Engineering, Construction and Architectural Management

Comparing the levels of performance of small scale local government contractors

in Northern Nigeria with international practice
Nuru Gambo Ilias Said Radzi Ismail
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Construction and Architectural Management, Vol. 23 Iss 5 pp. 588 - 609
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ECAM
23,5
588
Received 5 December 2014
Revised 22 May 2015
1 November 2015
Accepted 4 January 2016
Downloaded by Doctor Nuru Gambo At 07:26 18 October 2016 (PT)
Engineering, Construction and
Architectural Management
Vol. 23 No. 5, 2016
pp. 588-609
© Emerald Group Publishing Limited
0969-9988
DOI 10.1108/ECAM-12-2014-0155
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0969-9988.htm
Comparing the levels of
performance of small scale
local government contractors
in Northern Nigeria with
international practice
Nuru Gambo, Ilias Said and Radzi Ismail
School of Housing, Building and Planning,
Universiti Sains Malaysia (USM), Pulau Pinang, Malaysia
Abstract
Purpose – The purpose of this paper is to compare the performance levels of small scale local
government contractors (SSLGCs) in northern part of Nigeria with international practice. Previous
studies focused attention primarily on benchmarking the performance of contractors, but were mostly
conceptual rather than from empirical findings. This continuous to pose a challenge to the sustainable
development of the construction industry, particularly, in developing countries like Nigeria. There is
therefore a need to identify, assess and compare performance practice levels of small scale contractors.
Design/methodology/approach – The performance of each contractor was evaluated using a
five-point Likert scale used in obtaining mean performance levels in respect to three classes of
performance practices. A questionnaire survey was administered to major parties in the industry;
clients, contractors and consultants who were selected by using a proportionate stratified random
sampling technique. The contractors’ performance was compared by using ANOVA with post hoc.
Findings – The results indicated that the SSLGCs in Nigeria were average performers and there were
effects and differences among the various contractors’ levels of performance with international practice.
Research limitations/implications – The study is limited to SSLGCs in northern part of Nigeria.
Practical implications – The study provided the criteria for evaluation of SSLGCs’ performance in
Nigeria and other developing countries that faced similar problems.
Social implications – The study created bases for self-evaluation and competition among small scale
contractors in Nigeria for the enhancement of productivity particularly in rural areas and general
national development.
Originality/value – This study emanated from the governmental reports and past researches in the
area of performance management on the persistence of the poor performance of small scale contractors
in construction industry.
Keywords Management effectiveness, Construction management, Performance management,
Performance measures, Performance monitoring
Paper type Research paper
1. Introduction
The performance levels of small scale local government contractors (SSLGCs) posed a
challenge to sustainable development of indigenous small scale construction businesses
that serve as a catalyst for employment generation, national growth, poverty alleviation
and economic development particularly in developing countries (Mohammed and
Obeleagu-Nzelibe, 2013). The performance level of SSLGC is critical to the development of
the construction industry in general and vital to the completion of any construction project
in particular; it is the contractor who converts designs into practical reality. Proper
performance levels of SSLGC lead to increased client satisfaction, improved reputation and
 enhanced competitiveness in the construction industry (Pheng and Chuan, 2006). The Comparing the
performance levels of SSLGCs have been criticized due to the frequency of project delays, levels of
cost and time overruns, projects abandonments and projects not meeting specifications
(Alarcon and Mourgues, 2002; Cox et al., 2003; Masrom, 2012). The performance levels of
performance
contractors are characterized with the firm’s level of efficiency, effectiveness or quality of of SSLGC
works executed by contractors. The quality levels are ranged from poor/very low to
excellent/very high performances. Performance is an anticipated destination of any 589
contractor, and level of performance is considered as a journey toward such destination
(Elgar, 2008). Generally, the level of contractor’s performance depends on three major
factors: financial, technical and management performances of the firms/contractors (Elgar,
2008). Pinto and Pinto (1990) stated that performance or destination of a contractor includes
the efficient utilization of the firm’s financial, technical and management resources. The
firm’s level of performance is defined as a journey so far achieved by the firm in terms of
project cost psychosocial outcomes which refer to the satisfaction of interpersonal relations
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between project client and contractor and among other participants in the project team.
The success of any contractor is to deliver a project within the budgeted cost, time that
conforms to client’s expectations, meets specifications, attains good workmanship and
minimizes construction defects and conflicts (Songer and Molenaar, 1997). The
performance or destination of a contractor can be achieved by assessing the
performance levels of projects executed and identifying areas that need improvement
(Kumaraswamy and Thorpe, 1996).
From the global perspective, attempts have been made in the pharmaceutical industry
to measure and improve the performance of pharmaceutical capital projects.
Pharmaceutical is one of the industries that regularly reviewed the method of
performance measurement and improvement so as to enhance its productivity. The
review of performance in the industry created competition, value for money and above all
increased productivity. This was relevant because timely review and re-measurement of
performance leads to an improvement in any industry. For example, Hwang et al. (2010)
developed a metric for improving project performance in the pharmaceutical industry by
considering cost, schedule and dimensionality of projects. The metrics were regarded as
an efficient tool for pharmaceutical construction projects. This was achieved by
providing solutions to effectively managed cost, schedule and other resources for quality
delivery of pharmaceutical projects. The limitation of the study was that it considered
mostly major industrialized projects using three main internal factors cost, schedule and
dimensionality of projects, and did not consider small scale contractors’ projects that
were always embattled with problems of financing small projects and which
encompassed both technical and managerial issues. Similarly, a different study by
Hwang et al. (2008) discussed the usefulness of metrics for evaluating pharmaceutical
capital projects, which supported the view that industry-specific benchmarking
framework provides reasonable method for measuring and evaluating pharmaceutical
projects performance and hence can be used for continuous performance improvement.
Different studies in the construction industry have developed key performance indicators
(KPI) similar to those used in the manufacturing and service industries. The indicators
were developed to evaluate the performance of contractors in the construction industry.
The construction industry KPI were developed in the areas of cost performance factors,
schedule/time, quality, waste management, customer satisfaction, profitability,
