PEER-REVIEWED PAPER

IMPROVED SUBCONTRACTOR SELECTION EMPLOYING

PARTNERING PRINCIPLES

By Mohan M. Kumaraswamy,1 Member, ASCE, and Jason D. Matthews2

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ABSTRACT: Despite the increasing extent of subcontracting in construction, the importance

of subcontractor selection is frequently underestimated. While the subcontracting element needs
more attention in contractor selection itself, subcontractor selection techniques themselves need
considerable improvements. This paper examines how such techniques can beneficially draw
from improved multicriteria contractor selection methodologies in general, and specifically from
recent developments in client-contractor partnering. It is shown how partnering may be profit-
ably extended further into the supply chain, i.e., into subcontractor selection. A European case
study illustrates the development of a subcontractor selection process that incorporated partner-
ing principles. Despite the longer and costlier selection process, it was found that subcontractor
pricing levels were reduced by about 10% to account for anticipated efficiencies arising from
the proposed partnering. Markedly better time and cost control was achieved on the pilot project.
The relationships between all project participants were also found to have improved consider-
ably. Such observations confirm the value (1) of expanding the partnering ‘‘envelope’’ to en-
compass subcontractors in general; and more specifically, (2) of assessing the potential for such
extended partnering as an integral part of the subcontractor selection process.

INTRODUCTION AND BACKGROUND
Importance of Improved Subcontracting
The contribution of specialist and trade subcontractors
to the total construction process can account for as much
as 90% of the total value of the project (Nobbs 1993),
while the incidence and importance of subcontracting in
Hong Kong is similar (Matthews et al. 1997). Nobbs
(1993) attributed the increased involvement of subcon-
tractors to the shift away from the traditional craft base,
to a greater reliance on increasingly sophisticated tech-
nology-based products. Matthews et al. (1996) believed
that the increase in sophisticated technology-based prod-
ucts has required a high degree of design, manufacture,
installation and commissioning skills that have not been
readily available to the industry’s clients, as the skill base
has moved away from the main contractor’s organization.
This has resulted in main contractors concentrating their
efforts on managing site operations rather than employing
direct labor to undertake construction work. By contrast,
1
Assoc. Prof., Dept. of Civ. Engrg., Univ. of Hong Kong, Pokfulam
Rd., Hong Kong SAR, China.
2 contractor–sub-subcontractor relationship (Matthews
Res. Fellow, Dept. of Constr. and Real Estate, Univ. of Hong
Kong, Pokfulam Rd., Hong Kong SAR, China.
Note. Discussion open until November 1, 2000. To extend the clos-
ing date one month, a written request must be filed with the ASCE
Manager of Journals. The manuscript for this paper was submitted for
review and possible publication on April 6, 1999. This paper is part
of the Journal of Management in Engineering, Vol. 16, No. 3, May/
June, 2000. 䉷ASCE, ISSN 0742-597X/00/0003-0047–0057/$8.00 ⫹
$.50 per page. Paper No. 20666.
JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000 / 47
Jamieson et al. (1996) also attributed the increased use of
subcontractors to the increased complexity of both the
construction of buildings and the organizational relation-
ships.
However, this increase in complexity, the oversupply
of specialist firms, and the declining construction output
has cultivated an adversarial atmosphere, which has had
a negative effect on the main contractor-subcontractor re-
lationships. As main contractors have realized that the
greatest potential for cost savings lies with subcontractors,
the extent of unfair contract conditions, ‘‘Dutch auction-
ing,’’ and other onerous practices has increased (Corrup-
tion 1992; Matthews et al. 1996; Jamieson et al. 1996).
Subcontractors have also caused problems. With easy
entry into the construction market place in the U.K., sub-
contractor organizations have been established with very
little capital investment. Many of these subcontractor
companies do not have the necessary expertise to under-
take work satisfactorily and, as a consequence, are unable
to give their clients the service they require. Moreover,
many of the bad traits common to the main contractor–
subcontractor relationship are also common to the sub-
1996).
Importance of Improved Subcontractor
Relationships
Hinze and Tracey (1994) described the findings of ex-
ploratory research undertaken in the United States in or-
der to identify how subcontracts were placed. They put

J. Manage. Eng. 2000.16:47-57.

 forward a series of recommendations to improve the sub-
contractor–main contractor relationship. They added that
further in-depth research should pursue various critical
issues identified in their study.
In the U.K., the Latham Report (Latham 1994) pro-
vided a focus and motivation to explore improvements
in main contractor–subcontractor relationships for the
benefit of the industry as a whole. Partnering was seen
as one way to achieve these improvements (Matthews
1996).
Latham also recommended that partnering should be
considered in the context of main contractor–subcon-
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tractor relationships, commenting:
‘‘Partnering arrangements are also beneficial between
firms. Some main contractors have developed long term
relationships with subcontractors. That is welcome. Such
arrangements should be the principle objective of im-
proving performance and reducing costs for clients.
They should not be ‘cosy.’ The construction process ex-
ists to satisfy clients. Good relationships based on mu-
tual trust benefit clients’’ (Latham 1994).
