Available online at www.sciencedirect.

com

International Journal of Project Management 27 (2009) 89–95

www.elsevier.com/locate/ijproman

A feasibility evaluation on the outsourcing of quality

testing and inspection
Minsoo Choi a,*, Michael Brand b,1, Jinu Kim b,2
a
CERIK (Construction and Economy Research Institute of Korea), 11th F, Construction Building, 71-2 Nonhyun-dong,
Kangnam-gu, Seoul 135-701, South Korea
b
School of the Built Environment, The University of New South Wales, Sydney NSW 2052, Australia

Received 3 April 2007; received in revised form 9 October 2007; accepted 8 November 2007

Abstract

This paper evaluates the feasibility of outsourcing testing and inspection activities in construction work, based on a survey of inter-
ested parties and an evaluation using the Analytic Hierarchy Process (AHP) with experts on quality control. For the AHP, five criteria
were adopted and a number of pair-wise comparisons were performed in two stages. Finally, the weighting coefficient to approve the
outsourcing was calculated at 0.606, suggesting it more reasonable to permit rather than prohibit outsourcing. Outsourcing of test-
ing/inspection is necessary to enhance the objectivity and expert skill, despite the reduction in the sense of responsibility among the test-
ing technicians and inspectors. However, to initiate outsourcing, it is necessary to first separate the ‘quality testing and inspection’
activities from the ‘quality control’ activities at the job site. Furthermore, the project owner should preferably make the decision to out-
source testing and inspection activities and select the testing agency.
Ó 2007 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Outsourcing; Testing and inspection; AHP; Testing agency; Quality control

1. Introduction ment Program for personnel in quality management is

Quality control (QC) of construction work is an impor-
tant process for the construction industry and has been sys-
temized thus far in Korea. However, the recognition of the
importance of QC is still low. Thus, there is a tendency for
the QC to be performed perfunctorily, with the employ-
ment of unqualified persons lacking any direct relation
with QC. The appropriation of quality management costs
and independence of the quality management organization
is still unsatisfactory. In addition, a social Career Develop-
*
Corresponding author. Tel.: +82 2 3441 0637; fax: +82 2 3441
0707;mobile: +82 11 9897 6073.
E-mail addresses: msochoi@naver.com, minsooc@hanmail.net (M. Choi),
MichaelB@fbe.unsw.edu.au (M. Brand), J.kim@unsw.edu.au (J. Kim).
1
Tel.: +61 2 9385 5970; fax: +61 2 9385 4507.
2
Tel.: +61 2 9385 5237; fax: +61 2 9385 4507.
insufficient.
In general, QC activities include planning for quality
management, examining design drawings, checking specifi-
cations, purchasing, inspecting and testing. Inspections and
tests are fundamental to the quality management process
[3,7].
As the scales of construction projects have expanded
recently, the QC work load including quality testing and
inspection at a job site is on the rise. As a result, there is
a growing tendency for construction companies to out-
source labour-intensive quality testing and inspection
activities to external specialized testing agencies [4].
Accordingly, the number of such specialized testing
agencies that perform quality testing and inspection at
job sites is also on the rise. According to Williams [15]
and Schexnayder [13], outsourcing of QC is relatively com-
mon place in many countries such as the United States,
Japan, Korea and Taiwan.

