Assessment of Construction Risks in Projects Funded by External Sources in Jordan during the COVID-19 Pandemic

Abstract

In general, construction projects are vulnerable to various risks during their life cycle. These risks may negatively affect the project cost and duration, in addition to other factors, including environmental impact, health and safety, and quality of construction work. The COVID-19 pandemic has brought more challenges to construction projects. This study presents an assessment of 47 major risks affecting construction projects. The research investigates and assesses the risk factors associated with a special type of construction project, namely, projects funded by external sources, due to their importance, characteristics, and sensitivity. Furthermore, the study was carried out under the impact of the special conditions and constraints associated with the COVID-19 health pandemic. These conditions provided specific types of risks, results of risk assessment, and recommended responses to the risks. The studied risks were categorized using the PESTLE technique, an external factor analysis technique, which includes six groups of Political, Economic, Social, Technological, Legal, and Environmental risks. A questionnaire survey was conducted on 34 construction organizations that implemented or supervised projects funded by external sources. The aim of the survey was to assess the risks affecting the construction projects in terms of probability of occurrence and severity on the projects’ cost and time schedule. Then, the importance of each risk was calculated, and the risks were ranked according to their importance. The results showed the high importance of environmental and legal risks and indicated that the most important risk factors are the difficulty of issuing licenses and permits and the inappropriate definition of the scope of work. This study would help managers and fund providers make decisions regarding risks during uncontrolled pandemic or disastrous circumstances. Although the current study was conducted in Jordan, its procedures and results can be useful in other locations with different properties and conditions.

1. Introduction

Jordan is a developing country located in the Middle East. In the last two decades, Jordan has been affected by a high increase in its population caused by the fleeing of refugees from neighboring countries, such as Iraq and Syria [1]. In the last 20 years, the population of Jordan has more than doubled. Economic stresses and limited resources led to externally funded projects becoming a main source of infrastructure implementation and improvement. The condition with this type of project can be described as highly sensitive, where financial support could be lost due to any problems in planning and management. Furthermore, this type of project is characterized by “high specifications of materials and work, high precision of time schedules, in addition to high risks and safety planning”, which were severely affected during the pandemic due to lockdown, health precautions, varying regulations, and the associated challenges involving transportation and importation of goods. These surrounding conditions and the special characteristics of this type of project, along with the high sensitivity associated with such projects and the need to maintain external financial funding, all encouraged the study of this type of project, especially during the COVID-19 pandemic as conditions became more difficult.

Most of the key infrastructure projects in Jordan are funded by external sources [2,3], for example, Saudi Fund for Development (SFD), Kuwait Fund for Arab Economic Development (KFAED), International Bank for Reconstruction and Development (IBRD), German Development Bank (KfW), United Nations Office for Project Services (UNOPS), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), United Nations International Children’s Emergency Fund (UNICEF), and International Labour Organization (ILO). The projects supported by these organizations include the construction and rehabilitation of major highways, bridges, tunnels, schools, hospitals, and public transportation projects. According to experts, Jordan’s pivotal projects are mainly based on external support. Figure 1 provides a guide to the volume of construction projects funded by external sources compared with the total volume of public construction projects implemented in Jordan in the years 2014 to 2020. The volume of the construction projects in the figure was collected from the annual reports of the Government Tenders Department (GTD), which is a department in the Jordanian Ministry of Public Works and Housing [4]. The variations in the annual volume of public construction projects over the years, as shown in Figure 1, may depend on the political and economic conditions of the country, as well as the amount of funding received from external sources during the year.

The construction industry in Jordan plays a major role in economic growth. However, in the last 10 years, economic growth has stalled in this sector [5,6]. Furthermore, it is evident that the construction industry has encountered substantial challenges during the COVID-19 pandemic. The pandemic imposed new and challenging regulations on all the parties who work in the construction field, which in turn has increased the associated risks. Construction risks are identified as any factor that may affect positively or negatively any of the construction projects’ main objectives, such as the time frame, the cost, and the scope [7].

At the beginning of the crisis in February 2020, Jordan took strict preventive measures until September 2020. Then, the social and economic situation imposed high demands to ease these measures. This led the government to ease the strict measures. Consequently, the number of affected individuals with COVID-19 reached a peak in mid- and late November 2020. After that, another strict lockdown was exercised by the Jordanian government, which led to a decrease in COVID-19 cases until it reached its minimum in mid-January 2021, but then increased again until it reached its new peak in late March 2021. However, after the vaccine roll-out to mitigate the impact of the COVID-19 virus, the number of cases showed a downward trend and remained at a low rate until the time of writing this research [8,9,10,11,12].

The measures put in place to contain the virus included a reduction in the allowable working time, working days, and number of workers. Sudden and unpredictable changes in the pandemic situation and the government’s responses made the time and cost of planned work unpredictable. This caused a high decrease in the performance of projects and an increase in construction risks. The Project Management Institute (PMI) defined project risk as the effect of uncertainty that may have a positive or negative impact on project outcomes, comprising project cost, schedule, and/or quality [13,14]. It is important to identify project risks to be able to avoid or mitigate the impact of threats and trigger or maximize the impact of opportunities [13,14]. FIDIC shows that the contractor’s risk may occur due to loss or damage in the works, goods, or contractor’s document, while the contractor is responsible for their care and rectification [15]. However, the Employer’s risks comprise other types of risks that may affect the execution of work in the country, such as war, riot, or natural disasters. In these cases, if the contractors suffer delay or cost overrun, they can provide claims for an extension of time or financial compensation [15].

Therefore, construction projects funded by external sources, which are characterized by other types of projects by high compliance with the terms of the project tender, were more vulnerable to these risks. These projects normally follow high specifications of materials and work, high precision of time schedules, in addition to high risks and safety planning. From the beginning of the implementation of these projects, the organizations appoint external and internal control teams to double-check the quality and performance of the work. Furthermore, the external teams evaluate the validity of the project personnel and teams, excluding the unqualified and preventing any corruption. Many of the projects funded by external sources are managed by specialized organizations for project management in addition to contractors and consultants. Therefore, it is highly important to identify and evaluate the risk associated with the projects. To our knowledge, there is no study that has assessed this type of risk during the COVID-19 pandemic. Hence, this study will add to the body of knowledge on how to deal with such risks during times of crisis.

