Structural equation model for assessing impacts of contractor's performance on project success Hemanta Doloi a, ⁎ , K.C. Iyer b , Anil Sawhney b a Faculty of Architecture, Building and Planning, The University of Melbourne, Victoria 3010, Australia b Dept. of Civil Engineering, Indian Institute of Technology, Delhi, Hauz Khas, New Delhi 110016, India Received 9 February 2010; received in revised form 1 April 2010; accepted 25 May 2010 Abstract Contactor's expertise and performance play a significant role in successful delivery of a project. While clients strive hard to make the best decisions in selecting the right contractor for the right job, a clear understanding of the underlying attributes associated with contractors' selection in the context of achieving successful project outcomes is critical. In an attempt to understand these pre-emptive qualification criteria and their links to contractors' performance on a project, a hierarchical structural model is established. By employing the structural equation modelling technique, the model adapts a total of 29 technical attributes across five confirmatory factors namely, soundness of business and workforce (SBW), planning and control (PC), quality performance (QP), past performance (PP) and overall project success (OPS). Based on the survey data collected across medium size construction projects in Australia, the results of the model confirmed that technical planning and controlling expertise of contractor is key in achieving success on projects. With a clear understanding of the significance of these factors in the context of contractors' performance, these findings could potentially contribute to the development of a company's procedures or to enhance existing knowledge of contractor prequalification practices. © 2010 Elsevier Ltd. and IPMA. All rights reserved. Keywords: Prequalification; Contractor selection; Project performance; Structural model 1. Introduction Contractors' prequalification is one of the widely published topics in construction industry research. However, the relation- ship between prequalification criteria and contractors' ability to meeting clients' requirements and achieve project success remains largely unanswered and is an important topic for investigation (Holt, 1998; Mbachu, 2008). Every construction project is unique and comprises of unique complexities and risks across many issues throughout the construction process. Increasing complexity in design and involvement of multitude of stakeholders in modern construction projects, add further challenges for both clients and contractors in matching the required skills and capabilities to deliver the project successfully. Incorrect selection of a contractor for a given project may potentially lead to a bad legacy of failure coupled with its consequences such as poor business practices or bankruptcy (Uher and Runeson, 1984; Holt et al., 1995). Contractors' ability to succeed on a project depends on diverse inherent attributes ranging from project complexity, technical expertise to organisational capability and risk management practices. Thus, a robust prequalification process for selecting the right contractor is an important first step for ensuring success in candidate projects (Arslan et al., 2008). The intent of this research is to provide a clear understanding of such factors incorporating client's, design team's and contractors' viewpoints. Identification of these underlying factors from the successful project delivery perspective and their relationships to the project functions should help both clients and contractors in achieving successful project outcomes. This study aims to examine the effectiveness of prequalifi- cation criteria in contractor selection from a successful project delivery perspective. Based on previous studies (Doloi, 2009; Available online at www.sciencedirect.com International Journal of Project Management 29 (2011) 687 – 695 www.elsevier.com/locate/ijproman ⁎ Corresponding author. E-mail addresses: hdoloi@unimelb.edu.au (H. Doloi), kciyer@civil.iitd.ac.in (K.C. Iyer), sawhney@civil.iitd.ac.au (A. Sawhney). 0263-7863/$ - see front matter © 2010 Elsevier Ltd. and IPMA. All rights reserved. doi:10.1016/j.ijproman.2010.05.007