Journal of Financial Management of Property and Construction

Purpose – Subcontractors play a significant role in the Palestinian construction industry as about 90 per cent of the work is performed by subcontractors. The main objective of this paper is to identify and analyse the major problems which exist between the contractors and subcontractors in the construction industry in the Gaza Strip.

Design/methodology/approach – A questionnaire was designed to elicit contractors' and subcontractors' viewpoints regarding the most important causes of problems that affect the relationship between them. A total of 53 problems were identified based on a literature review, a pilot study was considered in this study and was listed under five groups. A total of 150 questionnaires were randomly sent to contractors and subcontractors. The respondents had extensive experience in the construction industry with average working experience of 20 years. The questionnaire was validated by the criterion-related reliability test that measures the correlation coefficients between the factors selected for in each group and for all groups as one entity, and structure validity test (Spearman test).

Findings – The result of the survey indicated that, assigning part of the works to new subcontractor without informing the original subcontractor, contractor's financial problems, delay in contract progress payments, non-adherence to the conditions of the contract, non-adherence of the subcontractor to the time schedule, and lack of construction quality work were the most important causes of interface problems, while involvement in several projects with the contractor at the same time, weather conditions, and geological problems on site were considered as trivial causes of potential interface problems. Spearman's rank correlation tests showed that there are no differences in the viewpoints between contractors and subcontractors.

Originality/value – The research findings might assist practitioners to focus on major problems which have existed between the contractors and subcontractors in the construction industry in their present and future projects. By eliminating or minimizing these problems, subcontractors are encouraged to contribute significantly to the capital risk, resources, managerial effort, and business expertise supporting the largest industry in Palestine. The paper would be valuable for all academics and industry professionals involved in construction business in general.