Effect Of LSMC On National Road-Contractor Performance In Aceh, Indonesia

Abstract

The conventional contract that was usually used in the national road construction in Indonesia was replaced by the Performance Based Contract (PBC) due to the weaknesses of conventional contract in terms of the life cycle of the project. However, because the contractor role and risk influence the contractor performance; hence, the PBC has been improvised into the Long Segment Maintenance Contract (LSMC). The LSMC was introduced to assist contractors in improving their organizations to enhance performance in undertaking national road construction projects. This study was conducted to investigate the relationship between LSMC and contractor performance in Aceh, Indonesia. Data collection for this study was done through a questionnaire survey, which was carried out involving non-small contractor companies from grades 5 to 7. Questionnaires were sent to 104 respondents. From the 104 questionnaires disseminated, 100 were completed and deemed usable. The data were analysed by the PLS software, followed by SPSS. The findings showed a positive relationship between LSMC and contractor performance.