Engineering, Construction and Architectural Management

Engineering, Construction and Architectural Management
Emerald Article: Factors influencing contractor performance: an international investigation Hong Xiao, David Proverbs
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To cite this document: Hong Xiao, David Proverbs, (2003),"Factors influencing contractor performance: an international investigation", Engineering, Construction and Architectural Management, Vol. 10 Iss: 5 pp. 322 - 332 Permanent link to this document: http://dx.doi.org/10.1108/09699980310502937 Downloaded on: 02-07-2012 References: This document contains references to 51 other documents Citations: This document has been cited by 2 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 3346 times since 2005. *
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Factors influencing contractor performance: an international investigation

Hong Xiao and David Proverbs
The authors Hong Xiao is a Researcher, Director of Research and David Proverbs is Postgraduate Co-ordinator, both at the Built Environment Research Unit, School of Engineering and the Built Environment, University of Wolverhampton, Wolverhampton, UK. Keywords Contract workers, Subcontracting, Construction works, Performance monitoring, Multiple regression analysis Abstract International comparisons of contractor performance can provide robust benchmarks for contractors in different countries and help to identify ways towards performance improvement. Based on a hypothetical construction project, overall contractor performance (OCP) in Japan, the UK and the USA is compared. Overall contractor performance is defined to embrace construction cost, construction time, construction quality and sustainable development, the philosophy being that the achievement of one aspect of performance should not be at the expense of another. Multiple regression analysis reveals that overall contractor performance is dependent on: their past performance on previous similar projects; their commitment towards lifetime employment; their perceived importance of time performance; their relationship with subcontractors; and the number of design variations during construction. To improve their overall performance, contractors are advised to focus on construction time, reduce delays, maintain a stable workforce and establish partnerships with their subcontractors. Clients should attempt to reduce design variations during construction. Electronic access The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0969-9988.htm
Engineering, Construction and Architectural Management Volume 10 . Number 5 . 2003 . pp. 322-332 # MCB UP Limited . ISSN 0969-9988 DOI 10.1108/09699980310502937
Introduction
The culmination of a three-year research study of contractor performance in Japan, the UK and the USA is presented. This paper reports one of the principal aspects of the research: the development of an overall performance model based on the practices of contractors in the three countries, the aim being towards identifying the primary factors found to influence contractor performance and possible ways for improvement. Here, overall contractor performance (OCP) embraces four fundamental aspects of performance, namely construction cost, construction time, construction quality, and sustainable development. The philosophy underpinning the development of the OCP model is that achievement of one aspect of performance should not be at the expense of another. In this paper, a brief review of earlier contractor performance studies is presented, followed by a short summary of the research methodology employed in this work. Finally, a detailed description of the OCP model is given and the implications of the results are discussed.
Earlier contractor performance studies

Contractor performance is critical to the success of any construction project as it is contractors who convert designs into practical reality. Improved contractor performance leads to increased client satisfaction, an improvement in the reputation of contractors and hence their competitiveness in the market. While contractor performance has been the subject of much research, evidence suggests that there remains much need for further improvement (Egan, 1998). Contractor performance has long been defined in terms of cost, time and quality, and each of these aspects has been the subject of much research. Other researchers have attempted to examine contractor performance more comprehensively. For example, Ireland (1985) investigated the role of managerial
The authors acknowledge the support of Mr Kenichi Matsui of the Public Works Research Institute of the Ministry of Construction of Japan and also numerous project managers in Japan, the UK and the USA for their generous cooperation and contributions to this research.
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Factors influencing contractor performance
Engineering, Construction and Architectural Management Volume 10 . Number 5 . 2003 . 322-332
actions in the improvement of project performance. Tam and Harris (1996) studied building projects in Hong Kong and identified the underlying factors that influenced contractor performance. Assaf et al. (1996) examined the characteristics of projects and contractors and their degree of influence on levels of contractor performance in Saudi Arabia. Contractor performance has long been recognised to vary internationally (Flanagan et al., 1986; Sidwell et al., 1988; Levy, 1990; Proverbs, 1998). Buildings are unique in nature and the construction process varies widely because of variations in factors such as the physical and economic environments, the construction team, and/or the location and time. Internationally, distinctive cultural features, traditions and customs present even further obstacles towards comparing contractor performance. Notwithstanding this, successful attempts in this regard have been witnessed. Flanagan et al. (1986) selected nine pairs of buildings projects similar in type and scale in the UK and the USA to compare the design and construction performance in the two countries. NEDO (1990) considered two identical Kodak PET plants built simultaneously in the UK and the USA, whilst Winch and Campagnac (1995) conducted an Anglo/French comparison of the organisation of the construction process. Proverbs (1998) used a hypothetical project to compare contractor performance in the UK, France and Germany. Therefore, through careful research design, such international investigation into contractor performance can provide robust performance benchmarks for contractors in different countries. Here, a multiple regression model is developed to identify the factors paramount to OCP. The argument here is that contractors need to consider all aspects of performance if they are to satisfy their clients. The work presented is part of an on-going research programme aimed at identifying best practice among contractors internationally.
