Social network analysis of project procurement in Iranian construction mega projects

Abstract

Several construction projects, worldwide, are suffering from delays and budget overruns; and Western Asia is not an exception. Studies have identified delays in progress payments and change order approvals as two of the main root causes of overruns in large building projects in the Middle East. In this study, the effect of procurement methods on these two factors has been investigated by analyzing the structure of social networks formed during these processes and evaluating the efficiency of information diffusion in such networks. Three contract types are focused, i.e., unit-rate; lump-sum; and EPC (Engineering, Procurement and Construction) to evaluate the functional performance of actor networks associated with them, and social network analysis (SNA) is used as the main analysis tool. After extracting the social networks formed in the mega-projects from the public domain in the Iranian construction industry, metrics from SNA were used to evaluate their functional performance concerning progress payment and change order management. The processes were compared at both network-level and the individuals involved. The observations were turned into an industry questionnaire and the key stakeholders involved in the projects were surveyed for validation and additional insights. The results identified the actors/roles of the most prominence in change and invoice networks of projects, as well as the strength and weaknesses of the three forms of standard contracts reviewed, as manifested in the performance of invoice and change management processes. It was observed that the formation of flat actor-networks in more modern contracts (such as the EPC) effectively supports a better flow of information, hence improves the performance of the processes under the study.