In this research, the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) external factor analysis technique is used to identify the risks affecting the externally funded construction projects during the COVID-19 pandemic in Jordan. PESTLE analysis was invented by Francis Aguilar who published it in a book in the late 1960s [16]. PESTLE is a strategic technique for external risk assessment that categorizes the risks into six groups: political, economic, social, technological, legal, and environmental risks [17]. The political risks are the factors concerned with the government’s influence on the economy, the economic risks are the factors affecting the economic performance of the company, the social risks are the factors that have a social impact on the community and market, the technological risks are the factors related to the availability and effect of modern technology on the operation of the industry and the market in a positive or negative way, the legal risks are the factors that consider the laws affecting the business and the policies maintained by the company, and finally, the environmental risks are the factors related to the surrounding environment [18]. In general, the risks are internal and external. Internal risks are specific to the company or project, which are easy to deal with when data of previous similar works or projects are available to use as examples [17,18]. This study concentrated on the external risks, which are beyond the control of the company. PESTLE is adopted in this research due to its comprehensive framework, which provides an effective tool to identify, investigate, assess, and categorize factors in the macro environment [17,19,20]. Moreover, PESTLE is a simple technique that many of the people engaged in managerial positions are familiar with. Therefore, using the PESTLE technique makes the results of this study more readable and usable for project stakeholders.

2. Literature Review

2.1. Risks in Construction Projects

Various studies have evaluated risks in construction projects. These studies were conducted in different settings, such as the location and type of the studied projects, and data collection and analysis methods. For example, in a Middle East located country, a study was conducted by Al-Sabah and Refaat [21] to identify and assess major construction risks in public projects in Kuwait in terms of expected occurrence and severity. A standardized questionnaire was conducted in 26 construction companies. The results indicated that the most important risks are those associated with subcontractors, such as the performance of subcontractors, subcontractors/suppliers’ coordination, and the performance of preselected subcontractors.

In another example, a study by Abbasi et al. [22] has evaluated and proposed solutions for the major risks affecting the construction companies in Jordan. The results from a conducted questionnaire survey with 169 respondents indicated that financial support or the progress of payments is the key risk. More examples of studies identifying and assessing the risks associated with the construction industry are summarized in Table 1.

2.2. Risks in Construction Projects Related to COVID-19 Pandemic

The construction industry has been significantly affected by the COVID-19 pandemic. A study by Wang et al. [23] has identified risk factors specific to the pandemic based on the analysis of 12 tunnel construction projects. The results showed that the most challenging risk factors in construction projects are the availability of labor, site accessibility, and shortage of construction materials and epidemic prevention materials. To better deal with this situation, the authors recommended adopting flexible project management and coordination skills, although this would result in additional costs in the construction project.

From its early stages, the COVID-19 pandemic caused significant negative impacts on the US construction industry, including time overrun, inability to provide materials on time, reduction in productivity, and increased material price. This was reported in a study by Alsharef et al. [24] which investigated the opinions of 34 project managers, engineers, designers, and superintendents. In response to the pandemic situation, the results showed that construction projects widely adopted risk management measures that helped enhance safety in construction sites. Furthermore, the construction projects adopted the formation of a task force team to monitor the pandemic situation and provide recommendations.

The COVID-19 pandemic has imposed profound changes on the construction sector. A study by Ayat et al. [25] performed a systematic review of literature that focused on the challenges, impact, and health and safety at construction sites during the time of the pandemic. Based on the recommendations of the literature review, the study developed a systematic mitigation strategy for the pandemic impact by presenting a set of measures regarding safety guidelines, process improvement, government intervention, psychological support, and technology adoption.

The pandemic conditions imposed risks and threats on the economic security of the enterprises in the construction industry as investigated by Onyshchenko et al. [26]. The study proved that an effective way to prevent and overcome the negative impact of the pandemic is the early identification of the risks. The authors proposed a structure model for identifying and predicting risks and threats to allow removing or mitigating them at an early stage of their development.

Previous studies have emphasized the role of construction contracts in responding to the impact of the COVID-19 pandemic. Hansen [27] explored the possibility of considering the COVID-19 outbreak as force majeure in construction contracts. The study proposed a decision framework that may assist the contract parties to decide the pandemic potential as a force majeure event. Yadeta and Pandey [28] proposed two scenarios as a response to the COVID-19 impact on the construction industry. The two proposed scenarios are ‘Force Majeure’ and ‘Changes in Law’. The authors stated that remedies were provided by the contract forms including FIDIC, JCT, or NEC to mitigate the impact of the pandemic on the construction industry. The study proposed guidance to manage the problems with the contractual provisions.

The reviewed studies were used to collect the risk factors and to compare their results with those of the current study. Furthermore, the reviewed literature shows that the current study has a unique aim and an adequate sample size, as well as a number of risk factors and categories, when compared to other studies.

As can be seen, many studies have investigated and assessed risk factors in construction projects. However, the current study has the tendency to highlight the risks affecting construction projects, which are funded by external sources. The data of the study were collected during the COVID-19 pandemic. The study depends on an extended number of risk factors and leads to practical recommendations regarding the major risks associated with this critical health situation. Although the risk factors of the current study were derived from previous literature, most of them were modified and adapted to the aim of this study.

Table 1. Summary of previous studies assessing risk factors in construction.