Research methodology
A hypothetical construction project (a sixstorey concrete framed office building considered common to the three countries) formed the basis of a semi-structured
questionnaire, designed to accrue the necessary performance data from contractors in the three countries. A broad, but carefully worded description of the project, including its location, gross floor area, height, and some basic technological characteristics were provided. To facilitate the inclusion of some national vernacular characteristics into the design of the hypothetical project, respondents were invited to determine the specification of certain building components, e.g. whether concrete elements were precast or in situ. Respondents were then asked to estimate the construction cost and duration for the hypothetical project, assuming that they were the general contractor. They were also encouraged to reflect upon their previous project experience and routine practices. For example, respondents were invited to estimate the probability of completing the hypothetical project within budget and on time, and to indicate the number of defects at practical completion, the times being called upon during defects liability period, and the number of reportable accidents on similar projects. Other information relevant to contractors' management and production practices, such as the average number of design variations encountered during construction, the frequency of meetings with subcontractors and project teams, and whether they had partnerships with any of the other participants (clients, subcontractors, consultants and suppliers) and the duration of the longest of these, was also sought. Respondents were asked to make an assessment of their client satisfaction levels in regard to their cost, time and quality performance, which while being somewhat subjective, was considered an appropriate compromise in the study. That is, it is acknowledged that different cultural backgrounds may impact on the way satisfaction/dissatisfaction is expressed. Nevertheless, satisfaction is a relative and subjective concept, and closely relates to levels of expectation (Swan and Combs, 1976; Ahmed and Kangari, 1995). It was therefore considered that as both clients and contractors are under the same cultural influences, this self-evaluation provides an indication of the international trends in client satisfaction. Respondents were assured that the information obtained from the survey would
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be kept strictly confidential and used for research purposes only. Data were not to be made available to any third party or used in any published material, except as a component in aggregated statistics. This was intended to appease any misgivings on behalf of the respondents and to induce an objective and realistic response to the questions presented. A survey was conducted simultaneously in Japan, the UK and the USA. In Japan, translated versions of the questionnaires were distributed to contractors of the Building Contractors Society (BCS). General contractors in the USA were contacted by means of a large contracting body, The Associated General Contractors of America (AGC). In the UK, companies listed in the Kompass directory and members of the CIOB were targeted in the survey. Altogether, 659 questionnaires were distributed to contractors and 98 completed responses were obtained, representing an average response rate of 15 per cent. For the analysis, 22 responses from Japan and 32 responses from both the UK and the USA respectively were used. The remaining 12 responses were reserved for validation purposes. Considering the complexity and volume of the questionnaire (seven pages), the relatively low response rate was not unexpected. This, however, should not invalidate the outcome of the survey. Rather, it does imply that the questionnaire had been taken seriously, and following detailed scrutiny the responses received were deemed both valid and reliable.
