Determining the Consistency in Contractor Selection

The assignment discusses the importance of contractor selection in construction projects, highlighting the need for a structured approach to ensure the correct value is achieved. The Analytical Hierarchical Process (AHP) is recommended as a methodology for selecting contractors, as it helps in increasing efficiency and effectiveness in decision-making. AHP enables the evaluation of multiple criteria simultaneously, leading to a more informed decision. The selection criteria should be based on financial position, payment method, project requirements, contractor strength, past experience, capability to sustain the project, risk identification, and mitigation. The assignment also emphasizes the importance of prequalification of contractors to ensure that only suitable candidates are considered for the project.

Assignment on construction management
2017

Analytical Hierarchical process
Contents
1. Introduction:........................................................................................................................2
Research Aim:........................................................................................................................3
Research objective:.................................................................................................................3
Problem Statement..................................................................................................................3
Background.............................................................................................................................4
2. Literature Review:..............................................................................................................6
Impact of selection procedure undertaken for the contractor on the performance of the
project:..................................................................................................................................12
3. Research methodology:.....................................................................................................14
Application of AHP on the Hypothetical case.....................................................................17
4. Results and findings:.........................................................................................................27
5. Conclusion and Recommendation:...................................................................................38
6. References:........................................................................................................................39
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Analytical Hierarchical process
Title: Application of the AHP in prequalifying contractors to deliver construction project
1. Introduction:
The successful construction of the project depends on the expertize contractor for completing
the activities. The competitive advantage can be gained with the effective selection of the
contractors which helps in bringing proficiency in the developed projects. The failure of the
construction project is due to the unawareness of the risks associated with the project
activities. The good quality construction output can be achieved with the implementation of
the selection criteria for contractor to complete the construction project undertaken. It has
been seen that the selection criteria is mostly based on the lowest bid encountered by the
contractor but this affect the quality of the construction project in meeting the requirement
proposed by the user. The Alternative hierarchical process is the methodology which works
best in selecting the contractor for providing good quality outcome. This system designed the
alternative action plan for encouraging the decision making quality of the project manager by
providing relevant information about the different contractors to him in the synchronized
manner. The effectiveness of the AHP methodology can be improved by setting the relative
priorities to the techniques used. The aim of this methodology is the quantification of the
priorities for setting the ratio scale to enhance the decision making capabilities of the project
manager. The systematic arrangement of the tangible and intangible components associated
with the project helps in taking the right decision for the betterment of the construction
project. The comparison in the contractors helps in identifying the criteria which helps in
selecting the best suitable contractor for undertaking the construction activities within the
baseline of the project (Lin, 2004). The development of the multiple decision criteria helps in
resolving the issues associated with the complexity of the project. The AHP methodology
helps in resolving the prequalification problem associated with the criteria used for selection
of the contractor. The hierarchical structure is prepared for resolving the issues associated
with the overall complexity of the project. The sub-criteria are developed of the decision
making criteria undertaken for selecting the best contractor for the effectiveness of the work.
The judgement process can be easily enhanced with the delivery of relevant information
about the selected contractor which are taken in the study. The setting of the priority is the
major step of the AHP methodology which helps in development of the comparison matrix
for predicting the highest value provided to the contractor (Nikolic, 2015). The pairwise
methodology helps in clear demonstration of the facts and figures associated with the
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Analytical Hierarchical process
working culture of the contractor. The non-linear approach should be undertaken for
resolving the proportionality and changes associate with the relationship between the
elements chosen for preparing research study of the contractor (Pandit, 2012). The project
can be effectively completed with the efficient and expert contractor chosen for completing
the construction activities to give the desired output as asked by the consumer in their
requirement specification plan. The AHP methodology is useful for the project manager to
take accurate decision in selecting the right contractor for continuing the project activities.
The facts and figures of different contractors are collected for developing the comparison
table to make easy selection of the contractor. The data collected about the contractor in the
sector of past performance measurement, bidding, experience in the field of contract, efficient
utilization of the resources from the past history, distribution of the work load among the
participating units, and safety procedures utilized for completing the construction activities of
the project to deliver the quality outcome to the user. In this paper we are going to focus on
the application of the AHP methodology in the selection of the contractor.
Research Aim:
The aim of the research is to focus on the criteria for selecting the contractor to carry out the
related construction activities by using the methodology of Analytical hierarchy process.
Research objective:
The purpose of this paper is to present clear perspective view of Analytical hierarchy process
and how it is used in the construction field. We are going to focus on the procedure used for
implementing the AHP method and how it is conveniently used for setting the criteria for
prequalification and associated priority. The objective of the paper is to suggest use of AHP
methodology in different areas of construction field.
Problem Statement
The final selection of the contractor is the difficult job for the project manager for the smooth
flowing of the construction activities. The prequalification model helps in reviewing the
existing practices undertaken for making the selection on the basis of hierarchical process.
The AHP process is used for resolving the tender price and quality of the selected contractor.
The research is focusing on the AHP methodology for taking the decision to improve the
existing condition of the construction project.
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Analytical Hierarchical process
Background
In the previous work, we have analysed the advantage of using AHP methodology in
developing the selection criteria for the contractor to plan the activities according to the
requirement of the construction project. The decision making issues and challenges can be
resolved with the use of AHP model for making right choice of the contractor for
successfully completing the project. The scaling tools are used for managing the priority to
the qualified level of the contractor. The significance of the AHP process is to provide
structuring to the decision making process undertaken by the project manager. The criteria
should be developed for comparing the excellence of the contractor associated with the
working process of the construction project. The criteria which should be followed for
managing the hierarchy structure is based on financial capability, performance of the past
history, contractor past experience portfolio, resources and material required by the
contractor, management and distribution of the workload, and safety procedure used for the
development of performance. The high quality of the project construction outcome can be
achieved for fetching the goal of the project. The job of constructing the project should be
given in the right hand for completing the project with efficiency. The investigation and the
assessment are the basic techniques which are used for management of the prequalification
criteria. The examination of the processes helps in examining the performance of the
supplier. The suitability and the sustainability are the pillar of the selection procedure
undertaken for making the choice of the contractor. The tender is the basic platform for
knowing the position of the contractor. The capability of managing the resource is prior
important for the performance mesasurement of the contractor. The use of equipment helps in
determining the flow of construction activities to provide desired output to the customers.
The tender should be filled by the approved contractor for the bidding process. The decision
making process for selecting the right contractor according to the requirement of the
construction project is depends upon the analysis of the multiple option available for defining
the activities.
 Problem statement: The project manager should be clear about the requirement of the
