Applying claim reduction criteria in selecting efficient contractors with the two-step grey data envelopment analysis approach

Abstract

PurposeThe application of correct contractor selection strategies leads to the selection of a qualified contractor and, as a result, the on-time delivery of the project with the desired quality and within the predetermined budgetary constraints. For this reason, evaluating and qualifying contractors before reviewing the proposed prices has been considered an important issue. One factor that disrupts the project completion process and the failure to achieve pre-planned goals effectively is the occurrence of contractors' disputes and claims in projects. To this end, the present study explores claim-reduction strategies for selecting effective contractors in an uncertain environment to reduce possible problems.Design/methodology/approachThe two-step grey data envelopment analysis (GDEA) approach was used to measure efficiency as a powerful tool in selecting efficient contractors during tenders. This approach can extend the applications of multi-criteria decision-making (MCDM) models. In other words, given some uncertainties, the unavailability of some data, and the problems with the DEA model, the two-step GDEA model was used to rank the contractors. The data confirmed the satisfactory outcomes from the selected model.FindingsThe preliminary assessment of contractors is a pre-tendering process and a step in categorizing contractors, excluding contractors lacking required qualifications, and selecting efficient contractors. At first, it will help the employer to exclude inexperienced and unqualified contractors, save resources and time, reduce threats, replace opportunities with threats, and reduce material and non-material costs during the completion of the project until the projects are put into operation. Consequently, this approach reduces claims to a minimum level and increases the organization's effective material and non-material profit.Originality/valueOil and gas plans and projects have a significant, sensitive, and decisive role in the economic, social, political, cultural, infrastructural, and all-round development of Iran; This is while most of the financial resources needed to implement the development and programs across the country come from oil revenues. Studies have indicated that despite the importance of these plans and projects, many of them are not completed successfully, and this causes irreparable losses to the country's economy and development in various fields.HighlightThe findings of this study can be used by organizations to select more effective contractors to assign projects and plans to them.The preliminary assessment of contractors is a pre-tendering process and a step in categorizing contractors, excluding contractors who lack required qualifications, and finally selecting efficient contractors.At first, it will help the employer to exclude inexperienced and unqualified contractors, save resources and time, reduce threats, replace opportunities with threats, and reduce material and non-material costs during the completion of the project until the projects are put into operation.This approach also gives credit to the employer during the execution period and contributes to assessing unqualified contractors and reducing the temptation to hand over the project to an unqualified contractor but with a lower bid price.Consequently, this approach reduces claims to a minimum level and increases the effective material and non-material profit of the organization.Moreover, it provides an extra-organizational evaluation for contractors, motivating them to upgrade their capabilities and optimally allocate material and non-material resources, especially human resources.