Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/25apr2206

Contractor Selection by using

Analytical Network Process (ANP)
Badr Adel Aljehani 1
1
Saudi Aramco

Publication Date: 2025/05/12

Abstract: Nowadays, contractor selection is a critical activity of the project owner. Selecting the right contractor is essential
to the project manager for the success of the project, and this cab happens by using the proper selecting method.
Traditionally, the contractor is being selected based on his offered bid price. This approach focuses only on the price factor
and forgetting other essential factors for the success of the project. In this research paper, the Analytic Network Process
(ANP) method is used as a decision tool model to select the most appropriate contractor. This decision-making method can
help the clients who work in the construction industry to identify contractors who are capable of delivering satisfactory
outcomes. Moreover, this research paper provides a case study of selecting the proper contractor among three contractors
by using ANP method. The case study identifies and computes the relative weight of the eight criteria and eleven sub-criteria
using a questionnaire.

Keywords: Contractor Selection, Project Management, Decision-Making, Bidding.

How to Cite: Badr Adel Aljehani. (2025). Contractor Selection by using Analytical Network Process (ANP). International Journal
of Innovative Science and Research Technology, 10(4), 3270-3276. https://doi.org/10.38124/ijisrt/25apr2206.

I. INTRODUCTION The crucial component of any successful project is to

select a capable contractor to carry out construction work and
The construction and infrastructure industry is essential deliver high-quality outcomes. Selecting qualified
to Saudi Arabia economy’s overhaul. Before the Covid-19 contractors is essential to good execution, since they are
pandemic, the construction and infrastructure industry in responsible for core activities in the project’s process. The
Saudi Arabia was amongst the largest in the Arab Gulf selection process should give the client the confidence to
countries, with a net worth of $825 billion of unawarded and select the capable contractor who can able to execute the
planned projects. The industry had noticed exceptional project satisfactorily, but unfortunately, this is not always
growth in the contracts awarded – from $11.2 billion in 2016 happening. Nowadays, the contractor selection awarding is
to $14.6 billion in 2018. basically based on the contractor who has the lowest tender
price among the competitors. One of the essential decision
With an increased focus from both the public and should be made by the client is to select a proper contractor.
private sectors, the need for construction and infrastructure The client shall select the most suitable contractor to
projects will continue to grow in line with Saudi Arabia accomplish the required outcomes of the project. Moreover,
Vision 2030. One of the essential elements to accomplish the several methods attempt to estimate contractors’ values using
goal’s vision is to execute the planned and unawarded project multiple selection criteria. These various methods include
is to select a capable contractor to implement the work. The cluster analysis, multi-criteria decision-making (MCDM),
construction industry in Saudi Arabia faced several risks at multi attribute analysis, bespoke approaches, multi-attribute
the industry level. A study made by Bajaber and Taha reveals utility theory, multiple regression, multivariate discriminant
that insufficiently qualified contractors and the participation analysis, and fuzzy set theory [2]. Pre-qualification and
of unqualified contractors are some of the risks that the project-specific elements are the basis to quantify and
projects have experienced nowadays in Saudi Arabia [1]. A identify the contractor selection criteria. Among those
study conducted by Makkah province principality indicates approaches, MCDM is fairly used in this research paper to
that 18% of the government projects failed. These failures select capable contractors.
could be avoided if clients could have avoided those
unqualified contractors who are likely to default. The The selection of a qualified contractor is crucial to
contractor is the first one who confronts these risks. If he achieving the required goals with high-quality outcomes of
could not overcome them, he would fail, and no one would any construction project. Therefore, selecting a proper
benefit. contractor is essential to the project’s overall success. This
research paper will apply multi-criteria analysis in Analytical
Network Process (ANP) to identify and select the proper