0263-7863/$30.00 Ó 2007 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2007.11.003
90 M. Choi et al. / International Journal of Project Management 27 (2009) 89–95
Construction companies gain by being faithful to their
inherent QC activities by outsourcing their testing and
inspection activities. On the other hand, there exists some
concern over the decreased sense of responsibility in case
of outsourced quality testing and inspection. Moreover,
there is an opinion that outsourcing is not desirable since
QC is an inherent part of a contractor’s business [1,2].
The purposes of this research are to evaluate the feasibil-
ity, effectiveness and necessity of outsourcing tests and
inspection works using the Analytic Hierarchy Process
(AHP), and to propose policies in connection with the out-
sourcing of testing/inspection activities.
2. Review of arguments for and against outsourcing
According to the results of a survey undertaken by Choi
[5] of construction engineers in Korea, 42.2% of the survey
respondents indicated that outsourcing of testing and
inspection activities might enhance the specialized skills
of testing technicians and inspectors. Building constructors
(20%) tended to emphasize the importance of outsourcing
tests and inspections for downsizing manpower at job sites.
The survey respondents (18.9%) indicated that outsourcing
is desirable in order to separate labour-intensive testing
and inspection works from QC activities.
Conversely, if tests and inspections are outsourced,
27.8% of respondents replied that the testing technicians
from the testing agency might be subordinated to the prime
contractor. Moreover, 18.9% indicated that outsourcing
might lead to a reduced sense of responsibility among tes-
ters (see Fig. 1).
3. Feasibility evaluation of outsourcing by the AHP
3.1. Outlook of the analytic hierarchy process
The AHP (Analytic Hierarchy Process) is a structured
approach to decision making developed by Saaty (1995).
The AHP is a weighted factor-scoring model and has the
The others 7.8%
To stabilize the
employment of
To enhance the
testing technicians,
specialized skills in
11.1%
testing/inspection,
42.2%
To separate
testing/inspection
from QC activity,
18.9%
To support the down-sing
of constructor 20.2%
1) Reasons for approval
Note: Replied from 90 construction engineers.
Fig. 1. The reasons for and against outsourcing testing/inspection [5].
ability to detect and incorporate inconsistencies inherent
in the decision making process. Therefore, the AHP has
been applied to a wide variety of decision making prob-
lems, including the evaluation of alternatives.
Accordingly, this study introduces the AHP to draw rea-
sonable conclusions in coping with the above mentioned
controversial points, particularly regarding whether the
outsourcing of testing/inspection is reasonable or not.
For the AHP, a questionnaire survey was undertaken
in March of 2006 of 22 experts on quality management
in Korea. The experts comprised public servants ( 2),
professors ( 3), researchers ( 4), construction engineers
( 4), graduate students ( 3), building material makers
( 3), a project owner, a constructor and a public testing
institute. To ensure the objectivity of this survey, we
excluded specialized testing agencies from the survey. Fur-
thermore, of the 22 experts surveyed, a total of 16 had
experience in working for construction companies or as
QC engineers.
3.2. Discussion of criteria
In order to evaluate the feasibility of outsourcing test
and inspection works by the AHP, the first step was to
define the criteria by which feasibility was to be deter-
mined. In determining the appropriate criteria, discussions
were undertaken with 6 of the 22 experts who took part in
the questionnaire survey. As a result, criteria were pro-
posed under the following five questions:
(1) Can the testing and inspection work be conducted
systemically?
Since quality testing/inspection is an integral part of
QC, there is some dispute as to how testing/inspection
can be separated from QC. Accordingly, provided that
the testing/inspection is outsourced, we should examine
whether or not the quality inspection and tests can be con-
ducted systemically.
Lack of testing The others 2.2%
agencies 6.7%
Possibility of
Testing agency's
sequrity problems
subordination to
in a job site 11.1%
constructors, 27.8%
Moral hazard between
a testing agency and
material suppliers,
12.2%
Difficulty in separating
Possibility of decreasing testing activity from
a tester's sense of QC activity, 21.1%
responsibility, 18.9%
2) Reasons for disapproval
 M. Choi et al. / International Journal of Project Management 27 (2009) 89–95
(2) Is it possible to enhance the expert skills of testing
technicians?
There are many kinds of testing activities that demand
specialized skills and experience specific to the testing and
inspection of construction work. Accordingly, we should
review whether or not outsourcing can enhance the expert
skills.
(3) Can outsourcing improve the objectivity of testing
and inspection?
The purpose of quality testing and inspection is to deter-
mine whether supplies of services conform to contract
requirements [9]. Therefore, objectivity is essential in con-
ducting tests and inspections [15]. Accordingly, the research-
ers ought to determine whether or not outsourcing improves
the objectivity and independence of testing and inspection.
(4) Can outsourcing enhance the sense of responsibility
of testing technicians and inspectors?
Provided that the testing/inspection activities are out-
sourced, some arguments that there is a possibility that
the sense of responsibility as a testing technician may dete-
riorate if the individual is not attached to the prime con-
tractor. However, there are some counterarguments that
the sense of responsibility hardly deteriorates because most
tests/inspections are conducted under the supervision of
QC managers belong to a prime contractor. Accordingly,
the researchers should examine whether or not outsourcing
can enhance the sense of responsibility of testing
technicians.
(5) Is it possible to enhance the status of testing
technicians?
Most testing technicians and inspectors tend to be
employed rather as project-specific temporary workers
than as regular workers. This may lead to lower the social
position of testing technicians and QC standards at con-
Evaluating feasibility for outsourcing
of testing/inspection activities
Possibility of Enhancement of
conducting expert skills of
Improvement
tests/ testing
of objectivity
inspections technicians
systemically /inspectors
Permit
Fig. 2. Hierarchy of the problem for the AHP.
91
struction sites [5,11]. Consequently, the systemic training
of testing technicians and the enhancement of their status
should be taken into account.
3.3. Criteria and hierarchy
In order to evaluate the feasibility of outsourcing tests/
inspections, this study adopted the following five criteria:
(a) the possibility of conducting tests/inspections systemi-
cally; (b) enhancement of the expert skills of the tester/
inspector; (c) improvement of objectivity; (d) securing a
sense of responsibility; and (e) improvement of the testing
technician’s status. The hierarchy of the problem was
designed with two levels, as seen in Fig. 2. The five criteria
for the AHP and the corresponding items for evaluation
are shown in Table 1.
3.4. Pair-wise comparison
In order to determine whether outsourcing should be
permitted, a number of pair-wise comparisons were neces-
sary, conducted in two stages. First, each pair of criteria
was mutually compared with respect to the goal. Second,
each pair of alternatives was compared with respect to each
criterion at the upper level of the hierarchy.
Comparisons of all elements of the hierarchy, that is, the
criteria with respect to the goal and the alternatives with
respect to the criteria, were made on both levels of the hier-
archy by using Saaty’s scale of pair-wise comparisons.
Weighting coefficients for all the criteria with respect to
the goal were derived in turn as a sub-result of the proce-
dure. Weighting coefficients for the two alternatives were
derived by the AHP with respect to the goal.
After 10 comparisons (i.e. (5  4)/2 = 10), a comparison
matrix was obtained, as shown in Table 2. The results were
the value of each matrix calculated by integrating the
answers of ten experts from the QC field and by using
the geometric mean instead of the arithmetic mean to avoid
being affected by outliers [8]. After the comparison matrix
for criteria vs. goal was completed, weighting coefficients
and the ranks of the criteria were calculated on the basis
(Goal)
Improvement
Securing
of the testing (Level)
a sense of
technician's
responsibility
status
Prohibit (Alternatives)
92 M. Choi et al. / International Journal of Project Management 27 (2009) 89–95

