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

ABSTRACT

In the kingdom of Saudi Arabia almost 60% of the construction projects were delayed in the recent decade. Contractor selection is the critical decision for the success of any construction project. The typical method of contractor selection in Saudi Arabian projects is generally based on prioritizing the lowest bid price, irrespective of experience, quality, and other factors without investigating in-depth the pre-qualification of contractors. This often leads to disputes and project delays. In this regard, the main goal of the presented research work is the development of a framework that can help decision-makers in both government and private sector to investigate the pre-qualification, and then to select the most suitable contractors for the proposed projects. The presented framework was developed based on a detailed literature review, market analysis, information collection from stakeholders and decision-makers along with collaboration with industry-academia experts. Forty criterion-based selection framework was developed in the presented research work with each criterion possessing a relative weightage developed in comparison with ones obtained using smart techniques. The main categories of the selection criteria are project value, financial capability, reputation, management structure, technical capability and performance, organizational culture, along with safety and environmental health. Through detailed survey and analysis, the main criterion for contractor selection was identified as quality assurance and control with the least important being the Current/Past Joint Venture(s). The presented framework model was validated using a case study where three construction contractors were evaluated using Multi-Attribute Utility Theory Score (MAUT). The framework was deemed reliable and valuable for contractor selection in construction projects for adding the increased selection criterion and insight into the selection evaluation.

KEYWORDS:

• Construction projects
• contractor selection
• framework
• selection criteria
• quality assurance
• quality control

1. Introduction

The global construction industry is expected to grow to an estimated USD 8 trillion in 2030, which will increase to USD 17.5 trillion by 2030. A growth of 85%, with an annual rate of 3.9% is reached. The Middle East and Africa are set to represent 6% of the global construction market in 2030 (Paul 2015). In 2016, the Kingdom of Saudi Arabia (KSA) launched the Saudi “Vision 2030,” a strategic plan that sets out the new economic direction for KSA aimed to raise efficiency and performance while also reducing financial waste, non-transparency, and corruption in all sectors of the economy (Beale and Company 2016). The construction sector in Saudi Arabia is second in contributing to the gross domestic product, only surpassed by the petroleum sector (SCA 2018). The construction industry in Saudi Arabia grew at a rate of 6.5% annually from 2014 to 2016 and is predicted to grow at a rate of 7.5% annually from 2016 to 2020. The amount of investment in the construction industry in Saudi Arabia is estimated at USD 84 billion in 2016 (Jeddah Chamber, Construction and real-estate sector, Technical report, 2016). Saudi Arabia’s construction sector plays a key role in supporting and developing the kingdom’s infrastructure and other sectors (AlMutairi, Saud, Augest 2017).

The selection of the most suitable contractor for a proposed construction project poses a challenge to private and government entities. Since construction projects vary from small scale projects to large megaprojects, the selection of a professional, knowledgeable contractor team plays a key role in securing the success of the

project. A well-designed project can suffer delays and disruptions owing to a lack of a suitable construction contractor. These disruptions and problems often cause financial disputes and project delays, and they could lead to substandard work and instability in a project. In this regards the selection of a suitable contractor is of prime importance for any project. Traditionally, contractors for any proposed construction project are selected using the lowest bid method. Contractors who are short of work or projects may bid more aggressively in the hope that they might win a project (Gary et. al. 1995). In case the project is awarded to the lowest bidding contractors; they need to cut their expenses in new ways so that they can complete the project without losing money (Zedan et. al. 1998). This can lead to poor quality of work and reduced performance of the project. For large construction projects, the most essential factor to consider when selecting the most appropriate contractor is to minimize the chances of a project implementation catastrophe in case a contractor fails to successfully execute the project. A reliable set of standards is thus required to be sure that each bidder’s professional capacity and quoted price can be realistically evaluated so that the most competent and cost-effective contractor will be selected to perform the construction of the proposed project (Halil 2007; Zavadskas, Peldschus, and Kaklauskas 1994; Sodangi, Salman, and Saleem 2018; Chee, Gary, and Patricia 2010; Saleem et al. 2019; Saleem and Hosoda 2021; Daniel et al. 2020). The Ministry of Municipal and Rural Affairs spent more than SR 12.5 billion on projects in KSA cities and provinces from 2014 to 2015. The percentage of delay on these projects averaged over 40% as shown in Figure 1 (Contracts and Projects, Technical report, 2015/2016, AlBogamy, Scott, and Dawood 2012). Several causes were identified as causing the delay of the projects with the main factors circulating around the contractor’s performance.

