King Fahd University of Petroleum and Minerals Department of Construction Engineering and Management Presented to: Dr. Sadi Assaf CEM 520 Class Causes of Contractor’s Failures in Saudi Arabia By: Adel Al-Barrak June 1993 Presented By: Tariq Al-Wabil 28 December 2003

OBJECTIVES RESEARCH METHODOLOGY RESULTS CONCLUSION RECOMMENDATION Q & A GUIDELINES Causes of Contractor’s Failures in Saudi Arabia

ٱ OBJECTIVES To undertake a comprehensive analysis of the most important factors that cause business failure among contractors. To identify and analyze the most severe factors causing failure in Saudi Arabia. To test the hypothesis that different grades of contractors, generally agree on the severity of failure. Causes of Contractor’s Failures in Saudi Arabia

ٱ RESEARCH METHODOLOGY Questionnaire Design. Part 1 : Purpose of the survey. Part 2 : General Information. Part 3 : Causes of Failures. Causes of Contractor’s Failures in Saudi Arabia

ٱ RESEARCH METHODOLOGY Questionnaire Design. Part 1 : Purpose of the survey. Part 2 : General Information. Part 3 : Causes of Failures. Causes of Contractor’s Failures in Saudi Arabia

ٱ RESEARCH METHODOLOGY Questionnaire Design. Part 1 : Purpose of the survey. Part 2 : General Information. Part 3 : Causes of Failures. Causes of Contractor’s Failures in Saudi Arabia

ٱ RESEARCH METHODOLOGY Questionnaire Design. Part 1 : Purpose of the survey. Part 2 : General Information. Part 3 : Causes of Failures. Causes of Contractor’s Failures in Saudi Arabia Statistical Sampling. Classification of Contractors. Sample size Information.

Contractor Classification Certificate Causes of Contractor’s Failures in Saudi Arabia

Degrees Financial Limits of Saudi Contractor#Field Degree (In Millions Riyal) 5 th 4 th 3 rd 2 nd 1 st Roads Water and sewage works Industrial Works Marine Works Buildings Electrical Works Mechanical Works Electronic Works DamsLandscaping Slaughter Houses Cities Cleaning & Hauling of garbage Parks & recreation grounds Maintenance Medical Centresb Maintenance Wells Drilling More than 300 More than 200 More than 100 More than 10 Causes of Contractor’s Failures in Saudi Arabia

ٱ RESEARCH METHODOLOGY Questionnaire Design. Part 1 : Purpose of the survey. Part 2 : General Information. Part 3 : Causes of Failures. Causes of Contractor’s Failures in Saudi Arabia Statistical Sampling. Classification of Contractors. Sample size Information.

Sample Size Information hStrataStrata Population N (h) Sample Size Percent of Sample to Population Size Prop. Sample 1 Group One %27.9% 2 Group Two %39.7% 3 Group Three %32.4% %100% ٱ RESEARCH METHODOLOGY

ٱ RESULTS STATISTICAL METHODS. Causes of Contractor’s Failures in Saudi Arabia STATISTICAL METHODS CROSS TABULATION STATISTICAL TECHNIQUES CORRELATIONRANKING Specialty Experience Volume of Business Number of Workers Mean Standard Deviation Standard Error of Mean Confidence Interval Coefficient of Variation Spearman Partial Multiple Grade One & Two Grade Three Grade Four

ٱ RESULTS MAJOR FINDINGS. Causes of Contractor’s Failures in Saudi Arabia Finance Causes % Environmental Causes 23.7 % Managerial Causes % Expansion Causes 21.7 %

ٱ RESULTS 1 - Project cost estimation > The Owner’s budget = Lowest Price. 2 - Comparison Between Contractors. 3 – Early Planning for the Project. 4 – Not Qualified Causes of Contractor’s Failures in Saudi Arabia Low Price + Low Quality.

ٱ RECOMMENDATIONS Qualified Owner Improvement of estimation. No. of payment, late payment. Two committees (organization/cash flow) Motivating Workers Long term planning. Causes of Contractor’s Failures in Saudi Arabia

ٱ CONCLUSION Insufficient Experience. Poor Estimation. Anyone could become a contractor. Cash flow Problem. Labor productivity & Improvement. Bad Decisions “One Man Role’ Neglect. Managerial Maturity. Causes of Contractor’s Failures in Saudi Arabia

Q & A Causes of Contractor’s Failures in Saudi Arabia

Thank You Causes of Contractor’s Failures in Saudi Arabia