Reference	Location	Year	Aim	Sample Size	No. of Risks	No. of Categories	Top-Ranked Risks
[7]	UK	1997	Investigates the construction industry’s perception of risk associated with its activities and the extent to which the industry uses risk analysis and management techniques.	100	NA	9	Financial Contractual arrangement (e.g., responsibilities) Market/industry (availability of workload)
[21]	Kuwait	2019	Investigates and assesses the considerable risks that affect the construction firms engaged in public projects and quantifies their occurrence and severity.	26	43	9	Performance of subcontractors Transmittal process Subcontractors/suppliers coordination
[29]	Gulf Region	2012	Develops a framework to assist international architectural, engineering, and construction (AEC) firms in managing risks when operating in Gulf construction.	143	57	6	Delayed or non-receipt of payment Design changes Project delay
[30]	Indonesia	2006	Identifies important risks and allocate them to the contractual parties.	53	27	4	Change in work Defective design Delayed payment on contract
[31]	East Asia (Singapore and China)	2003	Identifies the probability of occurrence and their impact on the cost growth of cross-border construction.	43	24	5	Convertibility and remittance of foreign currency Lack of legality in interpretation of contract document Language barrier
[32]	UAE	2008	Assesses and allocates major risks in the construction industry.	65	42	10	Inflation and sudden changes in prices Owners’ unreasonably imposed tight schedule Subcontractors’ poor performance
[33]	Iran	2013	Evaluates criticality of risks along with effectiveness of mitigation strategies associated with construction projects according to clients, contractors, and consultants by using criticality evaluation means.	76	25	5	Cash flow: lack of information about creditworthiness of partners and client’s inconsistency for payment Inflation and interest rate: Unanticipated inflation and interest rate Late payment: Client pays the contractors much later than is specified in the contract
[34]	Iraq	2019	Identifies and assesses the risks in construction projects by combining SWARA and COPRAS methods.	80	41	6	Mismatch of plans with documentation The surveys and preliminary data of the project are inaccurate Contractor is unqualified
[35]	Oman	2014	Develops a model for risk assessment in the Oman construction industry and makes comparison by risk factors importance means.	130	42	-	Project financing Payment delay to contractor Late approval (award letter, design)
[36]	Saudi Arabia	2020	Identifies and evaluates construction sector risks using Friedman test and Kendall’s W test.	115	29	-	Delayed payment to contractors Unreasonably imposed tight deadlines Frequent design changes Defective design Lack of skilled staff
[37]	Turkey	2021	Investigates key risk factors affecting Turkish construction sector based on their probability of occurrences by using Relative Importance Index (RII) and Exploratory Factor Analysis (EFA).	201	33	-	Using unqualified subcontractors/workers/staff during the process Delays in payments Economic matters, such as inflation and speculations on prices
[38]	China	2004	Evaluates the importance of various risks confronted by Chinese contractors.	42	45	10	Capital return difficulty Owners’ delayed payment Unfairness in tendering
[39]	International 54% and Pakistan 46%	2022	Evaluates causative interrelations and interdependencies between profitability influencing factors, through systems thinking and system dynamics modeling.	250	15	4	Rising cost of material due to market fluctuation Interrupted supply chain process Ineffective control of the manpower and equipment resources
[40]	Egypt	2022	Identifies and assesses the risk factors affecting residential projects at the early stages using Delphi technique.	200	43	6	Exchange rate fluctuation Construction material price hike Changing fuel price

Table 1. Summary of previous studies assessing risk factors in construction.

Reference	Location	Year	Aim	Sample Size	No. of Risks	No. of Categories	Top-Ranked Risks
[7]	UK	1997	Investigates the construction industry’s perception of risk associated with its activities and the extent to which the industry uses risk analysis and management techniques.	100	NA	9	Financial Contractual arrangement (e.g., responsibilities) Market/industry (availability of workload)
[21]	Kuwait	2019	Investigates and assesses the considerable risks that affect the construction firms engaged in public projects and quantifies their occurrence and severity.	26	43	9	Performance of subcontractors Transmittal process Subcontractors/suppliers coordination
[29]	Gulf Region	2012	Develops a framework to assist international architectural, engineering, and construction (AEC) firms in managing risks when operating in Gulf construction.	143	57	6	Delayed or non-receipt of payment Design changes Project delay
[30]	Indonesia	2006	Identifies important risks and allocate them to the contractual parties.	53	27	4	Change in work Defective design Delayed payment on contract
[31]	East Asia (Singapore and China)	2003	Identifies the probability of occurrence and their impact on the cost growth of cross-border construction.	43	24	5	Convertibility and remittance of foreign currency Lack of legality in interpretation of contract document Language barrier
[32]	UAE	2008	Assesses and allocates major risks in the construction industry.	65	42	10	Inflation and sudden changes in prices Owners’ unreasonably imposed tight schedule Subcontractors’ poor performance
[33]	Iran	2013	Evaluates criticality of risks along with effectiveness of mitigation strategies associated with construction projects according to clients, contractors, and consultants by using criticality evaluation means.	76	25	5	Cash flow: lack of information about creditworthiness of partners and client’s inconsistency for payment Inflation and interest rate: Unanticipated inflation and interest rate Late payment: Client pays the contractors much later than is specified in the contract
[34]	Iraq	2019	Identifies and assesses the risks in construction projects by combining SWARA and COPRAS methods.	80	41	6	Mismatch of plans with documentation The surveys and preliminary data of the project are inaccurate Contractor is unqualified
[35]	Oman	2014	Develops a model for risk assessment in the Oman construction industry and makes comparison by risk factors importance means.	130	42	-	Project financing Payment delay to contractor Late approval (award letter, design)
[36]	Saudi Arabia	2020	Identifies and evaluates construction sector risks using Friedman test and Kendall’s W test.	115	29	-	Delayed payment to contractors Unreasonably imposed tight deadlines Frequent design changes Defective design Lack of skilled staff
[37]	Turkey	2021	Investigates key risk factors affecting Turkish construction sector based on their probability of occurrences by using Relative Importance Index (RII) and Exploratory Factor Analysis (EFA).	201	33	-	Using unqualified subcontractors/workers/staff during the process Delays in payments Economic matters, such as inflation and speculations on prices
[38]	China	2004	Evaluates the importance of various risks confronted by Chinese contractors.	42	45	10	Capital return difficulty Owners’ delayed payment Unfairness in tendering
[39]	International 54% and Pakistan 46%	2022	Evaluates causative interrelations and interdependencies between profitability influencing factors, through systems thinking and system dynamics modeling.	250	15	4	Rising cost of material due to market fluctuation Interrupted supply chain process Ineffective control of the manpower and equipment resources
[40]	Egypt	2022	Identifies and assesses the risk factors affecting residential projects at the early stages using Delphi technique.	200	43	6	Exchange rate fluctuation Construction material price hike Changing fuel price