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

According to the process of contractor selection, the Saudi government has been highly dependent on the low bid delivery method for contractor selection, with the classification of contractors made according to prequalified methods as carried out by the Saudi Ministry of Municipal and Rural Affairs (AlMutairi 2017). Classification plays a key role in contractor selection. The Classification Agency has been responsible

for rating and classifying contractors with special rules and specific criteria and supervises the issuing of classification certificates. This certificate is a primary requisite for Saudi or foreign contractors to participate in government or non-government tenders (Tasneef, 2015). The criteria of contractor evaluation are based on the Ministry of Municipality of Rural Affairs requirements as detailed below (CSA, 2017);

2. Technical evaluation

• Workforce or available manpower

• Construction equipment

• Current projects (ongoing)

• Evaluation of the technical staff

• Client satisfaction

3. Financial evaluation

• Company capital/ working capital

• Financial statements.

The pre-qualification method is commonly adopted to identify reliable contractors and it is a process in which contractors are compared based on key criteria. These criteria include financial stability, similar experience, and performance/client satisfaction. The pre-qualification process includes screening contractors using the criteria selected by the individual owners. This method is preferred by clients to minimize the risk of failure (Danial et. al. 2020; Chee, Gary, and Patricia 2010) as shown in Figure 2. Researchers in the past have investigated the contractor selection criterion and have categorized them in technical, financial, management and health and safety aspects of evaluation (Othman, 2012, Aladdin et. al. 2019). Chinang calculated weighted values for technical ability, management capability, financial stability, reputation, and health and safety performance, while (Alshamrani 2012; Edumndas et. al. 2015; Zedan et. al. 1997; Turskis 2008), employed multi-attribute decision-making tools for ranking the criteria based on importance index. Abu Nemeh (2012) and Al-Harbi (2001) showed that three out of sixteen criteria constitute about 50% of the impact on the final decision of construction contractor selection. These criteria were (A) contractor submitted complete bid document (B) contractor classification and (C)bid price. Aprna et. al. (2018) proposed a process to evaluate contractors using three new selection factors in addition to the bid price such as time quotes, warranty period, and past performance of past. The study affirmed that the contractor’s selection played a huge role in projects and their success/failure. Somboonpisan et. al. (2021) developed a sustainable bidding model to measure the weight of potential environmental impacts utilizing the amount of CO₂ emission generated from construction equipment in fleet operations for high-way projects. Chen et al. (2020) introduced a multi-attribute group decision-making approach for the management and manipulation of bidder selection. The model consists of two-stage logic scoring of preference applying ELECTRE III approach by using fuzzy and nonelinear optimization technique while considering the reasoning logic pattern in human cognition process. Chen et al. (2021) also proposed integrated objective and subjective approach to compute criterion weights via applying of an ELECTRE III-based method that incorporates HFLTS possibility distributions, which enables descision makers in addressing the uncertainty, imprecision, indetermination, and embedded in evaluation of alternative-criterion decisions in the bidding process. Liu, Zhang, and Qi (2021) developed a tripartite game model between the management department, the business experts, and the technical experts is constructed for grouped multiattribute reserve auctions. the factors that affect the equilibrium behavior of each player and the static equilibrium strategies are analyzed by evolutionary game theory. Khoso et al. (2021) developed alternative system of dealing with the embedded group decision under a remote group decision environment by integrating Exploratory Factor Analysis and MACBETH. It was found that an embedded remote group decision making system could serve as an alternative system of group decision making which has plentiful perks in group decision applications.

