Quality Performance of Multi-layered Subcontracting Practices in Malaysian Construction Industry

Abstract

Multilayer subcontracting system is widely used within construction industry for better efficiency of subcontractors’ operation due to their unique skills. However, the practice raises poor quality products in construction practice and contributes to poor project performance. Therefore, this study was conducted with the objectives to investigate the practice of multilayer subcontracting in Malaysian construction industry, to identify the problems arisen from multilayer subcontracting and to identify the methods for improvement of quality performance by multilayer subcontracting. A questionnaire survey was conducted. Based on the results, implementation of multilayer subcontracting system contributes largely to the poor performance across all major aspects including ineffectively time and cost management, quality works deficiency and poor communication and coordination performance. With various layers, the long communication channel causes various problems such as less control on bottom layers subcontractors, communication errors with the consequent of extra cost and time incurred due to abortive and remedial works are being taken. Recommendations for improving the practice are suggested to enhance prequalification of subcontractors, restrain the use of “supply-and-fix” subcontracting arrangement, and formulate an appropriate subcontractor evaluation system. The findings of this study provided a baseline in examining the multilayer subcontracting practices among main contractors and subcontractors and exploring the areas where the improvements can be made for obtaining the benefits of using this practice.

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“…Work conditions have worsened globally in the construction industry since the 1970s due to the changes in employment regimes in terms of wage schemes, work hours, social security inclusion, and occupational health and safety (OHS) [ 1 , 2 ]. The rapidly disseminated subcontracting led to the recruitment of workers with lower-tier subcontractors who do not have the competency to adapt to labor standards and intend to dismiss them when not appropriately inspected [ 3 ]. Despite its extensive employment and value-added contributions [ 4 , 5 ], the construction industry attracted attention negatively as a leader in occupational accidents [ 6 ].…”

“…Subcontracting has become a permanent employment strategy in most countries due to the peculiar nature of the construction product which is immobile, geographically dispersed, and varies in size and composition [ 22 ]. The requirements of particular expertise, advanced equipment, and enormous investment cost have made multi-layered subcontracting a norm in the industry [ 3 ]. Workers are employed in insecure conditions in the subcontracting system far from collective bargaining opportunities, and they can limitedly benefit from OHS training.…”

“…Multi-layered subcontracting challenges the project management, coordination, and supervision in construction for all partners (contractors, clients, and project management teams). It blurs wage and compensation claims [ 3 ] and increases OHS incidences and accidents, especially for subcontractors’ employees [ 25 ]. Thus, by the diffusion of subcontracting, the construction industry becomes characterized by an increased risk of work accidents and worker rights violations [ 26 , 27 , 28 ].…”