Evaluation of Subcontractor Selection Criteria and Comparison With Their Financial Performance Indicators


  • Stefan Koprivica Faculty of Civil Engineering and Management, University Union - Nikola Tesla, Belgrade, Serbia


Construction industry, Subcontractor selection, Performance evaluation, Financial indicators, Decision-making


The successful selection of subcontractors is a crucial process for any construction project. Many factors affect the subcontractor selection, and in most cases, the subcontractor is chosen based on the lowest bid. However, selecting an improper subcontractor can cause delay of works and delay in the project, low work quality, and additional resources. As the research methodology, a survey was carried out by 30 project managers, construction managers and site engineers participating in the construction sector as Main Contractor. This survey aimed to evaluate 20 subcontractors based on the evaluator's experience. For each subcontractor, financial performance indicators were calculated. The paper presents the connection between the survey results and financial ratios, improving the subcontractor's selection and the Main Contractor's decision-making process.


Apostola, T., Aretoulis, G. N., Papaioannou, P., & Kalfakakou, G. P. (2013). Performance Analysis of Construction Enterprises using Financial Ratios’ groupings: An application in the British Construction Industry.

Arslan, G., Kivrak, S., Birgonul, M. T., & Dikmen, I. (2008). Improving sub-contractor selection process in construction projects: Web-based sub-contractor evaluation system (WEBSES). Automation in Construction, 17(4), 480-488.

Cooke, B., & Williams, P. (2013). Construction planning, programming and control. John Wiley & Sons.

Darvish, M., Yasaei, M., & Saeedi, A. (2009). Application of the graph theory and matrix methods to contractor ranking. International Journal of Project Management, 27(6), 610-619.

El-khalek, H. A., Aziz, R. F., & Morgan, E. S. (2019). Identification of construction subcontractor prequalification evaluation criteria and their impact on project success. Alexandria Engineering Journal, 58(1), 217-223.

El-Sawalhi, N., Eaton, D., & Rustom, R. (2007). Contractor pre-qualification model: State-of-the-art. International journal of project management, 25(5), 465-474.

Hegazy, M., & Hegazy, S. (2012). The development of key financial performance indicators for UK construction companies. Accounting, Accountability & Performance, 17(1/2), 49-77.

Kim, D., Oh, W., Yun, J., Youn, J., Do, S., & Lee, D. (2021). Development of Key Performance Indicators for Measuring the Management Performance of Small Construction Firms in Korea. Sustainability, 13(11), 6166.

Marzouk, M. M., El Kherbawy, A. A., & Khalifa, M. (2013). Factors influencing sub-contractors selection in construction projects. Hbrc Journal, 9(2), 150-158.

Mbachu, J. (2008). Conceptual framework for the assessment of subcontractors' eligibility and performance in the construction industry. Construction Management and Economics, 26(5), 471-484.

Mohamad, H. H., Ibrahim, A. H., & Massoud, H. H. (2013). Assessment of the expected construction company’s net profit using neural network and multiple regression models. Ain Shams Engineering Journal, 4(3), 375-385.

Okoroh, M. I., & Torrance, V. B. (1999). A model for subcontractor selection in refurbishment projects. Construction Management & Economics, 17(3), 315-327.

Polat, G., Kaplan, B., & Bingol, B. N. (2015). Subcontractor selection using genetic algorithm. Procedia Engineering, 123, 432-440.

Tserng, H. P., Chen, P. C., Huang, W. H., Lei, M. C., & Tran, Q. H. (2014). Prediction of default probability for construction firms using the logit model. Journal of civil engineering and management, 20(2), 247-255.

Turskis, Z. (2008). Multi‐attribute contractors ranking method by applying ordering of feasible alternatives of solutions in terms of preferability technique. Technological and Economic Development of Economy, 14(2), 224-239.

Ulubeyli, S., Kazaz, A., & Arslan, V. (2017). Decision criteria for subcontractor selection in international construction projects. In Proceedings of the International Conference on Civil and Environmental Engineering (ICOCEE), May (pp. 8-10).

Yu, I., Kim, K., Jung, Y., & Chin, S. (2007). Comparable performance measurement system for construction companies. Journal of Management in Engineering, 23(3), 131-139.



How to Cite

Koprivica, S. . (2022). Evaluation of Subcontractor Selection Criteria and Comparison With Their Financial Performance Indicators. Operations Research and Engineering Letters, 1(1), 36–43. Retrieved from http://orel.unionnikolatesla.edu.rs/index.php/orel/article/view/16