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

In light of the above-presented discussion, it is evident that in the past research work presented there is a distinct lack of research addressing the criteria for contractor selection in the Saudi Arabian. The contractor evaluation process and selection of bidders require critical knowledge and experience for a client to have confidence that a selected contractor will be able to successfully execute a project. Since, KSA is a growing economy with massive investment in the construction sector, hence any development in this avenue will hold immense value for the decision-makers of the country.

4. Problem statement

Recently, the percentage of delays on government projects in the Kingdom of Saudi Arabia reached 60% (Ismail, 2013). One of the fundamental causes identified during the literature review process has been the contractor selection process (Chinang et. al. 2017, Othman 2012, Aladdin et. al. 2019). Since the Kingdom of Saudi Arabia is experiencing rapid growth in infrastructure development under Vision 2030, hence, an advanced contractor selection approach is much needed to meet the growing challenges. Furthermore, the development proposed for KSA can also be adopted for other developing countries for contractor selection purposes. In light of the above-presented discussion, the main goal of the presented research work is to develop a framework that will assist both the government and private sectors to evaluate the pre-qualification of the nominated contractors and then choose the most suitable one for construction projects in KSA. The presented research work consisted of three phases: (A) developing the input, which consisted of a selection of criteria based on multiple resources (B) processing, which encompassed data collection and analysis of the developed framework process and (C) evaluating the output with a testing validation to then make the final contractor selection.

5. Methodology

Table 1 presents the 21-criterion studied in the presented research work. These criteria were selected based on the detailed literature review. These 21 factors remain common in Saudi Arabia and other countries. However, Saudi Arabia nowadays experiences rapid expansion and exponential growth in terms of construction projects and development, hence, it was required to go for further details depth of it (total of 40 factors) that gathered from experts in construction industry. However, this framework allows for modifications of selection criteria and further input from different stakeholders. This research methodology for investigating the presented criterion was divided into three main stages. The stages were named Input, Process, and output. The current section details the methodology adopted for the presented research investigation.

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

The first stage was the “Input”, which covered the literature review required to determine the criteria with which to select a construction contractor. The criteria were selected from the literature survey, data/feedbackfrom the Contractor Classification Agency, and expert’s opinion communicated via a survey conducted in the academic and construction field. The second stage titled the “Process”, addressed the information evaluation, ranking, and data processing methodology of the research team. At this stage gaps in information and data collected were identified and criterion was selected to fill these gaps using smart techniques. Furthermore, analysis of all the collected information and the development of the conclusion and recommendations are also presented for the reader’s interest. At the “Processing” stage, once all the information and data were assembled from the “Input” phase, a questionnaire, and interviews were conducted with a government official, private-sector decision-makers, and academia working in the construction sector of KSA. The questionnaire was designed to gather the information needed to complete the data previously collected, along with the expert’s feedback that would be employed for the pilot study to identify a contractor to select for work on a project. In the end, the total highest score was selected as an indicator of the most suitable contractor. The last stage, “Output,” was where the results were compiled from the “Process” phase and analyzed with respect to the criteria. After these results were analyzed, the information has been verified as complete, the result with the final contractor selection is presented as shown in Figure 3.

Figure 3. The research methodology.