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Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/25apr2206
contractor for new construction projects in Saudi Arabia. This This literature chapter sheds light on identifying the
study will define the impact and influence of such selection criteria for the decision-maker to select the proper contractor.
factors on the role of the client. Pre-qualification and bid evaluation processes are the most
contractor selection processes used to classify the contractor
In the last decade, the typical method to select a selection criteria.
contractor is by giving the work to the contractor who
proposes the lowest tender price in his offer. This practice has Pre-qualification of contractors considers as a decision
become known as the contractor selection based on price making obstacle that develop quantitative and qualitative
only, which significantly increases the project’s risk of measures. When spouting such concerns, the person who has
failure. the decision may offer imprecise, undefined, and incomplete
evaluations because of absence of information and also
Selecting a contractor by only using the price as the expertise deficiencies. Usually, a low-bid approach is
main selection factor leads to having project issues such as selected for majority construction projects. Sometimes, there
delay, cost overruns, and quality control issues. Therefore, are variations in time and cost in the project because there
developing appropriate contractor selection methods is was subjective bias in contractor selection. Therefore, pre-
necessary to gauge the probability that a construction qualification involves the process involving the screen of
contractor will successfully complete the assigned work contractors by the client where it compares the critical
within the defined scope. contractor-organizational criteria among contractors desirous
of tendering. Such criteria can be methodology, his
Several research types discussed using different factors performance, and workload. Researchers have recommended
other than price in selecting a contractor during the last valuable methods to identify contractor-organizational
decade. Since that time, contractor selection has been well criteria, such as MAA. On the other hand, the evaluation of
established because of including non-price factors. contractors can be done based on the particular criteria that
Nowadays, organizations focus on applying a process of can determine the contractor's suitability to implement a new
contractor selection that puts different factors other than price project. The purpose of the contractor evaluation is different
in consideration, generally with various weighted multi- from the contractor selection. Especially, contractor
criteria methods. assessment is the practice of measuring and investigating
attributes of project requirement.
II. LITERATURE REVIEW
In contrast, choose the right contractor refers to
In this challenging era, we need to effectively manage aggregating the outcomes of the contractor evaluation to
the flow or process to get successful project construction. The determine the best contractor. In common practice, group the
demands from the competition, client, and regulatory contractor evaluation and contractor selection to produce a
agencies have been booming rapidly; a failure to make proper single process that can distinguish the good contractors from
management for them can lead to obstacles for the unqualified ones based on the project's specific criteria.
construction team and the whole project. Several studies have Several proper methods are used to determine criteria based
revealed that overall owner satisfaction and project quality on the specific project. For instance, Multi-attribute utility
are directly related to the contractor's performance. The theory (MAUT) and Analytic Hericaricy Process (AHP) are
selection of a contractor is considered a significant challenge possible techniques, according to (Alarcon and Mourgues).
for the construction industry. There is a necessity for applying MAUT and AHP techniques can be used to determine the
systematic tools before selecting the optimum alternative weight of each selected criterion in selecting the contractor.
among different contractors. Selecting a capable contractor is The differences between these two methods are: first, AHP
an essential factor in increasing a chance to complete uses a basic record method for grade each criterion, at the
construction projects successfully. The selection of same time MAUT method uses utility amount; and second,
contractors is definitely a major aspect of delivering project AHP method used pairwise matrix to identify and compute
outcomes in terms of cost, quality, and schedule. the weights, while MAUT method is simply using scoring
technique. When the selected criteria are related to objectivity
Choosing a competent contractor is one of the critical and rationalization, ANP selection decision method would be
aspects of the client or parties involved who successfully a more practical and best approach to assign weights of the
achieves project outcomes. Contractor selection is a selected criteria. The research paper aims not to differentiate
challenging action because the growth and competition in the the best method among the existing contractor selection
construction industry are booming worldwide. The methods. ANP is a mixture of two parts:
probability of construction failure is relatively high for
individual contractor. Project owners need to manage and  Network of cluster and sub cluster that manage
confront these risks if they want to achieve excellent project interactions.
outcomes. For further explanation, it is important to  The network of influences of clusters and elements.
determine the decision-making tools where we can seek the
best of the good options to be the best solution to the raised Hierarchies in AHP do not represent the relationship
problem. It is recognized that failure to make an effective among the levels. There is no shortcoming in the ANP
decision usually leads to wrong, flawed, ineffectual approach. For example, the value of criteria in AHP
decisions. determines the value of alternatives but does not represent the

