Subcontracting Analysis (Cont\'d) What Factors

Subcontracting Analysis (Cont'd)

What factors should be evaluated when selecting a subcontractor? What are the typical methods used to evaluate these factors and are these methods effective?

Outsourcing may be a term of fairly recent origin, but the practice itself is truly ancient because humans have been compelled to organize themselves into cooperative networks throughout history just to survive. Indeed, many of the same reasons for such practices remain applicable today. Few companies today possess the expertise, talent and resources to accomplish everything required of an organization in-house and most therefore outsource some component of their business systems (Child & Faulkner, 1998). From this perspective, it just makes good business sense to ally with others that are in a better position because of superior talent, expertise and resources to do certain types of work more efficiently - and the construction industry is no exception.

In fact, although some automobile consumers, for example, may still possess the mechanical aptitude needed to work on cars today, few will likely possess the ultra-expensive computerized diagnostic equipment and sophisticated tools required to do so efficiently so it just makes sense to have "Mr. Goodwrench" do the work instead. According to Brimmer (1992), "The subcontractor works below the general contractor. This is usually a small firm (it could be a single individual with a few employees) that obtains work from the general contractor. The subcontractor may also be highly specialized for certain projects" (p. 43). Likewise, many contractors may lack to expertise or requisite experience needed for a given project and will require the assistance of numerous subcontractors to help complete the project on time and on budget (Applebaum, 1999).

In this regard, Brimmer adds that, "The key general and subcontracting firms have typically gained expertise by specific experience. For instance, an electrical contractor is nearly always an electrician, a plumbing contractor is a plumber and a mechanical contractor is a mechanic. The opportunity to enter early and master these trades is vital to success" (p. 43). In almost every case, there will be certain components of a project that can only be accomplished by certain trades and there will be local, state and federal laws to take into account as well (Sims, 2002). These are critical issues given the nature of the enormity of the construction industry in the United States today and the amounts of money that might be involved in a major project. For example, Brimmer (1992) emphasizes that, "The construction industry is a major force in the U.S. economy. It is a mainspring of economic growth and generates significant jobs and revenue" (p. 43).

According to Applebaum (1999), the construction industry can be divided into three fundamental components:

General building contractors;

Heavy construction contractors; and,

Specialty trade contractors.

This author reports that, "General building contractors build residential, industrial, commercial, and other buildings. Heavy construction contractors build sewer systems, roads, highways, bridges, tunnels, dams, and other projects. Specialty trade contractors are engaged in specialized work activities such as carpentry, masonry, plumbing, electrical, painting, heating and air-conditioning work, and all other trades that go into the building of a structure" (Applebaum, 1999, p. 5).

Research Approach. In order to gain as much insight as possible into what factors should be evaluated in selecting a subcontractor, this study employed a mixed methodology using both a critical review of the relevant literature and a case study of general contractors in the construction industry and how they have gone about accomplishing and evaluating the process in different settings for different types of projects. According to Gratton and Jones (2003), a critical reviewing of the timely literature is an essential task in all research. "No matter how original you think the research question may be, it is almost certain that your work will be building on the work of others. It is here that the review of such existing work is important" (p. 51).

In addition, the literature review is a useful way of developing the background required for the research, where it is important to demonstrate a clear understanding of the relevant theories and concepts, the results of past research into the area, the types of methodologies and research designs employed in such research, and areas where the literature is deficient (Gratton & Jones, 2003). In this regard, Wood and Ellis (2003) provide the following as important outcomes of a well conducted literature review as it specifically relates to the construction industry today:

It helps describe a topic of interest and refine either research questions or directions in which to look;

It presents a clear description and evaluation of the theories and concepts that have informed research into the topic of interest;

It provides insights into the topic of interest that are both methodological and substantive;

It clarifies the relationship to previous research and highlights where new research may contribute by identifying research possibilities which have been overlooked so far in the literature;

It demonstrates powers of critical analysis by, for instance, exposing taken for granted assumptions underpinning previous research and identifying the possibilities of replacing them with alternative assumptions;

It justifies any new research through a coherent critique of what has gone before and demonstrates why new research is both timely and important.

As to the case study approach, Zikmund (2000) reports that the case study method is "an exploratory research technique that intensively investigates one or a few situations similar to the researcher's problem situation" (p. 722). The main advantage of incorporating this approach into a research project is that a subject area can be investigated in depth and with great attention to detail (Leedy, 1997).