Since the early 1990s many organizations in the Brit-
ish construction industry have employed partnering
within their business practices and relationships. Walter
(1998) showed that many of the large U.K.-based main
contractors were pursuing partnering relationships, with
partnering ‘‘workloads’’ increasing over time. Similarly,
the Reading Construction Forum (The seven 1998) and
Watson (1999) clearly show the attention major ‘‘blue-
chip’’ clients are giving partnering.
Research undertaken by Matthews (1996) pointed to
the need to rationalize and improve the way subcontrac-
tors are procured by main contractors, with the adoption
of the ‘‘partnering philosophy’’ being the key to achiev-
ing these improvements.
The current partnering literature has largely concen-
trated on the client–main contractor relationship, with
little reference to the main contractor–subcontractor re-
lationship. Also, much of the partnering literature is con-
cerned with discussing partnering from a general per-
spective, with little attempt being made to detail the
‘‘mechanics’’ of how partnering relationships were
forged. This paper will overcome these two weaknesses
in not only discussing partnering between a main con-
tractor and its subcontractors, but also detailing the se-
lection criteria used to procure subcontractors.
The increasing size and importance of subcontracts also
make it worthwhile, if not necessary, to reexamine con-
tractor selection methodologies from the viewpoints of (1)
adapting these to subcontractor selection where possible;
and (2) encouraging better subcontracting practices by
drawing on lessons learned from contracting itself.
ADVANCES IN CONTRACTOR SELECTION
METHODOLOGIES
Shifting from ‘‘Price Only’’ Single Criterion to
Multiple Performance Criteria
‘‘Price only/lowest tender wins’’ practices appear sim-
ple, straightforward and reasonable, especially to deci-
48 / JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000
J. Manage. Eng. 2000.16:47-57.
sion makers who are (1) answerable to their sharehold-
ers, their superiors, or the taxpayers; and (2) unable to
see the product they are contracting to purchase. Clients
and their consultants often resort to simplifying assump-
tions, for example that (1) their specifications clearly de-
fined the product; and (2) all contractors are ‘‘the same’’
and will perform similarly (also under all circum-
stances). It is now widely accepted that such assump-
tions were naive, if not fallacious. Bitter experiences
have shown that the lowest tender may have originated
from inaccurate estimating, inadequate risk provisions,
deliberate decisions to use substandard resources, and/or
even ‘‘smart’’ pricing strategies aimed at generating
claims for extra payments through contractual loopholes
(Kumaraswamy and Walker 1999).
Such problems initially led large clients: (1) to com-
pile lists of ‘‘registered’’ contractors who were perceived
to have the required minimal experience, track records,
and capabilities for certain types and values of construc-
tion; or (2) to prequalify tenderers for a specific project.
Such short-listing of eligible tenderers overcame some
of the deficiencies of selecting the lowest tenderer there-
after. But further consideration of nonprice parameters
after receiving tenders as well has been urged, for ex-
ample by Holt et al. (1996), who recommended combin-
ing each ‘‘potential performance score’’ with the corre-
sponding tender bid to yield an ‘‘overall score’’ for each
tenderer.
On the other hand, the ‘‘money value’’ of time savings
may also be factored into the final evaluation, for ex-
ample if tenderers are permitted to propose alternative
project durations. For example, the Florida Department
of Transportation (Design-build 1996) cites a ‘‘dollar
value per day saved’’ in the request for proposal package
and tender price adjustments are accordingly incorpo-
rated for any proffered time savings, before comparing
prices (Palaneeswaran et al. 1999). Provision was also
made to incorporate special considerations for proposals
that significantly reduced traffic disruptions during con-
struction on the I-15 Corridor Reconstruction Project (I-
15 1997).
This major shift of focus to the potential of prospec-
tive contractors to meet multiple performance criteria
has spawned many proposed methodologies for evalu-
ating contractors at registration/prequalification and
tender stages. For example, Russell et al. (1990) devel-
oped a knowledge-based system for contractor prequal-
ification that involved the evaluation of the following
criteria: contractor’s reputation, past performance, finan-
cial stability, experience record, firm capacity, current
workload, and technical expertise. Holt (1998) compared
different technologies for such evaluation, including, for
example, bespoke approaches (developed by large client
organizations), multiattribute utility theory, cluster anal-
ysis, and fuzzy set theory. A recent Hong Kong–based
survey of public clients also revealed the development
of many innovative evaluation approaches that incor-
porated a range of criteria and techniques (Palanees-
waran et al. 1999).
 Examples of Evolving Methodologies, Better
Practices, and Critical Criteria
The aforementioned survey included a review of rel-
evant international journals and books, an Internet-based
survey of contractor selection practices of public clients
in the United States and Australia with follow-up by
post, and e-mail with relevant procurement officers and
fellow researchers. It also included case studies of con-
tractors’ evolving selection practices in Hong Kong pub-
lic bodies. Only a few relevant examples will be cited
here, however, to illustrate the trend in the context of its
relevance to the principal theme of this paper—on im-
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proving subcontractor selection.
