Application of DEA Cross-evaluation Model in
Project Dynamic Alliance Subcontractors Selection
Honglian Yin1,2 and Zhuofu Wang 1
1 2
Engineering Management Research Institute,HHU
Nanjing ,Jiangsu, P.R.China
sdsyyhl@163.com
Abstract—The correct choice of subcontractors(SCs) increases
the overall success of a construction project for general
contractors(GCs), but at present,there is not a uniform selection
process or method.Based on the characteristics of water
conservancy and hydroelectric projects, from the perspective of
construction GCs, evaluation index system of selecting SCs is
designed ,the DEA cross-evaluation model and its application are
given. Combinined with engineering example, the model is
tested.It is proved that the DEA model of SCs selection overcomes
the current strong subjective wishes weaknesses of GCs selecting
SCs in China, the evaluation results are more effective and more
objective in reality, and it provides a quantitative scientific
decision-making approach to SCs selection.
Keyword—dynamic alliance; subcontractors; selecting method;
DEA aggressive cross-evaluation;comprehensive evaluation
efficiency
Ⅰ . INTRODUCTION
The engineering general contracting is a transaction mode
which is popular international at present ,it will also be a
mainstream mode of China's construction transaction with
joint promotion of government and industries in the future. As
for the modern large –medium projects, especially water
conservancy and hydropower project, due to long periods,
huge investment,complex technology as well as multi-subject
and multi-specialty involved, there is greater risk that all the
works are undertaken entirely by a GC.Subcontracting can
make up deficiencies of GCs in technology, manpower,
equipment, capital,etc., defuse and share risk. However, GCs
take full responsibility to the owner, commit to management
and controlling of SCs, GCs are responsible for any problems
caused by SCs finally. An excellent SC can achieve goals
within planned duration within anticipated budget and quality.
On the contrary, a poor-performing SC results in a defective
work and therefore consumes additional costs and completion
time [1–3]. Improper SCs selection will not only to increase
difficulty on the management of SCs in the course of
implementation, but also impact the project overall goal, and
even affect GC’s reputation in the industry. Therefore, to
choose the best SCs is the key to the smooth realization of the
project for GCs.
At present, although there are better contractor selection
processes and bidding evaluation methods for owners in China,
however, due to the late domestic implementation of the
general contracting model,which is still in the starting
stage,the general contracting enterprise(GCE) does not have a
978-1-4244-3894-5/09/$25.00 ©2009 IEEE
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Jiyu Yu2,Zhaojun Ji2 and Huaqiu Ni 2
Shandong Water Polytechnic
Rizhao,Shandong,P.R.China
more systematic and complete mechanism and process of SCs
selection and evaluation.Although the GC’s status is similar to
the owner between GC and SC, after all,GC is different from
the owner,it is not economic that GC selects SCs according to
the tendering process of the owners. In this paper, based on
the characteristics of water conservancy and hydropower
project ,from the perspective of the construction GCs, the
evaluation indexes system of SCs selection are designed and
DEA cross-evaluation model is established. Finally, an
engineering example is given.
Ⅱ . DESIGN OF THE EVALUATION INDEX SYSTEM OF
DYNAMIC ALLIANCE SUBCONTRACTORS
There are three stages in dynamic alliance SCs selection
process[4].The first is the primary selection of subcontracting
cooperative partner of establish SCs database,the second is
selection excellent SC in specific project,and the third is
performance evaluation of SCs when the subproject is carried
out. The evaluation indexes of different selection
stage,evaluation purposes and SCs types are different.
The evaluation purpose of the first stage is investigation of
SCs’s whole situation, it does not involve a specific project, so
the evaluation indexes do not contain project quotation, and
they are shown in figure 1;when selecting specific project SC,
evaluation indexes should focus on engineering actual
situation and evaluation method, these are shown in figure 2
are evaluation indexes using comprehensive evaluation
method.
Ⅲ .DEA AGGRESSIVE CROSS-EVALUATION MODEL
OF DYNAMIC ALLIANCE SUBCONTRACTORS
DEA (Data Envelopment Analysis) was firstly advanced
by Charnes etal.(1978, 1979),and it is a linear programming
based on method for evaluating relative efficiency of Decision
Making Units(DMUs) with the same structure, and is mainly
used to deal with multiple input-output problems[5]. There are
many DEA models, C2R is an model of evaluating the scale
and technology of DMUs are efficient [5], but it is a model of
self-evaluation of DMUs and can only determine whether the
relatively efficient, when self-evaluation efficiency of DMUs
are the same, aggressive cross-evaluation is introducted [6-7]
and the comprehensive evaluation efficiency of each DMU is
calculated ,then the DMUs sorting are obtained according to
the comprehensive evaluation efficiency.
A. .DEA evaluation model establishment
1
 Primary selection subcontracting partner