Intent and Outcome. The intent of the foregoing approach is to provide industry professionals will some timely guidance concerning what techniques have proven successful in evaluating different subcontractors for a given project, notwithstanding the enormity of differences that each such project will entail.

Research Findings and Discussion.

The construction industry uses many of the same management techniques that are used in other fields, but the fact remains that there are some aspects of the construction industry that set it apart from other fields that suggest some management styles are just not appropriate or transferable. For example, as Sebestyen (1998) emphasizes, "Over the past 100 years, management in industry has emerged as a scientific discipline, with many new ideas such as ensuring competitive advantage, down-sizing, de-layering, concentration on the core business and human aspects, and re-engineering. Management in construction, on the other hand, has always been based on experience and organizational talent" (emphasis added) (p. 265). The experience and organizational talent that characterize successful general contractors will also widely vary.

For example, today, construction work is typically performed and coordinated by the general contractor who also may specialize in either residential or commercial and industrial building; the general contractor assumes complete responsibility for the project (in some cases the owner of a project will assign certain parts of the work to be performed by others such as outfitting a hotel with beds, furniture, drapes, pictures, lamps, and so forth, installing the special conveyor systems in a factory, or installing the racking systems that are needed for clothing in a warehouse) (Applebaum, 1999). This author notes that, "Although general contractors may do a portion of the work with their own crews, like carpentry, concrete, and masonry, they often subcontract most of the construction work to heavy construction contractors and to the specialty trade subcontractors" (Applebaum, 1999, p. 6).

Because the practice is so common and does not appear to be going anywhere soon, understanding which factors are typically used by construction contractors to select their subcontractors has assumed new relevance for industry observers and professionals today. It is reasonable to suggest that every contractor will have unique selection criteria by which they evaluate prospective subcontractors depending on the type of project involved and their own experiences with comparable projects in the past. Furthermore, it is also reasonable to suggest that previous experiences with subcontractors will play a large part in whether the same company is considered for a future job as well, just as word of mouth recommendations from other contractors will likely be taken into account.

Some of the most important - and intuitive -- factors to be taken into account when considering which subcontractor is most appropriate for a given project is whether the subcontractor possesses the requisite resources, skills and experience to accomplish the job in a timely fashion according to the project specifications and budget. According to Black's Law Dictionary (1990), the selection criteria used by most general contractors relates to which ever company emerges as the lowest responsible bidder, which is the "bidder, who not only has lowest price which conforms to with the specifications, but also is financially able and competent to complete the work as evidenced by prior performance" (p. 947). Therefore, selecting a subcontractor may require a specific trade or even general contracting experience, but the selection criteria involved will clearly directly relate to the job at hand, how well the company has performed these tasks on similar projects in the past, and their perceived ability to complete the project in a satisfactory manner for the general contractor. For example, in their study, "Nawkaw, Inc.: Changing the Color of Masonry," Amason and Ciavarella (2001) report that, "Commercial jobs usually were won through competitive bidding by general contractors, who then hired subcontractors. Sometimes general contractors did not seek bids, instead choosing subcontractors on the basis of their past performance" (p. 77).

Other factors involved that will likely influence which subcontractor will be selected relate to the organizational structure of the project. For example, as Frame (2003) points out, there is a basic approach to most large construction projects in use today. As shown in Figure 1 below, this is a commonly encountered organizational structure employed on construction projects which involves the owner retaining direct authority over both the contractor and architect-engineering firm; in this arrangement, the owner can issue directions, and the contractor and architect-engineering firm are obliged to comply and it is this degree of control over these two key players is what makes this structure appealing to owners (Frame, 2003).

Figure 1. Typical Configuration of Players in a Construction Project.

This approach also means that the contractor has an additional measure of control over subcontractors because although the architect-engineers retain authority over design issues, the contractor has authority over the physical building effort (Frame, 2003). Some valuable insights can be gained from a case study based on the experiences of the general contractor and primary architect-engineer firm used for the construction of the U.S. Penitentiary at Coleman, Florida, which was the first design/build project to be contracted by the U.S. Bureau of Prisons (Conley, 2000).

According to this author, "The project's success is the result of the team's ability to organize and work together, each viewing its individual roles and responsibilities from very different perspectives, while keeping the project focus in the forefront" (Conley, 2000, p. 118). In practice, the selection of the architect-engineer for this construction project was clearly based on the congruence between the respective organization's corporate culture and their mutual desire to complete the job in a timely and professional fashion. In this regard, Conley notes that, "Unwavering professionalism and open communication were necessary to produce viable construction schedules, system pricing, design and engineering, and construction means and methods in a concise group voice" (2000, p. 118).

