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IDENTIFICATION OF CHALLENGES FACED BY BUMIPUTRA CONTRACTORS AND ROLES OF LOCAL GOVERNMENT IN ENSURING A SUCCESSFUL COMPLETION OF A PROJECT

ABDUL RAHMAN AYUB, JANIDAH EMAN
Faculty of Civil Engineering, UiTM Pulau Pinang
13500 Permatang Pauh, Pulau Pinang

Contractor’s ability to complete government’s projects within time, cost and quality as stipulated in the contract documents is a challenging issue that requires immediate rectification plan by all parties involved in the construction industries, including local government authorities. Quality projects come from quality contractors. Under the 9^th. Malaysian Plan (RMK9) just announced by the government, the total development spending will go up to RM200 Billion and the Construction Sector will be the direct beneficiary of the RMK9. However, as reported by Utusan Malaysia on 8^th. February 2006, almost 40 % of the 34,241 registered Class F Contractors are not competent enough to undertake the government’s projects.

Delays or late deliveries, sub-standard workmanship and materials, poor safety management on sites and cost over-run of government’s projects are some the issues that have been seriously discussed by the government. Several actions can be taken by the government in ensuring a quality project such as improving the contractors selection process whereby only competent contractors should be allowed to participate in government projects, all design calculations and construction plan must be approved by professional engineers and subject to audit process by the Public Works Department and lastly more training in design, monitoring and supervising skills should be given to all personnel involved in the process.

Failures to perform to the quality expectations are a common cause of problems among the bumiputera contractors in government projects. The quality of contractors in implementing the government projects have often been subject to questions, criticisms and underrating and completion of a project. Improving the contractors’ selection process is one of the preventive action plans to overcome the quality problems in government projects.

Project failures is not only about delays, cost over-run or shoddy workmanship but it also include, among innumerable others, environmental degradation and physical eye-sores, lack of green fields or playgrounds, deforestation of all kind of pollution, pervasive soil erosion, flash floods, ozone depletion and mediocre building designs.

Projects failures create a lot problem directly or indirectly to all parties involved in the project such as the government or its agencies, the community where the project is implemented and the project’s contractor whose reputation and opportunity to secure future contracts will be at stake.

Project failures are due to variety of factors but what is more important is to search for the solutions and ways to prevent future occurance of the problems. The reasons for project failures especially among the bumiputera contractors should be looked as challenges that need to be highlighted especially when considering the fact that certain government projects are restricted for the bumiputera contractors. Therefore, to ensure a successful completion of a project, the procedures for award of contracts need to be evaluated and appraised to ensure that only the best contractor for the job will we selected.

It is the aim of this paper to study the causes of delay by referring to a case study and based on the responses by parties involved in the construction, the main causes for the project failure will be analysed and identified. From the responses, questionnaires and data analysis we will check the validity of the following hypothesis:

“The main challenges in ensuring a successful project are to ensure a proper planning and a comprehensive, thorough, in-depth and detailed feasibility studies is done by the contractor at the beginning of the project”.

Managing projects within time, cost and performance is easier said than done. As shown in Figure 3.0, time, cost and performance are the main constraints of a project. If the project is executed for an outside customer, then the project has a fourth constraint which is good customer relation or customer friendly. The definition of project success also has been extended or modified to include completion:

There are several factors that are important in ensuring a successful completion of a project. Those factors are:

1. A good field construction representative must be present to represent the interest of the owner and designer

2. Availability of good and detailed construction schedule that is developed by the contractor of the project

3. A good project control system must be developed to monitor, measure and evaluate the cost, schedule, labor-hours and quality of works.

