Effect of Contractor – Subcontractor Relationship on the Performance of Construction Project: A Case Study of Dire Dawa Construction Projects

Abstract

Because of the common practice of subletting construction work into smaller packages, subcontracting has become an attractive technique in the construction business. Effective subcontractor selection and monitoring reduce the problem while also determining the performance of construction firms. The engagement of a subcontractor in a building construction project results in relationships with the main contractor, which will influence the project's success. The purpose of this study was to look at how main contractors choose subcontractors and to analyze the effect of the main contractor-subcontractor relationship on project performance. This research used a descriptive survey method to look at the underlying characteristics that influence the relationship between the main contractor and subcontractors and their effect on the performance of construction projects. The findings of the study confirmed that most contractor depends on subcontractors for the execution of their work and therefore procurement and management of subcontractors highly affects the performance of the construction project. It was also discovered that the subcontractor often performs 20 percent to 50 percent of the work. Main contractors used subcontractors primarily to offer skilled labor, lower overhead expenses, and relieve work and financial burden on themselves. The major causes of issues between the main contractor and the subcontractor include the main contractor's delay in releasing payments, the subcontractor's shortage of trained personnel, and scheduling conflicts among the subcontractors on a given project. To eliminate antagonistic relationships, the study advises a trust-based cooperative partnership that incorporates subcontractors into a partnering strategy. Furthermore, for optimal construction project performance, simpler and complete subcontract documents would improve the interaction between the main contractor and the subcontractor.