Taken together, the foregoing considerations suggest that identifying the most appropriate subcontracting candidate for a given project can turn into a full-time job if the general contractor does not have relevant previous experience with similar projects because the subcontractor may not possess the precise mix of skills and resources needed and the general contractor might not recognize the deficiency. According to Applebaum (1999), "Specialty trade contractors usually work at only one trade, such as painting, carpentry, electrical work, or two or more closely related trades, such as plumbing, sprinkler work, and heating and air conditioning. Beyond fitting their work to that of other trades, specialty contractors do not have the responsibility for the building of the structure as a whole" (p. 6).

Likewise, specialty contractors may receive their contracts or purchase orders for their work from general contractors as well as engineers, construction managers, architects, or even the owners themselves; in addition, many specialty contractors perform repair work, which is typically contracted for by owners, occupants, architects, or rental agents (Applebaum, 1999). This means that the successful subcontractor for a given project will possess both the requisite resources as well as relevant experience with comparable projects in the past and be able to communicate this ability successfully to the general contractor (Amason & Ciavelia, 2001). This may be a subjective and informal analysis based on personal communications with friends and associates in the construction industry who have had personal experience with the subcontractor under consideration, or the selection process may require some more formal evaluation techniques.

Generally speaking, bids or proposals for subcontracting must be based on clear and complete specifications. According to the bidding procedures used by the City of Minneapolis (2004), "The contracts should be awarded to the lowest responsible bidder or the responder whose proposal is responsive to the solicitation and most advantageous in terms of price and any other factors identified in the solicitation" (Bidding procedures for the City of Minneapolis, 2004, p. 3).

Likewise, the bidding procedures for subcontractors established by the State of Utah (2005) provide that such contracts.".. shall be awarded promptly to the lowest responsible and responsive bidder who meets the requirements of the invitation for bids for a specific scope of work" (Procurement manual for construction managers and general contractors, 2005, p. 2). In this regard, Pressley (1997) provides some useful guidance on formalizing the selection process for subcontractors, particularly those with which the contractor has not had any previous experience, which is loosely interpreted for the purposes of this study as shown in Table 1 below.

Table 1.

Important issues to consider in the subcontractor selection process.

Issue

Approach/Rationale

Specifications

The bid specification should clearly outline what a contractor needs and expects from a subcontractor. The specifications should include a list of equipment and supplies that will be made available, together with a statement of expectation on how such property will be used; a list of equipment and supplies the contractor expects the subcontractor to provide should also be listed.

Services precise description of the services needed by the general contractor should be provided to the prospective subcontractor.

Insurance

The bid specifications should ask for documents verifying the subcontractor's insurance coverage. At minimum, these documents should include workers' compensation and comprehensive general liability.

Subcontractor company information

The specification should request a brief history of the subcontractor, its corporate staff members' contact information, staff organizational charts, and short biographies of staff members stating their position, length of service, and accumulated experience. The specification should also ask for the bidding subcontractor's financial statement and a list of additional references.

Source: Pressley, 1997.

Some contractors will assign a greater degree of importance to the ability of the subcontractor to "walk the walk" and "talk the talk" of a given project, seeking to use those subcontractors that most closely align with the cultural aspects of the general contracting organization. In this regard, Applebaum (1999) reports that the social organization of the construction industry and its associated technology and traditions, leads to construction worker behavior that results in the following cultural patterns:

Autonomy and self-reliance of the craftsworker.

Large measure of control over the work process by the craftsworker.

Decentralized decision making on the construction site.

Nonbureaucratic organization of construction work.

Loose supervision of craftsworkers by construction management.

Integrated and interdependence of work groups.

Enjoyment of work satisfaction by construction workers (Applebaum, 1999, p. 185).

