Development of a pre-qualification and selection framework for construction projects’ contractors in Saudi Arabia

Figures & data

Figure 1. Delayed and completed projects in KSA (Contracts and Projects, Technical report, 2015/2016).

Figure 2. Pre-qualification diagram (Chee, Gary, and Patricia 2010).

Table 1. Summary of the researchers’ 21 contractor selection criteria.

Sr. No.	Main Category	Criteria	References
1	Financial	Financial statements	(Cheng and Li 2004), (Al-Reshaid and Kartam, 2004), (Abu Nemeh 2012), (Awal 2010)& (Ytettey et al., 2018)
		Working capital	(Hatush and Skitmore 1998), (Enshassi 2014) & (Plebankiewicz 2009)
2	Technical	Year of experience	(Plebankiewicz 2009), (Al-Harbi 2001), (. Cheng and Li 2004), (Al-Reshaid and Kartam, 2004), (Abu Nemeh 2012), (Awal 2010), (Hatush and Skitmore 1998), (Chinang et al., 2017), (Watt, Kayis, and Willey 2008) & (Bubshait and AL-Gobail 1966)
		Scale of projects completed	(Cheng and Li 2004) Khoso et al. 2021
		Type of projects completed (Number)	(Cheng and Li 2004) Khoso et al. 2021
		Plant & Equipment: number and types of equipment	(Al-Harbi 2001), (Bubshait and AL-Gobail 1966), (Hatush and Skitmore 1998), (Enshassi 2014), (Awal 2010), (Abu Nemeh 2012)& (Plebankiewicz 2009)
		Manpower: availability of manpower and resources	(Plebankiewicz 2009), (Abu Nemeh 2012), (Awal 2010), (Hatush and Skitmore 1998), (Chinang et al., 2017), (Al-Harbi 2001) & (Bubshait and AL-Gobail 1966).
		Works load: capacity for assuming new projects	(Al-Harbi 2001), (Bubshait and AL-Gobail 1966), (Cheng and Li 2004)& (Watt, Kayis, and Willey 2008), Khoso et al. 2021
		Other resources – subcontractors	(Bubshait and AL-Gobail 1966), (Chinang et al., 2017) & (Awal 2010), Khoso et al. 2021
		Experience in the local area: Awareness of local environmental conditions	(Cheng and Li 2004) Somboonpisan and Charinee 2021, Khoso et al. 2021
3	Management	Management experience	(Abu Nemeh 2012), (Al-Harbi 2001), (Chinang et al., 2017), (Watt, Kayis, and Willey 2008), (Awal 2010), (Hatush and Skitmore 1998) & (Plebankiewicz 2009), Khoso et al. 2021
		Quality assurance and control (QA/QC)	(Enshassi 2014), (Watt, Kayis, and Willey 2008), (Awal 2010), (Bubshait and AL-Gobail 1966), (Al-Harbi 2001) & (Plebankiewicz 2009)
		Contractor organization	(Bubshait and AL-Gobail 1966), Khoso et al. 2021
		Certified management: staff Qualification	(Chinang et al., 2017), (Bubshait and AL-Gobail 1966) & (Watt, Kayis, and Willey 2008)
4	Health and safety	Safety attributes	(Bubshait and AL-Gobail 1966), (Watt, Kayis, and Willey 2008), (Enshassi 2014), (Cheng and Li 2004) & (Chinang et al., 2017)
		OSHA application: Occupational safety and health administration	(Abu Nemeh 2012), (Chinang et al., 2017) & (Watt, Kayis, and Willey 2008) Somboonpisan and Charinee 2021
5	Reputation	Past failures	(Enshassi 2014), (Hatush and Skitmore 1998), (Watt, Kayis, and Willey 2008), (Cheng and Li 2004), (Chinang et al., 2017), (Awal 2010) & (Plebankiewicz 2009).
		Client relationships	(Chinang et al., 2017), (Awal 2010), (Abu Nemeh 2012), (Cheng and Li 2004), (Watt, Kayis, and Willey 2008), (Hatush and Skitmore 1998) & (Plebankiewicz 2009).
		Past project performance	(Chinang et al., 2017), (Watt, Kayis, and Willey 2008), (Plebankiewicz 2009), (Bubshait and AL-Gobail 1966) & (Hatush and Skitmore 1998)
		Conflicts, litigation, and disputes	(Bubshait and AL-Gobail 1966), Khoso et al. 2021
		Satisfaction: client & subcontractor	(Watt, Kayis, and Willey 2008), Khoso et al. 2021

Figure 3. The research methodology.

Figure 4. Process for obtaining the forty-criteria.

Figure 5. Smart techniques used the data analysis process.

Figure 6. The enlarged methodology.

Table 2. Questionnaire survey for the weighting of the criteria on a 1–10 scale.

