Structural equation model for assessing impacts of contractor's performance on project success

Abstract

Contactor's expertise and performance play a significant role in successful delivery of a project. While clients strive hard to make the best decisions in selecting the right contractor for the right job, a clear understanding of the underlying attributes associated with contractors' selection in the context of achieving successful project outcomes is critical. In an attempt to understand these pre-emptive qualification criteria and their links to contractors' performance on a project, a hierarchical structural model is established. By employing the structural equation modelling technique, the model adapts a total of 29 technical attributes across five confirmatory factors namely, soundness of business and workforce (SBW), planning and control (PC), quality performance (QP), past performance (PP) and overall project success (OPS). Based on the survey data collected across medium size construction projects in Australia, the results of the model confirmed that technical planning and controlling expertise of contractor is key in achieving success on projects. With a clear understanding of the significance of these factors in the context of contractors' performance, these findings could potentially contribute to the development of a company's procedures or to enhance existing knowledge of contractor prequalification practices.