In many real-world settings, though, there may be some other factors that tend to affect the subcontractor selection process that are not necessarily written down anywhere, but nevertheless remain firmly in place. For example, as Brimmer emphasizes, Common threads, such as apprenticeship systems and trade unions, help connect the construction industry. Moreover, there is the old-boy network composed entirely of white males.... Frequently the officials letting public contracts belong to the old-body network. Once a contract has been awarded, the general contractor normally shares work with subcontractors" (p. 43). These lingering practices have created some institutionalized bias against blacks and women subcontractors in the construction industry:

Historic limitations, including small size and thin performance records, have restricted black firms from working primarily as subcontractors. Blacks often do not get notice of upcoming public contracts. Blacks are often contracted only by GCs to satisfy affirmative-action and set-aside requirements. In many cases, general contractors only include black subcontractors on public-sector projects where such participation is increasingly mandated; however, many minority-owned firms remain outside the selection process by general contractors for private-sector projects.

Minority-owned subcontractors may have problems securing bank loans.

In the construction industry, general contractors are able to increase total revenue above the winning bid price by negotiating change orders as the work progresses; however, many minority-owned subcontracting companies maintain that it is almost impossible for them to do this.

Having access to a secure supply for construction materials at competitive prices is vital; however, some minority-owned subcontractors have been excluded from developing such relationships (Brimmer, 1992).

While things may have changed for the better for minority-owned subcontractors in many regions of the country, it is reasonable to assume that many of these constraints remain firmly in place. Assuming, though, that the playing field is as level as it can be for everyone involved, the selection criteria used by a general contractor will tend to vary from project to project depending on its unique requirements and the personal preferences of the contracting organization. Therefore, it is important to develop some general process by which the subcontractor selection process can be managed over time.

For this purpose, Walla (1996) recommends that the general contractor assign a weight to each selection criterion and then calculate which company is best suited for a given project: "The request for proposal that bidders respond to typically provides separate fields for the various concerns mentioned earlier (equipment, management skills, price). When results are calculated, the company can assign each field a weight to correspond to that factor's importance in the selection process" (emphasis added) (Walla, 1996, p. 65). This weighted approach was recently used in a study by Dulung and Pheng (2006) to identify the selection criteria typically used by general contractors which determined that the five most common criteria used to select subcontractors were:

Experience with similar type of projects to the proposed work;

Relevant experience in building construction;

Current workload;

Technical abilities; and,

Responsiveness (Dulung & Pheng, 2006).

Although here again this assignment of respective weights to the factors deemed most important for a given project may be highly subjective, this approach represents a good starting point at least from which to develop a short list of suitable candidates for consideration as subcontractors for a given project. Other factors that might be considered in the subcontractor selection process might include whether the subcontractor complies with ISO 9000 requirements. For example, "ISO 9000 emphasizes control over subcontractors from material supply to subletting of work packages when subcontractors have not been certified" (Deng, Tam, Wang & Zeng, 2002, p. 83).

Summary and Recommendations.

Recap of Research Topic. Just as every construction project is unique, the research clearly showed that every general contractor likely has a unique set of evaluation criteria by which they first evaluate and then select a subcontractor for a given project. The approach used could be as informal and simple as using the same subcontractors that have been used for comparable projects in the past assuming acceptable performance and the satisfaction of the other relevant criteria required for any subcontractor (i.e., sufficient resources, required insurance, availability, experience with similar projects, and so forth) or as complex as an algorithm that assigns various weights to those criteria deemed most important for a given project's completion. Whichever approach is used, five of the most commonly used criteria were shown to be (a) experience with similar type of projects to the proposed work; (b) relevant experience in building construction; - current workload; (d) technical abilities; and (e) responsiveness.

Limitations. Because of the vast diversity of organizational structures in place in both general contracting and specialty subcontracting firms, it is difficult to generalize any findings from a literature review and case study approach to all general contractors and all subcontractors. Nevertheless, there were some common themes that emerged from the research including a legal definition of best bidder that included proven past experience and the financial capacity to perform the contractual requirements set forth in the bid specifications.

Recommendations and Rationale. In any construction project, time is going to be of the essence and the evaluation process for subcontractors must therefore be efficient. Consequently, it is recommended that by the time the selection process for potential subcontractors has been completed, the general contractor should have a fairly good idea of what subcontractors are suitable for the project and the short list should therefore just contain the top contenders: "The list of companies asked to participate in bidding for the contract should be short" (Pressley, 1997, p. 103).

Research topic 2. How do construction companies typically monitor and evaluate the performance of subcontractors? Is each of these methods effective?

Introduction.