undertaken project by analysing the requirement specification plan specified by the
stakeholders. The objective should be clearly defined to the project manager for the
selection of the contractor. The problem statement should be defined in brief to take
the clear advantage of the previous work done. The selection of the contractor
depends on the development of the action plan.
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Analytical Hierarchical process
 Data collection: The relevant information about the contractor should be collected on
the basis of criteria set for the effective selection of the contractor. The analysis of the
research result and the data collected should be done accurately. The selection of the
contractor is depends upon the information associated with the working procedure and
methodologies used in carrying over the construction activities. The areas which
should be covered for managing the relevant information associated with the work
done, position of the job criteria, previous work done by the contractor, and
assessment of the interview.
 Planning of the alternatives: The alternatives are the basic need for determining the
efficiency of the construction project. The project manager should take active decision
in providing the better alternatives in the emergency situation. The hierarchy of the
decision is based on the coordination between the working activities. The
differentiation helps in maintaining the hypothesized relationship between the
participating units. The criteria and sub-criteria are used for selecting the right choice
for the working construction project.
 Weightage associated with the alternative processes: The list of alternatives should be
create for assigning the weightage to the alternatives for determining the efficiency of
the project processes. The pair wise comparison matrix is used for determining the
importance of the contractor by taking criteria and sub-criteria under consideration.
 Selection of the best alternative: The best candidate should be selected for completing
the construction project which is equipped with the high quality tools and
technologies expertize workers and labours, availability of good quality material and
resources, management of services provided, adequate of funds associated with the
completion of the construction project, and others. The consistency of the alternatives
can be determined with the calculation of the consistency ratio, calculation of the
eigen vector, and determining the consistency index.
 Solution and selection: The selection of the contractor is associated with the signing
of the contract for completing the required project within the approved baseline and
cost. The milestone of the project should be made clearly specified in the contract.
 Monitoring of the progress: The laying down of the construction activities should be
monitored periodically for determining the connectivity between the construction
activities, availability of resources, and the completion of activities according to the
requirement specified in the action plan.
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Analytical Hierarchical process
 Reviewing of the planning activities: The activities should be changed according to
the changing demand of the customer to provide good quality product at the end of
the construction activities. The intermediate results should be reviewed periodically
for the measurement of the direction in achieving the desired result according to the
demand placed by the stakeholder.
2. Literature Review:
The process of AHP plays a vital role in the selection procedure used for determining the
criteria used for making choice of the appropriate contractor. The development of the
analytical hierarchy depends on the data collected through the process of questionnaire and
survey. The use of multi attribute value is used in the AHP methodology is used for
maintaining the multi criteria alternatives for resolving the complexity of the enterprise
(Harbi, 1998). From the research we have analysed that the following steps are followed in
the deployment of the AHP methodology for setting the criteria for supplier selection.
 The first step focuses on the determining the goal of the construction project
 The hierarchy should be developed for maintaining the intermediate result for
generating the alternatives for achieving the goal of setting selection criteria.
 The comparison matrix should be prepared for maintaining the measurement of the
relative measurement of the scale (Jiya, 2012).
 The set of matrix helps in enhancing the decision making capability of the project
manager to take an effective decision for selecting the right contractor according to
the requirement of the construction project (Vidal, 2013).
 The weight is allocated to the hierarchical synthesis table for lower down the sum of
the criteria.
 The consistency should be maintained for managing the matrix for pair wise
comparison table. The consistency of the judgement helps in checking consistency
ratio for the whole scenario (Balubaid, 2015). The reviewing of the processes helps in
managing the judgement of the comparison matrix.
The following table shows the numerical rating of the AHP preferences used in the
development of the pair wise comparison matrix.
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Analytical Hierarchical process
Numerical rating Preference related to the verbal judgement
9 Mostly preferred
8 It is in between to very strongly and
extremely
7 Preferred very strongly
6 It is in between strongly and very strongly
5 It is mostly preferred strongly
4 It is in between moderate and strongly
3 It is moderately preferred
2 It is in between equally and moderately
1 It is equally preferred
The manual implementation of the step followed in the AHP process helps in generating
numerous alternatives in the benefit of the construction project for selecting the contractor
(Tiwari, 2014). The capability of the judgement of the group members helps creating the
value chain of hierarchy for enhancing the quality of decision for the betterment of the
construction activities (Fong, 2000). The issues associated with the complexity of the
processes can be effectively developed for managing chaos in the working structure of the
project. The decision of the organization depends on the communication platform undertaken
for taking the effective and efficient judgement (Brown, 2008). The strategies should be used
for enabling the decision making capabilities for influencing the processes used for
determining the pre-qualification of the contractors. The following table shows the criteria
and sub-criteria used for analysing the prequalification for the setting the selection procedures
for the contractor:
Activities for pre-
qualification
Sub-activities Description
Financial situation of the
contractor
Financial statement
Financial rating of the
contractor by utilizing the
past history
Turnover of the company
Calculation of the leveraging
ratio
It helps in analysing the
financial stability of the
participating contractor so
that the construction
activities can be performed
efficiently.
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Analytical Hierarchical process
Calculation of the
profitability ratio
Ability of managing
activities
Organization of activities
Organization of the
knowledge
Deployment of the quality
program
Deployment of the project
management activities
Risk identification and
mitigation program
It focuses on the contractor
performance in the field of
management of activities for
the effective utilization of the
resources for achieving
quality product at the end of
the completion of the project.
Use of technical equipment
and innovative procedures
Skilled and expertise labour
Predicting the experience of
the employees
Use of experienced and
expertise of the employees in
the effective manner
Knowledge of the contractor
in the field of construction
activities
Work done in the past
Efficiency of the project in
the past
The past working procedure
should be undertaken for
analysing the working and
the technical capability of the
contractor for managing the
flow of construction program
Experience Completion of project done
in the history
Variation in the size of the
project done
Completion of the project in
time
Management of the chaos
and conflicts
Working capability of
managing the project
The variation in the project
done in the history helps in
taking the current project
according to the requirement
specification plan
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Analytical Hierarchical process
Undertaking of the
communication procedure
Reputation and goodwill of
the company
The good and healthy
relationship should be
developed between the
contractor and the sub-
contractor
It helps in raising the
satisfaction and trust of the
consumers. The work in
progress can be efficiently
maintained.
Effective utilization of the
physical and human resource
Distribution of equipment
Management of resources
Management of employees
Direct and indirect worker
The resources should be
distributed according to the
requirement of the
construction plan
Safety measures Managing safety measures
Managing the records and
documentation of safety
Deployment of the insurance
policy
The administration of the
safety methods helps in
insuring the life of the
working employees.
Quality control procedures Deployment of the quality
identification
Deployment of the quality
control
Deployment of the quality
assurance procedure
Response associated with the
complaints
The privilege is given on the
analysis of the quality control
methodology adopted by the
contractor for meeting the
selection criteria set for the
contractor
Environmental factor Activities related with the
disposal of the waste
associated with the
construction program
Recycling of the waste
The recycling of the waste
can helps in attracting the
project manager to give his
decision in the favour of the
contractor.
Planning methodology Maintenance of the
construction site
Organization of the quality
specification
The contractor should focus
on setting the tender price of
the project.
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Analytical Hierarchical process
Setting of the tender price
The choice of the project manager helps in resolving the complexity and the potential
problems associated with the working structure of the project. The arrangement of the group
session helps in examining the complex issues resolved with the AHP process. The
