Understanding the role of contractor capability in risk management: a comparative case study of two similar projects

Abstract

In the construction industry, contractor prequalification is used for measuring contractor capability and selecting capable contractors for the successful execution of projects. Research emphasizes that contractor capability and risk management are critical for project success and have a correlation. However, observations suggest that risks are not considered during prequalification and even prequalified contractors perform poorly causing project failures. Such observations indicate a research gap for which this research explores the role of contractor capability in risk management at the project level. The analysis uses a comparative case study of risk management in two similar ongoing projects having different contractors. It reveals that the contractor capability assessed during prequalification is an attribute of an organization; while the capability required to mitigate risks and execute work is an attribute of a project. When risks materialize, the capability of a contractor may reduce and the capability required to mitigate risks in a project may increase. This will create a deficit of resources resulting in poor performance by the contractor. Therefore, criteria for prequalification must be decided considering risks scenarios for projects and contractors to screen out marginally qualified contractors and increase chances of project success.

Keywords:

• Case study
• construction project
• contractor capability
• contractor prequalification
• risk management

Data availability statement

The authors confirm that the data supporting the findings of this study are available within the article and Supplemental Online Material of this article.

Acknowledgement

The work reported in the paper is an outcome of research grant (RP02737) funded by NBCC (India) Limited to Indian Institute of Technology Delhi, India. The authors would like to thank the anonymous reviewers and the editorial team for their valuable feedback on the manuscript.

Disclosure statement

The authors confirm that the research reported in this paper was carried out without any influence of the funding agency NBCC (India) Ltd. There is no conflict of interest with any organisation or person.