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Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/25apr2206
value of alternatives, impacting the criteria' importance. the process of ANP to measure analytically, which would be
Therefore, the linear structure of top to bottom is not the most suited.
appropriate for a complicated system. The main advantage of
ANP is the ability to solve the problems where criteria and  ANP uses a Multi-Criteria Analysis, which Consists of the
alternatives have such interactions that cannot be found in a Following:
hierarchy. When the decision-maker (client) chooses to
model a problem as a network, it is unnecessary to state  Tender Price TP
levels. A network is composed of clusters (components,  Financial Capability FC
criteria, or nodes) and elements (sub-criteria). The fact that
the node elements produce influence for any or all the  Financial Statement
elements of any other node. Arcs symbolize relationships in  Financial Reference
a network, and the directions of arcs indicate dependence. A
two-way arrow represents interdependency between two  Past Performance PP
nodes, termed external dependence, and a looped arc
symbolizes inner dependencies among elements in a node.  Failure to Complete Contract
 Delay
Interdependence can be implemented in several  Cost Overrun
techniques: (1) uncorrelated levels in the hierarchy are  Quality Achieved
compared, (2) dependence of two levels is two-way, and (3)
uncorrelated elements are connected. Figure 1 shows  Past Experience PE
examples of these interdependencies. A new matrix is called
a "supermatrix" is produced when interdependencies are  Scale of Projects Completed
incorporated. The relative importance weights in a single  Types of Projects Completed
matrix are adjusted because of supermatrix to build a new  Experience
final matrix with priorities list of the importance weights of  Quality Achieved
each criterion.
 Resources R

 Physical Resources
 Human Resources

 Work Load WL
 Methodology M
 Safety Performance SP

ANP consists of two parts. The first part includes a

network of criteria and sub-criteria that control the system’s
interactions between the set criteria [4]. Figure 2 shows the
criteria being input into SuperDecisions software. The second
part influences the network among the clusters and elements.
The network differs from one criterion to another criterion
and computes the Supermatrix of limiting influence. Figure 3
shows a view of the decision network model of the case study.

Hence, the SMEs input was gathered as their answer to

a comparison between each of the criteria mentioned earlier.
Fig 1: Example of Interdependence The SMEs were asked to compare each two factors as a scale
1-9 where 1 was characterized as ”same level of importance”,
III. METHODOLOGY and 9 was characterized as ”extremely relatively important”.
Table I shows the Satty Scale, which is used to characterize
The research conducted regarding the usefulness of the relative importance between each of the criteria. The data
ANP incorporated a multi-criteria analysis concerned with was hence plotted as a matrix, where as seen in figure 3 the
the decision making of the project. ANP, an Analytical relationships between each of the criteria is analysed
methodology that uses human judgment to determine the numerically [5]. Hence, at which point it is to be used within
most optimal choice for business decision, was used to Super Decisions software to be processed.
determine the most optimal contractor for a project.
Following the collection of the first set of data collected,
Initially data was gathered as the output of 8 subject a second set of data was gathered comparing the contractors
matter experts SMEs when they shared their expertise in to each other, in terms of how they ranked in each of the
regards to the selection between 3 hypothetical contractors to criteria used. Hence, again the data was input in Super
conduct a project. Hence, their output was complied within Decisions to compare analytically between the contractors.

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Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/25apr2206

Fig 2: The Clusters of Nodes Model within Super Decisions Software

Table 1: Satty Scale

1 Equal importance
3 Moderate importance of one over another
5 Strong or essential importance
7 Very strong or demonstrated importance
9 Extreme importance
2,4,6,8 Intermediate values
Use reciprocals for inverse comparisons

Fig 3: The Relationship between the Criteria of the Model

IV. RESULT calculated as in equation 1. Where λmax is the largest

eigenvalue and n is the size of the square matrix.
Initially the trade off among the criteria chosen was
plotted as a matrix where the level of importance between 𝜆𝑚𝑎𝑥 −𝑛
𝐶. 𝐼 = (1)
each criterion was plotted from both perspectives. The matrix 𝑛−1

shows the relative importance using the Satty scale [6], seen
Hence, the Consistency Ratio C.R was additionally
in table I, to characterize the difference in importance of each
calculated within the software as seen in equation 2, where it
criterion in comparason to all the other criteria.
is calculated using the found C.I and the Random Consistency
Index R.I for the matrix size [7].
Hence, the eigenvalues were calculated within the
Super Decisions software and used to calculate the 𝐶.𝐼
Consistency Index C.I of the matrices, where C.I was 𝐶. 𝑅 = (2)
𝑅.𝐼

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Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/25apr2206
Table 2: Pairwise Comparison Matrix for Relative Importance of Criteria with Reference to the Ultimate Objective
Ultimate Objective TP PP PE CW R SP M FC e-Vector
TP 1 2 1 3 3 1 2 6 0.20614
PP 1/2 1 1 2 2 1/2 1 4 0.12657
PE 1 1 1 3 3 1 2 4 0.18201
CW 1/3 1/2 1/3 1 1 1/4 1/2 3 0.06591
R 1/3 1/2 1/3 1 1 1/3 1/2 2 0.06382
SP 1 2 1 4 3 1 2 5 0.21003
M 1/2 1 1/2 2 2 1/2 1 3 0.11108
FC 1/6 1/4 1/4 1/3 1/2 1/5 1/3 1 0.03444
Inconsistency Ratio 0.00998