judgement helps in providing equal weightage to the participating units for the selection of
the contractor (Vavatsikos, 2007). The just in time approach is used for maintaining the
material supply according to the demand raised by the construction site. The productivity of
the working process can be enhanced with the active utilization of resources. The
development of the hierarchical structure helps in providing the structured format for
mentioning the criteria which is used for making the best choice among the list of contractor
who participates in the bidding process. The following table should be taken under
consideration for analysing the real situation of the contractor for managing the supply of the
material on the site location.
Decision criteria Factors Measurement of the
performance
List of alternatives
Selection of the
contractor for
carrying out
construction
activities
Location of the
contractor
Distance of the site
location
Availability of
material
Availability of funds
Past performance of
the contractor
Shortcomings of the
project completion
Inventory
management system
Quality of work done
Quality and the
quantity of the
material used
Local contractors
Non-local contractor
Builders
Vendors
Purchasing of the
material
Quality and quantity
of the material used
Purchasing of the
material according to
the project schedule
Uncertainty
associated with the
Shortcomings of the
project activities
Inventory
management system
Direct and indirect
Advanced supply for
three months
Advanced supply for
1 month
Daily supply of the
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Analytical Hierarchical process
scheduling of the
project activities
Data warehouse
capacity
Distance between
contractor and site
location
Availability of the
material
cost incurred raw material
Quantity of the
material purchased
Quality and quantity
of the material used
Purchasing of the
material according to
the project schedule
Uncertainty
associated with the
scheduling of the
project activities
Data warehouse
capacity
Distance between
contractor and site
location
Availability of the
material
Adequate
Shortage of the raw
material
Accuracy in
estimation
Less than estimation
More than estimation
The methodology of the AHP is based on the accumulation of multi-criteria used for
analysing the complexity of the problem area to take corrective action with regards to select
the right contractor for the project completion. The structural approach should be followed
for the implementation of analytical hierarchical process. It is comprised of four activities
which are categorised as defining of the problem area, comparing the importance of matrices
for the development of the building, accumulation of weights with the processes, and lastly
analysis of the processes and outcome (Sipahi, 2014). The pairwise matrix should be
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Analytical Hierarchical process
developed for comparing the criteria and the alternatives associated with the selection of the
contractors. The allocation of the resources can be effectively done with the use of AHP
process structure. The breakdown of the problems in the sub-problems helps in facilitating
the decision making process and management of the risks associated with the project. The
management of the financial and non-financial data helps in effectively carrying out the
project activities for the completion of the project on time (Taroun, 2011). The priority
should be determined associated with the business activities for enhancing the level of
performance of the construction project. The AHP tools helps in determining the requirement
and the risks associated with the business activities. The quantification of the performance
can be assured with the deployment of analytical hierarchical structure (Vignesh, 2016). The
following processes helps in improving the quality of the working project.
The balanced scorecard is prepared for improving the quality of the project by indulging the
key performance indicator in the working model of the construction project.
Impact of selection procedure undertaken for the contractor on the performance of the
project:
From the research it has been concluded that the failure of the construction project in the
existing working structure occurs due to the overrunning of the project with respect to time
and budget. The contractor is the whole sole responsible for completing the project within
mentioned data and time. The activities performed by the contractors are not according to the
requirement of the project demands. The contractor is not well-versed in completing the
project on time. The problems faced in the existing system in making the right choice with
respect to the contractor can be resolved with the use of analytical hierarchical process. The
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specification should be mentioned for achieved the desired output. The checklist should be
prepared for matching the quality of the contractor with the specification plan. It helps in
making the comparison between the selected contractor and the demand of the project. The
specification should be made clear to the project manager for taking the right decision. The
prequalification is the important phase of the selection procedure because it helps in
eliminating the unwanted contractor which does not fit with the working culture of the
construction project. The design and estimation of the construction phase helps in reducing
the chance of overrunning of the project. The innovative technologies should be used by the
contractor to develop a good quality outcome. The following procedure should be used for
making the selection of the contractor from the list of alternatives:
The deployment of the pre-qualification phase helps in removing and eliminating the
contractors which are not suitable for carrying out working action of the construction project.
The shortlist of the qualified contractors is prepared for participating in the process of bidding
for getting the contract of the construction project. The lowest bid contractor is the preferred
choice of the project manager but it has been found that the lowest bid contractor is not
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Analytical Hierarchical process
capable of providing good quality construction project. The technical evaluation and other
perspective view should be given privilege for the selection of the contractor. After the
evaluation of the bidding proposal, other criteria should be taken under consideration for
making the final selection of the contractor. There are various selection criteria which should
be given privilege for making the choice of most appropriate contractor. The matching of the
selection criteria makes the project manager to give their judgement in the favour of the high
bidding contractor to get the high quality output after the completion of the construction
phase. From the research it has been found that the criteria which are many used by the
organization for the selection of the contractor are categorised as quality of work provided,
delivery of the project on time, minimum cost of the contract, past performance analysis,
relationship with the client and contractor, use of innovative tools and technologies, loyalty,
willingness towards the work, manageability, technical awareness, skills and expertise in the
employees employed for carrying out the construction program. The role of the contractor
decides the success and failure of the construction project. The result of the prequalification
evaluation method depends upon the methodology used by the contractor in carrying out
activities, scheduling of construction planning chart, expected quality of the outcome, safety
measurement taken for carrying out flawless construction activities, deployment of the
manpower and expertise labour class for finishing the work, use of equipment and resources,
organization of the activities, utilization of the personnel and the resources correctly at right
place, and financial capability of the system for completing the work efficiently and
effectively.
3. Research methodology:
The selection of the contractor is the major issue for the management of the fluency in the
project activities (Awal, 2008). The research methodology is applied for analysing the
selection criteria used by the professionals for selecting the contractors. The research
questions which should be undertaken for the selection of the contractor to complete the
construction program are given below:
 What is the ratio of failure and success of the project done in the past?
 What is the efficiency of using the resources associated with the construction phases?
 What is the quality of work done provided by the supplier in the past
 What is the level of satisfaction in the consumer?
 Is the requirement specification plan fulfilled or not?
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Analytical Hierarchical process
 What is the role of contractor in the success of the project?
 What is the financial capability of the contractor in completing the project activities?
The questionnaire and survey are the basic methodologies used for carrying out activities in
regards to the data collection on the basis of the contractor. The survey should be based on
the attitudes and behaviour usually adopted by the clients in the selection of the contractor.
The measurement of the existing performance helps in knowing the satisfaction level of the
customers. The deployment of the questionnaire research methodology helps in determining
the criteria which should be used for the selection of the contractor. The pair wise comparison
matrix is used for determining the weightage provided to the selection criteria. The feasibility
study helps in channelizing the process of the selection criteria. There are four major
perspective view for making a choice of the particular contractor. The weightage should be
given to the selection criteria which help in bringing effectiveness in the contractor to achieve
high quality outcome after the completion of the project activities. The contractor should be
well-versed in making the appropriate amount required for completing the activities, legal
requirements should be completely fulfilled, financial stability for providing adequate amount
of funds for completing the project activities within the mentioned time, and lastly
availability of the innovative tools and technologies for completing the project efficiently
