The selection of subcontractors: is price the major factor?

The philosophy of ‘lowest price wins’ in the selection of subcontractors often leads to problems with quality of work and claims for further costs. Since Latham (1994), many models have offered selection methods that take account of a wide range of quality criteria as well as price. A review of existing literature and models enables a list of selection criteria to be drawn up and a survey ascertains which selection criteria are considered most important and whether opinions change when faced with different types of project. The results of the questionnaire are analysed through the use of Simple Relative Indexes, Spearman’s Rank Correlation Coefficient tests and a number of T-tests. It is established that price is no longer considered the only important factor in subcontractor selection, and that health and safety, past performance, and insurance cover are considered equally important and, in some scenarios, more important than price.