productivity and safety. These KPI were benchmarked to identify key factors that
affected contractors’ performances which included cash flow problem and the nature of
working environment (Hwang et al., 2008; Zairi, 1994; Fisher et al., 1995; Elmuti and
 ECAM Kathawala, 1997; Brah et al., 2000; Ling and Peh, 2005). KPI are sets of business metrics
23,5 used to evaluate or benchmark factors that are important to the success of any project or
business organization (Hwang et al., 2008, 2010; Ling and Peh, 2005). The benchmarking
approach was found to be helpful in comparing performances of Vietnamese
contractors against their competitors, learning from the good practice of others and
execute changes for continuous improvement (Kim and Huynh, 2008). Conversely, poor
590 performance of small scale contractors has been a source of concern to the clients as well
as other parties involved in construction industry (Amusan, 2009). The construction
industry in Malaysia is among the industries facing poor level of contractors’
performance with 92 percent of projects exposed cost overrun, with only 8 percent of
projects achieving targeted cost, with time overrun usually between 5 and 10 percent, all
of which were attributed to problems associated with financial, technical and
management performances of contractors (Rahman et al., 2012). In India, over 40 percent
of construction projects faced time overrun of between 1 and 252 months due to
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contractors financial problems which is considered as the main cause of the industry’s
poor performance, and further leading to technical and managerial problems of most of
the construction firms in the country (Iyer and Jha, 2005, 2006; Loevinsohn and Harding,
2005; Majid and McCaffer, 1998). In Ghana, monthly payment difficulties by client
agencies in the public sector is the most important factor contributing to poor
performance of small scale contractors, followed by contractor management and
technical perfomances (Frimpong et al., 2003). The performance level of SSLGC in Nigeria
is very alarming. The report indicated that about 60 percent of the estimated initial cost
of projects is lost due to poor performance of contractors. This argument was supported
by the report of local government monitoring and evaluation committee (Ezeh, 2013).
Most of the government projects in Nigeria ended up as abandoned projects, and Local
Government Monitoring and Evaluation Committee reported that 65.5 percent of local
government projects were abandoned between the 2008 and 2009 fiscal years, because of
financial problems and incompetency of small scale contractors in handling capital
projects (Local Government Monitoring and Evaluation Committee, 2009). Government
administrations in the past have attempted to solve the problems of poor performance of
small scale contractors through establishment of KPIs. However, this has not improved
the situation. The improvement and change may come through empirical findings by
making comparisons against international contractors, as well as evaluating the journey
achieved by the contractors, i.e., level of contractor’s performance and improvement
toward the identified area of their weakness. The purpose of this study is to assess and
compare the performance levels of SSLGC in the northern part of Nigeria with
international practice. Northern part of Nigeria is one of the regions in the country that is
considered as backward in terms of availability of social amenities such as good roads,
affordable housing, safe drinking water and electricity. The region has the highest
population and land mass, and governments in the past, after the end of military rule in
1999, have attempted to provide the rural areas of the region with feeder roads, safe
drinking water, low-cost housing estates, etc. However, efforts of past administrations
failed probably due to low performance of contractors engaged in providing the
amenities mentioned.
The objectives of the study are:
(1) to identify and assess the level of performance of SSLGC in Northern Nigeria; and
(2) to compare the performance level of SSLGC in Northern Nigeria with
international practice.
 2. Literature review Comparing the
The overall or general contractor performance comprises three key areas of performances: levels of
financial, technical and management performances (Hatush and Skitmore, 1997; Alarcon
and Mourgues, 2002; Singh and Tiong, 2005). These areas of performances have
performance
significant impact on the overall/general performances of SSLGC in developing countries of SSLGC
(Singh and Tiong, 2005).
591
2.1 Financial performance of SSLGC
Contractor financial problem is the financial difficulties a contractor faced of not having
sufficient fund to carryout construction activities, and includes payments of material,
plant and equipment, salaries and wages of labor. This contributes to poor financial
performance of small scale contractors (Ali et al., 2012; Zagorsky, 2007). Delays or the
inability of project clients to pay contractors on time, low-profit margins, insufficient
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capital base and excessive debt are the major factors contributing to financial difficulties
of SSLGC (Thornton, 2007). In developing countries like Indonesia and Ghana, financial
performance of small scale contractors was considered as less effective with associated
problems of slow collection, lack of prompt payment of approved valued works, topping
the list in the years 2005 and 2007, where contractors received late payment from project
clients (Faridi and El-Sayegh, 2006; Majid and McCaffer, 1998; Arditi et al., 1985; Al-Khalil
and Al-Ghafly, 1999; Frimpong et al., 2003; Assaf and Al-Hejji, 2006). In Malaysia, delays
in payments of approved valued works have negative impacts on the financial
performance of small scale contractors, leading to project delays, abandonment and
substituting of specified material with inferior ones, seriously affecting the performance
of the contracting business (Sambasivan and Soon, 2007). In Saudi Arabia, both public
and private clients rated the performance of small scale maintenance contractors as
effective due to proper financial management of projects (Al-Hammad and Assaf, 1996).
Insufficient profit is the second highest factor contributing to the financial difficulties of
small scale contractors in Malaysia; the effects of insufficient profits cannot be controlled
because it is due to adverse economic conditions (Ali et al., 2012). Negative impact of
insufficient capital is one of the major causes of financial difficulties among contractors
with poor financial control by contractors leading to insufficient capital and hence,
contractors will have excessive debts, further exacerbating their financial difficulties as
they cannot pay back the debts (Ali et al., 2012; Liu, 2010). SSLGCs have very low
financial reserves and use the profit from ongoing projects to finance the next; hence, a
loss in one project ultimately leads to cash flow problems and liquidation (Stretton, 1984).
There is also the tendency for SSLGC in developing countries to take money out of the
business for spending on personal items (International Labour Organization, 1987). Most
SSLGCs’ businesses are owned, operated and controlled by a single person, i.e. the sole
owner, and it is thus very likely that project funds would sometimes be channeled into
personal matters which might result in financial strain on the projects. In addition, delays
in contractor payment caused by the cumbersome process of making contractor
payments in the public sector invariably create financial problems to the contractor.
Unless well managed, this delay is very damaging to contractors who often operate in a
location remote from the client (Edmond and Miles, 1984; Wasi and Skitmore, 2001).