without any conflict. The contractor should focus on the safety measures used for the labours
and employees working at the site location. The development of the analytical hierarchical
structure helps in determining the technical risks, economic risks, legal risks, and
environmental risks can be easily determined which in turn helps in designing the proactive
action plan. The major concern of the project manager is to minimize the overrunning of the
budget and time associated with the completion of project plan. The active participation of
the employees makes the decision effective because the innovative ideas of the members can
be taken into consideration for enhancing the performance of the undertaking project. The
priority should be set on the basis of the selection criteria undertaken for fetching the
requirement of the customers (Wadugodapitiya, 2012). The selection of the contractor is
based on the priority set by using the AHP methodology. The development of the analytical
hierarchy depends on the data collected through the process of questionnaire and survey. The
AHP tools work effectively by determining the data associated with the client perspective
view, financial perspective view, integral business perspective view, team member
perspective view, safety measurement perspective view, and the growth and learning
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Analytical Hierarchical process
perspective view (Pangsri, 2015). The satisfaction of the customers can be raised with the
effective utilization of the innovative technologies. The client perspective view focuses on
determining the satisfaction level of the customer in relation with the quality of the project,
managing the quality of the finished product, determining the completion time of the project,
determining the budget required for completing the construction activities program, and
increasing the assistance of the resources required for completing the activities (Cakmak,
2014). The financial perspective view helps in determining the cost associated with the
working construction activities, measurement of profitability ratio associated with the
working project, management of the inflow and outflow of the cash for identifying the cash
flow, completion of the activities on time, association of the internal and external processes,
and increasing the efficiency of the project. The integral business perspective view work in
the progress of managing the quality of the input and the output, measuring the capability of
the human resources and machinery used in the project, increasing the efficiency and
accuracy in the working culture of the team members, managing the performance appraisal
for the team member, and the selection of the team for carrying out construction activities.
The safety measurement perspective view focuses on determining the issues associated with
the safety measurement used by the labour at site location, periodically checking of the
equipment used, assessment of the environmental effect with the development of the
construction project, and the risks associated with the working activities of the labour. The
action plan should be developed for providing safety to the working employees during the
working hours at the site location. The innovation perspective view helps in adding new
features and design to the construction project with the active participation of the customers
and the employees. The availability of the skilled and expertise workers is the major concern
for completing the approved construction design according to the requirement specification
plan. The use of innovative technologies in the working curriculum help in aiding efficiency
in the working culture for providing good quality outcome as desired by the customer. The
rating scale which is used by the AHP methodology for the selection of the contractor on the
basis of prequalification selection criteria is based on the intermediate values and the
associated judgement based on experience.
Application of AHP on the Hypothetical case
The prequalification of the contractors helps in analysing the AHP methodology in the
management of the construction project. The competency helps in determining the criteria for
representing the project activities. The analysis of the bidding documents helps in managing
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Analytical Hierarchical process
the contractor pre-qualification. The efficiency and effectiveness of the skills helps in
determining the cost and time associated with the project management. The guidelines of the
pre-qualification help in analysing the performance of the contractors. The strategies should
be used for enabling the decision making capabilities for influencing the processes used for
determining the pre-qualification of the contractors. The pre-qualification of the contractors
are determined with the use of five processes which are named as dimensional weighting
process, prequalification with the two step procedure, strategy for wide dimension, formula
for pre-qualification, and judgment taken on subjective criteria. The dimension weighting
method is used for making choice between the selection criteria setting according to the
requirement mentioned by the project owner. The ranking of the contractor is provided on the
basis of criteria used for selection. The scoring earned by the contactor helps in making the
choice of the desirable contractor who is meeting all the requirement specified by the project
manager in their selection criteria. The prequalification of the contractor is based on the rank
calculated by summing the total score earned in the selection criteria format. The drawback
of this method is the weightage given to the contractor is based on the judgement of the
project manager. The two step prequalification procedure is based on the factors which are
used for screening the performance of the contractor. The ineligible contractors are directly
removed from the prequalification phase. The consistency in the contractor can be achieved
with the removal of ineligible contractors from the list of selection. The strategy and
procedure should be developed for differentiating the eligible and ineligible applicants. The
dimension wide strategy method is used for arranging the selected contractor in the
descending order. It gives the clear evaluation of the contractor for meeting criteria for
prequalification process. It helps in measuring the performance of the contractor based on
selection criteria set by the owner of the project. The method based on prequalification
formula is used to determine the maximum capacity of effectiveness which can be shown by
the contractor in providing good quality outcome. The quality of the work done can e
estimated with the use of prequalification formula for providing judgement with regards to
the selection procedure undertaken. The contractor is removed from the list of selection if the
capability of the contractor is less than the expected for completing the project activities. The
contractor can participate in the bidding process if he matches the criteria and the requirement
of the project. The subjective judgement is based on the previous experience and relationship
with the contractor. The decision is based on the performance chart which is taken under
observation for accepting and rejecting the proposal of the contractor for participating in the
bidding process. The conflicts and chaos occurred in the previous experiences can affect the
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decision of the project owner. From the study, we have evaluated that the construction work
should not be provided to the lowest bidder because the quality of the construction work get
suffered. The lowest bidder is unable to provide good quality outcome according to the
expectation of the project owner due to the limited availability of funding. The
prequalification should be based on analysing the delay of time in providing completed
project to the owner because it helps in measuring the performance and effectiveness in
providing the work on time. The tools and technologies should be used for measuring the
value of prequalification for participating the contractor in the bidding process. The failure of
the construction project is mainly because of two reasons one is wrong estimation of the
performance of the contractor and second is the monitoring system used for analysing the
work in progress. The setting of the prequalification procedure depends on various factors
which help in resolving the value and performance of the participating contractor. The
prequalification factors are categorised as work experience of the contractor, financial
support provided for completing the construction activities, working performance in the past,
the present workload of other projects, availability of expertise employees, availability of
labour, availability of resources and equipment, location of the project, capabilities of the
contractor for managing the project efficiently, quality control procedures and matrix, past
experience in the failure of the project, utilization of the resources, on demand availability of
the resources, use of safety techniques, scheduling of activities with respect to the cost, time,
and availability of the resources , and the active participation in the maintenance procedures
after the completion of the project. The attributes which should be focused for taking decision
with regards to the selection of the contractor are managing the arguments with the group
decision, taking a subjective judgement in the scenario, managing non-linear behaviour of the
participating units, consideration given to the uncertainty and risks, management of training
program, interpretation of the result, applying mathematical fundamentals, development of
the adaptive model, creating multi-criteria perspective view, implementing and acquiring the
high professional knowledge, collection of qualitative and quantitative data.
The evaluation of the tender is the vital role in the selection procedure undertaken for
selecting the contractor. The quality panel of the tender can be estimated with the analysis of
the standard used in specifying the facilities provided for completing the project plan. The
reviewing of the financial condition of the contractor helps in analysing the working
capability at the time of emergency and maintaining the flow of processes. The assessment of
the financial score aids the weightage to the selection criteria. The past experience and the
18