It is one thing, of course, to "talk the talk" of the construction industry and be awarded a subcontract; it is another thing, entirely to "walk the walk" and general contractors need some way to efficiently monitor and evaluate the performance of the subcontractors engaged for a given project. Some of the more salient issues that will be considered include the obvious factors such as whether the subcontractor remains within budget and the project's timeline for completion; other factors, though, may be less obvious but no less important in contributing to the successful completion of the project but these may be much more difficult to assess. As noted above, because the construction industry is fundamentally different than most other fields, apply traditional performance measures across the board to subcontractors on the job may not be effective, or even desirable. Many of the factors that may affect the subcontractor's performance are directly related to the quality of the organizational talent that the general contractor brings to bear on a given project, for instance, with the subcontractor work being tied to the completion of other aspects of the project before they can proceed. Although it is different in many ways in terms of management, the construction industry has benefited from some of the performance measurement methods that have emerged in recent years such as the balanced scorecard and the critical path method, which are discussed further below. Furthermore, there are some other, more subjective criteria that are commonly used in assessing subcontractor performance and these are discussed as well.

Research Approach. The same research approach employing a critical review of the peer-reviewed, scholarly and organizational literature used for research topic no. 1 above will be applied to the instant issue under consideration.

Intent and Outcome. It is the intent of this analysis to develop some timely insights into what factors are typically used to monitor and evaluate the effectiveness of a given subcontractor's performance by a general contractor with a best practices outcome being provided as a result.

Research Findings and Discussion.

There are some performance measures available to help general contractors assess the performance of subcontractors on a periodic basis, but the process is not as straightforward ias in many other industries and must remain sufficiently flexible to take into account the exigencies that will undoubtedly arise during any given construction project. According to Deng and his colleagues (2002), "Compared with other industries, the construction industry is characterized by activities, which are discontinuous, dispersed, diverse and distinct. Quality management in the construction setting is, thus, more difficult. Teamwork is very important in the construction industry. However, the emphasis on teamwork is not more prominent in ISO 9000 than in total quality management" (p. 83).

The day-to-day evaluation of a subcontractor's performance may be best accomplished by an experienced member of the general contractor's management team. For this purpose, it is important to select a team member who possesses the requisite experience from similar jobs in the past as well as the type of trade involved so as to ensure that quality work is recognized as well as any deficiencies that might arise during the course of the project. For example, Applebaum (1999) reports that such individuals typically enjoy the respect of everyone on the job site and this facilitates the inspection and evaluation process:

Since knowledge and skill are acquired through experience, older construction workers are often treated with respect based on their years in the industry. A man with experience is assumed to have acquired many tricks of the trade. Rather than viewed as inadequate because of age, older construction workers are treated as elder statesmen. If his physical strength wanes, an older worker will be given a job suitable to his years, with no lessening of his standing among his peers. (p. 29)

Moreover, Applebaum (1999) provides some useful general guidance concerning how the subjective analyses of different subcontractors' work might be accomplished in a day-to-day fashion. Subcontractors must be able to demonstrate their knowledge through work considered acceptable by their fellow tradesmen, Applebaum emphasizes, and in this context, acceptable work means:

that work is straight and true, level, in accordance with the dimensions on the drawings, and in the proper location. Work is also acceptable if it is performed at the correct time, that is when it is needed to be done so that other trades can continue to work. It is electrical roughing so that walls can be closed up. It is sheet metal roughing above a ceiling so the ceiling can be completed and closed up. It is a counter installed so a sink can be dropped and connected. The evaluation of a craftsworker's performance by his workmates and other trades gives the tradesman his self-respect. (p. 29)

Other factors that might be used for evaluation of subcontractor performance could relate to a subjective assessment of how well the subcontractor conformed to both the written and unwritten expectations based on professional experience in the field. For example, it was just such adherence to the principles of the Clark/DLR design/build's mission statement that made the USP-Coleman a success far and above the stipulated contractual requirements. From the outset, the case study emphasizes that there was a stated mission that established a goal of bringing unsurpassed excellence to the project by dedicating the contractor and subcontractor to become partners "to establish a new standard for the design/build process," of which teamwork played a vital role (Conley, 2000, p. 118).

Levels of trust were established very early by all team members, including the BOP. Work efforts were jointly distributed, organized, scheduled and shared. The USP-Coleman project schedule was aggressive, and the team wanted to ensure the BOP encountered no surprises during any of its formal internal reviews or later during construction. This required a commitment not only to constant communication but also to the transfer of documentation from team member to team member in a very timely manner during the design stages. Subcontractors and suppliers were brought on board early to provide input on the project's direction. They were involved with the design and direction of many of the systems that have been selected for the project. Value, schedule, material availability and constructability issues were discussed and openly debated at team design meetings to ensure the best possible system selections for the project. It is difficult to schedule weekly and biweekly meetings on a project with stringent time requirements and expect high levels of progress, but it is essential for successful communication. (Conley, 2000, p. 118).