2.2 Technical performance of SSLGC

Technical performance is defined as the totality of features required by a project or
services to satisfy a given need and fitness for purpose (Parfitt and Sanvido, 1993).
 ECAM Technical performance is a guarantee of the projects that convince the clients or the end
23,5 users that the specification was completely adhered to during construction.
The meeting of specification is suggested by Songer and Molenaar (1997) and
Wateridge (1995) as one way to achieved contractor’s technical performance, and
defined specification as workmanship or guidelines provided to contractors by clients
at commencement of projects. The aim of technical specification is to ensure that the
592 technical requirements specified are achieved and is provided to ensure that buildings
are constructed in good standards and according to proper procedures. Freeman and
Beale (1992) extended the definition of technical performance to scope and quality.
Hence, meeting technical specifications are grouped under the “quality” category.
In comparing technical performance of contractors in Japan, UK and the USA, the
Japanese contractors completed projects mostly with very minor defects and provided
more time for defects liability period. The contractors were less often called back for
rework as against UK and US contractors that seek regular feedback on defects from
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project clients. The superior technical performance of Japanese contractors against

their American and UK counterparts was due to quality consciousness, advance
quality management and quality assurance (Xiao and Proverbs, 2002). Identifying
factors contributing to poor technical performance of SSLGCs is one major step in
improving the performance level of SSLGCs, as most times these contractors do not
own plant and equipment required for the construction work; they rent the equipment
when required and at times these plant and equipment are scarce particularly during
busy seasons of construction, and the equipment were usually not properly maintained
(Sambasivan and Soon, 2007). Mistakes in setting out buildings at construction stages,
inadequate contractor experience and frequent failure of construction equipment were
the main factors contributing to the poor technical performance of SSLGCs
(Sambasivan and Soon, 2007). Also the findings from Memon et al. (2011) supported
the previous findings that contractor inexperience and inadequate experience of labor
were the major factors contributing to poor technical performance of SSLGCs in
developing countries. Skill and technical competence of contractor workforce,
contractor’s ability to identify and mitigate technical and schedule/program risk,
contractor’s compliance with technical requirements were the major factors influencing
technical performance of projects (Jafari, 2013; Frimpong et al., 2003). However, Luu
et al. (2008a) argued that inability of the firms to recruit and retain qualified technical
staff, inaccuracy of detail working drawings and lack of good cooperation among the
parties in the contracts were the major factors contributing to poor contractors’
technical performance. This view was supported by Doloi et al. (2011), and added that
inability of contractors to proactively respond to changes in technical direction
influenced their technical performance.

2.3 Management performance of SSLGC

Effective and efficient management performance of construction business is very
important to ensure projects are completed on time and within budgeted cost. Poor
coordination contributes to delays as well as cost overrun. Poor site management occur
when contractors do not have good planning, organization and coordination and lack of
knowledge in managing the project team (Kadir et al., 2005). A project manager is the
leader in a construction project that he is required to manage all the works on site from
monitoring progress of construction works to managing all the administrative work in
the project. It is thus of utmost importance for the project manager to manage the work
and project teams effectively. Poor site control affects the whole team performance and
 also the progress of works, resulting in the eventual outcome of project cost and time Comparing the
overruns (Elinwa and Joshua, 2001; Faridi and El-Sayegh, 2006; Arditi et al., 1985; levels of
Arditi and Pattanakitchamroon, 2006; Toor and Ogunlana, 2008; Aibinu and Odeyinka,
2006). Poor management performance is one of the major factors crippling the
performance
development of SSLGCs’ businesses in developing countries. Kumaraswamy (1996) of SSLGC
compared the performance of Hong Kong contractors with international practice trends
in evaluation and selection of contractors, and found that the managerial performance 593
of contractors was satisfactory with the need for improvement in tendering procedure
and provision of incentives. Similarly, the managerial performance of Saudi Arabian
contractors was described as effective in project planning, supply chain and
management of sub-contractors (Al-Hammad and Assaf, 1996). Studies in the past
revealed the contractor’s inability to effectively coordinate, integrate and manage the
services of subcontractors, inefficiency in interfacing and communicating with the
government’s/client’s staff or representative and ineffectiveness in dealing with
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emergency situations on site are the three major factors contributing to poor
management performance of contractors (Assaf and Al-Hejji, 2006; Frimpong et al.,
2003). Faridi and El-Sayegh (2006) argued that contractors’ poor demonstration of
strong commitment to integrity and business ethics, reasonableness, cooperation and
commitment to client satisfaction, poor level of decentralization of contractor’s project
organization were the major factors contributing to the poor management performance
of SSLGCs. Doloi et al. (2011) supported this argument and added that trustworthiness
of contractor, frequent site meetings and constant review of project programs and
schedules, together with the necessary follow-up and rectification measures would go a
long way toward improving management performance of SSLGCs.

3. Research method
This study is a quantitative in nature; a questionnaire survey was administered to 550
small scale contractors, consulting firms and project clients in northern part of Nigeria.
The region comprises of 19 states and federal capital territory Abuja. The region
represents almost 80 percent of the total country’s land mass (744,249.08 Sq Km) and a
population of about 95 million peoples (National population commission, 2000).