Palaneeswaran et al. (1999) highlighted some of the
emerging ‘‘best practices’’ principles, such as
1. Seeking value for money, public accountability,
transparency, and open and fair competition;
2. Incorporating indicators to evaluate responsive-
ness, responsibility, and competency of builders;
and
3. Incorporating ‘‘performance ratings,’’ for example:
(a) the ‘‘prequalification rating,’’ formulated by the
West Virginia Department of Highways, based on
past performance, net current assets, insurance, line
of credit, and equipment availability factors; and
(b) the PASS (Performance Assessment Scoring
System) of the Hong Kong Housing Authority that
involves detailed evaluation of the performance of
registered contractors on their ongoing projects,
which is then fed into their PASS scores that would
in turn entitle contractors with higher scores to
more bidding opportunities for future projects (by
including the better-performing contractors in
shortlists that exclude the poor performers).
Russell (1996) discussed the merits and methodolo-
gies of contractor prequalification in greater detail, while
Hatush and Skitmore (1997) reported on a Delphic study
that investigated perceived relationships between 20
contractor selection criteria (CSC) currently in use in the
U.K. and project success factors (PSFs) in terms of time,
cost, and quality. Dominant CSCs perceived to affect all
three PSFs were found to include past failures, financial
status, financial stability, credit ratings, experience, abil-
ity, management personnel, and management knowl-
edge.
These critical criteria/factors also need to be incor-
porated in measurable indicators/parameters, for exam-
ple via transformed financial ratio models for improved
contractor evaluation as demonstrated by Edum-Fotwe
et al. (1995). On the other hand, contractors who are
‘‘registered’’ (for longer-term prequalification with large
client organizations) or prequalified (for specific jobs)
may be banded into groupings that would help determine
the maximum dollar value of work for which such a
contractor may be allowed to bid. In the United States,
various states have developed their own rating systems
with classified and well-defined limits such as ‘‘maxi-
mum capacity rating’’ for the total value of uncompleted
JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000 / 49
J. Manage. Eng. 2000.16:47-57.
prime contract work permissible at an any time, ‘‘work
class rating’’ being the maximum value within that class
(Prequalification 1997); ‘‘available bidding capacity,’’
and ‘‘available work rating’’ (Rules 1997).
In Australia, general prequalification criteria recom-
mended by CIDA (the former Construction Industry De-
velopment Agency) were classified under groupings of
technical capacity, financial capacity, quality assurance,
time performance, occupational health and safety, human
resource management, and skill formation. These general
criteria are incorporated in specific prequalification pro-
cesses and indicators being developed by state govern-
ment bodies, for example in Queensland and South Aus-
tralia (Palaneeswaran et al. 1999).
Human Resources Teamworking, Partnering, and
Subcontractors
While the human resource itself and human resource
management were commonly considered criteria in the
contractor evaluation systems surveyed, only a few of the
systems specifically invited attention (1) to the potential
for partnering; and (2) to subcontractor teams. For ex-
ample, ‘‘subcontractors and consultants’’ are briefly listed
as a factor under the ‘‘technical capacity’’ criterion group
recommended by CIDA in Australia, as mentioned in the
above paragraph. In an example from the United States,
the Utah Department of Transportation (I-15 1997) doc-
umented how (1) a requirement that prime contractors
perform at least 30% of the work was waived on the I-
15 Corridor Reconstruction Project; (2) ‘‘partnering was
not only desirable, but a must for the project;’’ and (3)
subcontracting opportunities for local contractors and
suppliers were encouraged/facilitated.
Baxendale and Greaves (1997) while recounting the
increasing popularity of client–main contractor partner-
ing, also showed how both subcontractors and main con-
tractors would benefit from incorporating subcontractors
within the partnering orbit and processes. Conversely, a
case study of a partnered project in Hong Kong that did
not involve the many subcontractors revealed resulting
inadequacies in the expected partnering, leading to the
conclusion that ‘‘partnering begins at home’’ in team-
work within the contracting team itself (Dissanayaka and
Kumaraswamy 1997).
It appears that despite the significant extent of sub-
contracting in most construction industries, the evalua-
tion of proposed subcontractors has not yet featured
prominently in contractor selection criteria and meth-
odologies. While some contractors require that subcon-
tractors be approved by the client, this may not be an
appropriate/adequate check in a pressurized operational
phase when delays in agreeing on a series of subcon-
tractors may be counterproductive. It also may not be
possible to probe (at that stage) into the multiple layers
of sub-subcontractors (and below) that eventually
emerge on Hong Kong construction sites, for example.
Therefore, when evaluating potential contractors at
tender stage (or even at registration/prequalification
stages, if feasible) provision should be made to assess at
least (1) the proposed subcontractor selection method-
 ology/criteria; (2) any potential/short-listed subcontrac-
tors; and (3) how well the main contractor/subcontractor
team may operate in a partnering mode with the client’s
project management/design team.
PARTNERING
In order to appreciate the potential impact the part-
nering philosophy can have both on the main contractor/
subcontractor relationship and the subcontractor selec-
tion process, it is worth noting the development of
partnering as well as the main elements of a generic
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partnering relationship. This section does not seek to be
exhaustible in discussing these trends, as much work has
been undertaken in this respect by other commentators,
such as the Reading Construction Forum (Trusting 1995;
The seven 1998), the Construction Industry Institute (In
search 1991), the National Economic Development Of-
fice (Partnering: Contracting 1991), Crowley and Karim
(1995), and the Associated General Contractors of Amer-
ica (Partnering: A concept 1991). However, the follow-
ing will highlight the main relevant themes and points
that were, and should be, borne in mind when develop-
ing partnering relationships and subcontractor selection
criteria.