5.1. Pilot study & criterion development

To develop an effective questionnaire, the research team decided on conducting a pilot study. The aim of the pilot study was conducted gauge the level of understanding, verification, and enhancement of the proposed questionnaire. 7% of the distributed questionnaire were categorized as a pilot study. The rationale of choosing 7% as a pilot study was to aim in the middle of 5–10% value of the distributed questionnaire. Hence, the percentage studied in the pilot study has a rational background. Based on the feedback of the pilot study, several modifications were incorporated into the final version of the questionnaire with 40 criteria were revised and confirmed through consultations with the experts as presented in Table 2. A total of 266 questionnaires were distributed via interviews and through an online survey (using QuestionPro). Figure 4 presented the combination of the criterion used for the investigation. It also shows that 21 criteria were gathered from literature and previous similar works. 5 criteria were introduced by experts who are acting as project and general managers, directors of construction, maintenance, and operation support services in governmental sectors, and contract and procurement managers. The last 14 criteria are proposed by academics who hold Ph.D. in construction and management with field experience and acting as project management advisors and consultants in governmental projects. The criteria were divided into seven major classes, and each class consisted of sub-criterions. These classes were: 1. Project Value, 2. Financial Capability, 3. Reputation, 4. Technical Capability and Performance, 5. Management Ability, 6. Organization’s Culture, and 7. Environmental Safety and Health. Each of the 40-criterion listed in Table 2 were classified in the above-mentioned 07 classes. Furthermore, for in-depth investigation and analysis, each of the 40 criteria were also further sub-divided into sub-criterions. The aim of the team for this step was to use each description for clarifying to the questionnaire readers and also to use the results for in-depth analysis. Table 3 presents the details of each criterion, its classification, and sub-criterions. The classification and sub-classes were developed based on a detailed literature review and by consultation with academic and construction experts. The survey results of 266 participants were analyzed using the strategy outlined in Figure 5. The results obtained from the users were normalized and relative weightage was calculated. The Multi-Attribute Utility Theory Score (MAUT) was then applied to identify the effectiveness and efficiencies of the proposed framework. Figure 6 presents the enlarged methodology adopted for the presented research work. Once the framework was developed using the participant’s feedback, three contractors were selected for validating the proposed framework. The proceeding section details the methodology adopted by the research team for data analysis and using smart techniques to fill in the gaps.

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.

5.2. Data collection and analysis

This section details the data analysis and feedback received from the survey participants. A total of 266 survey questionnaires were distributed to members of the construction industry ranging from governmental ministries to private sectors employees and academia. The research team aimed to develop a wide view of opinions related to the contractor selection criterion prevailing in the KSA construction industry. Figure 7 presents the results of the percentage of the participants who responded to the questionnaire survey. It can be seen that 38% of the questionnaires were returned with completed expert’s responses, which represents 100 responses in total. 166 incomplete questionnaires were received during the survey timeline. These were removed from the data collection, and another 22 were excluded by using the correlation statistics (≤ 0.1). The remaining 78 approved responses are used for detailed analysis in the presented research study.

Figure 7. Participants’ response to the questionnaire.

Out of the 78 approved reliable responses, three participants resided outside the Kingdom of Saudi Arabia. Furthermore, the questionnaires collected from the structured interviews had 60 responses. Figure 8 presents the variation of the received questionnaire participants. From the results, it is evident that the respondents included a range of members from the construction industry. This is a healthy sign from the standpoint of reliability and value of the data analysis. The results indicate that questionnaire respondent consisted of 29 Project Managers (PMs), 5 Area Contract Managers (ACMs), 5 Construction Managers (CMs), 14 ProjectEngineers (PEs), 9 Engineers (ENGs), 5 Resident Engineers (REs), and 11 Architects (ARCHs). Moreover, the age of some of the respondents (PMs, ACMs, and CMs) was between 36–60 years old with 15 to 30 years of experience, while the age of other respondents (ENGs, REs and ARCHs) was between 30–40 years old with 8 to 12 years of experience. The reach team also reached out to at least 100 participants in the field to fill in the questionnaire as shown in Figure 8. Figure 9 details the sector division of the survey respondents. From the figure, it is evident that the survey results comprised of a reasonable mix of responses from the sectors. This intern adds value to the analysis of the presented data. The questionnaire results indicate that the respondents were employed by the government (17), by semi-governmental agencies (38), and in the private sector (23). Table 4 presents the response criteria analysis of the survey results from semi-government, government, and private sector participants.

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

Figure 9. Respondents’ organizations.