3.1 Research population and sample size

Everitt and Skrondal (2002) stated that population is a term used for any limited or
unlimited group of units, which are usually people but may be, for example,
organizations and items. Therefore, the population for this study is the total registered
Nigerian small scale contractors operating at the local government levels of the
Nigerian construction market, total registered project management consultancy firms
in Nigeria and total number of local governments in Nigeria.
The total number of the population is as follows:

i. Registered small scale contractors 2,130

ii. Project management consultancy firms 1,777
iii. Local governments 774
Total 4,681

Sources of information are from Nigerian Business Directory, 2014 (www.Vconnect.

com) and Constitution of the Federal Republic of Nigeria 1999 as amended.
 ECAM The required number of samples based on the population size is 357 based on
23,5 Krejcie and Morgan (1970) and the rule of thumb as in Sekaran and Bougie (2011).
This study used simple proportionate stratified random sampling method for selecting
research samples because it is often regarded as ideal (Oppenheim, 2000).

3.2 Data collection

594 According to Sekaran and Bougie (2011) data for research are collected in different
ways and in various settings from different sources. This study used designed
questionnaires to collect the data from SSLGC in Nigeria, project management
consultancy firms and local government councils. The data for this study were
firsthand data source (primary). According to Sekaran and Bougie (2011) primary data
are the original information obtained firsthand on the variables of consideration for a
specific purpose of the study. This study collected primary data from major
construction works stakeholders in Nigeria. A total of 357 questionnaires were
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analyzed. A statistical package IBM SPSS version 21 was used in the analysis of
collated data. One-way ANOVA with post hoc SPSS program was used to compare and
evaluate the differences among various group levels of performances of SSLGCs in
northern part of Nigeria. One-way ANOVA with post hoc is the most suitable program
for evaluation of the differences between two or more groups (Pallant, 2010). The study
recorded the overall response rate of 65 percent compared to researches of Odeyinka
et al. (2008) with 52 percent and Yasamis et al. (2002) with 54 percent.

3.3 Operationalization of the research constructs

The research constructs comprising financial, technical and management Performances of
SSLGC were all measured using five-point Likert scale. Likert scale concerns with
uni-dimensionlity that makes sure all factors measure the same thing and is the most
popular scaling procedure in use today (Giudici, 2003; Oppenheim, 2000). Overall
performance of small scale construction business being the dependent construct was
measured using five-point Likert scale; the scale defined the level of performance of the
business ranging from very low performance to very high performance. Level of
performance is described as the journey so far reached by the business (Elgar, 2008).
The performance levels are defined by Team Leadership (2010) below:
(1) very low performance (level 1) refers to unsatisfactory performance that does
not meet any requirement of job standards;
(2) low performance (level 2) implies performance that slightly or nearly meets
some requirements of the job standards;
(3) average performance (level 3) describes the performance that consistently meets
the normal expectations of the work standards;
(4) high performance (level 4) implies where the contractor consistently meets and
frequently exceeds most expectations of the work standards; and
(5) very high performance (level 5) implies achievements in all aspects of
responsibilities are consistently and substantially beyond expectations.

3.4 Content validity

Sekaran and Bougie (2011) stated that content validity and reliability are used in
research to validate the instrument used for a research study. Content validity is used
 to assess how well an idea or concept is represented by the items in a questionnaire. Comparing the
The content validity for this study was conducted by requesting experts in the field levels of
of construction and project management researchers and academics on the
suitability of the items in the questionnaire. After thorough discussions, the
performance
experts verified, validated and agreed on nine items under financial performance, of SSLGC
11 items under technical performance and nine items under management
performance as shown in Table I. 595
The following hypotheses were developed to test the differences in the performance
levels of SSLGCs in Northern Nigeria; the hypotheses are based on null hypotheses:
H01. There are no significant differences and effects among the levels of contractors
financial performance.
H02. There are no significant differences and effects among the levels of contractors
technical performance.
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H03. There are no significant differences and effects among the levels of contractors
management performance.

S/No. Financial performance Technical performance Management performance

1 Contractor’s ability to apply Skill and technical competence of Contractor’s ability to manage
cost efficient practices contractor’s workforce services of sub-contractors
2 Contractor’s accuracy in Contractor’s ability to identify and Contractors efficiency in
pricing bid documents mitigate technical risk communicating and
interfacing with client
representatives
3 Contractor’s proficiency in Contractor’s compliance with Contractor’s effectiveness in
tackling financial project technical requirement dealing with emergency
difficulties during situation
construction
4 Contractor’s financial Prompt attention to technical Contractor’s commitment to
stability problems integrity and business ethics
5 Contractor’s financial bid Contractor’s responsiveness to Contractor’s reasonableness
evaluation method change in technical direction in meeting clients
requirements
6 Contractor’s financial Contractor’s ability to recruit and Level of decentralization of
capability to execute retain qualified technical staff contractor’s organization
projects
7 Contractor’s conformity Contractor’s cooperation with Trustworthiness of
with planned expenditure government technical staff and contractor
effective implementation of
technical variation
8 Contractor’s experience in Contractor’s ability to provides Frequency of projects
financial management products that satisfied technical meeting
standards
9 Contractor’s ability to Firm’s availability of relevant Contractor’s ability in
attract loans from financial plant and equipment meeting previous project
institutions programs
10 _ Contractor’s accuracy of _
interpreting contract documents Table I.
11 _ Firm’s adequacy or number of _ Items in survey
technical staff instrument
 ECAM 4. Data analysis and results
23,5 The analysis and discussion of the data obtained for this study is presented in
this section.

4.1 Reliability test

Table II shows the reliability test for this study and was conducted using IBM SPSS
596 software. The reliability test was achieved by determining Cronbach’s α for each
construct. The α coefficient shows how reliable and consistent the survey instrument
was in measuring the concept it was intended to measure. The values of the Cronbach’s
α for the three main research constructs were as follows: financial performance was
0.71; technical performance was 0.84 and 0.83 for management performance, with all
values well above the prescribed Cronbach’s α value of 0.70, according to Sekaran and
Bougie (2011) and Pallant (2010). The Cronbach’s α values for the three constructs thus
confirm that the survey instrument was reliable and consistent in measurement of the
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intended purpose or items.

