Many projects, particularly in the energy sector, suffer from problems and ambiguities that exist in the buyout phase of projects and result in massive time and cost overruns. Establishing an appropriate subcontracting strategy in an industrial project is a multifaceted practice in which many factors are involved, yet the associated issues are seldom acknowledged. This study first investigates the relevant problems, and then identifies and analyzes the important factors influencing subcontracting strategies from a general contractor’s point of view. The analysis is based on two questionnaire surveys and interviews administered to 40 practitioners who were involved in seven Lump-Sum-Turn-Key projects in companies operating as general contractors in execution of large-scale hydro power plants. Twenty-seven problems associated with, and 32 factors affecting subcontracting practices have been identified, analyzed and rank-ordered based on their relative importance parameters. The study also provides guidelines and recommendations regarding actions that need to be taken by general contractors to effectively develop an appropriate subcontracting strategy, enhance existing practices, and accordingly curtail the relevant time and cost overruns.
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