Table 3: Pairwise Comparison Matrix for Relative Importance of Criteria with Reference to the Tender Price T.P
TP PP PE CW R SP M FC eVector
PP 1 1 3 2 1/2 3 3 0.20471
PE 1 1 3 3 1/2 3 2 0.11233
CW 1/3 1/3 1 3 1/2 2 2 0.11233
R 1/2 1/3 1/3 1 1/3 1/2 1/2 0.20471
SP 2 2 2 3 1 3 3 0.11233
M 1/3 1/3 1/2 2 1/3 1 3 0.11233
FC 1/3 1/2 1/2 2 1/3 1/3 1 0.14125
Inconsistency Ratio 0.00985

The use of the C.R is essential as it determines the clusters on the ultimate objective. Hence, each of the criteria
consistency of the inputs, expected to not exceed 10. was used exclusively to generate a comparison matrix with
said criteria as being the one with ultimate importance. An
As such the matrix was plotted as a pairwise comparison example was plotted with the Tender Price as the reference
as seen in table II, where the relative importance is plotted, criterion as seen in in table III.
with an addition of the eigenvalue as the right most column.
Furthermore, the sub-criteria were plotted within the
The pairwise comparison matrix is developed for software to measure the relative importance between each of
establishing the relative importance of each of these criteria them, an example is shown in table IV.
in the implementation of the contractor selection model

Table 4: Pairwise Comparison Matrix for Relative Importance of Criteria Between Criteria with Reference to the Financial
Capability F.C
FC FR FS eVector
FR 1 1/9 0.1
FS 9 1 0.9
Inconsistency Ratio 0

Hence, data regarding the three contractors interested in withheld, and the data provided was hypothetical. However,
handling this project was plotted within the software, the data plotted was proposed to study the effectively of ANP.
however due to confidentiality the contractors names were The data was plotted as seen in table V.

Table 5: Table Showing the Comparison of the Three Contractors for Each Criterion
Number Criteria/Sub-Criteria Contractor A Contractor B Contractor C
1 Tender Price $6 MM $10MM $4 MM
2 Financial Capability $ 20 MM $8 MM $ 13 MM
2.1 Financial Statement Great Financial Position Poor Financial Position Good Financial
Position
2.2 Financial Reference All financial details provided Poor financial details Some financial details
provided provided
3 Past Performance Average Above Average Below Average
3.1 Delay Rarely No Delays Rarely
3.2 Failure to complete One Project was not Achieve All Assigned One Project was not
contract completed. Work. completed.
3.3 Quality Achieved Good High Poor
3.4 Cost Overrun High Tolerance Good Tolerance Poor Tolerance
4 Past Experience High Experience Good Experience Poor Experience

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Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology
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4.1 Experience in local area Average Below Average Above Average
4.2 Type of completed project High Experience with similar Good Experience with Poor Experience with
projects. similar projects. similar projects.
4.3 Scale of completed project Completed 20 projects with Completed 12 projects Completed 8 projects
similar scope of work with similar scope of with similar scope of
work work
5 Resources Below Average Above Average Average
5.1 Human Resources Manpower of 50 qualified Manpower of 100 Manpower of 70
workers. qualified workers. qualified workers.
5.2 Physical Resources Below Average Above Average Average
6 Current Workload 10 Ongoing Capital Projects 2 Ongoing Capital 5 Ongoing Capital
at various locations Projects and three Projects and 1 Mega
projects Nearing Project Underway
completion
7 Methodology Good Implementation Good Implementation Poor Implementation
Procedure Procedure Procedure
8 Safety Performance Above Average Average Average

This step is to set pairwise comparisons for the relative corresponding criteria weight basically results the weighted
importance of each of the alternatives Contractor A, supermatrix. The weighted supermatrix derives the limit
Contractor B, and Contractor C with reference to respective supermatrix to powers by multiplying it times itself. This
criteria and sub-criteria. Table V shows which alternative has matrix demonstrates the weights for all the components in the
the highest relative weight for each criterion. supermatrix.