As mentioned above, a good successful completion depends very much on the ability of the owner representative or project manager to direct and supervise the project from beginning to the end. Some important roles of a project manager are listed below:

1. The project manager must define the project, reduce the project to a set of manageable task

2. The project manager must set the final goal of a project and must motivate the project team members to complete the project on time

3. A project manager must be equipped with technical skills. These should include financial planning, contract management, creative thinking and problem solving techniques

Contractors are independent business organizations and are awarded the projects to produce the required end product as stipulated in the contract documents. In the case of the owner and the contractor may disagree on certain things, the achievement of the end product must always be the top priority of both parties. A good relationship between owner and the project contractor must be maintained so that the contractor’s expertise, labor and equipment can be best utilised to achieve the objectives of the project. The contractor is also required to produce a quality control plan to maintain a job surveillance of its own, to perform tests and keep records to ensure the works conform to the contract requirements. The owner should monitor and supervise the contractor’s quality plan and make a sport checks inspection from time to time during the construction process (Oberlender, 1993)

Project failure is, therefore, defined as project that does not meet the contract deadline, exceed the project contract cost, does not meet the required contract specification and quality and does not fulfil the customer friendly requirements. The following are eight (8) main reasons considered to be the reasons for project failures in the case study:

1. Insufficient instruction and information in the contract specification, drawing and design

3. Inefficient and ineffective planning and management by the owner, contractor and designer

The guidelines for identifying the causes of project failures or challenges faced by bumiputera contractors as outlined in this paper, is based on a range of data. These include:

A Case Study referred to in this paper is a project awarded to Bumiputera Contractor which has exceeded the completion time as stipulated in the contract documents. The project is the construction of a lecture and examination hall for a public university. The project value was RM1, 994,000.00. The project was categorised as a Fast Track Project. The actual duration of the project was 6 months. Since the project completion was delayed due to acceptable and excusable reasons, two stages of extension were issued. First extension lasted for 63 days and second one lasted for 50 days. After the extension time was exhausted, the project was declared late and Certificate of Non-Completion was issued. The penalty was imposed at RM505.00 per day for 57 days. The project was finally completed and handed over to the owner 87 days after the Certificate of Non-Completion or 200 days after the actual contract completion time.

In this study, questionnaires related to the causes of delay for the project were distributed among the parties involved in the construction such as engineers, site supervisors, technicians and the owner’s project manager.

In this study, interviews and questionnaires are conducted and distributed to 20 team members of the projects. A total of 14 responses were returned back and analysed. The questionnaires listed the probable causes of delay for the project. Respondents were requested to mark the degree of contribution of each cause of delay based on the range or scale 1 to 8.

Causes of Delay	Descriptions
A	Insufficient instruction and information in the contract specification, drawing and design
B	Lack of construction materials and machineries
C	Inefficient and ineffective planning and management by the owner, contractor and designer
D	Lack of staff and labours
E	Changed Conditions/Differing Site Conditions
F	Inexperienced labors
G	Lack of technical knowledge background among the contractor and the owner
H	Communication problems

Causes of Delay	Degree of Weightage Contributions Toward Delay								Total Weightage
Causes of Delay	8	7	6	5	4	3	2	1	Total Weightage
A	0(0)	2(14)	0(0)	1(5)	0(0)	3(9)	5(10)	3(3)	41
B	0(0)	0(0)	4(24)	1(5)	1(4)	1(3)	3(6)	4(4)	46
C	8(64)	2(14)	2(12)	2(10)	0(0)	0(0)	0(0)	0(0)	100
D	4(32)	4(28)	2(12)	2(10)	2(8)	0(0)	0(0)	0(0)	90
E	0(0)	1(7)	0(0)	1(5)	0(0)	2(6)	5(10)	5(5)	33
F	0(0)	0(0)	4(24)	2(10)	2(8)	1(3)	4(8)	1(1)	54
G	4(32)	3(21)	2(12)	3(15)	1(4)	1(3)	0(0)	0(0)	87
H	4(32)	2(14)	0(0)	4(20)	2(8)	1(3)	1(2)	0(0)	79

Based on Table 7.2, the first column in the table represents the degree of contribution to the causes of delay of project (A, B, C, D, E, F, G, and H).

The numbers outside bracket represent the number of respondents who had chosen the specific cause of delay with a certain degree of contribution towards delay.

Total Contribution Weightage is summation of number of respondents multiplied by the degree of contribution for that specific cause of Delay.

The last column in the Table 7.2 shows the total overall contribution weightage toward causes of delay.

Total overall contribution weightage shown in Table 7.2 shows the cause of delay with maximum contribution weightage which is cause of delay C which is “Inefficient and ineffective planning and management by the owner, contractor and designer “with a weightage of 100. The lowest weightage is the cause of delay E which is “Changed Conditions/Differing Site Conditions”

From the results of the questionnaires, the majority of the respondents were in the opinion that the main cause of delay for the project is “Inefficient and ineffective planning and management by the owner, contractor and designer”. The majority of the respondents also think that “Changed conditions/Differing Site Conditions” was the least cause of delay in the project.