Concepts of the OCP model

Client satisfaction should be the main focus when contractor performance is evaluated and compared because ``clients are at the core of the process and their needs must be met by the industry'' (Latham, 1994). Clients normally expect their projects to be delivered within budget, on time and to the level of quality required. However, achieving these prime objectives should not be at the expense of the contractors' sustainable development. Both clients and contractors should be able to benefit from the construction projects. Therefore, in the context of this research, contractor performance is extended to include the sustainable development of contractors, as
measured by their profitability, investment in research and development, harmonious relations throughout projects, environmental protection, and safety (Mohsini and Davidson, 1992; Atkin and Pothecary, 1994; Flanagan et al., 1998; Harris and Holt, 1999; Palaneeswaran and Kumaraswamy, 2000). It has been argued that the very low and unreliable rate of profitability within construction is an obstacle to sustainable healthy development (Egan, 1998). Increasing financial pressure on contractors only damages the industry and merely serves to jeopardise their existence. In addition to such economic factors, other social and environmental issues form part of their sustainable development (Hill and Bowen, 1997; DETR, 2000). For example, construction companies have a social responsibility to provide staff training and maintain a high level of health and safety. Adequate investment in research and development facilitates continuous improvement in technology and management. Every construction project has an impact on the environment, and it is the contractors' obligation to take protective measures. The creation of a ``win-win'' situation for both clients and contractors is the desired outcome. Hence, in this research contractor performance was evaluated in terms of construction cost, construction time, construction quality and sustainable development. The indicators for these four measures as identified from the literature (Xiao and Proverbs, 2002a, b, c) are shown in Table I. Various aspects of contractor performance have previously been evaluated and compared amongst the three countries with a view to identifying respective strengths and weaknesses and possible ways of improvement (Xiao and Proverbs, 2002a, b, c). Performance-enhancing models in terms of construction cost, construction time, construction quality, and sustainable development were subsequently developed to identify the relationships between these aspects (i.e. the dependent variables) and construction practices and methods (i.e. the independent variables) in the building process. The aim of the models was to identify the factors found to be significant towards achieving outstanding performance in terms of cost, time, quality and sustainable development respectively.
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Table I Indicators of OCP and their weight distribution Aspect Cost Performance indicator Construction cost Measurement Weight Total (%) weight (%) 8.33 8.33 8.33 8.33 8.33 25 25
Time
Quality
Sustainable development
Unit price (in PPPs) for the hypothetical project (/m2) Cost certainty Probability to finish the hypothetical project on budget (%) Client satisfaction on cost Client satisfaction on similar projects (on scale of 1 to 10) Construction time Construction duration for the hypothetical project (weeks) Time certainty Probability to finish the hypothetical project on time (%) Client satisfaction on time Client satisfaction on similar projects (on scale of 1 to 10) Defects Number of defects on similar projects Being called upon Number of being called upon on similar projects Liability period Years Client satisfaction on quality Client satisfaction on similar projects (on scale of 1 to 10) Profitability Percentage of profit at the unit price (%) Partnership Whether having partnership with other participants and the duration of the longest of these Investment in R&D and training Ratio of investment in R&D and training against annual turnover Environment protection Whether have environment protection policy and measures Health and safety Number of reportable accidents on similar projects
8.33 6.25 6.25 6.25 6.25 5
25
25
5 5 5 5
As these aspects are highly interrelated and affect one another, contractor performance is most appropriately modelled at an aggregated level. To do so, the 15 indicators of contractor performance were converted into performance indices on a scale of zero to ten. For each indicator, the best performance among all the contractors investigated was assigned a value of ten and the worst performance was assigned a value of zero, while those in between were assigned values proportionally between zero and ten. For those indicators measured on a positive scale (higher value equals better performance), such as cost certainty and client satisfaction, the index was calculated as: Index Xi maximum= maximum minimum 10 For those indicators measured on a negative scale (lower value equals better performance) such as the unit price for the hypothetical
project and defects at practical completion, the index was calculated as: Index maximum Xi = maximum minimum 10 where maximum represents the highest value for each indicator; minimum represents the lowest value for each indicator; and Xi represents the value of performance indicators for contractor i. The final OCP index was the aggregated weighted individual values for each of the performance indicators. Here, the four aspects of contractor performance were considered equally important (25 per cent each) and apportioned equally to the various measures. For example, cost performance was measured against three indicators (construction cost, cost certainty, and client satisfaction), and each weighted 8.33 per cent. The performance indicators, their
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measurement and weight distribution are summarised in Table I.
Development of the model

In this research, multiple regression analysis was utilised to identify the factors influencing OCP, to establish the relationships between dependent and independent variables, and to determine the relative importance of each independent variable. The analysis was conducted with the aid of the statistical package for social sciences (SPSS 10). The Pearson correlation (r) was selected to measure the strength of a linear association. Only those independent variables which were significantly related to the respective dependent variables were incorporated into the modelling process. The significance level was 0.05 (2-tailed). Multicollinearity among independent variables was assessed by means of the tolerance value, with those less than 0.1 being omitted from the multiple regression analysis. Multiple regression analysis was applied to the OCP index as the dependent variable. The Pearson correlation tests identified 19 independent variables significantly related to OCP. A stepwise procedure was then applied under the selection criteria (to enter, F < = 0.050; to move, F > = 0.100), and five independent variables were selected. The final regression model can be presented as: Y 5:458 6:403E 02DELAYEDT 0:489 LIFEEMP2 0:172 CSTIME 0:415 PSUBCON2 2:003E 03 DVARIATI Here, DELAYEDT represents the typical delay on similar projects (as percentage of the original contract time); LIFEEMP2 is a dummy variable for a commitment towards lifetime employment (one for ``yes'' and zero for ``no''); CSTIME represents the importance contractors allocate to construction time to satisfy clients (on a scale of one to ten where one represents totally unimportant while ten represents very important); PSUBCON2 is a dummy variable for the partnering with subcontractors (one for ``yes'' and zero for ``no''); and DVARIATI represents the typical number of design variations during construction.
