Quantity
Surveying. In fulfillment of this degree program, it is required to conduct a research
and produce a dissertation.
Research Topic: Factors affecting performance quality of subcontracting in Sri
Lankan construction industry
Aim of the research
The aim of this research is to explore and identify factors affecting performance
quality of subcontracting current level of each factor within Sri Lankan construction
industry.
I would be grateful if you could complete this questionnaire. The information
gathered through this survey will be only used for this particular research.

Yours faithfully,

Dissertation Supervisor

Attanayake A.M.C.

Mr. Sandun Fernando

Final year undergraduate

Lecturer

Department of Building Economics

Department of Building Economics

Faculty of Architecture

Faculty of Architecture

University of Moratuwa

University of Moratuwa

T.P: 071-9138390

Department of Building Economics

51

Appendixes

Section A (Subcontractors` perspective)

Please mark as (x) for degree of affecting rate for each factor mentioned in the table according to given scale, as how are following factors
affected to performance quality of subcontracting.
Never (1)

Rare (2)

Sometimes (3)

Often (4)

Always (5)

Factors
1

Subcontractors workmanship

Subcontractors past experience in performing the work

Subcontractors profit level

Subcontractors compliance to quality specifications

Usage of construction materials by subcontractors

Setting realistic contract time for subcontractors

Communication between main contractor and subcontractors

Site co-ordination

Adequate site safety for subcontractors

10 Management of subcontractor work

Department of Building Economics

52

Appendixes

Section B (Subcontractors` perspective)

Please mark as (x) for the degree of level of each factor mentioned in the table according to given scale as, what is the level of the each factor
within subcontracting and construction site.
Very low/poor (1)

Low/poor (2)

Medium (3)

High/Good (4)

Very high/good (5)

Factor
1

What is the level of Subcontractors workmanship?

What is the level of Subcontractors past experience in performing the work?

How about the subcontractors profit level, within the construction site?

What is the level of subcontractors compliance to quality specifications?

What is the efficient level of construction materials usage by subcontractors?

What is the frequency level of setting realistic contract time for subcontractors?

What is the efficient level of construction materials usage by subcontractors?

What is the level of site co-ordination for subcontractors work?

What is the level of site safety for subcontractors work?

10 What is the management level of subcontractors work?

Department of Building Economics

53