Abstract:
The importance of small and micro-construction companies in Ethiopia has been
recognized by many researchers and policymakers. The contribution of small contractors
to the creation of jobs and to the alleviation of poverty has also been recognized by many
developing countries, including Ethiopia. However, these companies face many problems
which are causing poor performance in their business. The main aim of this study is to
identify factors affecting the cost and time performance of small and micro-construction
Companies’ in Gondar City projects. To address the basic research questions, various
research methodologies were employed, such as desk studies, questionnaire surveys, and
case studies. The researcher conducted exploratory research using a questionnaire survey
to identity the factors that cause project cost overruns and delays in companies; a deep
review of different literature associated with the title, and then identified a total of 31
factors that affect cost performance and 33 factors that affect time performance. The
sample size was 113 companies and 21 consultants, where 87 and 16 responded to the
survey, respectively. The samples were involved in construction projects in Gondar
between 2009 and 2013 EC. The main reason behind the selection of a sample during this
period is that as a country, there was political uncertainty, especially in this specific area.
The relative importance index was used to rank the factors in the questionnaire survey
data, and the Spearman rank correlation coefficient was used to measure the relationship
in ranking between respondents who scored for different factors. In addition, 31 projects
from purposefully selected small and micro-construction companies were used for the
desk study to assess the performance of SME construction companies in terms of time
and cost in order to confirm the presence of cost and time performance problems. For the
desk study, the starting and final time and cost were gathered and used to evaluate the
time and cost performance by using the variance formula. Furthermore, qualitative data
was collected using case studies on three projects executed by SMEs to identify the
factors that cause project cost overruns and delays. Based on this, the findings confirm
that most small and micro construction companies execute their projects inefficiently in
terms of time and cost. Also, the top 10 factors that had a significant impact on both time
and cost performance were identified. And different recommendations are proposed for
different groups that participate in the project. This research will provide background
information for new small and micro-construction companies and help them stay aware
of the environment before entering.
Keywords: Cost performance, Gondar, Time performance.