Analytical Hierarchical process
work done should be accurately measured for determining the quality of work provided to the
customers. The feedback from the professional about the contractor helps in analysing the
rate of chaos and conflicts associated in the accomplishment of the project plan. The
schematic procedures should be used for determining the comparison between the
performance of the contractor which makes the decision making process easy. The
experience of the contractor and the sub-contractor should be taken under research study.
The inclusion of the AHP methodology on the hypothetical case helps in demonstrating the
efficiency of it in the setting of the selection criteria for the contractor (Puri, 2014). The
hierarchical structure should be prepared on the basis of objective of the construction project.
The selection criteria should be prepared on the basis of project objectives and capability of
the contractors which are taken under consideration (Semaan, 2014). It has been analysed that
the criteria which should be focused for making the final selection of the contractor are price
and cost of the tender, financial funding capabilities, experience and work done of the
contractor, analysis of the work done in the past, effective utilization of the resources,
management and distribution of the workload, development of the good and healthy
relationship with the stakeholder, and safety measurement taken for performing the
construction activities. The following diagram shows the criteria which is used for selecting
the criteria.
19

Analytical Hierarchical process
With the organization of the survey, we have found the following criteria which are
commonly used by the project manager for selecting the contractor to perform construction
activities.
Selection criteria Description
Tender price The project manager are get attracted towards
the contractor who provide lowest bid in the
tender for carrying out the construction
activities (Bucheli, 2013)
Financial analysis It helps in analysing the back up support of
the funds provided by the contractor
company at the time of need. With the proper
management of funds helps in providing
good quality project at the end of the project
cycle.
Financial statement of the project The calculation of the ratio analysis helps in
estimating the profitability ratio of the
company to assess the financial support
provided to the contractor for making the
availability of the resources and the
equipment.
Financial references It helps in analysing the credit support being
provided to the company for managing the
financial stability to complete the project
activities efficiently and effectively.
Analysis of the past activities and work done The estimation of the future work done can
be guided with the analysis of the past
working rate. The execution of the
construction activities helps in completing
the project within the mentioned deadline.
Failure in the completion of the contract The analysis of the past performance helps in
finding the reason of failure of the project.
The cause and the factors responsible can be
analysed briefly to take proactive action plan
20