This study requires the following matrix to be completed based on your experience. Please rank the relative importance of each category based on a 1–10.
Criteria for Contractors Selection		Weight age (Ranking)
		1	2	3	4	5	6	7	8	9	10
1	List of current projects and their budget (on going)
2	List of completed projects and their value (on time)
3	Total of awarded projects and their value
4	Company capital /working capital
5	Financial Statement (Audit)
6	Credit facility
7	Credit history
8	Insurance coverage
9	Performance bonds
10	Ministry of Municipal and rural affairs classification certificate for: “Building”
11	Saudi contractors’ authority membership
12	Past performance i.e. failure record & success record
13	Claims and contractual disputes
14	Overall project satisfaction (past project, client, consultant, Suppliers) etc.
15	Reputation of the sub-contractors & supplier long lead item
16	Certifications/official documents
17	Previous experience on a similar type and size of project
18	Construction plant and equipment
19	Manpower/workforce resources Outsourced workforce
20	Experience of the technical staff (years)
21	Technical advantages (know-how)
22	Logistic Plan
23	Planning & Scheduling Department
24	Management tools & Technology
25	Quality assurance & Quality control plan
26	Management expertise (years)
27	Management staff availability
28	Staff Qualification/Certified
29	Head office/Sub offices’ location(s)
30	Continued project monitoring and time lapse updates
31	Estimation Department
32	Awareness of the local working culture
33	Relations with regulating authority
34	Awareness of the local environmental conditions
35	Current/Past Joint Venture(s)
36	Incident records (min 5 years)
37	Company safety policy
38	OSHA/HSE Certificate
39	Medical insurance
40	Employment and training

Table 3. The final selected criteria, incorporating input from construction field experts.

