Forecasting model to predict project success based on the contractors’ characteristics

Abstract

Successful delivery of construction projects requires completing the projects on time and within budget, while ensuring the delivery of a quality product. Most construction projects experience delays, cost overruns and quality problems. In a country like the United Arab Emirates (UAE), where high development activities are happening rapidly, it is very dangerous for the overall economy if repeated failures in construction projects remain unsolved or even uninvestigated. The selection of the right contractor has a direct and significant impact on the success of construction projects. There is a need to select the appropriate contractor who is capable of increasing the chances of the project’s success. Relying on the selection of the lowest bidder is misleading. The research objective is to develop a model that predicts the project’s success based on the contractor’s characteristics, be they financial or non-financial. This will reduce the risks associated with the process extensively. Sixteen key characteristics, that have a direct impact on project success, were identified through an extensive literature review. Those sixteen characteristics were grouped into four main categories: the firm’s capacity, past experience and past performance, project management capabilities and sustainability and technology practices. A survey, using the Analytic Hierarchy Process (AHP), was conducted to prioritize those characteristics and link them to the success criteria. Success criteria were limited to cost, time and quality. Forty-five respondents completed the survey including owners, contractors and consultants. The results indicated that respondents prefer financial (bid price) slightly over non-financial characteristics (0.513 and 0.487, respectively). As for the non-financial characteristics, the results show that the main categories are ranked as follows: project management capabilities, past experience and past performance, sustainability and technology practices and firm’s capacity. Four out of the top five characteristics were found to be part of the project management capabilities group. In terms of project success criteria, the results are as follows: quality (0.413), cost (0.317), and time (0.270). Through relating contractor characteristics and financial factors to the project success criteria, a forecasting model has been developed to predict project success based on the given parameters. A case study is also presented to show the application of the proposed model.