The adoption of partnering into the construction in-
dustries of the United States, Australia, and the U.K. can
be attributed to the fact that relationships in these in-
dustries were commonly lacking trust, respect, and hon-
esty between professionals, main contractors, and sub-
contractors. This had led to procurement problems, with
claims, litigation, and unsatisfied clients being common.
The 1994 report on the U.K. construction industry by
Sir Michael Latham, entitled Constructing the Team (La-
tham 1994), provided an impetus to improve the rela-
tionships between all parties involved in construction
procurement. Partnering was seen by many as the key to
achieving this improvement. Sir John Egan advocated
the use of partnering in his more recent review of the
U.K. construction industry, Rethinking Construction
(Egan 1998). He wrote that partnering through the sup-
ply chain is a critical approach with which the U.K. con-
struction industry can drive innovation and sustain in-
cremental improvement in performance.
Walter (1998) reported that partnering has been pop-
ularly adopted in the U.K., with national contractors now
prepared to work in a climate of cooperation fostered by
partnering arrangements. Walter found that many firms
were expecting partnering contracts (whether formal or
informal) to account for over two-thirds of their work-
loads in the financial year 1998 to 1999.
One of the most commonly cited definitions for part-
nering is that of the Construction Industry Institute (In
search 1991): ‘‘a long-term commitment between two or
more organisations for the purpose of achieving specific
business objectives by maximising the effectiveness of
each participant’s resources. This requires changing tra-
ditional relationships to a shared culture without regard
to organisational boundaries. The relationship is based
on trust, dedication to common goals, and an under-
50 / JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000
J. Manage. Eng. 2000.16:47-57.
standing of each other’s individual expectations and
values.’’
The vast majority of partnering commentators (Gaede
1995; Trusting 1995; Matthews 1996) discuss partnering
in the context of either project partnering or strategic
partnering. Project partnering is partnering undertaken
on a single project. At the end of the project the part-
nering relationship is terminated and another relationship
may commence on the next project. Project partnering
was pioneered in the U.S. construction industry during
the mid to late 1980s.
Strategic partnering takes place when two or more
firms use partnering on a long-term basis to undertake
more than one construction project, or some continuing
construction activity (Trusting 1995). However, Kubal
(1994) and, more recently, the Reading Construction Fo-
rum (The seven 1998) discuss partnering at an industry-
wide level. Kubal (1994) notes that although partnering
is practiced on fragmented projects, it required national
lobbying in order for partnering to be used across in-
dustry under the correct circumstances. In the U.K., the
Reading Construction Forum (The seven 1998) develop
this point further by stating that new initatives in part-
nering have enabled ‘‘second- and third-generation part-
nering’’ to evolve. Watson (1999) reported that second-
generation partnering was underpinned by the ‘‘seven
pillars’’ of partnering (The seven 1998), these being strat-
egy, membership, equity, integration, benchmarks, pro-
ject processes, and feedback. In the third generation of
partnering the construction firm should be building vir-
tual organizations with its supply chain to provide a
complete service that is efficient, creative, and innova-
tive (Watson 1999).
Table 1 compares four studies on partnering under-
taken between 1991 and 1996 in the United States and
the U.K. It highlights the main elements of partnering
as identified from these studies.
Such consideration of the main elements of both proj-
ect and strategic partnering has been commonplace
within the partnering literature since its first implemen-
tation in the late 1980s and early 1990s. Many com-
mentators [for example, Cook and Hancher (1990), Part-
nering: A concept (1991), Mosley et al. (1991), Sanders
and Moore (1992), Harbuck et al. (1994), Larson (1995),
Trusting (1995), and Matthews (1996)] have discussed
partnering elements, but very few have discussed part-
nering in the context of the main contractor–subcon-
tractor relationship.
Baxendale and Greaves (1997) noted in their survey
of U.K. main contractors that several companies had
identified that they were adopting, or going to adopt,
partnering relationships with their subcontractors in or-
der to improve service and reduce costs. They also note
that many main contractors in the U.K. were at the time
expressing their intentions (within the trade press) to
partner with subcontractors, a view supported by Watson
(1999). Love (1997) points to an episode in the United
States that clearly shows how partnering can facilitate
project performance within the context of the main con-
tractor–subcontractor relationship. However, it can be
 TABLE 1. Comparison of Identified Partnering Elements [Adapted from Matthews (1996)]
Associated General Contractors
of America (Partnering:
A concept 1991) Sanders and Moore (1992)
(1) (2)
Commitment Cooperative management team
Continuous evaluation Cooperation
Equity Open communication
Mutual objectives Group working
Timely responsiveness Common goals
Trust Problem solving
Implementation
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concluded by a scan of the partnering literature that the
impact of partnering on the main contractor–subcontrac-
tor relationships has largely been overlooked. This paper
will seek, in part, to overcome this weakness and discuss
the impact of partnering on subcontractor selection.