A. Cooperation quality B. Financial situation C. Construction capability D. Cooperative desire

A1. Enterprise culture
compatibility
A2. Application of
information technology
A3. Sustainable
development ability
B1. Annual production capacity
B2.Profit interest rate
B3. Net assets debt rate
B4. Operation capital return rate
B5. Get credit
B6. Net assets profit rate
C1.Eenterprise qualification D1.Management layer
standards Cooperative desire
C2. Quality assurance system D2.Enterprise cooperative
spirit
C3. Construction experi-
ence and performance D3.Rsources complementarity
C4. Social reputation
C5.Equipment and technical
force

Figure 1. Evaluation indexes of primary selection subcontracting partner

Excellent subcontractor selection

A. Commercial bid evaluation B. Technical bid evaluation. C. Historical cooperation efficiency

A1. Bidding price B1. Quality objective and guarantee measures C1. Cooperation cost

A2. Unit price rationality B2. Construction scheme and method C2. Cooperation years

A3. Bidding documents B3.Construction schedule and period C3.Cooperation projects operation
responsiveness and completeness excellent and good rate
: B4. Enterprise qualification standard

B5.Site project manager and technology director

B6. Similar projects experience and performance
B7. Resource allocation
B8. Site safety assurance measures, civilized construction
and environmental protection

Figure 2. Evaluation indexes of excellent subcontractor selection in specific project

Assumed that DEA model has n DMUi, one DMU
represents one SC, DMUi input-output vectors are respectively
xi=(x1i,x2i,…,xni)T>0(i=1,2,…,n),yi=(y1i,y2i,…ysi)T>0(i=1,2, …,s
)and V=(v1,v2, …,vn)T;U=(u1,u2, …,un)Tare respectively weight
vectors of input-output(u,v ﹥ 0).Then C2R model of SC
Assumed that ui* and vi* are the optimal solution of linear
Programming (2), named the best weights of DMUi. Then
Eii=yiTui*is the efficiency values of DMUi, named
self-evaluation value. When Eii=1, DMUi is efficient, when Eii
<1,DMUi is inefficient.

{
selection is as follow: In the primary selection of sub-contracting cooperative
y Tu partner, mainly selecting SCs whose technology and scale are
max i T = Eii
xi v efficient as GC’s partners, the number of requests is not
(1) unique. Therefore model P1 can be used to select those
y jT u ( j = 1, 2, " , n ), u ≥ 0, v ≥ 0 self-evaluation value is 1 as partners, and bring into SCs
s.t. T ≤ 1
xj v database.
Using the Charnes-Cooper transformation, the fractional
programming (1) can be changed to a linear programming When the tender select specific project SCs, for each
model C2R: individual project, need to select the best SC. Using model
P1,a result that a number of SCs’s self-evaluation efficiency
Model P1(Self-evaluation model): value are 1 may be obtained, at this time aggressive