The 14 variables eliminated in the regression were: (1) annual turnover; (2) number of employees; (3) ratio of projects won by competitive bidding; (4) importance contractors allocate to environmental protection to satisfy clients; importance contractors allocate to; (5) time; (6) time certainty; (7) quality; (8) environmental protection; (9) public relations and; (10) technological innovation to themselves; (11) total quality management system; (12) usage of letter for communication in construction; (13) frequencies of meeting per week within project team; and (14) with subcontractors. The resulting R2 was 0.490, signifying that nearly half of the total variation in OCP could be explained by the five independent variables. The regression analysis results are summarised in Table II. The bell shaped and symmetrical histogram of standardized residuals (refer to Figure 1) and the normal probability (P-P) plot for OCP (refer to Figure 2) with points basically clustered to the diagonal line demonstrate that the model does not violate the assumptions of normality. The random pattern of the data points in the plot of studentized residuals versus predicted values for OCP (refer to Figure 3) indicates that the assumption of constant variance is not violated. As the data were collected simultaneously from different contractors in different countries, it can be assumed that all the observations are independent, and the Durbin-Watson test (1.763) also confirmed this. As nearly half of the OCP was not explained by the five variables selected in the stepwise regression, those variables eliminated in the regression might still have certain impact on the OCP. Further, there may be other factors which have not been considered in this research (such as the organisational structure of contractors and the extent of client involvement in the construction process) which may also have some influence on OCP, but these were considered beyond the scope of this research.
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Table II Regression analysis results results of OCP index Multiple R R2 Durbin-Watson 0.700 0.490 1.708 Standard error Adjusted R2 0.6048 0.458
Analysis of variance DF Regression 5 Residual 80 F = 15.357, Sig. F = 0.000 Variables in the equation (Constant) DELAYEDT LIFEEMP2 CSTIME PSUBCON2 DVARIATI B 5.458 6.403E-02 0.489 0.172 0.415 2.003E-03
Sum of squares Mean square 28.084 5.617 29.260 0.366
Std. error 0.522 0.015 0.133 0.054 0.136 0.001
Beta 0.365 0.297 0.261 0.254 0.192
t
10.453 4.266 3.671 3.168 3.058 2.318
Sig. 0.000 0.000 0.000 0.002 0.003 0.023
Tolerance 0.872 0.977 0.938 0.925 0.925
VIF 1.147 1.023 1.066 1.081 1.081
Figure 1 Histogram of standardized residuals for OCP
Figure 2 Normal probability (P-P) plot for OCP
Sensitivity analysis
In this research, the OCP was calculated by an index aggregating the arbitrarily weighted performance measurement values. As different clients may have different priorities for their projects and thus varying weights may be assigned to these performance indicators, it would be beneficial to examine the impact of the change in the weights on the modeling results. To do so, another OCP index was calculated with a different set of weights, assuming the 15 performance indicators were equally important. This resulted in varying weightings with sustainable development (33.3 per cent) and quality performance (26.7 per cent) having heavier weights than cost and time performance
(20 per cent each). The Pearson correlation (r) tests identified 21 related independent variables. This included the same 19 variables identified in the original model plus the importance contractors allocate to construction quality to satisfy clients, and the quality assurance certificates (such as ISO 9001). A stepwise multiple regression analysis was then applied to the new OCP index as the dependent variable. The same five independent variables were selected as the significant influencing factors to OCP, as shown in Table III. This indicates that the OCP index is insensitive to the weighting assigned to the performance indicators, and demonstrates that the influencing factors identified by the multiple regression model do have significant impact on OCP.