METHODOLOGY OF A U.K.-BASED
EUROPEAN CASE STUDY
Introduction
The main contractor who initiated this study believed
that in order to perform more productively it had to work
more closely with its subcontractors and also improve
working relationships. The main contractor formulated a
research strategy aimed at identifying how to create an
environment on-site where it can be clearly demon-
strated that their subcontractors perform more cost-ef-
fectively in meeting customer needs than they can when
working on sites of other main contractors.
Background to Collaborating Contractor
The European main contractor has an annual turnover
in excess of £800 million (1999/2000) in the U.K. alone.
The contractor undertakes traditional, design/build, and
negotiated projects.
Case Study Methodology
In order to formulate an alternative approach to project
partnering and subcontractor selection, a four-stage re-
search methodology was developed by a team of 10 ex-
perts drawn from the main contractor and academia. The
experts agreed that this research methodology enabled
identification of the main areas that had negative and
positive impacts on the main contractor–subcontractor
relationship. This approach elicited opinions on how
subcontractors could improve their dealings with both
this main contractor and others; and how subcontractors
believed that this main contractor and others could im-
prove their dealings with subcontractors and identify
those procedures and elements where a main contractor
was ‘‘good’’ or ‘‘bad’’ as compared to their competitors.
The aims of the four stages were as follows.
Stage 1: Assess Requirements of Subcontractors
from Main Contractor’s Perspective
This stage aimed at assessing the requirements of sub-
JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000 / 51
J. Manage. Eng. 2000.16:47-57.
Reading Construction Forum
Matthews (1996) (Trusting 1995)
(3) (4)
Goals and objectives Free and open communication
Trust Open book costing
Problem resolution Annual review of performance
Commitment Workshops
Continuous evaluation Continuous evaluation
Group working Mutual objectives
Win-win philosophy Problem resolution
Shared risk
Equity
Cooperation
contractors from the main contractor’s perspective in or-
der to ascertain how the operations of each could be
improved, and also at obtaining a holistic view on how
practices and approaches, including those of subcontrac-
tor selection, between the main contractor and subcon-
tractors could be improved and what features of their
relationships were perceived to be important or unim-
portant.
Examples of open-ended questions asked include
• ‘‘What characteristics of a subcontract firm can
have a detrimental effect on the relationship be-
tween it and the main contractor?’’
• ‘‘How do you think the precontract/contract/post-
contract phases of the main contractor’s subcon-
tract process could change to make an improve-
ment on the way the main contractor deals, selects,
and communicates with subcontractors?’’
Stage 2: Assess Requirements of Main
Contractors: Subcontractor’s View
The second stage of the research aimed at assessing
the requirements of main contractors from the subcon-
tractor’s perspective by undertaking a review of features
of a main contractor’s organization, including main con-
tractor selection procedures and criteria, that were per-
ceived to be important or unimportant.
Examples of open-ended questions asked are
• ‘‘When you receive an enquiry/tender for the same
contract from different main contractors, does the
price that you quote differ for each contractor?’’
• ‘‘What is the extent of the difference?’’
• ‘‘Would any preference be given to a particular
main contractor?’’
Stage 3: Compare Main Contractor Performance
to That of Its Competitors
Stage 3 of the research aimed at identifying those
practices and approaches used to procure and manage
subcontractors that were perceived by subcontractors to
be better or worse than the collaborating contractor’s
competitors.
Examples of questions asked include
 • ‘‘How do you rate the feedback you get from the
main contractor on your tender in comparison to
other main contractors: excellent, good, adequate,
poor, or very poor?’’
• ‘‘If a limited number of subcontractors, say four,
were used in tendering, how would this affect the
competitiveness of your bid?’’
Stage 4: Develop Alternative Project Partnering
Approach
The aim of this stage was to develop an alternative
approach to partnering to suit the particular requirements
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of this main contractor, and to improve subcontractor
relationships by taking into consideration the findings of
the first three stages. The particular requirements of the
main contractor were as follows:
1. The main contractor did not want to commit to
long-term relationships without fully understanding
the practicalities of what they were undertaking.
They required, in the first instance, an approach of
developing relationships for a project-by-project
basis only.
2. The main contractor required an approach that pro-
vided both time and cost savings.
3. The approach to partnering required an element of
price competition. This competition was seen to
provide assurances that any price quoted by a sub-
contractor was representative of the current market
price.
4. The new approach would allow the use of more
than one tender subcontractor, as well as employ
their specialist knowledge during all stages of the
project.
In this context it should be noted that the specific de-
tails of the overall partnering approach had been initially
developed by referring to the partnering literature, which
included: Partnering: A concept (1991), In search
(1991), Partnering: Contracting (1991), and Crowley
and Karim (1995). On reviewing the partnering literature
it was concluded that the partnering approaches de-
scribed were primarily applicable to the U.S. construc-
tion industry and had limited application to the U.K.
Also, the models and methods advocated did not appear
to be adequately adaptable and did not allow for the
special needs of U.K. contractor tendering and estimat-
ing. Finally, the approaches developed were primarily
concerned with the client–main contractor relationship.