2.3. Identification of Risk Factors

In order to achieve the purpose of this study, a systematic review of related literature has been conducted. Three research databases, comprising Web of Science (WoS), Scopus, and Google Scholar, were used to select the sample of articles to be reviewed and used in the current study. Search terms were proposed using the keywords ‘Risk’ and ‘Construction’. The first 50 articles that appeared in the searched databases were screened and filtered to select the research that was most relevant to the current study and contained adequate details of risk factors. Thus, risks were identified based on the review of this literature.

Table 2. Risk factors derived from the literature and expert consultation.

Groups	Risk Factors		References
			[7]	[21]	[29]	[30]	[31]	[32]	[33]	[34]	[35]	[36]	[37]	[38]	[39]	[40]	Current Study	Repetition
Political	1	Political fast changes during the crisis	✓	✓	✓	✓	✓		✓	✓	✓	✓	✓	✓		✓	✓	12
(P)	2	Reduction in authority performance	✓	✓		✓	✓	✓	✓		✓	✓	✓	✓		✓	✓	11
	3	Lack of security and increase of crimes		✓	✓			✓	✓	✓	✓	✓				✓	✓	8
	4	Potential corruption to avoid restrictions	✓	✓		✓	✓	✓	✓		✓	✓	✓	✓		✓	✓	11
	5	Inadequate duration of the project due to constantly changing circumstances	✓	✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓		✓	12
	6	Potential authority fines	✓	✓	✓		✓	✓	✓		✓		✓	✓		✓	✓	10
	7	Sudden close in public authorities due to infected cases							✓								✓	1
Economic	8	Change of prices because of the crisis	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	14
(EC)	9	Resources restrictions	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	14
	10	Additional work cost caused by the crisis		✓					✓	✓	✓		✓	✓	✓		✓	7
	11	Inadequate management decisions due to limited resources (during construction)	✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	13
	12	Retainage magnitude		✓		✓	✓	✓	✓	✓	✓			✓			✓	8
	13	Insufficient project delivery system		✓			✓	✓	✓	✓	✓				✓		✓	7
	14	Delays or shortages in the payment process due to fluctuations in the health status		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	13
	15	Lack of quality resources	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	13
Social	16	Government-imposed holidays and curfews (lockdown days)								✓		✓					✓	2
(S)	17	Social distancing problems and difficulty of team working							✓	✓							✓	2
	18	Making tough decisions by engineers during project implementation	✓	✓			✓	✓	✓	✓	✓		✓	✓	✓	✓	✓	11
	19	The project communication process is inappropriate (inadequate)		✓	✓		✓	✓	✓	✓	✓		✓	✓	✓	✓	✓	11
	20	Social and psychological problems		✓	✓			✓	✓			✓		✓	✓		✓	7
Legal	21	Lack of laws that support local industry during the crisis		✓		✓	✓	✓	✓	✓	✓		✓	✓	✓	✓	✓	11
(L)	22	Issuing strict instructions and regulations due to the crisis	✓	✓		✓	✓	✓	✓	✓	✓			✓		✓	✓	10
	23	Difficulty of issuing licenses and permits		✓		✓	✓	✓	✓	✓	✓			✓		✓	✓	9
	24	Resistance to follow regulations						✓	✓		✓	✓	✓	✓		✓	✓	7
	25	Complicated construction legislative system and laws	✓	✓			✓	✓	✓	✓	✓	✓	✓			✓	✓	10
	26	Terms of the contract difficult to implement during the pandemic	✓	✓			✓	✓	✓	✓	✓	✓	✓		✓		✓	10
	27	Lack of supplemental reports that deal with health and pandemic conditions		✓	✓	✓			✓								✓	4
	28	The contract is insufficient due to the new conditions of the pandemic		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓		✓		✓	11
	29	Delays in resolving disputes		✓		✓		✓	✓	✓	✓		✓		✓	✓	✓	9
	30	Difficulty of agreeing with a third party to obtain services and resources with the required quality		✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	12
	31	Difficulty of applying new health standards and control of infection							✓				✓				✓	2
	32	Negotiation instead of litigation in dispute	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓		✓	✓	✓	12
	33	Difficult site restrictions		✓	✓		✓	✓	✓	✓	✓	✓		✓		✓	✓	10
Technological	34	Insufficient testing performance	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓		✓	12
(T)	35	Difficulty finding experienced and efficient workers due to the crisis	✓	✓		✓	✓	✓	✓	✓		✓	✓	✓	✓	✓	✓	12
	36	Low performance of subcontractors during project implementation	✓	✓	✓	✓	✓	✓	✓	✓		✓	✓	✓	✓		✓	12
	37	Low-performance contractors	✓	✓	✓	✓	✓	✓		✓		✓	✓	✓	✓	✓	✓	12
	38	Difficulty of schedule monitoring and control	✓	✓	✓	✓	✓	✓	✓	✓		✓	✓	✓	✓	✓	✓	13
	39	Lack of efficiency of the project management team	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	14
	40	Damages caused by delay	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	14
Environmental	41	Harsh weather condition	✓	✓				✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	11
(EN)	42	Unexpected accidents and natural disasters (God willing)	✓	✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	13
	43	Major change order & owner’s intervention	✓	✓	✓	✓		✓	✓	✓	✓	✓	✓	✓		✓	✓	12
	44	Variation orders		✓	✓		✓	✓	✓	✓	✓	✓	✓	✓		✓	✓	11
	45	Inappropriate definition of scope of work due to new and volatile conditions	✓	✓			✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	12
	46	A wide variety of construction work		✓	✓		✓	✓	✓		✓		✓	✓	✓	✓	✓	10
	47	Insufficient coordination of contractors (ineffective) with suppliers	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	14