Table 1
Criteria for AHP
Criteria Items for evaluation
C1 Possibility of conducting tests/inspections Which is the more effective method to harmonize the testing/inspection activities with
systematically construction work?
Which is the better way to minimize conflict between the constructor and the testing
technician?
Is it possible and reasonable to separate testing/inspection activities from QC?
Is it possible to harmonize testing/inspection with the QC activities of the constructor?
Are there a sufficient number of specialized testing agencies, and if so, can they provide high-
quality services?
C2 Enhancement of expert skills of the tester / Which is the more efficient method to raise the specialized skills of testing technicians?
inspector Which is more useful for training the testing technicians systematically?
Which is more useful in improving the expert skills of testing technicians?
C3 Improvement of objectivity Which is more desirable for conducting the testing and inspection objectively and
independently?
Can the testing organization conduct their testing/inspection duty on an equal footing with
constructors?
C4 Securing a sense of responsibility Which is more effective for conducting the testing/inspection activities sincerely and
faithfully?
Which is more effective for raising the testing technicians’ sense of responsibility and pride?
C5 Improvement of the testing technician’s status Which is more useful for stabilizing the employment of testing technicians?
Which is more effective for improving the working conditions of testing technicians?
Which is more effective in convincing a well-trained employee as a testing technician and
inspector?
Which is more useful for managing the careers of testing technicians?