Analytical Hierarchical process
for completing the activities as scheduled and
overcome the problem of failure.
Delay in the project The delay in the project is responsible for
rising the cost and budget associated with the
project activities which can result into the
financial loss of the company.
Quality The delivery of the quality product is the
major factor for the analysis of the quality
control methodology being implemented in
the working structure of the construction
project.
Experience The experience helps in taking the project in
the right direction for overcoming the
conflicts and issues associated with the
working project.
Scaling of the project completion The technical capability and the reputation
and good will of the contractor company
plays a vital role in the selection procedure
History of project completed It helps in analysing the area of expertise of
the contractor company
Availability of the physical resources It helps in focusing the efficiency of the
contractor company in making availability of
the resources according to the demand of the
project
Availability of the human resource The analysis of the skills and expertise helps
in estimating the quality of the work which
can be provided the labour employees after
the completion of the project
Distribution of the workload The basic criteria which is used by the
contractor for distributing the workload
among the different participating units.
Past relationship between client and
contractor
The mutual trust is the basic necessity for
bringing coordination among the different
21

Analytical Hierarchical process
activities
Safety measures The focus should be given on the safety
measures which are used by the company in
carrying over the task and construction
activities. The brief description of the safety
precaution should be given by the contractor
for analysis the working structure of the
company.
The following activities show the hierarchical structure which should be followed for the
selection of the contractor.
22
Selection criteria of the contractor
Criteria
for
tender
price
Criteria
for
financial
analysis
Criteria
based on
past
performa
nce
Criteria
based
on past
experie
nce
Criteria
based on
resource
availabilit
y
Criteria
used for
managin
g the
workload
Relationsh
ip
between
client and
contractor
Safety
measur
ed used
Altern
ative
bid 1
Altern
ative
bid 2
Altern
Altern
ative
bid 1
Altern
ative
bid 2
Altern
Altern
ative
bid 1
Altern
ative
bid 2
Altern
Altern
ative
bid 1
Altern
ative
bid 2
Altern
Altern
ative
bid 1
Altern
ative
bid 2
Altern
Altern
ative
bid 1
Altern
ative
bid 2
Altern
ative
bid 1
Altern
ative
bid 2
Altern
Altern
ative
bid 1
Altern
ative
bid 2

Analytical Hierarchical process
The following table shows the comparison scale used for measuring the difference in the
contractor performance:
Intensity Definition Description
1 The distribution of equal
importance provided to the
participating contractor
The distribution of the
activities and criteria should
be based on the project
objective
3 Weak relationship There is a difference in the
judgement and the
experience of the contractor
5 Strongly important area The activities should be
strongly linked to with the
judgement and the
experience.
7 Demonstration of the equally
important activities
The activities should be
measured in accordance with
the dominance practices
9 Absolute importance
provided to the activities
The affirmation of the
activities helps in generating
highest affirmation with the
working portal
2, 4, 6, and 8 The accumulation of the
intermediate values
The activities should be
designed according to the
requirement of the project
23

Analytical Hierarchical process
Criteria used for the selection of the contractor:
Criteria A B C D
A 1 5 7 6
B 1/4 5 1 6
C 1/5 1 4 5
D 1/7 1/5 1/3 3
The following table shows the final weightage given to the hierarchy of the criteria used for
assessment of the activities:
Selection
criteria
Weightage Criteria matrix Final weightage Consistency
ratio
Past work
experience of
the contractor
0.17 0.50 0.07 0.002
Background of
the company
0.35 0.54 0.19 N/A
Organization of
the interview
0.26 0.65 0.14 N/A
Analysis of the
result
0.26 0.45 0.12 N/A
Consistency
ratio = total
weightage of the
criteria selection
0.0012 1.002 N/A
The following table show the normalized matrix for the selection criteria used for the
contractor:
Criteria Pric
e of
the
ten
Finan
cial
capab
ility
Past
perform
ance of
the
Past
experi
ence
of the
Utiliza
tion of
the
resour
Distrib
ution of
the
worklo
Relatio
nship
between
the
Safety
perform
ance
Priorit
y
vector
/
24

Analytical Hierarchical process
der compan
y
compa
ny
ces ad client
and the
contract
or
normal
ized
eigen
vector
Tender
price
210
/
440
1880 /
2481
70 / 210 140 /
410
63 /
290
48 /
210
27 / 152 8 / 39 0.343
Financi
al
capabili
ty
36 /
440
314 /
2481
105 /
210
140 /
410
414 /
1460
21 / 69 27 / 152 4 / 39 0.246
Past
perform
ance
41 /
440
44 /
2481
14 / 210 99 /
410
63 /
290
34 /
203
9 / 52 6 / 39 0.142
Past
experie
nce
31 /
440
44 /
2481
4/ 210 21 /
410
441 /
1460
34 /
203
4 / 51 6 / 39 0.091
Utilizati
on of
the
resourc
e
41 /
440
44 /
2481
4/ 210 5 /
410
63 /
1460
7 / 203 29 / 152 9 / 39 0.078
Distribu
tion of
the
workloa
d
31 /
440
34 /
2481
4/ 210 4 / 410 63 /
1460
7 / 203 29 / 152 1 / 39 0.047
Relatio
nship
between
contract
or and
the
31 /
440
44 /
2481
6 / 410 21 /
1252
63 /
1460
1 / 203 3 / 152 4 / 39 0.032
25

Analytical Hierarchical process
client
Safety
perform
ance
31 /
440
65 /
2481
6 / 410 9 /
1252
8 /
1460
7 / 203 2 / 153 5 / 39 0.024
The analysis of the table helps in demonstrating the priorities set for selection criteria:
Selection criteria Analysis of the Relative priority
Setting of the tender price 0.343
Financial capability 0.246
Past performance 0.142
Past experience 0.091
Utilization of the resource 0.078
Distribution of the workload 0.047
Relationship between contractor and the
client
0.032
Safety performance measurement 0.024
4. Results and findings:
The following table shows the result of the analysis done on the selection criteria preferred
for the choice of the contractor.
Selection criteria Analysis of the
local priority
Analysis
of the
global
priority
Sub-criteria Analysis
of the
local
priority
Analysis
of the
global
priority
Setting of the tender
price
0.343 0.343 Financial
Statement
0.988 0.210
Financial capability 0.246 0.246 Financial
References
0.099 0.023
Past performance 0.142 0.142 Failure in
the
completion
0.648 0.090
26