4.2 Factor analysis

Table III shows the factor analysis for this study. The factor analysis was carried out to
test and identify problems associated with multi-collinearity and singularity in the
survey instrument on the three major constructs namely: financial, technical and
management performances of contractors. The Kaiser-Meyer-Olkin measure of
sampling adequacy KMO was 0.92, 0.87 and 0.86, respectively, and all are significant at
p ¼ 0.00 significance level, the total variance obtained were 58.68, 64.27 and
71.53 percent, respectively. The determinants of R-Matrix were 0.006, 0.001 and 0.003
for financial, technical and management performances, respectively. This showed that
all the three determinants were greater than 0.0001 which indicated that there was no
multi-collinearity or singularity among the items in the research instrument. Therefore,
no single item was extracted from the research instrument due to either multi-
collinearity or singularity (Field, 2009).

4.3 Descriptive statistics

One-way ANOVA with post hoc SPSS program was used to evaluate the difference
among the performance levels of SSLGCs in northern part of Nigeria and was also used
to identify the differences among the contractors’ scores. The contractor’s levels of
performances were categorized and grouped into five groups. The first group involves

Table II. Financial Technical Management

Reliability test by performance performance performance
Cronbach’s a
coefficient 0.71 0.84 0.83

Table III. Constructs Total variance explained (%) R-Matrix KMO p-value
Factor analysis of
financial, technical Financial performance 58.68 0.006 0.92 0.00
and management Technical performance 64.27 0.001 0.87 0.00
performances Management performance 71.53 0.003 0.86 0.00
 contractors having very low rating in the construction industry, i.e. contractors with Comparing the
the ratings between 1.1 and 2.0 score as contractors having very low performance. levels of
Then performance-level ratings between 2.1 and 3.0 scores are contractors with low
performance in the industry. The performance ratings between 3.1 and 4.0 scores
performance
indicate contractors with average performance. The scores between 4.1 and 4.9 rated of SSLGC
contractors with high performance. Finally, scores of 5.0 and above referred to
contractors with very high/excellent performance in the industry ( Jafari, 2013; Team 597
Leadership, 2010; Assaf and Al-Hejji, 2006; Frimpong et al., 2003; Dissanayaka and
Kumaraswamy, 1999).
4.3.1 Descriptive statistics of financial performance. Table IV shows the descriptive
statistics for this analysis which indicated that the mean score value of contractors
having very low performance was 1.56 and the standard deviation of 0.16. Contractors
that scored low performance had a mean value of 3.6 and the standard deviation of 1.14,
the contractors with average performance scores had a mean value of 2.95 with a
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standard deviation of 0.90 with regards to financial performance of the contractors. The
contractors with high performance scored the mean value of 3.94 and the standard
deviation of 0.60. Lastly contractors with very high performance scored the mean value
of 4.81 and standard deviation of 0.32 with regards to the financial performance of
contractors. The mean total score was 3.58 which indicated that SSLGCs in Northern
Nigeria were average performing contractors with regards to their financial practices.
4.3.2 Descriptive statistics of technical performance. Table IV also shows the
descriptive statistics of contractors’ technical performance. Contractors with a very low
performance score had a mean of 1.41 and standard deviation of 0.58. Contractors with

n Mean SD SE

Finper
VLP 2 1.5556 0.15713 0.11111
LP 69 3.6232 1.14415 0.13774
AP 138 2.9501 0.89958 0.07658
HP 109 3.9419 0.60227 0.05769
VHP 39 4.8148 0.32075 0.05136
Total 357 3.5789 1.03291 0.05467
Tecper
VLP 2 1.4091 0.57854 0.40909
LP 69 3.6324 1.16498 0.14025
AP 138 2.8518 0.66406 0.05653
HP 109 4.0025 0.52362 0.05015
VHP 39 4.8508 0.26006 0.04164
Total 357 3.5643 0.99206 0.05251
Manper
VLP 2 1.0000 0.00000 0.00000
LP 69 3.8309 1.10548 0.13308
AP 138 3.6111 0.98271 0.08365
HP 109 3.8369 0.82742 0.07925
VHP 39 4.8547 0.23522 0.03767 Table IV.
Total 357 3.8438 0.99854 0.05285 Average
Notes: VLP, very low performance; LP, low performance; AP, average performance; HP, high performance of
performance; VHP, very high performance. *The mean difference is significant at the 0.05 level contractors
 ECAM a low performance score had a mean value of 3.63 and standard deviation of 1.16.
23,5 Contractors that scored average performance with regards to their technical
performance had a mean of 2.85 and standard deviation of 0.66. Contractors having
a high performance with regards to their technical practice scored a mean value of 4.00
and standard deviation of 0.52. Lastly contractors that scored very high performance
with regards to their technical practice had a mean value of 4.85 and standard deviation
598 0.26. The total mean value of the technical performance of small scale contractors in
Nigeria was 3.56 which indicated that SSLGCs in Northern Nigeria were average
performing contractors with regards to their technical practices.
4.3.3 Descriptive statistics of management performance. Table IV further captures
descriptive statistic in respect of the managerial performance of the contractors. The
analysis indicated that contractors with a very low performance scored a mean value of
1.00 and standard deviation of 0.00. Contractors that score low performance with
regards to their management performance had a mean value of 3.83 and standard
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deviation of 1.11. Contractors with average performance scored a mean value of 3.61
and standard deviation of 0.98. Contractors with the mean score value of 3.84 and
standard deviation of 0.83 performed high. Lastly contractors with the mean score
value of 4.85 performed very high with regards to their management performance. The
total mean value of contractors with respect to their managerial performance was 3.84.
This indicated that local government contractors in Northern Nigeria were average
performing contractors with respect to their managerial practices.