Table 2
Comparison matrix and weighting coefficients
C1 C2 C3 C4 C5 Weighting coefficient Rank
C1 1.000 1.463 0.530 1.568 1.139 0.205 2
C2 0.683 1.000 0.460 0.350 0.877 0.122 5
C3 1.887 2.176 1.000 1.397 1.822 0.302 1
C4 0.638 2.657 0.716 1.000 0.981 0.203 3
C5 0.878 1.140 0.549 1.020 1.000 0.168 4
Note: kmax = 0.0251, inconsistency index = 0.028.

of the procedure described by Saaty [12]. The results of that
calculation are shown in Table 2. The weighting coefficients
represent the relative importance of each criterion in mak-
ing a decision.
As a measure of inconsistency, the AHP uses a method
to calculate the inconsistency index. According to Saaty
[12], the originator of the AHP, if the inconsistency index
is lower than 0.10 (that is, 10% inconsistency), the AHP
results are acceptable. The inconsistency index obtained
here is 0.028; therefore, the AHP results of this study are
very acceptable.
From the evaluated results, the element ‘improvement of
objectivity’ was ranked as relatively the most important cri-
terion. Judging from the results, it could be concluded that
the experts on QC attached greater importance to the
inherent role of testing technicians and inspectors than to
stable employment or the specialization of skills.
3.5. Decision of alternatives
As a second step, following the same procedure as
above, the AHP was used to compute weights for the
two alternatives (permit outsourcing or prohibit it) with
respect to the five criteria shown below. After 5  2 = 10
comparisons, the five matrices were generated, which are
shown in Table 3. Here, each vector consists of the alterna-
tives’ weights; for each criterion at a higher level, there is
one vector of weighting coefficients for each of the alterna-
tives. The overall vector of alternatives’ weighting coeffi-
cients is the final result of comparisons made on both
levels of hierarchy.
As a final step, the final weighting coefficients of the
alternatives can be calculated using the following two
results: (a) the relative weight through pair-wise compari-
son with respect to each element (criteria); and (b) weights
for the two alternatives (i.e. permit or prohibit) with
respect to the five criteria. The result is summarized in
Table 4. Finally, by means of the AHP, the final weighting
coefficient to approve of outsourcing tests/inspections was
calculated at 0.606. Therefore, it was concluded that
permitting the outsourcing of testing/inspection is more
reasonable than prohibiting it.
The results of the AHP indicate that most experts
recognize that outsourcing is necessary to enhance the
 M. Choi et al. / International Journal of Project Management 27 (2009) 89–95 93

Table 3
Comparison matrices: alternatives vs. criteria
Criteria Prohibit Permit Weights
(C1) Possibility of conducting tests/inspections systemically Prohibit 1 1.0385 0.509
Permit 0.9629 1 0.491
(C2) Enhancement of the specialties of the tester/inspector Prohibit 1 0.3154 0.240
Permit 3.1706 1 0.760
(C3) Improvement of objectivity Prohibit 1 0.3626 0.266
Permit 2.7577 1 0.734
(C4) Securing a sense of responsibility Prohibit 1 1.1885 0.543
Permit 0.8414 1 0.457
(C5) Improvement of the testing technician’s status Prohibit 1 0.7127 0.416
Permit 1.4031 1 0.584

Table 4
Weighting coefficients for alternatives with respect to the goal
Alternatives C1 (0.205) C2 (0.122) C3 (0.302) C4 (0.203) C5 (0.168) Weighting coefficient Rank
Prohibit 0.509 0.240 0.266 0.543 0.416 0.394 2
Permit 0.491 0.760 0.734 0.457 0.584 0.606 1
Note: The values in parentheses are the weighting coefficients of the criteria with respect to the goal.