No.	Main Criteria	Sub-Criteria	Definitions and Explanation
1	Project value	List of current (on going) projects and their budgets	Very important to show the availability of resources.
2		List of completed projects and their value (on time)	This list should indicate the start and completed project dates for projects delivered on-time during at least the last five (5) years.
3		Total of awarded projects and their values	The number of projects awarded over at least the last five (5) years.
4	Financial Capability	Company capital /working capital	Money invested in a business to generate income. Shows the ability to settle short-term debt when due, and is a financial metric that represents the operating liquidity available to a business, organization or other entity, including governmental entities.
5		Financial Statement (Audit)	This is a formal record of the financial activities and position of a business, person, or other entity. Financial statements for businesses usually include income statements, balance sheets, statements of retained earnings and cash flow.
6		Credit facility	A credit facility is a type of loan made in a business or corporate finance context, including revolving credit, term loans, committed facilities, letters of credit, and most retail credit accounts.
7		History facility	The history facility is a type of the previous financial transactions of a contractor, such as loans and their repayment schedule.
8		Insurance coverage	Sufficient insurance to cover the needs of engineering projects, including contractor risk insurance, construction risk insurance, contractor plant insurance, machine breakdown insurance and electronic equipment breakdown insurance.
9		Performance bonds	A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee the satisfactory completion of a project by a contractor. Usually, bonds are valued at from one to five percentages (1–5%) of a contract’s value.
10	Reputation	Ministry of Municipal and Rural affairs classification certificate for: “Building”	This certificate is an indicator of a contractor’s ability and competence in line with his own potential (financial, technical, managerial and operational). It is very important for a contractor to be classified and registered in the KSA.
11		Saudi contractors’ authority membership	A construction sector organization promoting the development and implementation of high-quality organizational standards as well as innovation, skills development, improved communication in the sector and economic sustainability; it is essential that every Saudi contractor is a registered member of this Authority.
12		Past performance; i.e., failure & success records	Past performance refers to the outcome of previous projects, expressed as the number of successes (within budget and on-time) and failures.
13		Claims and contractual disputes	This response indicates how many times a contractor has been involved with legal claims with respect to projects, including the accumulation of enough evidence to justify the right to sue to obtain money, property, or the enforcement of a right against another party. Contractual disputes can arise when the people involved in a contract do not stand by their original agreements. Disputes over contracts are bound to happen, and if handled poorly, disagreements over the terms of a contract can cause irreversible harm to business relationships (and lead to higher costs).
14		Overall project satisfaction (past projects, clients, consultants, suppliers, etc.)	The extent of customer satisfaction with projects after their completion.
15		Reputation of the sub-contractors & supplier long lead items	Good past relationships with general contractors and suppliers, prompt payment habits, effective planning and supervision, and the reputation of finishing projects on time as well as discussions about how the work will be done are the factors that have the greatest effect on lowering the amounts of subcontractors’ bids to such general contractors.
16	Technical Capability and performance	Certifications/official documents	Determining if all of the required certificates and related documents about a contractor are in place, such as: Zakat certificate, Saudization certificate, Chamber certificate, GOSI certificate etc.
17		Previous experience	The experience of the contractor on similar project types and sizes.
18		Construction plant and equipment	Provides a comprehensive list of the construction plant and equipment necessary to perform the work. Contains sufficient detail to demonstrate a complete understanding of the work to be performed. It is also important to know if the equipment belongs to a contractor or if it is rented.
19		Manpower/workforce resources Outsourced workforce	This is the total labor force of a nation, including both men and women. This criteria also indicates the source(s) of anticipated labor and their levels of training (including any trade certifications).
20		Experience of the technical staff (years)	This value indicates the total experience of engineers and the skilled drafter’s in the same type of projects.
21		Technical advantages (know-how)	The contractor’s advantages in terms of practical knowledge on how to accomplish a required task, such as developing their own system.
22		Logistic Plan	A strategic logistics plan defines how a contractor plans to mobilize and transfer the required equipment and material to the site.
23	Management Ability	Planning & Scheduling Department	A very important department that makes it possible for contractors to provide a descriptive narrative of their proposed construction plan including the strategy, sequencing, site logistics, construction methods and height working method (including scaffolding and harnesses if applicable) and any major construction equipment to be utilized.
24		Management tools & Technology	Management tools are the systems, applications, controls, calculating solutions, methodologies, etc. used by organizations to be able to cope with changing markets, ensure their competitive position and improve performance.
25		Quality assurance & Quality control plan	The candidate contractor’s outline of his quality assurance/quality control (QA/QC) programs.
26		Management expertise (years)	The years of experience of the management employees.
27		Management staff availability	The types and availability of the management staff.
28		Staff Qualification/Certified	The number of employees that are certified by a reliable certifying association.
29		Head office /Sub-offices location(s)	The distribution of contractor offices in local and international locations.
30		Continued project monitoring and time lapse updates	An aspect that is especially important if the contractor company is located far from the project site. Project monitoring refers to the process of keeping track of all project-related metrics including team performance and task duration, the identification of potential problems and taking any corrective actions necessary to ensure that the project is within its scope, on budget and meeting the specified deadlines.
31	Organization’s Culture	Estimation Department	A successful construction estimating department makes a serious commitment and requires sufficient investment to operate properly. Upper echelon estimators are not easy to find.
32		Awareness of the local working culture	It is very helpful for a contractor to be familiar with the local work culture.
33		Relation with regulating authority	If the contractor is based outside of the kingdom the contractor must stay informed of the country’s regulations to avoid any penalty.
34		Awareness of local environmental conditions	The contractor must be knowledgeable about the local weather conditions and plan the work accordingly.
35		Current /Past Joint Venture(s)	Joint ventures are a relatively new structure to achieve the specific objectives of a partnership, such as a temporary arrangement between two or more firms.
36	Environmental safety and Health	Incident records (min 5 years)	Records with the full details of all accidents or dangerous occurrences over the last five years.
37		Company safety policy	A safety policy is a statement of intent to ensure that operations are carried out in a way that ensures the health and safety of everyone.
38		OSHA/HSE application	The Occupational Safety and Health Administration (OSHA) is an agency of the United States Department of Labor. OSHA’s workplace safety inspections have been shown to reduce injury rates and injury costs without adverse effects to employment, sales, credit ratings, or firm survival. The Health and Safety Executive (HSE) is the body responsible for the encouragement, regulation and enforcement of workplace health, safety and welfare, and for research into occupational risks in the United Kingdom.
39		Medical insurance	Covers the whole or a part of the risk of an employee incurring medical expenses.
40		Employee training and development	Training helps employees to learn specific knowledge or skills to improve their performance in their current roles. Development is more expansive and focuses on employee growth and future performance, rather than an immediate job role.

Figure 7. Participants’ response to the questionnaire.

Figure 8. The positions of the respondents (78).

Figure 9. Respondents’ organizations.

Table 4. The responses criteria analysis.

Table 5. Normalization of the criteria.

Figure 10. Normalization for criteria 1.

Figure 11. Normalization for criteria 2.

Figure 12. STDV scatter for all main categories.

Table 6. Geometric and EV Weight Calculation.