4.4 Graphical representation of descriptive statistics

Figure 1 shows the graph of the mean levels of contractors’ financial performance
practice. Contactors with very low-level performance had a mean value of 1.56, while
those with low performance had a mean value of 3.60. Contractors with average
performance scored a mean value of 2.95, and contractors with high performance
level scored a mean value of 3.94. Lastly, contractors with very high performance
scored a mean value of 4.81. The total mean score was 3.58 which indicated that small
scale contractors in Northern Nigeria had average financial practice with regards to
projects execution.

5.00

4.00
Mean of Finper

3.00

2.00

Figure 1. 1.00
Level of contractor’s
financial Very low Low Average High Very high
performance performance performance performance performance
performance
Level of contractor’s performance
 Figure 2 shows the graph of contractors’ technical performance. Contractors with very Comparing the
low performance had a mean score value of 1.41, while those with low performance had levels of
a mean score of 3.63. Contractors with average performance had a mean score value of
2.85, while contractors with a mean value score of 4.00 were high performing
performance
contractors with respect to their technical practice. Lastly, contractors with very high of SSLGC
performance had a mean value of 4.85. The total mean of technical performance level
was 3.56, which indicated that SSLGC in Northern Nigeria were average performing 599
contractors with respect to their technically practices.
Figure 3 shows the graph of management performance of SSLGCs in Northern
Nigeria. Contractors with the mean score value of 1.00 had a very low performance,
followed by contractors with low performance score having a mean score value of 3.83.
Contractors with mean score value of 3.61 were average performing contractors; while
those with 3.84 mean score value were high performing contractors. Lastly, very high
performing contractors scored a mean value of 4.85. Finally, the total mean score value
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of SSLGCs in Northern Nigeria with respect to their management practice was 3.84.
This indicated that SSLGC in Northern Nigeria were average performing contractors
with respect to their management practices.

5.00

4.00
Mean of Tecper

3.00

2.00

1.00 Figure 2.
Level of contractor’s
Very low Low Average High Very high technical
performance performance performance performance performance
performance
Level of contractor’s performance

5.00

4.00
Mean of Manper

3.00

2.00

Figure 3.
1.00 Levels of
contractors’
Very low Low Average High Very high management
performance performance performance performance performance
performance
Level of contractor’s performance
 ECAM 4.5 Differences among the levels of contractors performances
23,5 Table V shows the results of ANOVA test. The results indicated that the level of
contractor’s performance had a significant effect on the financial practice of SSLGC, with
the result value of F(4, 352) ¼ 49.551, at p ¼ 0.000. The mean value for the five performance
group levels indicated that the performance levels of contractors improve from very low
performance to very high performance except between low and average performances,
600 where the result does not show any significant improvement. This is probably due to the
respondents having assessed the two levels of performances almost at equal levels. The η2
was calculated to be 0.36 which indicated that there was large effect among the performance
levels of SSLGCs with regards to their financial practice (Cohen, 1988). This therefore leads
to the rejection of the null hypothesis (H01) that there are no significant differences and
effects among the levels of contractors’ financial performance in Northern Nigeria.
The level of contractors’ performance with regards to the technical practice of the
contractors was significant at F(4, 352) ¼ 78.466, p ¼ 0.000. The mean value for the five
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group levels of performances improved from very low performance to very high
performance with the exception between low and average performances which might
be due to the closeness of the two performance levels. This indicated that there was no
significant difference between the two group levels of performances. The η2 was
calculated to be 0.47 which indicated that there was large effect among the performance
levels of contractors with regards to contractors’ technical practice (Cohen, 1988). This
thus leads to rejection of the null hypotheses (H02) that there are no significant
differences and effects between the levels of contractors’ technical performance in
Northern Nigeria. The management performance level of SSLGC was also significant at
F(4, 352) ¼ 19.179, p ¼ 0.000. The contractor’s performance improved from very low to
very high levels of performance. The η2 was calculated to be 0.18 which indicated that
there was a large effect on the group levels of contractors’ performance with regards to
managerial practice (Cohen, 1988). This leads to rejection of the null hypotheses (H03)
that there are no significant differences and effects among the group levels of
contractors’ management performance in Northern Nigeria.

4.6 Comparisons among the group levels of contractors performance

Table VI shows the multiple comparisons among the contractors’ group levels of
performances. The group levels of contractors performances were as follows: the first

Sum of squares df Mean square F Sig. η2

Finper
Between groups 136.825 4 34.206 49.551 0.000 0.36
Within groups 242.993 352 0.690
Total 379.818 356
Tecper
Between groups 165.151 4 41.288 78.466 0.000 0.47
Within groups 185.218 352 0.526
Total 350.369 356
Manper
Table V. Between groups 63.518 4 15.879 19.179 0.000 0.18
Table of Within groups 291.446 352 0.828
ANOVA test Total 354.964 356
 (I) Level of contractor’s ( J) Level of contractor’s
Comparing the
performance (group) performance (group) Mean difference (I-J) SE Sig. levels of
performance
VLP LP −2.06763* 0.59596 0.018
AP −1.39452 0.59175 0.237 of SSLGC
HP −2.38634* 0.59287 0.003
VHP −3.25926* 0.60238 0.000
LP VLP 2.06763* 0.59596 0.018 601
AP 0.67311* 0.12250 0.000
HP −0.31871 0.12782 0.186
VHP −1.19163* 0.16645 0.000
AP VLP 1.39452 0.59175 0.237
LP −0.67311* 0.12250 0.000
HP −0.99182* 0.10647 0.000
VHP −1.86473* 0.15067 0.000
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HP VLP 2.38634* 0.59287 0.003