Table 4. The responses criteria analysis.

Table 5. Normalization of the criteria.

This study requires the following matrix

6. Normalization

Table 5 presents the normalization of the criteria, where each column for each entry in the column was also divided using the column sum to yield all the normalized scores and the sums for each of the columns is equal to 1. These were further used to calculate the weights of each criterion. Figures 10 and 11 present the normalized percentage of criteria. These results assisted the research team in identifying the most important and least important parameters related to

Figure 10. Normalization for criteria 1.

Figure 11. Normalization for criteria 2.

contractor selection in the construction industry of KSA. Weightings are the equivalent of having several similar items with the same value involved in the average. The weight is calculated based on one of the highest expert’s weights. The total weight for each main category shall be equal to 1. The procedure to calculate the weighted average is as detailed below;

(1) $\mathrm{E}\mathrm{W}1\ast \mathrm{C}1+\mathrm{E}\mathrm{W}2\ast \mathrm{C}2+\mathrm{E}\mathrm{W}3\ast \mathrm{C}3$(1)

Where EW is the expert weight and C is a criterion. The similarity between the weighted average and the average of the criterion represents 80%. The relative weights for the criteria were computed for every respondent, followed by mean, median, and the standard deviations calculations accordingly. The relative weight shows the Median, Average, and Standard Deviation for the forty criteria. Figure 12 presents the result related to the Standard Deviation (STDV) for the main construction contractor selection criteria categories. Upon completion of quality assurance checking of the received results. The data were analyzed to develop the framework. The proceeding section details the testing and validation of the proposed framework for contractor selection in construction projects of KSA.

Figure 12. STDV scatter for all main categories.

7. Analysis results

78 responses for construction contractor selection criteria passed the statistical tests and could thus be utilized in this evaluation. The relative weights of the pre-qualification and selection criteria were calculated for every respondent, along with the mean, median, mode, and standard deviation. The relative weights of the pre-qualification and selection criteria were then calculated based on the mean/average. Afterward, the average relative weights were calculated. Finally, the Eigen Vector weights were calculated by using the geometric mean calculated for each criterion using the equation. The geometric mean and Eigen Vector weight for each of the 40 criteria are listed in Table 6. Using the EV weights, the results of the seven main criteria categories were displayed as a percentage of their perceived importance. The percentage represented the importance of the category with regards to others involved in the analysis. These totals were 8% for the project value, 15% for financial capability, 15% for reputation, 18% for technical capability and performance, 20% for management ability, 11% for the organization’s culture, and 13% for environmental safety and health.

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

Detailed analysis was conducted to analyze the distribution of weights in each sub-category. From the analysis, it was evident that the project value category criteria were divided almost evenly: 35% for the lists of current projects, 35% for lists of completed projects, and 30% for the total awarded projects. The financial capability category criteria were divided into the following percentages: 17% for the company’s capital & working capital, 19% for its financial statement, 16% for the credit facility, 17% for credit history, 16% for insurance coverage, and 15% for performance bonds.

The reputation category criteria were fairly evenly distributed in terms of their percentages: 18% for the Ministry of Municipal and rural affairs’ classification certificate for “Building”, 15% for the Saudi contractors’ authority membership, 18% for past performance, i.e., failure and success record, 16% for claims and contractual disputes, 18% for overall project satisfaction (past projects, clients, consultants, suppliers), and 15% for the reputation of sub-contractors & long lead item suppliers.

The technical capability and performance category criteria were divided almost evenly in terms of their importance: 14% for certifications/official documents, 16% for previous experience, 14% for construction plant and equipment, 15% for manpower/workforce resources/outsourced workforce, 15% for the experience of the technical staff, 14% for technical advantages (know-how), and 12% for the logistical plans.