Mary Galey, project administrator, represented the BOP's commitment to the design/build team by involving herself and Keith Robinson, project manager, in all team meetings during the design and documentation stages. BOP staff were responsible for reviewing and commenting on final compliance issues relating to architecture, engineering, construction, contracts, security electronics, food service and security. This commitment allowed the project to stay on schedule and provided the designer/builder a conduit to gain the proper information in a timely manner. No deadlines were missed, a fact that bears observance. (Conley, 2000, p. 118).

Once the design efforts were completed and the construction began, the managers, designers, estimators, engineers and preconstruction professionals maintained their original commitment and remained part of the solution during construction, fulfilling a key component of the mission statement. USP-Coleman currently is in the construction phase, with more than 50% complete. The project has progressed well and team members remain close and continue to achieve high levels of communication and teamwork on the construction site daily. (Conley, 2000, p. 118).

In their study, "Using the Balanced Scorecard as a Strategic Management System," Kaplan and Norton (1996) report that general contractors can also use performance measurements techniques such as the balanced scorecard as a strategic management system to evaluate subcontractor performance on a periodic basis: "Building a scorecard can help managers link today's actions with tomorrow's goals," the authors advise, and, "The balanced scorecard supplemented traditional financial measures with criteria that measured performance from three additional perspectives- those of customers, internal business processes, and learning and growth" (p. 75). Although these techniques have been typically applied internally to gauge a company's own performance, they are likewise amenable to evaluating the performance of subcontractors as they relate to the overall goals of the project. These perspectives are described further in Table 2 below as they apply to the evaluation of subcontractor performance by the general contractor in a given construction project.

Table 2.

The four metrics of subcontractor performance using the balanced scorecard approach.

Metric

Approach/Rationale

Translating the vision

This metric helps managers assess how well the subcontractor conforms to the general contractor's vision and strategy for the project. In this regard, quantifiable specifics are important when assigning relative weights. The authors emphasize the, "Despite the best intentions of those at the top, lofty statements about becoming 'best in class,' 'the number one supplier,' or an 'empowered organization' don't translate easily into operational terms that provide useful guides to action at the local level. For people to act on the words in vision and strategy statements, those statements must be expressed as an integrated set of objectives and measures, agreed upon by all senior executives, that describe the long-term drivers of success."

Communicating and linking

This metric allows managers to communicate their strategy up and down the organization and link it to departmental and individual objectives. Traditionally, individual departments in an organizational setting are evaluated by their performance with incentives being tied to short-term goals. This aspect of the balanced scorecard approach provides the general contractor with the ability to measure the extent to which all levels of the organizational structure understand the long-term strategy for the project and that both general contractor and subcontractor objectives are aligned with accomplishing it.

Business planning

The addition of this factor to the evaluation process provides general contractors with the ability to better align their business and financial plans with those of their subcontractors. The authors emphasize that, like other industries, the construction industry is confronted with regular changes that require careful implementation and coordination between contractor and subcontractors with clear priorities in mind for completion: "When managers use the ambitious goals set for balanced scorecard measures as the basis for allocating resources and setting priorities, they can undertake and coordinate only those initiatives that move them toward their long-term strategic objectives."

Feedback and learning

The addition of this metric allows general contractors to measure how well subcontractors learn from their previous on-the-job experiences. According to the authors, "Existing feedback and review processes focus on whether the company, its departments, or its individual employees have met their budgeted financial goals. With the balanced scorecard at the center of its management systems, a company can monitor short-term results from the three additional perspectives - customers, internal business processes, and learning and growth - and evaluate strategy in the light of recent performance." As a result, the balanced scorecard provides the general contractor with the ability to modify construction strategies to reflect the real-time learning that has taken place by the subcontractor in allocating resources and coordinating work by other trades in the order in which they must be accomplished.

Source: Kaplan & Norton, 1996, p. 76-7.

Given the enormously complex nature of the enterprise, it is not surprising that software developers have responded to the needs of general contractors by providing applications that are specifically designed to track the performance of subcontractors during a construction project and some popular versions are described further in Table 3 below.