Analytical Hierarchical process
of the
project
Past experience 0.091 0.091 Overrunnin
g of the cost
0.162 0.024
Utilization of the
resource
0.078 0.078 Delay in the
project
0.144 0.019
Distribution of the
workload
0.047 0.047 Achieving
the expected
quality
0.144 0.005
Relationship
between contractor
and the client
0.032 0.032 Scaling the
project
completion
0.481 0.042
Safety performance
measurement
0.024 0.024 Analysis of
the past
history
0.404 0.036
Experience
in the local
community
0.114 0.011
Utilization
of the
physical
resources
0.499 0.0394
Utilization
of the
human
resource
0.499 0.0394
Accumulation of the normalized priorities associated with the different selection criteria
mentioned above:
1. Price mentioned in the tender
Tender price Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
27

Analytical Hierarchical process
normalized
priorities
Alternative bid 1 1 1 / 6 1 / 3 0.071
Alternative bid 2 6 1 / 2 1 / 5 0.650
Alternative bid 3 5 1 3 0.279
Principal eigen value = 3. 064
Consistency index = 0.033
Consistency ratio = 0.054
2. Financial Statement
Financial
Statement
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 1/3 1/3 0.210
Alternative bid 2 1 2 2 0.410
Alternative bid 3 1 2 2 0.410
Principal eigen value = 3. 005
Consistency index = 0.005
Consistency ratio = 0.005
3. Financial References
Financial
References
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 7 5 0.740
Alternative bid 2 1/7 1 1/5 .065
Alternative bid 3 1/7 1/5 1 0.191
28

Analytical Hierarchical process
Principal eigen value = 3. 192
Consistency index = 0.033
Consistency ratio = 0.054
4. Failure in completing the construction project:
Failure in
completing the
construction
project
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 3 1 0.645
Alternative bid 2 3 1 3 0.102
Alternative bid 3 1/ 2 1 1/3 .227
Principal eigen value = 3. 055
Consistency index = 0.097
Consistency ratio = 0.175
5. Overrunning of the cost associated with the construction activities
Overrunning of
the cost
associated with
the construction
activities
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 2 7 8 0.792
Alternative bid 2 1/7 1 3 0.122
Alternative bid 3 1/7 1/3 1 0.078
Principal eigen value = 3. 052
29

Analytical Hierarchical process
Consistency index = 0.028
Consistency ratio = 0.152
6. Delay in the completion of the project
Overrunning
of the cost
associated
with the
construction
activities
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 2 4 9 0.695
Alternative bid 2 1/3 1 4 0.217
Alternative bid 3 1/8 1/3 1 0.092
Principal eigen value = 3. 052
Consistency index = 0.028
Consistency ratio = 0.152
7. Expected quality of the outcome
Expected quality
of the outcome
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 8 7 0.775
Alternative bid 2 1/8 2 1/5 0.066
Alternative bid 3 1.7 5 2 0.167
Principal eigen value = 3. 052
Consistency index = 0.028
Consistency ratio = 0.152
30

Analytical Hierarchical process
8. Scaling of the project completion
Scaling of the
project
completion
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 8 6 0.732
Alternative bid 2 1/7 2 1/5 0.082
Alternative bid 3 1/4 3 2 0.187
Principal eigen value = 3. 063
Consistency index = 0.031
Consistency ratio = 0.063
9. Types of the project completed in the past
Types of the
project
completed in
the past
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 2 5 0.450
Alternative bid 2 1/3 2 1/3 0.199
Alternative bid 3 2 3 1 0.399
Principal eigen value = 3. 001
Consistency index = 0.001
Consistency ratio = 0.002
10. Local area experience
Local area
experience
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
31

Analytical Hierarchical process
priorities
Alternative bid 1 2 1/3 1/5 0.125
Alternative bid 2 2 1 1/3 0.412
Alternative bid 3 3 1 2 0.452
Principal eigen value = 3. 008
Consistency index = 0.004
Consistency ratio = 0.008
11. Availability of physical resources
Availability of
the physical
resources
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 7 5 0.754
Alternative bid 2 1/5 1 ¼ 0.181
Alternative bid 3 1 5 3 0.064
Principal eigen value = 3. 132
Consistency index = 0.064
Consistency ratio = 0.118
12. Utilization of the human resources
Utilization of the
human resources
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 5 3 0.697
Alternative bid 2 1/3 2 1/4 0.092
Alternative bid 3 1/5 2 3 0.220
32

Analytical Hierarchical process
Principal eigen value = 3. 052
Consistency index = 0.028
Consistency ratio = 0.053
13: Distribution of the workload
Distribution of
the work load
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 5 2 0.473
Alternative bid 2 1/5 4 1 0.082
Alternative bid 3 1 4 2 0.443
Principal eigen value = 3. 003
Consistency index = 0.003
Consistency ratio = 0.005
13. Relationship of the contractor with the client in the past:
Relationship of
the contractor
with the client in
the past
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 7 8 0.803
Alternative bid 2 1/8 1 1/9 0.073
Alternative bid 3 1/7 1 2 0.123
Principal eigen value = 3. 035
Consistency index = 0.017
Consistency ratio = 0.035
33

Analytical Hierarchical process
14. Measurement of the safety performance
Measurement of
the safety
performance
Alternative bid 1 Alternative bid 2 Alternative bid 3 Calculation
of the
normalized
priorities
Alternative bid 1 1 8 8 0.697
Alternative bid 2 1/8 5 1/9 0.072
Alternative bid 3 1/7 ½ 2 0.122
Principal eigen value = 3. 035
Consistency index = 0.017
Consistency ratio = 0.035
The following table shows the prioritization calculated from the different selection criteria of
all the three bids:
Bid Price
of
the
tende
r
Financi
al status
Financi
al
referen
ces
Failure
in
completi
ng the
project
Overrunn
ing of the
cost
Delay in
the
project
Quality of
the work
provided
Scali
ng
Bid 1 0.07
1
0.210 0.740 0.645 0.792 0.695 0.775 0.732
Bid 2 0.65
0
0.0410 .065 0.102 0.122 0.217 0.066 0.082
Bid 3 0.27
9
0.410 0.191 .227 0.078 0.092 0.167 0.187
Relati
ve
priori
ty
criteri
0.34
1
0.222 0.023 0.092 0.022 0.021 0.005 0.042
34