LP 0.31871 0.12782 0.186
AP 0.99182* 0.10647 0.000
VHP −0.87292* 0.15503 0.000 Table VI.
VHP VLP 3.25926* 0.60238 0.000 Post hoc
LP 1.19163* 0.16645 0.000 comparisons of
AP 1.86473* 0.15067 0.000 contractors’ financial
HP 0.87292* 0.15503 0.000 performance
Note: *The mean difference is significant at the 0.05 level (Scheffe)

group is very low performing contractors with respect to their financial, technical and
management practices. The second group is low performing contractors. The third group is
average performing contractors. The fourth group is high performing contractors and fifth
group is very high performing contractors. The level of performance practice was a
measure that indicated which group a contractor belonged to. The group of contractors
with very low performance level differ significantly with the groups of low, high and very
high performing group levels at po0.05 level of significance, but does not differ
significantly with the average performing group level. This was as a result of almost the
same consensus among respondents’ ratings between the two groups. The group of
contractors with low performance level differs significantly with the groups of very low,
average and very high group levels of performances at po0.05 level of significance. The
group of average performing contractors level differ significantly with the groups of low,
high and very high performance levels at po0.05 significance level. Lastly the group of
very high contractors’ performance levels differs significantly with the groups of very low,
low, average and high performance levels. This indicated that the financial performance of
SSLGCs improves whenever a contractor moves from group of lower performance level to
a group of very high performance level and as they are able to achieve financial stability.
Table VII shows the post hoc comparisons among the five groups of contractors’
performance levels with respect to the contractor’s technical practice. The group of
contractors with very low performance levels differs significantly with the groups of low,
high and very high performance levels at po0.05 significance level, but does not differ
significantly with the groups of average performance level. This might be as a result of the
lack of consensus among respondents rating the two groups. The group of contractors’
with low performance level differs significantly with the groups of very low, average, high
and very high performance levels at po0.05 significance level. The group of contractors’
with average performance levels differs significantly with the group of low, high and very
 ECAM ( J) Level of contractor’s
23,5 Scheffe performance Mean difference (I-J) SE Sig.

VLP LP −2.22332* 0.52031 0.001

AP −1.44269 0.51663 0.102
HP −2.59341* 0.51761 0.000
VHP −3.44172* 0.52591 0.000
602 LP VLP 2.22332* 0.52031 0.001
AP 0.78063* 0.10695 0.000
HP −0.37009* 0.11159 0.028
VHP −1.21840* 0.14532 0.000
AP VLP 1.44269 0.51663 0.102
LP −0.78063* 0.10695 0.000
HP −1.15072* 0.09295 0.000
VHP −1.99904* 0.13155 0.000
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HP VLP 2.59341* 0.51761 0.000

LP 0.37009* 0.11159 0.028
AP 1.15072* 0.09295 0.000
VHP −0.84831* 0.13535 0.000
Table VII. VHP VLP 3.44172* 0.52591 0.000
Post hoc comparison LP 1.21840* 0.14532 0.000
of contractors’ AP 1.99904* 0.13155 0.000
technical HP 0.84831* 0.13535 0.000
performance Notes: VLP, very low performance; LP, low performance; AP, average performance; HP, high
(Scheffe) performance; VHP, very high performance. *The mean difference is significant at the 0.05 level

high performance levels at po0.05, but does not differ significantly with groups of very
low performance levels. The group of contractors with high performance levels differs
significantly with the groups of very low, low, average and very high performance levels
at po0.05 significance level. The group of contractors with very high performance level
differs significantly with the groups of very low, low, average and high performance
levels. This indicated that the technical performance of contractors improved whenever a
contractor moves from lower performance group level to very high performance group
level where they tended to achieve very high technical practice.
Table VIII shows the post hoc comparisons among the groups of contractors’
performance levels with respect to the contractor’s management practice. The group of
contractors with very low performance level differs significantly with the groups of low,
average, high and very high performance levels at po0.05 significance level. The group
of contractors with low performance levels differs significantly with the groups of very
low and very high performance levels, but does not differ significantly with the group
of average and high performance levels at po0.05 significance level. The group of
contractors with average performance level differs significantly with the groups of very
low and very high performance levels but does not differ with low and high performance
levels at po0.05 significance level. The group of contractors with high performance levels
differ significantly with the groups of very, low and very high performance levels but does
not differ significantly with low and average performance levels at po0.05 significance
level. Lastly, the group of contractors with very high performance levels differs
significantly with the groups of very low, low, average and high performance levels at
po0.05 significance level. This indicated that the management performance practice of
contractors improved whenever a firm moves from lower performance level to very high
performance level where they tended to achieve very high managerial practice.
 (I) Level of contractor’s ( J) Level of contractor’s Mean difference
Comparing the
performance performance (I-J) SE Sig. levels of
performance
VLP LP −2.83092* 0.65268 0.001
AP −2.61111* 0.64806 0.003 of SSLGC
HP −2.83690* 0.64929 0.001
VHP −3.85470* 0.65971 0.000
LP VLP 2.83092* 0.65268 0.001 603
AP 0.21981 0.13416 0.612
HP −0.00598 0.13998 1.000
VHP −1.02378* 0.18229 0.000
AP VLP 2.61111* 0.64806 0.003
LP −0.21981 0.13416 0.612
HP −0.22579 0.11660 0.442
VHP −1.24359* 0.16501 0.000
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HP VLP 2.83690* 0.64929 0.001

LP 0.00598 0.13998 1.000
AP 0.22579 0.11660 0.442
VHP −1.01780* 0.16978 0.000
VHP VLP 3.85470* 0.65971 0.000 Table VIII.
LP 1.02378* 0.18229 0.000 Post hoc comparison
AP 1.24359* 0.16501 0.000 of contractors
HP 1.01780* 0.16978 0.000 management
Notes: VLP, very low performance; LP, low performance; AP, average performance; HP, high performance
performance; VHP, very high performance. *The mean difference is significant at the 0.05 level (Scheffe)