objectivity and specialization of quality testing and inspec-
tion, even though outsourcing is slightly undesirable in that
it can reduce the sense of responsibility and induce conflicts
between the testing technicians and construction engineers.
In conclusion, when testing/inspection is outsourced,
the objectivity in testing and inspection is far greater than
that when constructors carry out testing/inspection by
themselves. Also, testing technicians and inspectors can
be stably employed in specialized testing agencies and con-
tinually engaged in testing/inspection at job sites.
Thus, it is anticipated that the expert skills of testing
technicians and inspectors may be enhanced further and
their employment status also more stabilized. In addition,
provided that a quality manager is employed by the prime
contractor, even though the testing and inspection are out-
sourced, QC may not be compromised.
4. Practical considerations for outsourcing
4.1. Summary of practical considerations for outsourcing
From the AHP results, it is concluded that outsourcing
of tests and inspections is appropriate. For outsourcing test
and inspection work, the principal questions as derived
from the discussions with the experts on QC are summa-
rized below:
(a) In order to outsource tests and inspections, is it not
necessary to legally separate a tester and inspector
from the quality management personnel?
(b) Who would be the most appropriate person to make
decisions concerning the outsourcing and selection
of the testing agency, the project owner or the
contractor?
(c) Is it necessary to restrict the scale and kind of con-
struction work that can be outsourced for testing
and inspection? Which aspects of QC can be
outsourced?
To cope with the argument points, this study surveyed
the opinions of interested parties in Korea (131 construc-
tion engineers, 26 project owners, 30 supervisors and 24
testing agencies). The survey results are summarized in
Table 5.
4.2. Separation of inspector/tester from quality manager
It is desirable that QC/QA managers at job sites be tied
to the prime contractor, considering that the prime con-
tractor should be held responsible for QC [6]. In order to
support outsourcing tests and inspections, there is a need
to separate testing and inspection activities from QC at
job sites. Testing technicians and inspectors should also
be separated from quality management personnel. Accord-
ing to the survey results shown in Table 5, about 68% of
respondents indicated that the testing technicians and
inspectors should be separated from the quality manage-
ment personnnel.
4.3. The decision maker for outsourcing and selecting the
testing agency
There are differing opinions between constructors and
project owners about who should decide whether testing
and inspection must be outsourced or not. According to
the survey results, the majority of project owners, supervi-
sors, and testing agencies replied that the project owner
should decide whether or not to outsource. However, as
94 M. Choi et al. / International Journal of Project Management 27 (2009) 89–95

Table 5
Opinions on practical considerations for outsourcing
Unit: %
Total Constructor Owner Supervisor Testing
agency
Separation of tester/inspector from quality management Agree 59.3 57.3 69.2 40.0 70.8
personnel Partially agree 9.0 10.7 7.7 13.3 4.2
Disagree 27.6 26.7 15.4 43.3 25.0
No comment 4.1 5.3 7.7 3.3 0.0
Decision maker of outsourcing and selecting a testing agency By owner 51.1 30.7 66.7 43.3 63.6
By constructor 28.8 56.2 33.3 16.7 9.1
By supervisor 20.1 13.1 0.0 40.0 27.3
The scope of QC activities that can be outsourced Testing/Inspection only 62.3 52.7 66.7 73.3 56.5
All types of QC 28.9 29.5 33.3 26.7 26.1
activities
Others 8.8 17.8 0.0 0.0 17.4
Note: The percentage value is a weighted mean calculated by giving weights 3, 2 and 1 to the responses that are ranked first, second and third, respectively.