The management ability and performance category criteria were almost evenly distributed, with the least-important criterion (head office & sub-office locations) at 9% only 5% behind the three most important criteria: quality assurance & quality control plan, management expertise, and management staff availability, which each had 14% of the total importance. The other categories were close behind, with 13% for the planning & scheduling department, 13% for staff qualification/certified 12% for management tools & technology, and 11% for continuous project monitoring and time-lapse updates.

The organization’s culture category criteria were divided in their importance as follows: 21% for the estimating department, 20% for awareness of the local working culture, 21% for familiarity with the regulating authority/ties, 22% for knowledge of the local environmental conditions, and 16% for current /past joint ventures.

The environmental safety and health category criteria were almost evenly divided: 19% for incident records, 22% for the company safety policy, 19% for an OSHA/HSE certificate, 19% for medical insurance, and 21% for employment and training.

The expert’s judgments were calculated, verified, and the consistency of all the judgments was deemed as satisfactory. The relative weights for each construction contractor pre-qualification and selection criteria were analyzed with indicating the EV weight and ranking for all 40 criteria, grouped by their category. The weights used to determine the ranking were calculated by multiplying the relative weights for each sub-criterion and the corresponding upper element. Afterward, these criteria were ranked in descending order based on the priority EV weight or importance of each criterion as presented in Table 7. The percentage of the difference between the first (most important) criteria and the last (least important) one was 63%. The proceeding section details the procedure adopted for the validation of the proposed framework.

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

8. Framework test and validation

The objective of the proposed framework is to assist the decision-makers in selecting the most suitable candidate for the contractor position needed to execute the project. Figure 13 presents the contractor selection process and assessment flowchart. The selection of the contractor in the presented proposed framework primarily depends on the type of contract and project delivery method. For instance, the framework is suitable for two types of contracts such as negotiated contracts and competitive contracts as shown in Figure 13. The negotiated contract and delivery method consist of construction and design-construction contracts while the competitive approach includes design-bid-construction and A + B contracts. The selection of the most suitable contractor in the negotiated approach is primarily governed by the contractor evaluation against the selection criteria while no bidding is needed to complete the process. In such a case the most suitable contractor is selected based on the highest obtained score according to the contractor’s performance against the 40 prequalification criteria. On the other hand, the selection of the best contractor for the competitive contracts will be conducted based on both prequalifications that have the 40 selection criteria and bid price as shown in Figure 13. The contractors’ performance will be first examined against the 40 prequalification criteria. A limited number of contractors with a high obtained score will only be selected to continue for the next stage which includes the bidding and contract price assessment. The most suitable contractor will be then selected based on the highest overall obtained score achieved at both stages i.e. prequalification and bid price assessment. In light of the presented research work, the team decided to validate the proposed framework using a case study. The objective of the proposed case study was to test the proposed framework under real-world application conditions. Figure 14 indicates the steps involved in the validation of the proposed framework for optimized contractor selection for construction projects in KSA. In light of this objective three contractors were selected to test the validity of the presented framework.

Figure 13. Contractors selection process and assessment flowchart.

Figure 14. Chart of the case study steps.

These contractors were selected based on the criterion that all three were planning to submit a bid on a major construction project in the eastern region of KSA. Furthermore, these three contractors were among the top-tier contractors in the kingdom. Hence, their selection had a logical background.

To evaluate the developed contractor assessment framework, interviews were conducted with the selected construction contractors. Meetings were arranged with these three contractors A, B, and C, who were assisted by the Royal Commission in Al-Jubail Industrial City (the government agency requesting bids) and classified by the Saudi Classification agency. The three contractors were preparing to bid on the residential projects in Al-Jubail industrial city. The criteria for pre-qualification and selection as proposed in the presented research work were applied to each contractor. After receiving the feedback from all three construction contractors, the analysis was applied to all of their responses. Table 8 presents the ranked criterion after the analysis of results obtained from the three contractors. Each contractor was evaluated using the 40 criteria developed using the proposed framework. Figure 15 presents the utility curve obtained from the analysis of the presented results. The weight of the utility score for each criterion was calculated from the formula of the utility curve. For example: At criterion 2 the formula used is y = 0.068x – 0.2204 = (0.068*16)-0.2204 = 0.867 = weight for the utility score for criterion 2. Table 9 shows the utility score for the three contractors. The total score value for each criterion is then calculated using the formula as detailed below.