presents studies that the authors used to identify the risk factors for the current research. A check mark in the table fields indicates that the risk factor identified in the current research has a factor that is similar to or is derivative from a factor in the reference used, while a gray colored field indicates that there is no related factor in the reference used. The authors found these studies useful in terms of their required level of details regarding the risk factors, the applied method of research, and the relation to the current study. These risk factors were then modified to fulfil the research objectives after consultation with experts involved in construction projects funded by external sources. Five experts were consulted through direct interviews, including two academics with over five years of experience and more than two publications in the field of construction risk, and three practitioners with over 10 years of experience as senior managers on construction projects involving at least two completed projects funded by external sources. The experts were first contacted by calling to provide an idea of the research objectives. Then, a full list of risk factors identified in the literature was sent to them. After this, the list was discussed with them in over two face-to-face interviews with each one. Each interview discussed the original full list and the list modified by previous expert views until the final list was developed and approved by the interviewees. This resulted in 47 risks categorized into six groups.

Although most of these risk factors were derived from previous literature, many were modified and updated to reflect the special condition of the study. As can be observed in Table 2, some risk factors were reshaped to link them to the special pandemic situation, such as risks number 1, 5, 7, 8, 10, 14, 16, 21, 26, and 28. Other factors in the identified potential risks were selected because they are highly linked and sensitive to the particular characteristics of the type of construction projects funded by external sources, such as risks number 9, 11, 13, 14, 18, 25, 30, 33, 39, and 44. However, some risk factors identified in the literature were found not applicable or not important for inclusion in the risk factors considered in the current study. Examples of these factors include inflation and instability of currency exchange rates, unfair bidding and corruption, and cultural and language barriers.

By using a quantitative approach based on a subjective survey, these risks were evaluated in terms of probability of occurrence, severity of project cost, and severity of project schedule. Specifically, a four-point scale, Likert-type format was used to collect the respondents’ feedback, where the response format was 1 = absence, 2 = minimal, 3 = medium, and 4 = high probability of occurrence, severity of project cost, or severity of project schedule. A four-point Likert scale is a useful measure when the authors wish to eliminate respondents’ tendency to favor neutral choices that may weaken the assessment results. In addition, a four-point Likert scale is appropriate, if the simple 3 × 3-matrix type of the Risk Assessment Tool (RAT) is used, as will be explained in the following sections.

3. Methodology

The aim of this study is to identify and assess the risks associated with construction projects funded by external sources during the COVID-19 pandemic in Jordan. The study has adopted a methodology procedure that is described in Figure 2. Related procedures were used in previous studies [7,21,29,30,31,32,38].

A questionnaire survey was used in the current study because of its importance to define and detail various characteristics and because it has the ability to provide results that can be easily quantified, analyzed, and generalized [41].

A list of 78 construction companies was collected from the database of the Jordan Engineers Association (JEA) for companies involved recently in construction projects funded by external sources. All the listed companies were contacted to provide contact details of a specialist from the construction company or from other companies involved in their projects. The required specialist was defined as an engineer who had at least five years of experience in an engineering and/or managerial role in construction projects funded by external sources. Out of the 78 companies, only the contact addresses of 53 specialists were provided. The survey was sent by using electronic forms (SurveyMonkey, San Mateo, California, United States) to the specialists representing 53 construction companies. The number of respondents to the survey was 34, representing a 64% response rate. The structure of the questionnaire survey consists of two main sections: the first reflects respondents’ experiences and roles and the second reflects their perspectives on each of the identified risks. The questionnaire includes 58 questions (11 in the first section and 47 in the second), and the estimated time for completion is 12 min. The survey was conducted during July, August, and September 2020. There was a limitation on the number of respondents since strict preventive measures were applied during this period, and only large companies could work at that time. All the projects within the study were finished shortly before conducting the survey, most of them having had durations of less than six months. Therefore, the projects of the study can be considered as being highly affected by the pandemic.

3.1. Characteristics of Respondents

The first section includes 10 questions to capture the characteristics of the respondents with the properties of their projects and companies as presented in Figure 3. All the questionnaire’s participants have at least five years of experience in the construction sector, have at least one completed project funded by external sources, and have an interest in the risk management field. The figure shows that most of the respondents worked on commercial and institutional building projects, while almost half of the respondents belonged to contracting companies. The delivery system that was the most frequently used in the respondents’ projects was Construction Management Multi-Prime (CMMP). In addition, the results showed that most of the respondents are either site engineers or general managers. The type of contract, which was mostly used in the studied projects, was the measured or unit rate contract. The results of this part of the survey highlight characteristics of the construction projects funded by external sources. Furthermore, the characteristics of the respondents show that they are in positions in construction projects that qualify them to have the information and knowledge required to provide a valid and reliable assessment of the risks in construction projects.

Most of the studied projects have contractual and actual duration ranges from one month to one year. Most of the studied projects were affected by time delay (74%) and cost overrun (66%). Figure 4 shows the amount and percentage of delay and cost overrun in the studied projects. As can be seen, almost all the studied projects encountered less than six months of delay and less than 500,000 JD of cost overrun. According to the literature, the amount of time delay and cost overrun increased dramatically because of the pandemic [24,42,43].

