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Improving the main contractor-subcontractor relationship

through partnering on construction projects

STUDENT PAPER

By Tafadzwa Mudzvokorwa

Department of Civil & Environmental Engineering
University of Zambia

Lusaka, Zambia


Abstract

The construction sector plays a significant role in the national economy through consolidating and enabling other sectors. Projects in the construction industry provide basic amenities and infrastructures that support social and economic development. Subcontracting is a major aspect of construction projects as it allows for specialisation, the sharing responsibilities and mitigation of project risks. However, instead of improving project success, subcontracting can act as a catalyst for poor project outcomes. Though there are many reasons that contribute to problems from subcontracting, a strained relationship between main contractors and subcontractors can be seen as a notorious contributor to poor project outcome. The study aimed at investigating the relationship between main contractors and subcontractors in Zambia and to provide a means to improve the relationship. To investigate the relationship, data collection techniques utilised included, literature review, questionnaire survey and interviews. The study established that the relationship between main contractors and subcontractors on most projects in Zambia is poor therefore needing attention. Top factors that can enhance the main contractor-subcontractor relationship were identified. From the factors deduced a non-contractual project partnering model was developed with the aim of improving this relationship

Keywords: Construction Project, Main contractor, Subcontractor, Partnering, Zambia

Introduction

The construction industry contributes significantly towards the economic output of a country (Mirawati et al., 2015). The construction industry in the United Kingdom (UK) contributed £103 billion in economic output which is 6.5 percent of the total output in 2014. It also created 2.1 million jobs which was 6.3 percent of the UK total employment (Rhodes, 2015). In Zambia, the construction industry comprised 9.9 percent of the national Gross Domestic Product (GDP), with a growth rate of 8.9 percent from 2013 (CSO, 2016). A major aspect of projects in the construction industry is subcontracting (Ujene et al, 2011). Research has shown that currently up to 90 percent of the work on a construction project is performed by subcontractors (Rajput and Agarwal, 2015). Assigning work to a subcontractor reduces work load and limits the contractors risk exposure (Abdullahi, 2014). Manu et al., (2013) indicated that subcontracting is a means of bargaining down labour cost, encourage quicker completion of tasks, externalise less rewarding and dangerous activities and rapidly meet changing product market demands.

However, with all its benefits, subcontracting can be a risk to construction projects (Yoke-Lian et al, 2013). Kaliba, (2010) identified that subcontracting was causing project schedule overruns in Zambia. A major aspect that contributes to the degree of success or failure of projects which are subcontracted is the relationship between main contractors and subcontractors (Jin et al., 2013; Okunlola, 2015; White & Marasini, 2014; McCord and Gunderson, 2014). When utilising subcontracting, interface problems can emanate. These problems include the lack of cooperation, limited trust, and ineffective communication leading to an adversarial relationship between the main contractor and subcontractor (Mirawati et al., 2015). However, a better interface between project parties encourages project success or even improves project performance (Vilasini et al, 2012). Eom et al, (2015) added that maintaining long-term relationships with subcontractors is absolutely necessary to improving the overall efficiency in the supply chain.

Partnering is recognised by many researchers as a means to foster the collaborative relationship between parties and improve project performance (Meng, 2012; Hong Kong CIC, 2012). Partnering is a voluntary process by which two or more organizations act as a team to achieve mutually beneficial goals (Nevada Department of Transportation, 2010). However, the integration and building close relationships in construction projects has not been taken seriously (Meng, 2012). In Zambia virtually no literature is available on relationships and partnering in the construction industry. Therefore, this paper addresses this, and contributes to the body of subcontracting knowledge by detailing a partnering approach for main contractors and subcontractors.

Partnering

There is no definite definition of partnering as partnering projects can differ from each other and because it is difficult to define the exact factors that a partnering strategy consists of (Widen et al, 2014). Partnering is generally understood as a commitment by parties involved in a project to work closely or cooperatively, instead of competitively and adversarial. It is a long term commitment between two or more organisations to implement a structured collaborative approach that facilitates team work across contractual boundaries for the purposes of achieving specific business objectives (California Department of Transportation Division of Construction, 2013). It involves the building of harmonious working relationships between stakeholders by aligning of shared goals and objectives. Through this the development of trust and shared goal there is an increase in the likelihood of project success

Types of Partnering

Partnering has been categorised in different ways by various researchers. The categorising employed is usually based on the duration of the partnering arrangement. Here partnering can be either project partnering or strategic partnering. Where project partnering is based on a single project whilst strategic partnering is based on a long term commitment (Meng, 2012). However, for this research partnering methods are classified using Hong Kong Construction Industry Council (Hong Kong CIC, 2012) method where partnering arrangements are categorised based on contractual status. The categories are:

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About the Author


Tafadzwa Mudzvokorwa

Lusaka, Zambia




Tafadzwa Mudzvokorwa
studied at the University of Sunderland where he obtained a Bachelor of Engineering degree in Electronics and Electrical Engineering. He is currently pursuing a Master of Engineering degree in Project Management in the Department of Civil and Environmental Engineering at the University of Zambia in Lusaka, Zambia. Tafadzwa can be contacted at tafmud@gmail.com