Sample Size
In the first three stages of this research case study, 217
questionnaires and 59 interviews were completed. Sub-
contractors surveyed ranged from sophisticated E&M or-
ganizations to small ‘‘labor-only’’ groups undertaking
bar-bending, for example. Personnel interviewed were
chosen from those in a hands-on management position.
Sample sizes for each stage were
52 / JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000
J. Manage. Eng. 2000.16:47-57.
• Stage 1: 141 questionnaires and 11 interviews
• Stage 2: 76 questionnaires and 31 interviews
• Stage 3: 17 interviews
Method of Analysis
The questionnaires contained closed (tick-the-box)
and open-ended questions. Closed questions took the
form of a statement that had to be marked in terms of
importance from 1 (no importance) to 6 (most impor-
tant). All statements were given a percentage (%) score,
which was either a positive or negative percentage of the
total score that could be obtained [i.e., a higher positive
score (⫹%) indicated its relative importance, whereas a
negative score (⫺%) indicated its relative unimpor-
tance].
Open-ended questions were analyzed by using a con-
tent analysis identification test. All responses to ques-
tions were recorded using, where possible, a tape re-
corder. Answers to questions were then incorporated into
a computerized database. The database allowed answers
to questions to be recorded in a systematic way that, in
turn, facilitated the overall identification of those issues
that were found to be the most and least prevalent.
Development of Questionnaires
The designs of the questionnaires were based on es-
tablished principles, for example derived from Sinclair
(1975) and Oppenheim (1966). All questionnaires and
interview instruments were developed by means of a test
and revision process. This process tested the content and
understanding of the questionnaires.
Basic subject areas were identified before questions
were formulated. Within all the research stages, the fol-
lowing were identified by industry experts as being im-
portant.
• Main contractor–subcontractor relationship;
• Main contractor–other main contractors relation-
ships;
• Other main contractors–subcontractor relation-
ships;
• Partnering;
• Subcontracting practices and processes; and
• Adversarial practices adopted by the main contrac-
tor, other main contractors, and subcontractors.
Questions to be incorporated into questionnaires were
in the first instance identified by referring to construction
industry literature. Primary sources of literature used
were academic and trade journals. Further questions
were identified by interviewing personnel from the main
contractor and subcontractors.
Research Conclusions of Case Study
The above research elicited observations and general
conclusions that were beneficial within the overall con-
text of this study. For example, conclusions from stage
1 included the following:
 1. Main contractor employees believe that there was
benefit in developing partnering arrangements with
key subcontractors.
2. Supervision and management characteristics were
the most important features of subcontractors from
the main contractor’s perspective.
3. Little consensus was identified on how relation-
ships between the main contractor and its subcon-
tractors could be improved. However, two points
were identified as having possible significance: im-
proving communication, and more teamwork.
4. Positive attitudes were demonstrated as having the
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most positive impact on the relationship between
the main contractor and its subcontractors.
5. Compliance to commitments and the ability of the
subcontractor to respond quickly and correctly to
main contractor needs were confirmed as critical
and important across all divisions of the main con-
tractor.
6. It was established within the research that main
contractor subcontracting process could be im-
proved by more feedback and review of subcon-
tractors primarily within the pre- and postcontract
stage. Other improvements identified included bet-
ter evaluation of subcontractor bids, and allowing
the main contractor site team more involvement in
the selection of subcontractors.
General conclusions from stage 2 can be summarized
as follows:
1. Poor site management was identified as a charac-
teristic that particularly weakened the main con-
tractor–subcontractor relationship. By contrast it
was seen that good site management would have a
particularly positive impact on the subcontractor’s
ability to carry out their work.
2. A better attitude toward subcontractors and more
trust and fair dealing, especially when paying sub-
contractors, were identified as being ways of im-
proving main contractor–subcontractor relation-
ships.
3. Subcontractors should be involved earlier within
the building process to develop mutual understand-
ing of the project.
4. All subcontractors interviewed confirmed that they
were willing to undertake partnering arrangements
in the future.
5. Subcontractors gave certain main contractors pref-
erential treatment.
6. Main contractors placed too much importance on
price to the detriment of quality.
7. Subcontractors have a good understanding of what
is important to main contractors when dealing with
subcontractors.
8. Important issues in improving the main contractor–
subcontractor relationships were payment, com-
munication, feedback, selection, tendering, contract
management, and contract administration.
JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000 / 53
J. Manage. Eng. 2000.16:47-57.
General conclusions from stage 3 include the fol-
lowing:
1. Earlier involvement of subcontractors should take
place at the precontract estimating stage.
2. Benefits of involving subcontractors earlier were
identified as increasing knowledge and understand-
ing of the project, and that the main contractor and
subcontractor can share their specialist knowledge.
3. The most important time for feedback to be given
to subcontractors was at the tender stage. Tender
feedback from the main contractor and other main
contractors was only established as being ‘‘ade-
quate.’’
In stage 4, an overall generic ‘‘project partnering’’ ap-
proach was selected based on an extensive literature re-
view and findings from the previous stages and parallel
research (Matthews 1996). The decision was based pri-
marily on the following factors:
1. As the main contractor did not want to commit to
long-term relationships without fully understanding
the practicalities and legal implications of what
they were undertaking, it was concluded that proj-
ect partnering relationships were most appropriate.