3.2. Assessment of Risk Factors

The second section of the questionnaire asks respondents to evaluate the 47 defined risks in terms of probability of occurrence, severity of project cost, and severity of project schedule. The number of responses for each of the three evaluation categories is collected and analyzed. The Importance Indicator (II) of the responses was calculated for each risk factor using Equation (1), where Wi refers to the four weight categories, given the values 1 to 4 and used to evaluate the probability of occurrence or severity of risks on either the schedule or cost, Xi is the number of responses counted in each evaluation category for each risk factor, and N is the total number of responses for each risk factor. According to the literature, the importance index and the relative importance index provide the same ranking results for studied variables [44].

$$\mathrm{T}\mathrm{h}\mathrm{e}\mathrm{I}\mathrm{m}\mathrm{p}\mathrm{o}\mathrm{r}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{c}\mathrm{e}\mathrm{I}\mathrm{n}\mathrm{d}\mathrm{i}\mathrm{c}\mathrm{a}\mathrm{t}\mathrm{o}\mathrm{r}\left(\mathrm{I}\mathrm{I}\right)={\sum }_{\mathrm{i}=1}^{\mathrm{i}=4}{\mathrm{W}}_{\mathrm{i}}{\mathrm{X}}_{\mathrm{i}}/\mathrm{N}$$

(1)

The II for each risk factor was calculated for the probability of occurrence, severity to project cost, and severity to project schedule, as given in

Table 3. Results of II, RI, and the ranks of risk factors.

Group ID	Group Name	Risk No.	Risk Factor	Importance Indicator (II)			Risk Importance (RI)		Importance Rank
				Probability of Occurrence	Severity on Project Cost	Severity on Project Schedule	Cost	Schedule	Cost	Schedule
P	Political	1	Political fast changes during the crisis	2.44	2.47	2.38	6.03	5.82	37	36
		2	Reduction in authority performance	2.85	2.74	2.74	7.80	7.80	12	11
		3	Lack of security and increase in crimes	2.56	2.44	2.56	6.25	6.55	32	29
		4	Potential corruption to avoid restrictions	2.85	2.85	2.41	8.14	6.88	8	23
		5	Inadequate duration of the project due to constantly changing circumstances	2.64	2.85	2.94	7.51	7.75	14	12
		6	Potential authority fines	1.94	2.03	1.94	3.94	3.76	44	45
		7	Sudden close in public authorities due to infected cases	2.38	2.59	2.38	6.17	5.68	34	37
EC	Economic	8	Change of prices because of the crisis	2.32	2.50	2.41	5.81	5.60	38	39
		9	Resources restrictions	2.24	2.24	2.15	5.03	4.82	42	42
		10	Additional work cost caused by the crisis	2.30	2.48	2.27	5.72	5.23	39	41
		11	Inadequate management decisions due to limited resources (during construction)	2.56	2.65	2.63	6.78	6.73	25	27
		12	Retainage magnitude	3.12	2.03	2.00	6.34	6.24	30	31
		13	Insufficient project delivery system	2.42	2.28	2.22	5.53	5.38	41	40
		14	Delays or shortages in the payment process due to fluctuations in the health status	3.00	2.27	2.33	6.82	7.00	23	21
		15	Lack of quality resources	2.70	2.64	2.52	7.11	6.78	19	24
S	Social	16	Government-imposed holidays and curfews (lockdown days)	2.97	2.29	2.56	6.81	7.60	24	14
		17	Social distancing problems and difficulty of team working	2.88	2.29	2.76	6.60	7.96	28	9
		18	Making tough decisions by engineers during project implementation	2.85	3.06	3.09	8.73	8.81	4	4
		19	The project communication process is inappropriate (inadequate)	2.62	2.56	2.59	6.70	6.78	26	25
		20	Social and psychological problems	1.79	2.06	2.09	3.68	3.73	47	46
L	Legal	21	Lack of laws that support local industry during the crisis	2.47	2.59	2.53	6.39	6.25	29	30
		22	Issuing strict instructions and regulations due to the crisis	2.91	2.76	2.55	8.02	7.40	10	17
		23	Difficulty of issuing licenses and permits	3.33	3.00	3.21	10.00	10.71	1	2
		24	Resistance to follow regulations	3.06	2.84	2.76	8.70	8.44	5	5
		25	Complicated construction legislative system and laws	2.18	2.09	2.03	4.56	4.42	43	43
		26	Terms of the contract difficult to implement during the pandemic	2.73	2.76	2.79	7.52	7.60	13	13
		27	Lack of supplemental reports that deal with health and pandemic conditions	1.94	2.03	2.00	3.94	3.88	46	44
		28	The contract is insufficient due to the new conditions of the pandemic	2.64	2.67	2.64	7.03	6.95	20	22
		29	Delays in resolving disputes	2.36	2.67	2.58	6.30	6.09	31	32
		30	Difficulty of agreeing with a third party to obtain services and resources with the required quality	2.52	2.42	2.24	6.10	5.64	35	38
		31	Difficulty of applying new health standards and control of infection	2.88	2.79	2.76	8.03	7.94	9	10
		32	Negotiation instead of litigation in dispute	1.97	2.00	1.84	3.94	3.63	45	47
		33	Difficult site restrictions	2.79	2.52	2.55	7.01	7.10	21	19
T	Technological	34	Insufficient testing performance	2.67	2.58	2.48	6.87	6.63	22	28
		35	Difficulty finding experienced and efficient workers due to the crisis	2.91	2.91	2.88	8.46	8.37	6	6
		36	Low performance of subcontractors during project implementation	2.58	2.78	2.63	7.16	6.76	18	26
		37	Low-performance contractors	2.42	2.58	2.45	6.24	5.95	33	34
		38	Difficulty of schedule monitoring and control	2.47	2.27	2.36	5.61	5.84	40	35
		39	Lack of efficiency of the project management team	2.36	2.58	2.55	6.09	6.02	36	33
		40	Damages caused by delay	3.09	2.36	2.36	7.31	7.31	17	18
EN	Environmental	41	Harsh weather condition	2.85	2.76	2.79	7.89	7.97	11	8
		42	Unexpected accidents and natural disasters (God willing)	2.44	2.71	2.88	6.61	7.04	27	20
		43	Major change order and owner’s intervention	2.55	2.91	2.94	7.40	7.48	16	16
		44	Variation orders	2.94	3.12	3.09	9.17	9.09	3	3
		45	Inappropriate definition of scope of work due to new and volatile conditions	3.47	2.85	3.18	9.88	11.02	2	1
		46	A wide variety of construction work	2.97	2.82	2.72	8.37	8.07	7	7
		47	Insufficient coordination of contractors (ineffective) with suppliers	2.61	2.88	2.91	7.50	7.58	15	15