No.	List of Criteria	Geometric	EV weight
1	List of current projects (on going)	7.49	0.0268
2	List of completed projects (on time)	7.47	0.0267
3	Total of awarded projects	6.50	0.0232
4	Company capital /working capital	7.11	0.0254
5	Financial Statement (Audit)	7.64	0.0273
6	Credit facility	6.75	0.0241
7	Credit history	6.86	0.0245
8	Insurance coverage	6.57	0.0235
9	Performance bonds	6.16	0.0220
10	Ministry of Municipal and rural affairs classification certificate for: “Building”	7.72	0.0276
11	Saudi contractors’ authority membership	6.47	0.0231
12	Past performance i.e. failure record & success record	7.89	0.0282
13	Claims and contractual disputes	6.94	0.0248
14	Overall project satisfaction (past project, client, consultant, Suppliers) etc.	7.81	0.0279
15	Reputation of the sub-contractors & supplier long lead item	6.49	0.0232
16	Certifications/official documents	7.02	0.0251
17	Previous experience on a similar type and size of project	8.09	0.0289
18	Construction plant and equipment	7.24	0.0259
19	Manpower/workforce resources /Outsourced workforce	7.69	0.0275
20	Experience of the technical staff (years)	8.01	0.0286
21	Technical advantages (know-how)	7.37	0.0263
22	Logistic Plan	6.34	0.0227
23	Planning & Scheduling Department	7.28	0.0260
24	Management tools & Technology	7.19	0.0257
25	Quality assurance & Quality control plan	8.12	0.0290
26	Management expertise (years)	7.82	0.0280
27	Management staff availability	7.89	0.0282
28	Staff Qualification/Certified	7.57	0.0271
29	Head office/Sub offices’ location(s)	5.04	0.0180
30	Continued project monitoring and time lapse updates	6.16	0.0220
31	Estimation Department	6.26	0.0224
32	Awareness of the local working culture	5.92	0.0212
33	Relations with regulating authority	6.47	0.0231
34	Awareness of the local environmental conditions	6.62	0.0237
35	Current/Past Joint Venture(s)	4.97	0.0178
36	Incident records (min 5 years)	6.49	0.0232
37	Company safety policy	7.62	0.0272
38	OSHA/HSE Certificate	6.82	0.0244
39	Medical insurance	6.53	0.0233
40	Employment and training	7.41	0.0265
Total		279.82	1.00

Table 7. Ranked important criteria.

No.	List of Criteria	EV wieght	Ranking
1	Quality assurance & Quality control plan	0.0290	1
2	Previous experience on a similar type and size of project	0.0289	2
3	Experience of the technical staff (years)	0.0286	3
4	Past performance i.e. failure record & success record	0.0282	4
5	Management staff availability	0.0282	5
6	Management expertise (years)	0.0280	6
7	Overall project satisfaction (past project, client, consultant, Suppliers) etc.	0.0279	7
8	Ministry of Municipal and rural affairs classification certificate for: “Building”	0.0276	8
9	Manpower/workforce resources /Outsourced workforce	0.0275	9
10	Financial Statement (Audit)	0.0273	10
11	Company safety policy	0.0272	11
12	Staff Qualification/Certified	0.0271	12
13	List of current projects	0.0268	13
14	List of completed projects	0.0267	14
15	Employment and training	0.0265	15
16	Technical advantages (know-how)	0.0263	16
17	Planning & Scheduling Department	0.0260	17
18	Construction plant and equipment	0.0259	18
19	Management tools & Technology	0.0257	19
20	Company capital /working capital	0.0254	20
21	Certifications/official documents	0.0251	21
22	Claims and contractual disputes	0.0248	22
23	Credit history	0.0245	23
24	OSHA/HSE Certificate	0.0244	24
25	Credit facility	0.0241	25
26	Awareness of the local environmental conditions	0.0237	26
27	Insurance Coverage	0.0235	27
28	Medical insurance	0.0233	28
29	Total of awarded projects	0.0232	29
30	Reputation of the sub-contractors	0.0232	30
31	Incident records (min 5 years)	0.0232	31
32	Saudi contractors’ authority membership	0.0231	32
33	Relations with regulating authority	0.0231	33
34	Logistic Plan	0.0227	34
35	Estimation Department	0.0224	35
36	Performance bonds	0.0220	36
37	Continued project monitoring and time lapse updates	0.0220	37
38	Awareness of the local working culture	0.0212	38
39	Head office/Sub offices location(s)	0.0180	39
40	Current/Past Joint Venture(s)	0.0178	40
Total		1.00	40

Figure 13. Contractors selection process and assessment flowchart.

Figure 14. Chart of the case study steps.

Figure 15. Utility value curve for criteria 2.

Table 8. The preference of pre-qualification and selection criteria 2.

The preference of selection criteria 2
Criteria	Utility Scores
C2	Respondents	0.0	0.25	0.50	0.75	1.0
	1	2.5	8.00	10.00	15.00	20.00
	2	2.5	8.00	10.00	15.00	20.00
	3	5.00	7.00	9.00	12.00	15.00
	Avg.	3.3	7.7	9.7	14.0	18.3
	y	3.3	7.7	9.7	14.0	18.3
	x	0.0	0.25	0.50	0.75	1.0

Table 9. The contractor score.

Contractor	A	B	C
Total	73	75	78

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