This approach would allow the main contractor to
develop relationships on a project-by-project basis.
2. Although the main contractor understood that a
strategic partnering approach potentially offered
greater time and cost savings, it was aware of its
lack of experience in formal partnering and be-
lieved that successful project partnering relation-
ships could in time develop into longer-term rela-
tionships.
3. The main contractor concluded that it would be
easier and useful, at least in the first instance, to
incorporate an element of price competition into
project partnering.
The new approach would allow the use of the tenderers’/
subcontractors’ specialist knowledge during all stages of
the project.
Partnering Subcontractor Selection Process
The selection process was designed by one of the writ-
ers of this paper, based on the research findings previ-
ously outlined, together with his extensive personal ex-
periences with partnering and subcontracting. Once the
process had been designed, validation took place via in-
ternal approval by experienced main contractor person-
nel. It was then implemented in the main contractor’s
partnering projects throughout the U.K., and eventually
extended to Europe.
The main areas of the partnering approach related to
subcontractor identification, selection, and appoint-
ment are
• Package and company identification;
• First subcontractor interview;
• Second subcontractor interview;
 • Third interview tender clarification; and
• Final subcontractor selection.
Package and Company Identification
The objective of this stage was to identify all major
packages on the project that would benefit from the part-
nering approach. Trades and packages were examined
under the following headings:
• Design content;
• Complexity of construction;
• High subcontract value;
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• Long periods of construction;
• Early commencement of construction;
• High level of aesthetics;
• Long procurement times; and
• Those trades that could ‘‘add value’’ with their
early input.
Key trades/packages that were identified included
structural steel frame, brickwork, mechanical and elec-
trical engineering, ceilings, floors, partitions, stone clad-
ding, atrium glazing, and lifts.
Having identified all trades/packages, names of sub-
contractors were put forward by all project team mem-
bers during a team meeting. The team assessed each
company in order to shorten the list. Subcontractors were
assessed primarily on past performance. Other criteria to
be employed include
• Ability to undertake this quantity of work;
• Ability to produce the required standard of work;
• Ability to undertake the work (not wanting to
‘‘overstretch’’ the subcontractors);
• Positive attitude (past experiences);
• Firm financial background;
• Good in-house design service (where applicable);
• Good standards of management (site and head of-
fice); and
• Main contractor’s desire (if any) to develop a long-
term relationship with the subcontractors.
On conclusion of the team meeting, between 3 and 5
short-listed subcontractors remained for each package.
Each of the subcontractors was invited to the first sub-
contractor interview, also informing them of the type of
project, its location, programmed time, and other basic
data.
First Subcontractor Interview
The first subcontractor interview had three aims:
firstly, to assess the subcontractor’s ability in terms of
attitude, proactiveness, design capability, honesty, back-
ground, and workload; secondly, to introduce the project
and the philosophy of partnering and the team to the
subcontractors; and thirdly, to hand over pricing details
and other relevant information.
The project team was represented by the principal
quantity surveyor, project estimator, project manager (for
primarily construction trades), appropriate engineer (for
54 / JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000
J. Manage. Eng. 2000.16:47-57.
services or structural trades), project design manager,
and in certain instances, the architect for those trades
with high aesthetical content/contributions, and a planner
for those trades with critical programming implications.
The main contractor’s project manager chaired the
meeting. The criteria against which the subcontractors
were to be assessed was developed by the project team
facilitated by an independent party. The subcontractors
were informed at the meeting of the general nature of
the criteria under which their submissions would be eval-
uated. These criteria were
• Understanding of the partnership concept;
• Response to partnering;
• Alternative proposals put forward for their package
(these included design innovation, alternative prod-
uct specification, and value engineering);
• Indicative price;
• Technical ability;
• Enthusiasm for the project;
• Past experience of similar work; and
• Quality awareness.
Assessment of the subcontractors during the meeting
was facilitated by the use of a pro forma that was com-
pleted by the project team members at the meeting. The
pro forma was used during the final stages of the sub-
contractor selection process. Fig. 1 shows the structure
and nature of the pro forma used. While arguably sub-
jective, these assessments, when combined and com-
pared across many subcontractors, were found to yield
reasonable outcomes. Averages were taken if necessary
(or agreement reached at the meeting) if the same sub-
contractor received different ratings at the outset.
Information handed to all subcontractors at this inter-
view included maximum cost plan prices, drawings of
general arrangements and sections, specifications, and
approximate quantities. The structure and agenda for this
meeting can be seen in Appendix I. Each interview was
scheduled to last for one hour, with between three and
six interviews taking place in any particular day. It was
common for all subcontractors concerned with a partic-
ular trade to be interviewed in one day.
In some situations, the first subcontractor interview
was only used to evaluate subcontractors, as pricing in-
formation was not available.
Second Subcontractor Interview: Project Briefing
In the scenario where the first interview acted as an
evaluation interview only, the second interview was used
to hand over pricing documentation to the subcontractor,
as well as to offer another opportunity to the subcon-
tractor to meet members of the project team if he/she
had not fully understood the requirements of the project
from the first interview.