Analytical Hierarchical process
a
Bid Type
of
the
proje
ct
done
Past
experie
nce
Utilizati
on of
the
physical
resourc
es
Utilizati
on of
the
human
resource
Current
workload
Relations
hip
between
client and
the
contracto
r
Safety
measurem
ent
Bid 1 0.45
0
0.125 0.754 0.697 0.473 0.803 0.697
Bid 2 0.19
9
0.412 0.181 0.092 0.082 0.073 0.072
Bid 3 0.39
9
0.452 0.064 0.220 0.443 0.123 0.122
Relati
ve
priori
ty
0.36 0.009 0.0398 0.0398 0.048 0.031 0.022
The composition of the priority is calculated which helps in taking the decision for the
selection of the contractor. From the analysis of the above table we have calculated as Bid 1
is equal to 0.341, Bid 2 is equal to 0.374, and Bid 3 is equal to 0.282. The analysis of the
selection criteria helps in reducing the complexity for taking the right decision in the
betterment of the working curriculum of the construction project (Attaran, 2013). The
development of the hierarchical structure helps in comparing the strength and the weaknesses
of the individual contractor.
The following table shows the facilities provided by the different contractor in the
construction of the project
Criteria Contractor 1 Contractor 2 Contractor 3
Experience of the
contractor in the field
of construction
5 years 6 years 4 years
35

Analytical Hierarchical process
Type of project done 2 similar type of
construction project
1 international
project and 3 similar
project
4 different project
Financial scenario Assets are around $5
Million
Assets are around $7
million
Assets are around $4
million
Performance and
quality of the
construction project
Good quality output Good quality output Average quality
output
Delay in completion
of the project
No delay 1 project delay 2 project delay
Human resource 140 labours and 12
skilled and
specialized labour
120 Labour and 150
skilled and
specialised labour
125 labours with
skilled and expertise
Availability of the
physical resources
5 mixing machines
2 excavators
12 other equipment
7 cement mixer
machines
1 excavator
2 bulldozers
1200 steel work units
16 other equipment
2 Trucks
2 cement mixer
1 excavator
2 bulldozers
10 extra equipment
Workload 1 pending work No work 2 medium sized
projects
The following table shows the contractor prequalification matrix:
Contracto
r
Experience Financial
stability
Quality
performance
Manpower
resources
Equipmen
t resources
Current
workload
A 0.085 0.423 0.268 0.152 0.083 0.143
B 0.245 0.087 0.075 0.275 0.267 0.538
C 0.153 0.179 0.462 0.448 0.557 0.172
The decision making capabilities helps in managing the criteria and the sub-criteria for
determining the requirements for completion of the activities (Alzober, 2014). The sensitivity
analysis helps in taking the judgement for determining the overall priorities for managing the
36

Analytical Hierarchical process
different values. The AHP methodology can be used for improving the decision making
capabilities of the project manager by developing the paired comparison matrix. The rate of
comparison helps in determining the correct value of the matrix for the analysis of the
collective decision. The rating procedures are used for investigating the complaints and the
issues of the underlying contractor taken in the research study. The independency of the
investigation helps in determining the consistency in the questionnaire organized for
achieving the correct value of the contractor. The productivity of the working process can be
enhanced with the active utilization of resources. The consistency test helps in managing the
decision to improve the business perspective view of the organization. The coordination
among the activities helps in determining the problem in the decision area. The systematic
decision can be taken with the arrangement of structured approach. The aim of the AHP is to
assign priority to the working procedures undertaken by the different contractor.
5. Conclusion and Recommendation:
From the above discussion, it is recommended that the progress of the construction project
depends on the accuracy of the work done performed by the contractor for the
accomplishment of the project plan on time. The selection criteria should be based on the
financial position and payment method used by them, requirement of the undertaken project,
strength and reputation of the contractor, type of the project done in the past, past experience,
capability in sustaining the project, resolving power for the chaos and conflicts associated
with the working employees, and the risks identification and mitigation methodology used by
the contractor. The checklist should be prepared for comparing the requirement of the project
plan and the criteria of the selected candidate. The difference should be noted in the
structured format for looking for the next alternative. It helps in making the right choice of
the contractor. The selection of the contractor can be easily preceded by the Analytical
hierarchical process because it helps in increasing the efficiency of the project owner in
providing correct and right judgement in the selection of the contractor in the direction of the
benefit for the construction project. From the research analysis, we found that the project
should not be given to the lowest bidder because it can affect the quality of the work provided
after the completion of the project due to limited supply of funds. The weightage should be
given to the selection criteria which help in bringing effectiveness in the contractor to achieve
high quality outcome after the completion of the project activities. The use of analytical
hierarchy process helps in maintaining the balance between the objectivity and subjectivity in
37

Analytical Hierarchical process
taking decision associated with the selection of the contractor for completing the construction
project. The development of the criteria for meeting the prequalification process and final
selection process helps in appointing the perfect contractor according to the requirement of
the project. The ineligible contractors can be removed from the selection list by introducing
the methodology of prequalification fundamentals. The prequalification procedures are
helpful in analysing the working structure and the capability of the participating contractor.
The strength and weaknesses of the contractor helps in identifying the acceptance and
rejection of the contractor. The finding of the uniqueness in the participating contractor helps
in accelerating the selection of the contractor. The development of the hierarchical structure
helps in providing the structured format for mentioning the criteria which is used for making
the best choice among the list of contractor who participates in the bidding process. The
decision making complexity can be resolved with the technology of AHP by focusing on the
multiple criteria for selecting the contractor. It brings the feeling of innovation in the
participating unit because previously the contractor focused on making the lowest bidding for
getting the contract of the project. The AHP methodology has completely changed the
scenario of selection procedure used for implementing the decision with regards to the
contract given to the contractor for completing the construction activities within the
mentioned deadline and cost. The characteristics of the contractor are also highlighted with
the use of Analytical hierarchical process for completing the project with efficiency and
effectiveness.
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Analytical Hierarchical process
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39