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Figure 3 Studentized residuals versus predicted values for OCP
Discussion of the results

Multiple regression analysis revealed a positive relationship between the OCP index and a commitment towards lifetime employment, the importance contractors allocate to construction time, and partnering with subcontractors respectively. In contrast, a negative relationship was found between OCP and the typical delay on similar projects and the number of design variations during construction respectively. The implications of these results for contractors are now discussed. Importance of construction time Clients normally expect fast projects in order to attain ``first in the market'' advantage over competitors (Kog et al., 1999). Shorter
Table III Regression analysis results of the new OCP index Multiple R R2 Durbin-Watson 0.717 0.514 1.666 Standard error Adjusted R2
construction time leads to improved client satisfaction and places contractors in an advantageous position in the market. Because of time-related overheads and other relevant expenses such as the hire of construction plant and liquidated damage, contractors also prefer to shorten their stay on site to reduce costs and increase their profits. Once delays occur, the lost time may be made up by working longer hours, more shifts, increasing the numbers of operatives and providing additional plant, at considerable additional cost. Quality standards may also invariably drop during accelerated work (Farrow, 1991). An emphasis on time can make contractors realise any quality problems will cause rework, making the time target more difficult to achieve, and therefore greater effort is expended in an attempt to guarantee satisfactory quality performance. Contractors' past performance is one of the most important determinants of predictive performance (Tam and Harris, 1996). This means those contractors who complete projects successfully are more likely to achieve project targets in the future. Delays are not uncommon in construction projects (Wright, 1997; Graves and Rowe, 1999) and have significant cost and quality implications, as contended above. Thus, a high priority should be given to contractors' past time performance during selection (Khosrowshahi, 1999; Fong and Choi, 2000). Contractors of high repute and better past performance will bring about improved client confidence and raise the possibility of future business.
0.5816 0.484
Analysis of variance DF Regression 5 Residual 80 F = 16.941, Sig. F = 0.000 Variables in the equation (Constant) DELAYEDT LIFEEMP2 CSTIME PSUBCON2 DVARIATI B 5.238 6.434E-02 0.555 0.155 0.388 2.216E-03
Sum of squares Mean square 28.649 5.730 27.057 0.338 SEB 0.502 0.014 0.128 0.052 0.130 0.001 Beta 0.372 0.341 0.238 0.241 0.216
t
10.453 4.458 4.330 2.963 2.977 2.667
Sig. 0.000 0.000 0.000 0.004 0.004 0.009
Tolerance 0.872 0.977 0.938 0.925 0.925
VIF 1.147 1.023 1.066 1.081 1.081
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A commitment towards lifetime employment The multiple regression model revealed a positive relationship between a commitment towards lifetime employment and OCP. In the survey, all Japanese companies claimed to provide lifetime employment. In contrast, approximately half of US companies and about a third of UK companies claimed to do so. Compared to the manufacturing industry, the work force in construction is quite transient (Arditi and Gunaydin, 1998). While lifetime employment does not necessarily mean employment till retirement even in Japan now (Sidwell et al., 1988; Morton, 1994), it does provide a certain degree of stability and continuity. This gives contractors an incentive to invest in training their workforce, leading to better quality, productivity and efficiency. With a commitment to lifetime employment, the workforce may be more committed as they realise their own interests lie in the survival and development of the company. A sense of loyalty and belonging can motivate operatives to play an active role in activities such as TQM, which requires the participation of everyone in an organisation. The performance of Japanese workers, who often form groups to study, suggest and practise ways to improve the quality of their operations and the final products (Levy, 1990), demonstrates the benefits of such commitment on the behalf of employers. Partnering with subcontractors Contractor performance is positively and strongly associated with their relationships with subcontractors (Kale and Arditi, 2001), as confirmed in this research. Subcontracting is common practice on construction projects nowadays and a majority of the work on site is conducted by subcontractors. However, subcontracting can be the cause of delays (NEDO, 1983; Majid and McCaffer, 1998), and damage by subcontractors and poor workmanship has been identified as the primary cause of defects at practical completion (Love and Li, 2000). The sense of alienation and mistrust between contractors and subcontractors often prevents teamwork and can cause various productivity barriers (Hsieh, 1998). Uncertainties in connection with a subcontractor's technical qualifications, timeliness, reliability and financial stability may bring risks to