Tender Clarification
This interview was set for those instances where the
first interview acted as an initial subcontractor evaluation
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FIG. 1. Pro Forma Employed for Subcontractor Interview (Each Subcontractor Is Marked from Total Score of 10 for Each Cri-
terion. Also, Each Criterion Could Be Weighted Depending on Its Relative Importance, if Required)

whilst the second was used to hand over pricing docu-
mentation. The aim of this interview is to give both the
main contractor and the subcontractor the opportunity to
discuss the tender and check for compliance and accu-
racy following the return of the tender documentation.
Subcontractor Selection
The final decision on what subcontractor was to be
employed was left primarily to the main contractor, al-
though the client’s quantity surveyor had the opportunity
to raise any relevant issues.
The selection was made on the criteria communicated
to the subcontractor during the first interview. The se-
lected subcontractor was informed by the project esti-
mator that the main contractor wished to work with him/
her on the project. An indicative price and budget rates
were agreed upon based on the clients’ cost plan.
CONCLUSIONS
Twenty separate debriefing interviews with both suc-
cessful and unsuccessful subcontractors revealed that
JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000 / 55
they had consciously reduced their pricing levels by an
average of around 10% (varying only within a close
range), in recognition of savings that they anticipated
from the improved working relationships and arrange-
ments. These enhanced operational efficiencies were ex-
pected to arise from the partnering arrangements. Con-
fidence in such direct and tangible benefits from
partnering was perhaps inspired by (1) acceptance of the
main contractor’s philosophy that industry needed a rad-
ically changed approach to doing business; (2) increased
acceptance of partnering principles in the industry in
general; (3) benefits that were seen to have emerged
from such client–main contractor partnering; and (3)
commitment to main contractor–subcontractor partner-
ing demonstrated by this main contractor in the prelim-
inary meetings and throughout the entire selection pro-
cess.
Follow-up interviews with over 40 project participants
(30 were formal, while about 12 were informal) also
elicited a general consensus of much better working re-
lationships between and within teams having been gen-

J. Manage. Eng. 2000.16:47-57.

 erated in this pilot project. It was also found much easier
to control time and cost performance levels and achieve
higher quality levels given the close cooperation and
openness/transparency that facilitated earlier anticipation
and minimization of potential problems. However, it was
also noted during the follow-up interviews that the
tender costs during this partnering approach were greater
than those found on competitively tendered projects.
The foregoing observations from the case study con-
firmed the value of integrating subcontractors into part-
nering arrangements. This also complemented observa-
tions in Hong Kong on the deficiencies of project
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partnering arrangements that did not include subcontrac-
tors. It is also consistent with the general philosophy of
partnering, in integrating all key participants and incul-
cating a common sense of project purpose, commitment,
teamwork, and problem-solving.
This established need for main contractor–subcontrac-
tor partnering must therefore be incorporated in the sub-
contractor selection criteria and reflected in the selection
process itself. The case study described in this paper
demonstrates a successful application in this respect. The
needs to incorporate other nonprice criteria in selecting
subcontractors can also be addressed by drawing on ap-
propriate approaches from innovative and ‘‘better prac-
tice’’ contractor selection methodologies that are also
scanned in this paper. Examples include the incorpora-
tion of (1) indicators of responsiveness, responsibility,
and competency; (2) performance ratings derived from
previous projects; and (3) capacity ratings of potential
participants (including subcontractors).
Conversely, it is also concluded that main contractor
selection itself should incorporate considerations of the
type of subcontractors, subcontracting arrangements,
and/or subcontractor selection systems that are envisaged
by the various potential main contractors (i.e., at pre-
qualification or bid stages).
The increasing importance of construction subcon-
tracting thus reinforces the criticality of comprehensive
selection methodologies that draw on experiences from
other parts of the supply chain, while developing appro-
priate arrangements that would enhance the overall ef-
fectiveness and efficiency of the total construction proj-
ect team.
APPENDIX I. FIRST STAGE
SUBCONTRACTOR INTERVIEW AGENDA
The structure of each interview is divided into three
main stages:
1. Introduction to project (15 min)
2. Technical/design details (15 min)
3. Questions and answers where subcontractor takes
the lead (10 min)
Agenda for Interview
1. Introduction to project
a. Location (land surrounding site, access)
b. Introduction to client
56 / JOURNAL OF MANAGEMENT IN ENGINEERING / MAY/JUNE 2000
J. Manage. Eng. 2000.16:47-57.
c. Final tenant
d. Other projects on development
e. Design philosophy
f. Future awards
2. Main contractor perspective
a. Previous development tendering
b. Negotiated design and construct through presen-
tation
c. Present flip charts of presentation
(1) Client concerns
(2) Client needs
(3) How main contractor addressed concerns and
needs
d. What main contractor wants from subcontractors
e. Go away and think about project
(1) Achieve cost efficiency
3. Technical/design details
a. Technical details
b. Who will supply what (attendance)
c. What main contractor needs from subcontractor
(cost efficient with design input)
d. Use subcontractor knowledge/experience
e. Examine information from main contractor in or-
der to build up price from
(1) Drawings
(2) Specifications
(3) Details
(4) Form of subcontract
(5) Prelims
f. What subcontractor can use in terms of plant
g. Performance details of system
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