Each supermatrix network has three supermatrices: The unweighted, weighted and limiting matrices were
Unweighted Supermatrix, the Weighted Supermatrix, and the calculated, and input within the SuperDecisions software,
Limit supermatrix. The following sections describe each hence the priorities were calculated as seen in table VI. The
supermatrix. three contractors A, B and C produced normalized cluster
values of 0.380, 0.334 and 0.285 respectively. The values
The Unweighted Supermatrix is basically formed from produced were normalized from the results of the limiting
the vector priorities that are determined from the various Supermatrix via dividing the raw results of each via the
comparison matrices. Multiplying all the parts in a block of highest raw value within the same column.
the unweighted supermatrix’s component by the

Table 6: Table Showing the Priorities from Limit Supermatrix

Name Normalized By Cluster Limiting
Contractor A 0.38003 0.07328
Contractor B 0.33439 0.06448
Contractor C 0.28558 0.055069
CW 0.07563 0.041037
FC 0.13786 0.074806
M 0.0851 0.046179
PE 0.15439 0.083778
PP 0.13374 0.072569
R 0.10264 0.055696
SP 0.1239 0.06723
TP 0.18675 0.101334
Ultimate Objective 1 0.156973
AQ 0.04486 0.004826
CC 0.12302 0.013233
CO 0.03964 0.004264
D 0.04545 0.004889
EA 0.06074 0.006534
FR 0.07824 0.008416
FS 0.18255 0.019637
HR 0.09708 0.010443
PR 0.09708 0.010443
SC 0.12483 0.013428
TC 0.10649 0.011455

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Volume 10, Issue 4, April – 2025 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/25apr2206
 Discussion https://doi.org/10.1061/(asce)0742-
Based on the result from table VI, contractor A is the 597x(2002)18:2(52)
best choice and capable contractor to handle the project, [3]. Clarke, L. E. (2007). Factors in the Selection of
based on the selected criteria. Contractors for Engineering Works. University of
Southern Queensland, Australia.
Several observations can be derived from applying the https://eprints.usq.edu.au/3984/1/Clarke_2007.pdf.
ANP analysis of selecting the capable contractor: [4]. Rokou, E. (2014). Many Hands Make Work Light or
Not? A Novel Tool for Group Decision Making with
 The result of the ANP calculations show that contractor A ANP. https://doi.org/10.13033/isahp.y2014.118
is the most capable contractor among the others, based on [5]. Paramasivam, V., Senthil, V., & Rajam Ramasamy,
the selected criteria were developed by the subject matter N. (2010). Decision making in equipment selection: an
experts. The project client is satisfied with the ANP integrated approach with digraph and matrix
analysis outcomes. approach, AHP and ANP. The International Journal of
 If the selection decision were based only on the lowest Advanced Manufacturing Technology, 54(9-12),
tender price, contractor C would be selected. 1233–1244. https://doi.org/10.1007/s00170-010-
 The highest three weights among eight criteria are safety 2997-4
performance, tender price, and past experience, which [6]. Saaty, T. L., & Vargas, L. G. (2013). The Analytic
their weights summation equal to almost 60% of the total Network Process. Decision Making with the Analytic
weights of the eight criteria. Network Process, 1–40. https://doi.org/10.1007/978-
 AHP is a popular selection decision tool nowadays. 1-4614-7279-7_1
However, AHP is limited in the capability where it is only [7]. Satty, T. L. (n.d.). Analytic network process.
applied in the simple decision problems. At the same time, SpringerReference.
ANP provides a powerful tool in complicated decision https://doi.org/10.1007/springerreference_5234
problems.
 If the relative weight of each criterion has been changed,
the final decision might be different.
 Inconsistency ratios of all pairwise comparison matrices
in this study are within the acceptable range. These rations
indicate that judgments from the experts are more
consistent.

V. DISCUSSION

Multi-criteria selection techniques should be used and

implemented in project management to select the “capable”
contractor to deliver the project outcomes. Contractor
selection is an important activity prior to project awarding for
ensuring that a project is achieved on schedule and within
budget and that the results are of high quality. Multi-criteria
contractor selection aims to distinguish the “capable”
contractor from other contractors using an assessment based
on several election objectives. Selecting a proper contractor
helps avoid any potential risks that might be encountered if
the project was awarded to a less capable contractor. In this
research paper, the ANP decision approach is implemented in
selection the proper contractor, and ANP improves the
familiar (MCDM) approach to criteria prioritization.

REFERENCES

[1]. Bajaber, M., and M. Taha. “Contractor Selection in

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[2]. Alarcón, L. F., & Mourgues, C. (2002). Performance
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