Figure 15. Utility value curve for criteria 2.

$Vi\left(x\right)\sum WiUi=(WiC1UiC1)+(WiC2UiC2)+(WiC3UiC3)+(WiC4UiC4)+(WiC5UiC5)$

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

After applying the Utility Score calculation for each of the three contractors, the framework indicated the percentage of the suitability scores for each contractor. The total scores were 73 for contractor A, 75 for contractor B, and 78 for contractor C. The contractor obtaining the highest percentage was, therefore, contractor C as shown in Table 9. In summary, it can be stated that the contractor who obtains a high percentage, as well as a competitive bidding price, will be the most

qualified to be awarded the project. The most-preferred alternative is the one with the highest score. Government ministries and organizations, as well as the private sector companies, can adjust the criteria based on their requirements, and these requirements will also vary according to project type. Hence, the proposed framework provides in-depth insight into the contractor pre-qualification and selection process and evades the delays associated with the lowest bid selection criterion.

9. Conclusion

The construction industry is massive and complex. Traditionally the lowest bid selection criterion has been prevalent in the construction industry of the kingdom of Saudi Arabia. However, owing to massive delays cost overrun, and poor quality of the finished project. It is necessary to develop an in-depth detailed framework that can take into consideration all possible aspects of a contract’s performance to select the most suitable candidate for the construction of a proposed project. In this regard, the contribution of this study was developing of comprehensive pre-qualification and selection framework for construction projects contractors in KSA. A total of 40 qualification criteria that govern the assessment and selection process were identified in this study based on data gathered from literature, academics, and construction experts. Hence, the developed framework will assist government and buildings owners to firstly identify the qualification of the competitive contractors and then to select the most appropriate one. The following conclusion can be drawn from the presented research work;

• The selection process is quite inappropriate, as it considers price as the main criterion for awarding projects. One major benefit of the proposed framework is that it will enhance the process of evaluating the pre-qualification of contractors, awarding the contracts, and restricting the participation of unqualified contractors.

• The developed framework is based on the dimensional weighting method and a correlation process, thereby enhancing the selection procedure with an evaluation of forty pertinent criteria in addition to the bidding price. This framework can be adapted by any ministry or large private sector company, as it utilizes the pre-qualification criteria that impact the selection of construction contractors.

• Forty criteria were determined from this study, rather than the twenty-one obtained from previous studies.

• The presented forty criteria are important standards for choosing contractors, as these are the criteria with the highest weights and thus have the greatest impact on a project’s success.

• Government ministries and large construction companies can adjust some of the criteria based on a project’s unique requirements, economic and social status.

To improve the selection for construction contractors in Saudi Arabia, the following avenues are suggested:

• The forty criteria for choosing a suitable construction contractor for a project could be adjusted based on the project type and its requirements. This will also be appropriate as it will allow clients to provide their requirements to the framework which could then give them a list of the contractors that will best serve their purpose from different angles. This customizing possibility will thus offer the flexibility to evaluate more contractors based on different criteria.

• Training courses to improve the capabilities of bid evaluators will prove valuable, improving and standardizing the assessment process.

• An online database of registered construction contractors should be assembled and made available on a government website so private-sector owners and ministries can reach out to quality certified professionals of the industry.

It should be noted that the developed framework is limited to the number of experts and respondents who participated in the different development process stages. It is also limited in terms of location for the construction projects in Saudi Arabia. Additionally, the ranking, weighting, of the prequalification criteria was limited to the applied eigenvector technique. The validation of the framework is limited to several investigated contractors. Moreover, it is limited to the applied analysis technique (Multi-Attribute Utility Theory).

Disclosure statement

No potential conflict of interest was reported by the author(s).