Construction industry contains many small and medium sized companies which depend on one another in a construction project. The practice of subcontracting is common in the construction industry; it has been observed that a major portion of any construction project is handed over to subcontractors by the main contractor. Subcontractors have to work simultaneously with other subcontractors during a construction project but real cooperative behavior among them is rare.
The main contractor mainly acts as team leader or project manager of these subcontractors. Generally clients and developers consider big contractors, very important stakeholders in construction projects. Very little focus is paid to subcontractors and supplier which overall execute major portion of the project and they are the important part of construction supply chain. A problem which commonly arises in construction projects is that these subcontractors are contractually bound to the main contractor and not to one another while the construction process flows from one subcontractor to the other.
Therefore it is necessary that these partner organizations have cooperative relationships with one another. These cooperative relationships will certainly prove very beneficial not only for these partner organizations but also for the main contractor and the client, whenever they will work together. The main focus of this study is Pakistan construction industry. In Pakistan construction industry, lack of cooperation is generally observed among participants, in construction projects.
In this thesis, previous literature has been reviewed to identify the necessity and nature of cooperation among subcontractors in the construction industry. An out come of a survey is also discussed. The survey was carried out in form of interviews/questionnaires among contractors and subcontractors working in construction industry of Pakistan. The purpose of survey was to investigate the relationships among main contractors and subcontractors. Development of suggestions to create cooperation among these parties during construction projects was also the aim of this survey. In order to explore conditions for cooperation in construction supply chain, analytical modeling is carried out with the help of game theory.
Game theory is an interesting process for analysis of competitive situations. The result of this analysis provides fundamental suggestions for cooperation among construction supply chain members.
In view of the literature research, survey findings and analytical modeling, a strategic model has been developed. Recommendations have been suggested in strategic model to achieve better coordination among different partners in construction projects.
Due to the increased role of subcontractors in construction projects, provision of balanced subcontract conditions have become very important.
Subcontract conditions have been reformed and introduced in construction industry all over the world. Keeping in view the contract laws in Pakistan construction industry, standard subcontract conditions have been developed. These fundamental subcontract conditions will helpful in preparation of a balanced subcontract for any organization.