| Abstract: | Subcontracting, in construction industry is an integral component of the construction industry and it is a process of subletting trade or work packages to ordinary contractors or to specialist contractors, commonly referred to as sub-contractors (Thomas E Uher and Philip Daveport, 2009).
Subcontractors are specialist agents in the execution of a specific job, supplying manpower, equipment, tools, and designs. Subcontractors play a significant role in ensuring the success of construction projects, as up to 90% of the total project value are entrusted to various subcontracting firms.
In Ethiopian Construction industry a significant portion of the project work have been provided to sub contractors because of the need to accomplish projects on time by main contractor, the need to look for specialists, financial problem, to mitigate delay, the need to transfer risk and many more using preset criteria.
The aim of this paper is to review the sub contracting practices in the construction industry of Ethiopian with the specific case on Ethiopian Construction Works Corporation. The study was based on a questionnaire survey of ECWC as main contractor, selected subcontractors and consultants. Information was obtained on reason for sub-contracting, sub-contractor selection criteria, issues in sub-contracting & benefits of sub-contracting taking in to account the 21 pre-identified considerations from literature review and analysis of each of them were using SPSS.
Moreover, interview with different construction department heads were conducted to triangulate the actual situation obtained by questionnaire and documentary review of selected projects have been done to obtain further information.
The results indicate that most of those construction projects transferred to subcontractors because of the need for specialists and the need to complete projects within the schedule, look for specialized services and to mitigate delays are the peak reason for subletting part of the project. Another explanation behind this is to perform some volume of work and to overtake the complexity and dynamic nature of construction project, call to transfer risk,
to get cost reduction and to obtain technology transfer were identified as the medium reasons for subletting projects.
Tender Price and financial standing of the subcontractor were identified as the critical criteria to select subcontractors whereas; Technical Qualification was the intermediate criteria set by the corporation in order opt for subcontractor. Professional Qualification and Technical knowhow were discovered as the least subcontractor selection criteria. Beside this, Methodology, Work plan, Capability of subcontractor and Number of staff (Personnel for the key positions) were identified from interview.
Payment by main contractor is identified as the pinnacle issue while Absence of formal contract document between main contractor and subcontractor, Construction insurance, Right of Ways Issue and Subcontractor bonding/retention are identified as the common issues in subcontracting. Safeguarding Adjacent Properties mainly in the project site, Extension of Intended Completion Date and Health and Safety on Sites were another issue identified from interview.
Finally, analysis of the data and interview shows that the corporation has benefited from subcontracting by sharing of financial burden and obtaining specialists, likewise timely completion of projects and Risk transfer are designated as an added benefit of subcontracting. |