{
max y j T u = Eii cross-evaluation[8] can be used.After each DMUi efficiency
( 2) value Eii is solved using model P1, again using the optimal
s.t. y j T u ≤ x j T v( j = 1, 2," n), solution ui* and vi* of every DMUi to calculate the efficiency
value of other DMUk,the cross-evaluation value is gained:
xiT v = 1, v ≥ 0, u ≥ 0

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 y kT ui*
Eik =
xkT vi*
The larger the cross-evaluation value Eik,the more
favorable to DMUk, the more unfavorable to DMUi is.
Therefore, under the premise of ensuring DMUi to be
maximum Eii, the cross-evaluation value Eik of the other
DMUk should be possible smaller.So,let max yiTu be the first
ykT u
goal, min be the second goal, and set up aggressive
xkT v
cross-evaluation model:
Model P2( aggressive cross-evaluation model):
Step1, using model P1 self-evaluation value Eii(0≤i≤n) of
DMUi is obtained;
Step2,given i ∈ {1, 2," , n} and k ∈ {1, 2," , n} , the
following linear programming is solved;
{
min y kT u
s .t . y Tj u ≤ x Tj v (1 ≤ j ≤ n ),
y iT u = E ii x iT v , x kT v = 1, u ≥ 0 , v ≥ 0
Step3, using optimal solution uik* and vik* of formula(4),
cross-evaluation value is obtained:
ykT uik*
Eik = T *
= ykT uik*
xk vik
Step4,by using cross-evaluation value ,cross-evaluation
matrix is obtained:
E11 E12 … E1ｎ
E= E21 E22 … E2ｎ
…… ……
Eｎ1 Eｎ2 … Eｎｎ
In formula (6), the main diagonal elements Eii are
self-evaluation value of each DMUi, the main non-diagonal
elements Eik (k ≠ i) is cross-evaluation value .The i column
elements of E are evaluation values which DMUi aggresses all
the DMUs, the bigger these values the more efficient DMUi is;
the i row elements (does not include the diagonal elements)
are evaluation values which others aggress DMUi, the smaller
these values the better DMUi is. Using following formula
comprehensive value which DMUi aggresses all DMUs,
named comprehensive evaluation efficiency, is calculated.
1 n
∑ eki
ei =
n k =1
The bigger ei ,the more efficient DMUi is.In the specific
SC selection, firstly comparing Eii, the bigger Eii, the more
prior SC is ; If Eii is equal , then comparing ei, the bigger
ei ,the more prior SC is.
B. Model application
1）Evaluation indexes data sourc：There are quantitative and
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qualitative indexes in above identified evaluation index
(3) system.
a) Quantitative indexes：(1) The financial position indexes:
These indexes can be determined through enterprise financial
statements, on-site investigation, net public data, access
information, banks investigation etc.(2) Construction ability
indexes: qualification standards can be gained through
enterprise’s qualification certificate, such as professional
subcontracting first grade, or second grade, and so on, which
respectively expressed with 3, 2, and 1;If quality assurance
system is adopted by the GB/TI9001-2000-ISO9001: 2000
standard, then it is replaced with 5, if not it is adopted,then is
replaced with 2; Construction experience and performance can
be expressed by the number of similar projects and project
price have been completed in the last three years; Social
reputation can be expressed with credit grade determined by
the banking sector, quality supervision department,industrial
and commercial department. (3) Equipment and technology
force can be expressed by actual equipment amount and the
( 4) number of construction team with what professional title and
educational background. (4) Bidding price and construction
period is the values indicated in bidding document. (5) On-site
project manager can be expressed by project manager
qualifications,such as the first or second grade construction
engineer which respectively expressed with 5 or 3; On-site
technical director can be expressed by his professional title ,
(5) such as 5 represents high grade, 3 represents medium grade. (6)
Resources amount which will be put in specific project can be
expressed by the amount of equipment and construction
technicians. (7) The cooperation cost, Cooperation projects
operation excellent and good rate, cooperation years can be
gained based on the actual situations of the past cooperation
with SCs. As the DEA model has nothing to do with the input