. The evaluation of severity for both project cost and project time will help to ensure the validity and credibility of the study results, especially when the results for both are consistent. A Risk Assessment Tool (RAT) was used as an illustrative method to assess the risk factors in terms of the level of importance, as shown in Figure 5.

4. Results

The average II for each of the risk groups was calculated for probability of occurrence, severity on project cost, and severity on project schedule. The RAT illustration was then created for probability of occurrence versus the average II of the severity on project cost and schedule, as shown in Figure 6. The illustration shows that the group of Environmental Risks has the highest level of importance to the cost and schedule of projects.

In addition to the illustration of risk groups, the RAT method was applied to show the level of importance of the individual risk factors, as shown in Figure 7 and Figure 8.

Since it is not easy to present the data of the 47 risk factors by using RAT illustration, Risk Importance (RI) was calculated. Risk Importance for each risk factor can be obtained by multiplying the Importance Indicator (II) of Probability of Occurrence by the Importance Indicator (II) of Severity on project cost or schedule, as shown in Equation (2).

$$\mathrm{R}\mathrm{i}\mathrm{s}\mathrm{k}\mathrm{I}\mathrm{m}\mathrm{p}\mathrm{o}\mathrm{r}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{c}\mathrm{e}\left(\mathrm{R}\mathrm{I}\right)=\mathrm{I}\mathrm{I}\mathrm{P}\mathrm{r}\mathrm{o}\mathrm{b}\mathrm{a}\mathrm{b}\mathrm{i}\mathrm{l}\mathrm{i}\mathrm{t}\mathrm{y}\mathrm{o}\mathrm{f}\mathrm{O}\mathrm{c}\mathrm{c}\mathrm{u}\mathrm{r}\mathrm{e}\mathrm{n}\mathrm{c}\mathrm{e}\times \mathrm{I}\mathrm{I}\mathrm{S}\mathrm{e}\mathrm{v}\mathrm{e}\mathrm{r}\mathrm{i}\mathrm{t}\mathrm{y}\mathrm{o}\mathrm{n}\mathrm{c}\mathrm{o}\mathrm{s}\mathrm{t}\mathrm{o}\mathrm{r}\mathrm{t}\mathrm{i}\mathrm{m}\mathrm{e}$$

(2)

The ranks of the risk factors were then calculated depending on the RI of cost and schedule. Table 3 lists the calculated values of II, RI, and the ranks of risks according to their importance on the cost and schedule of the projects. To simplify reading and analyzing the results, the top 10 important risks on the cost and schedule of the studied sample of construction projects were highlighted.

5. Discussion

Based on the ranking results, the five most important risks to the project cost and schedule in the opinion of respondents are difficulty of issuing licenses and permits, the inappropriate definition of the scope of work due to new and volatile conditions, variation orders, making tough decisions by engineers during project implementation, and resistance to follow regulations. These risks belong to the risk groups of Environmental, Legal, and Social risks.

Difficulty of issuing licenses and permits was ranked in risk importance as first on project cost and second on project schedule. This result may be related to some reasons. For example, the process of issuing work and residence permits for foreign workers has become a longer process with a higher cost during the pandemic, with the fact that the majority of construction workers in Jordan are foreign workers. The pandemic has also forced government departments to halve the number of employees and reduce the number of working hours, which affected work productivity and delayed transactions. This result agrees to some extent with the findings of Al-Sabah and Refaat [21], where the risk related to permits and licenses was ranked seventh and fourth in their importance to project cost and schedule, respectively. Furthermore, El-Sayegh [32] found that the delay in approvals was ranked seventh in terms of probability of occurrence and impact on construction projects. Another research by Andi [30] conducted on Indonesian construction projects before 2005 evaluated the risk of permits and ordinances among the least ranked factors in terms of their impact and frequency. Alsharef et al. [24] highlighted the idea of the formation of a task force team in the construction organizations to update the work procedures according to the pandemic-related regulations and take advantage of any government relief programs.

Inappropriate definition of the scope of work due to new and volatile conditions was ranked first in importance to project schedule and second in importance to project cost. Many contractors and engineers were committed to large projects before the start of the pandemic, within conditions and scope of work that became unsuitable for the new and volatile conditions. For example, the planned time and cost are no longer valid in the new circumstance. The new conditions also imposed restrictions on the imported materials and tools that made adherence to the specifications and contracts very difficult. This result is different from the results found in the research conducted before the pandemic. The lack of scope of work definition in El-Sayegh [32] was ranked 6th and 14th in their importance by international and local companies, respectively, while the insufficient scope definition in the work of Al-Sabah and Refaat [21] was ranked 22nd and 23rd in their importance to cost and schedule risks, respectively. Yadeta and Pandey [28] claimed that solutions for construction companies have been provided by globally applicable contracts to mitigate the influence of the pandemic on the construction companies.

The risk of variation orders was ranked third in importance to project schedule and cost. In the difficult pandemic conditions, the change and variation orders increased dramatically in number and value. The lack of materials, the significant increase in cost, and the lack of workers with the appropriate expertise required changing work items and specifications. This result agrees to some extent with the findings of Andi [30], where the risk of variation orders was ranked first in terms of impact and frequency on the projects. However, variation orders risk was ranked 20th and 19th by Al-Sabah and Refaat [21] in terms of its importance to cost and schedule, respectively. In the work of Abdul-Rahman et al. [29], the risk of undocumented variation or change orders was ranked 16th among 57 risk factors in terms of risk significance. Wang et al. [23] have encouraged the adoption of flexible project management and coordination to improve effective response to the pandemic, despite the higher work cost.