contractors in terms of cost, time and quality (Akinci and Fischer, 1998). Contractors and subcontractors need to work closely with each other and share common goals. Here, a ``winwin'' scenario is desirable. Partnering may be one way of achieving this. The philosophy underpinning partnering is a commitment between involved parties to cooperate, allowing each to meet its own business objectives more effectively, meanwhile achieving the objectives of the project as a whole (Bennett and Jayes, 1995; Bresnen and Marshall, 2000). A partnership between contractors and subcontractors can promote openness, reduce programme times and the need to be contractual and alleviate problems more effectively (Millett et al., 2000). In the survey, nearly half of the contractors investigated partnered with their subcontractors. Long-term cooperation fostered by partnering can eliminate the learning curves which originate from the temporariness of construction projects. Furthermore, partnering can improve communication between parties and strengthen teamwork (Arditi and Gunaydin, 1998). Projects where partnering has been implemented have been known to benefit from better performance, lower budget overruns and shorter delays (Pocock et al., 1996). Without much extra input, the typical cost saving for partnered projects ranges from 2 per cent to 10 per cent, and can be up to 30 per cent in the long term because of improved productivity (Bennett and Jayes, 1995). The characteristics of partnering (i.e. continuous evaluation, the project charter, mutual objectives and team building) can also facilitate the transfer of knowledge between contractors and subcontractors and improve safety management and performance on site (Matthews and Rowlinson, 1999). The extensive use of partnering is considered a mode of achieving high quality (Arditi and Gunaydin, 1998). Design variations The survey analysis found that the number of design variations during construction had a detrimental effect on OCP. Even though variations allow clients' functional requirements to be met as closely as possible, when implemented during construction they have been known to be disruptive to the planned construction process, and to have implications in terms of construction cost,
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time and quality (Ireland, 1985; Flanagan et al., 1986; NEDO, 1988; Hanna et al., 1999). Design variations occur due to problems in aspects such as the thoroughness of the pre-design site investigation, the completeness of working drawings available at the time of estimate, and the general unpredictable circumstances during construction, or simply design errors and additions to the scope of work (Kaming et al., 1997; Hanna et al., 2002). Design variations have substantial impact on cost overruns (Dawood et al., 2001), and even for very successful projects, design variations during construction can cause a 5-8 per cent increase in project cost (Cox et al., 1999). Higher construction costs in the UK have been attributed to the higher number of design variations during construction (Xiao and Proverbs, 2002a). Whether initiated by clients and consultants, design variations during construction often lead to delays (NEDO, 1983, 1988; Chan and Kumaraswamy, 1996). They were perceived as the commonest principal source of cost and time overruns in construction projects (Kumaraswamy and Chan, 1995). To reduce construction cost and construction time, design variations need to be minimised (Ireland, 1985). A clear and thorough brief, quality contract documentation, and the use of an independent cost manager were perceived as the three most important strategies for reducing design variations by Australian practitioners (Chan and Yeong, 1995) and may be considered effective in other countries.
Summary
In order to satisfy clients more effectively and strengthen their competitiveness in the market, contractors need to improve their performance. Based on a hypothetical highrise concrete framed building, a questionnaire survey was conducted among contractors in Japan, the UK and the USA to collect performance data. Here, performance was considered in terms of overall contractor performance (OCP), measured in terms of cost, time, quality and sustainable development. Subsequently, an OCP index on a scale of zero to ten was developed by aggregating the weighted performance measurement values. Multiple regression
analysis was applied to investigate the factors influencing OCP for such buildings. Results indicated that the OCP of high-rise concrete framed buildings was influenced by a contractor's past performance on similar projects, commitment towards lifetime employment, perceived importance of time performance, relationships with subcontractors, and the number of design variations during construction. Results of a sensitivity test indicated that the OCP index was relatively stable when varying the weighting of the performance indicators. Construction time is important to both clients and contractors because of its economic implications. Delays lead to an increase in construction costs and a reduction in quality. The past performance of contractors represents a reliable indicator of their performance on future projects. With a lifetime employment policy, the workforce may be more stable and more committed, and contractors more willing to invest in training, resulting in a better workforce and improved overall performance. Partnerships between contractors and subcontractors can enhance mutual trust and teamwork, and lead to harmonious relationships and also can help to achieve better performance. Design variations during construction are disruptive and often cause cost overruns and delays. In order to improve their overall performance, contractors are advised to focus on aspects of time performance, maintain a stable and well-trained workforce, and establish long-term partnerships with their subcontractors. Clients should realise that design variations during construction bring about uncertainties and risks and are disruptive to the planned work, and should be avoided as much as possible.
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