seen in Table 5, about 56% of construction engineers indi-
cated that constructors should make the decision.
Provided that a contractor selects the testing agency, the
agency is apt to be subordinated to the contractor; thus,
the testing agency may have some difficulties in conducting
the testing and inspection work in an independent fashion.
Accordingly, in order to improve the objectivity and inde-
pendence of the testing and inspection activities, it is desir-
able that the project owner makes the decision to outsource
and also selects the testing agency.
4.4. Scope of work to be outsourced
In general, QC includes planning for quality assurance,
examination of design drawings, checking of specifications,
purchasing, inspection, testing, management of incongru-
ent items, recording of QC, etc. [7]. Some experts argue
that all types of QC activities, including testing and inspec-
tion, can be outsourced, as seen in Table 5. But the out-
sourcing of all types of QC activities is against ISO
regulations [10,14]. Moreover, it is slightly difficult for test-
ing agencies to understand constructors’ internal quality
management systems and also access their computer net-
works. Accordingly, the scope of QC activities that can
be outsourced should be limited to tests and inspections
at the job site.
In general, the QC system of a small construction com-
pany is non-systematic and of a low grade. Therefore, it is
desirable that all types of QC activities may be outsourced
in such a small construction work.
5. Conclusions
From the AHP and survey results, it was found that out-
sourcing tests and inspections is necessary for enhancing
the objectivity of quality testing and inspection as well as
the expert skills of testing technicians, even though it
may be undesirable in that it reduces the sense of responsi-
bility. By means of the AHP, the weighting coefficient to
approve of outsourcing testing and inspection was finally
calculated at 0.606. Hence, it could be concluded that the
outsourcing of tests and inspections at job sites is
appropriate.
In order to permit outsourcing testing and inspection
activities, there is a need to separate the testing technicians
and inspectors from the quality management personnel, on
the condition that the quality manager at the job site
should be attached to the prime contractor. Moreover, it
is desirable that the project owner has the authority to
decide when to outsource and also to select the testing
agency. The scope of the QC activities that can be outsour-
ced should be limited to testing and inspection works,
except for small job sites.
On the other hand, for qualitative improvement in QC,
including the testing and inspection work at a job site, it is
necessary to strengthen the specialization and indepen-
dence of the QC organization. In terms of the administra-
tive aspects, it is necessary to improve the regulations
regarding laboratory or testing technicians. With respect
to the management of a national technical license, it is nec-
essary to delineate a career in quality management from a
career at construction sites.
References
[1] Barrie DS, Paulson BC. Professional construction management:
including CM. Design-construct and general contracting. McGraw-
Hill, Inc.; 1992 [p. 371–394].
[2] Battikha MG, Russell A. Construction quality management – present
and future. Can J Civil Eng 1998;25(3):401–11.
[3] Battikha MG. Computer-based system for construction quality
management. J Constr Eng Manage 2002:164–73.
[4] Choi MS. A study to improve a quality testing & inspection system in
construction work – through benchmarking foreign construction
projects. J Architect Eng, The Architecture Institute of Korea (AIK)
2005;21(12):143–8.
[5] Choi MS. A study to promote efficiency of QC activity by outsourcing
quality testing and inspection. Ministry Construct Transport 2004.
[6] David Hoyle. ISO 9000: 2000 Quality Systems Handbook, December,
2000.
[7] Davis K, Ledbetter WB. Measuring design and construction quality
cost. Austin, Tex: Construction Industry Institution (CII); 1987.
 M. Choi et al. / International Journal of Project Management 27 (2009) 89–95
[8] Doune Kun. Decision making method by the game theory. JUSE
Press Ltd.; 1996 [p. 170].
[9] General Services Administration. Federal Acquisition Regulation
(FAR). 2006.
[10] Han JG. A study on the application of ISO 9001: 2000 in domestic
construction industry. In: Proceedings of architectural engineering,
vol. 22. The Architecture Institute of Korea (AIK), 2002. p. 515–521.
[11] Ishido S. Construction quality management in Japan – Present and
future. In: Proceedings of annual conference, The Korean institute for
industrial safety. 1996. p. 32–48.
95
[12] Saaty TL. Decision making for leaders. RWS Publications; 1995.
[13] Schexnayder CJ, Mayo RE. Construction management fundamentals.
2003. p. 491–496.
[14] The International Organization for Standardization, ISO 10006:
2003, Quality management systems – Guidelines for quality manage-
ment in projects, 2003.
[15] Williams JD. Application of TQM system in the construction
industry. Construct Manage. Construction and Economy Research
Institute of Korea (CERIK) 1996:89–111.