Making tough decisions by engineers during project implementation was ranked in the fourth position for its importance in the project cost and schedule. When engineers or consultants make tough decisions, it is mostly because they consider that the work lacks the required quality or specifications. Moreover, often when these decisions are made, they cause an increase in cost and delay in the projects at the expense of the contractor, without justification for requesting extensions of time or an increase in price. The projects funded by external sources are characterized by the presence of several bodies responsible for supervising and controlling the work; therefore, these projects are subjected to multiple, different, and sometimes harsh decisions from several sides. This result does not agree with the findings of Al-Sabah and Refaat [21], where the risk of harsh decisions of engineers was ranked 23rd and 20th in their importance to cost and schedule risks, respectively, among 28 project risks.

Resistance to follow regulations was ranked by respondents as the fifth risk in its importance to the project cost and schedule. The regulations and restrictions during the pandemic period have increased significantly and led to increased difficulties and challenges in construction projects that were originally characterized by challenges before the pandemic. For example, when the total and partial curfews were imposed, it caused delays in projects and negative impact on contractors and employees, many of whom depend on daily wages. In addition, the imposition of strict health conditions in projects to limit the spread of disease, especially adherence to general health tools and social distancing, led to difficulties and restrictions in the work of employees. Also, the limitations on the number of workers allowed in construction projects, the imposition of financial fines, and the suspension of violating projects led to vast financial problems for employees and contractors. This result does not agree with the literature reviewed in this research, where the risk of resistance to follow regulations was not used in the list of risks experienced in the construction projects. Wang et al. [23] and Alsharef et al. [24] commented that local governments and authorities can make key contributions to mitigate the difficulties.

Other risk factors were ranked in the top 10 in terms of their importance on the project cost and schedule, such as difficulty finding experienced and efficient workers due to the crisis, a wide variety of construction work, harsh weather conditions, potential corruption to avoid restrictions, difficulty in applying new health standards and control of infection, issuing strict instructions and regulations due to the crisis, and social distancing problems and its difficulty of team working. As can be noted, these risks are distributed among the different PESTLE groups of risks. The most important PESTLE group of risks was the environmental group. It has four of the most important risks. Ultimately, these risks should receive great attention from practitioners and decision-makers.

6. Conclusions and Recommendations

Funders and decision-makers must be vigilant and well-equipped when funding or investing in the construction sector. Previously in this paper, the risks and challenges that can be faced in construction projects were investigated. As the risks and challenges have increased in the recent period due to fluctuating health conditions, the study of risks in the construction industry became vital. This study has applied an electronic questionnaire survey to identify the most important risks that may lead to time delay and cost increase during the implementation of construction projects. This study sheds light on the significant risks that may cause negative impacts on construction projects funded by external sources during the COVID-19 pandemic. The discussion and results of the study can help decision-makers regarding the response to the outbreak of the pandemic and take the necessary precautions to mitigate the negative impact of any pandemic that may occur in the future.

To reduce these challenges, difficulties, and risks, the following solutions and measures are proposed by the authors after consultation with the experts:

• Facilitating the process of issuing licenses and permits in terms of long and complicated procedures is recommended. Developing electronic permit application forms and conducting electronic transactions is a good technique, which can reduce the number of employees in the government authorities and also time and effort. Al-Sabah and Refaat [21] recommended continuous reviewing and evaluation of procedures and protocols in the country to minimize any difficulties that could be encountered.
• The development of guidelines and instructions by the official authorities and the relevant unions to direct engineering institutions to use the appropriate scope of work for the fluctuating health conditions is one of the important matters that may help avoid the risks of the pandemic. Abdul-Rahman et al. [29] proposed to target projects with well-defined scopes, low unexpected risks, and low potential for change during the stages of construction.
• To limit the increase in variation and change orders, it is recommended to move towards adopting more comprehensive and flexible contracts to deal with the shortage in the availability of materials and expertise. Abdul-Rahman et al. [29] emphasized on the clarity of change. Al-Sabah and Refaat [21] encouraged that the contract documents should be prepared with high levels of details prior to the start of construction.
• Reconsider the time plan and cost estimates for current projects to make them more appropriate for the current situation. This will help to reduce the pressure on engineers and encourage them to make fewer tough decisions. Abdul-Rahman et al. [29] encouraged engaging experienced managers in the projects, reshuffling the work members to enhance efficiency, and increasing the workforce when the job load is heavy. Al-Sabah and Refaat [21] stressed that taking care in following the submittals and approvals can reduce delays caused by unsuccessful submittals.
• Imposing new conditions and easier restrictions on importing and encouraging local industries for materials and tools that must be used according to the specifications and scope of work specified, so that it becomes easy to comply with specifications and contracts. Abdul-Rahman et al. [29] recommended considering obtainable materials and importing materials from neighboring countries.
• Taking into account the current circumstances when developing the project timeline, in addition to the flexibility to extend the project duration when there are reasons that require it. Abdul-Rahman et al. [29] encouraged regular meetings that may help to review and reconsider the current situation and to decide on the required changes and extensions in the project duration. Al-Sabah and Refaat [21] stressed that environmental risks should be considered when developing the cost estimates and schedule of the construction project.

In future research, the authors can build on the current study to consider other types of projects in conditions that are different from those studied in this paper. Another type of research method can be used by applying a case study to test the methods, findings, and recommendations of the current study and evaluate their effect. In future research, more criteria than cost and time risks to the construction project, such as quality, safety, and communication, can be evaluated. Furthermore, it might be of particular interest in future to evaluate the obtained risk factors in different countries and compare the results with the current study. This may reflect the special characteristics of the construction projects in each country.