Ranking of the causes of delay based on the contribution weightage is shown in Table 7.3 below.

Ranking	Cause of Delay	Description
1	C	Inefficient and ineffective project planning and management by the owner, contractor and designer
2	D	Lack of staff and labours
3	G	Lack of technical knowledge background among the contractor and the owner
4	H	Communication problems
5	F	Inexperienced labors
6	B	Lack of construction materials and machineries
7	A	Insufficient instruction and information in the contract specification, drawing and design
8	E	Changed Conditions/Differing Site Conditions

The causes of delay as shown in Table 7.3 are some of the major challenges and issues faced by Bumiputera Contractors in the Construction Industry. From the study, it is shown that with contribution weightage of 100, the main cause of the project delay is due to inefficient and ineffective project planning and management by the owner, contractor and designer.

The study also shows that with contributing weightage of 33, the least cause of delay in the project was due to the changed conditions or differing site conditions. The second cause of delay was due to lack of staff and labors followed by lack of technical knowledge background among the contractor and the owner. Other causes of delay in there ranking are due to communication problems, inexperienced labor, lack of construction materials and machineries and lastly insufficient instruction and information in the contract specification, drawing and design.

The causes of delay in a project are not limited to the list of causes of delay in the ranking. There are some other major causes of delay not included in the list. The other major causes of delay or challenges in project are shown in Table 8.1 below:

The list of causes of delay and challenges in ensuring a successful project is actually endless. What is more important in ensuring a sucessful project is by taking necessary steps to prevent those problems from happening. In fact, the biggest challenge of Bumiputera Contractors in ensuring a successful project is the effort of putting in place necessary preventive actions so that any cause of delay will not affect or hamper the progress rate of their project.

The local authoritiy as the owner or the end-user of any project under its jurisdiction may have certain disagreements with the project contractor during the implementation process of a project. Nevertheless, the achievement of the end product must always be the top priority of both parties. As far as possible, a good relationship between the owner and the project contractor must be maintained so that the contractor’s expertise, labor and and equipment can be best utilised to achieve the objectives of the project. Apart from that, the contractor should be required to produce a quality control plan to maintain a job surveillance of its own, to perform tests and keep records to ensure the works conform to the contract requirements. The local authority should monitor and supervise the contractor’s quality plan and make a sport checks inspection from time to time during the construction process.

However, in any case, prevention is better than cure. A quality project will only come from a quality contractor. Therefore, the procedures for award and contracts need to be evaluated and appraised so that only the best qualified, credible and competent contractors will be selected for the jobs. It is no longer wise and practical to select a contractor based on the lowest bid. Some other factors such as the possibility of hidden cost due to misinterpretation of contract documents, variation orders or manipulation of contract clauses need to be taken into consideration. The process and procedures for the selection of contractors must be performance-based. Table 8.2 shows some the recommended criterias that can be used by the local authority during the pre-qualification process of contractors.

Based on the results of the data analysis for the causes of delay in the case study following conclusion can be made:

“The main challenge in ensuring a successful project is to ensure a proper planning and a comprehensive, thorough, in-depth and detailed feasibility studies is done by the contractor at the beginning of the project”.

However, the biggest challenge for Bumiputera Contractors in ensuring a successful project is putting in place the necessary preventive action plans so that the unnecessary delay will not affect the progress rate of their project.

Apart from that, the local authority also should ensure that the procedures for award and contracts need to be evaluated and appraised so that only the best qualified, credible and competent contractors will be selected for the jobs.

Plans for further researches should include a study on the past performances of Bumiputera Contractors and establishment of preventive action plans for Bumiputera Contractors in ensuring a successful project.

The permission granted by the Director of UiTM Pulau Pinang to undertake this study is gratefully acknowledged. Deep appreciation also goes to Secretariat of ICLG 2006 for giving the opportunity for this paper to be presented in the International Conference of Local Governments 2006. Any opinion expressed is solely the writer’s and do not necessarily reflect the view of the UiTM Pulau Pinang.