Abstract:
The construction industry remains one of the most dynamic and challenging industries in the world
due to the complexity of its production process. This makes it subject to more risk and uncertainty
than other industries that make it difficult for newcomers as well as small-scale contractors to be
sustainable in the construction industry. The identification and assessment of new risks along with
their interrelationships and coming up with the appropriate responses to new risks is a cumbersome
process entailing some degree of complexity. The present research focuses on the identification of
critical risks, the allocation of those risks among the small scale contracting parties, and the
determination of appropriate response measures to managing the risks thus identified.
The study first elicited the views of senior construction professionals on risks in the small-scale
contractors in a preliminary survey prior to carrying out a questionnaire survey among a selected group
of small-scale contractors. Sixteen (16) significant risk factors were identified and evaluated by using
the Relative Importance Index (RII). The research further worked out the allocation of risk among the
contracting parties and the appropriate response measures. On the basis of the research outcomes, the
study proposes a risk management framework for appropriate risk management among small-scale
contractors. The findings reveal the importance of paying attention to risk aspects by small-scale
contractors in construction projects and identifying the problems relating to inadequate knowledge or
techniques of small-scale contractors that may pose barriers to it. The paper proposes proper education
and training of such contractors as one measure to overcome the identified barriers. It recommends the
hiring of risk management consultants and the bearing of the risk by the party that has most control
over it rather than passing it on to the other party as ways to control risks.