(6) -output dimension, so for the quantitative indexes, it doesn’t
require non-dimensional treatment.
b) Qualitative indexes：In the evaluation index system, in
addition to the above-mentioned quantitative indexes, the
others are qualitative indexes. Quantification process of
qualitative indexes is a difficulty in which the reasonableness
directly impacts on the evaluation model effectiveness and
evaluation results in accuracy .In this paper, qualitative
indexes are evaluated by expert scoring with evaluation
standard,by decimal or centesimal grade system. Experts are
whom with senior titles selected from GC’s safety
management, engineering and technology management,
quality management and construction departments or whom
with economic or technical senior titles retained from the
community,and these experts who are related to SCs should be
avoided. The number of experts is less than five singular
(7) people, experts mark each qualitative indexes of all SCs, and
then take the average of scores.
2) Input and output indexes determination.In evaluation index
system of primary selection subcontracting partner,net assets
debt rate and profit interest rate are negative indexes,and the
rest are positive indexes. In the DEA evaluation system, the
smaller input and the bigger output,the better it is, so input
indexes are net assets debt rate and profit interest rate; In
evaluation index system of selection specific project SC, the
3
smaller the bidding price, the shorter the period and the
smaller the cooperation cost, the better it is, so these three
indexes are input indexes,and the rest are the output indexes.
Ⅳ. ENGINEERING EXAMPLE
After a GC has signed a general contract with
owner,according to engineering characteristics and enterprise
itself condition,the GC decides to subcontract
electromechanical equipment and it’s installation professional
engineering. Due to tight scheduling, the GC invites three SCs
whose construction capacity, financial situation, social
reputation are better and with whom they had many good
cooperations. According to the indexes shown in figure1,
tested by P1 model,three SCs have reached the scale and
technology efficiency. Now to select the best SC of this three
SCs for the subcontracting engineering, according to the index
system of figure2, the evaluation indexes of this three SCs are
as shown in table 1, the qualitative indexes in tab.1 is the
average of three experts scoring by decimal grade system .
Table 1. The indexes data of each SC
Based on model P2, after inputing indexes cross-evaluation
matrix is calculated:
1.0000 0.5556 0.3846
E= 0.9570 1.0000 0.6395
1.0000 1.0000 0.9805
Where,diagonal elements are self-evaluation values:
E11=1.0000 E22=1.0000 E33= 0.9805.
The first SC self-evaluation value is equal to that of the
second, it can not distinguish the efficient SC with inefficient
ones only based on self-evaluation values,so aggressive
cross-evaluation values need to be calculated,which the
comprehensive evaluation efficiency values of the three SCs
are as follows :
e1 = 0.9857, e2 = 0.8519, e3 = 0.6682, according to the
above mentioned evaluation method, the order of the three
SCs is DMU1 >DMU2 >DMU3.

Subcontractors
Index DMU1 DMU2 DMU3
Bidding price ( ten thousand Yuan) 1400 1480 1550
Input Construction scheme (day) 138 135 140
Cooperation cost ( ten thousand Yuan /each times) 1.0 1.2 1.3
Unit price rationality (score) 8 7.5 7.8
Bidding documents responsiveness and completeness (score) 9 9.2 8.8
Quality objective and guarantee measures(score) 9.5 9.0 9.2
Construction scheme and method( score) 9 8.5 8.2
Output
Enterprise qualification standard 3 3 2
Site project manager and technology director 5 5 4
Similar projects experience and performance( ten thousand Yuan) 5000 4000 4500
Construction team technicians (amount) 20 18 17
)
Site safety assurance measures, civilized construction and environmental protection (score) 8.5 8.0 7.8
Cooperation years(year) 3 2 1.5
Cooperation projects operation excellent and good rate（%） 93 92 93
As a result, the first SC is the best one.
Ⅴ. CONCLUSION subcontractors:astrategic asset”, Journal of Construction Management
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