5. Discussions and findings

IBM SPSS software was used to achieve the aim of this study. One-way ANOVA with
post hoc SPSS program was used to evaluate group levels of contractors’ performance
by considering three performance practices of contractors namely: financial, technical
and management. The contractors’ performance groups were classified into very low
performing group, low performing group, average performing group, high performing
group and very high performing group. The contractors’ level of performance is the
metric that determined which group a contractor belonged to. The metric is based on
the assessment of three major stakeholders in the Nigerian construction industry
(contractors, clients and consultants). The assessment was based on the items
contained in the research survey instrument. The stakeholders were asked to assess
and rate the items in the questionnaire on a five-point Likert scale, i.e. ratings from very
low performance practice to very high performance practice. The performance groups’
practices and performance ratings were adapted from the studies of Team leadership
(2010), Oyewobi and Ogunsemi (2010), Bassioni et al. (2004) and that of Luu et al.
(2008b). The overall contractors’ performance practices comprised of financial,
technical and management practices (Hatush and Skitmore, 1997; Alarcon and
Mourgues, 2002; Singh and Tiong, 2005).
The mean value of SSLGCs’ financial performance practice was 3.58, which falls
within the range of average financially performing contractors. This is probably as a
result of small scale local government contracting businesses in northern part of
Nigeria being predominantly small size in nature. The contractors are engaged in
small size contracting businesses, usually associated with refurbishment works
and buildings of small sizes as compared with major international contractors.
 ECAM The contractors work on very tight financial resources with thin profit margins,
23,5 sometimes even translate to making loses on the business. Moreover, small scale
contractors in northern part of Nigeria lack the pre-requisite knowledge of financial
management since the business is mostly a one-man outfit with sole owner having
absolute and sole right to decide on what to do with the profits gained. The results
further indicated that there were significant differences between contractors’ level of
604 financial performance practice. This illustrates that whenever a contractor moves from
lower to higher performance levels the contractor gains increased financial skill and is
therefore able to manage financial resources better while minimizing waste.
The differences emanated from performance group metric that measures and rates
the contractors’ performance practices into five groups. The respondents agreed that
there were differences among the five group levels of performances, and the results also
indicated that there were significant effects among the various group levels of
performance. This is because of the agreement among stakeholders in the construction
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industry that there were differences among the five group levels of performance. The
financial performance of SSLGCs in Northern Nigeria as compared with contractors in
Indonesia and Ghana was satisfactory as against ineffective performance of
contractors in the two countries mentioned. The value of small scale contractors’
technical performance was 3.56 which fall within the range of average technical
performing contractors. This is probably due to the contractors’ tight resources of not
being able to employ adequate skilled labors, procure right plants and equipments,
appropriately train available staff and adhering to sound business ethics. The results
indicated significant differences among the five group levels of contractors’
performance with a high effect. The reason was that there was a consensus among
the stakeholders’ ratings and the stakeholders agreed that low performing contractors
would not have the same technical practice as compared to the high performing ones.
The technical performance of SSLGCs in Northern Nigeria as compared with Japanese,
USA and UK contractors was low due to frequency of abandoned projects and problem
of reworks. The mean value of contractors’ management performance was 3.84 which
also fall within the range of average performing contractors with regards to
management practice. The result indicated significant differences among the
contractors’ management performance levels. This is probably due to the inability of
contractors to manage services of sub-contractors on-site, poor project planning, poor
level of contractor’s team decentralization processes, etc. The construction business in
northern part of Nigeria is mostly a one man business, with the owner having full
authority on all matters of the firm, with little or no fear of repercussions on the
business. The contractor close the door of partnerships in the business because of the
freedom enjoyed via sole ownership and the complete autonomy of decision making at
any time. These are the main reasons for the low/average performance of SSLGCs in
northern part of Nigeria. The management performance of SSLGCs in northern part of
Nigeria mirrors a similar trend with management performance of contractors in
Hong Kong and Saudi Arabia.

6. Conclusions and recommendations

The study considered three performance practices, namely: financial, technical and
management with the view to identify contractors’ areas of weaknesses and improve
upon it. The study also serves as a wake-up call and to provide awareness to SSLGCs in
Northern Nigeria as well as project clients in the public and private sectors to assess the
levels of performance practices of potential contractors in the region before any
 invitations to tender. The study further found that SSLGCs in northern part of Nigeria Comparing the
were average performing contractors as compared to contractors in Japan, USA and levels of
UK, and had similar performance capabilities with small scale contractors in Saudi
Arabia, Hong Kong, Malaysia and Papua New Guinea. It was also revealed that there
performance
were significant differences and effects among the five levels of contractors’ of SSLGC
performance practices. The performance of SSLGCs in Nigeria as compared with
international contractors was average. The study recommended the introduction of a 605
mediating variable that would cancel out the effects of factors contributing to the poor
performances of SSLGCs in Nigeria. Most of the factors identified here are more or less
related to financing of projects. It would be conceivable perhaps to consider the
introduction of upfront or advance payment’ system to the contractors to purchase
plant and equipment, train staff and recruit qualified project managers and generally
have sufficient resources to embark on project with minimal constraints related to
capital and finance.
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About the authors

Nuru Gambo is a Lecturer in Department of Quantity Surveying, Abubakar Tafawa Balewa
University, Bauchi, Nigeria. He is a Member of Nigerian Institute of Quantity Surveyors,
and Registered Quantity Surveyor with the Quantity Surveyors Registration Board of Nigeria.
His main research interests are performance management, cost modeling, small scale business
and quantity surveying. Nuru Gambo is the corresponding author and can be contacted at:
gambonuru@yahoo.com
Ilias Said is an Associate Professor in Construction Management at the School of Housing,
Building and Planning, Universiti Sains, Malaysia. He is a Registered Quantity Surveyor with the
Board of Quantity Surveyors Malaysia and Royal Institution of Surveyors Malaysia. His main
research interests are quality management, ISO 9000, service quality and business performance.
Radzi Ismail is a Senior Lecturer at the School of Housing, Building and Planning, Universiti
Sains, Malaysia. He has been involved in teaching in Project Management and Construction
Management related subjects. His main research interests are project management and green
building.

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