2399030-78457900 CIVIL AND ARCHITECTURAL ENGINEERING SECTION DEPARTMENT OF ENGINEERING Gauging Levels of Stakeholders Compliance to Rules and Regulations in Commercial Projects in Muscat In partial fulfillment for the award of degree of Advanced Diploma in Quantity Surveying 9105903663951

2399030-78457900
CIVIL AND ARCHITECTURAL ENGINEERING SECTION DEPARTMENT OF ENGINEERING
Gauging Levels of Stakeholders Compliance to Rules and Regulations in Commercial Projects in Muscat
In partial fulfillment for the award of degree of
Advanced Diploma in Quantity Surveying
9105903663951.Anood Moosa Al Zadjali 16S1445
2.Ghaida Abdullah Al Yahyaie 12S1468
3.Maryam Amran Al Amri 12S14101
4.Rajaa Hilal Al Jabri 12S14143
5.Reham Hilal Al Husaini 12J15191
001.Anood Moosa Al Zadjali 16S1445
2.Ghaida Abdullah Al Yahyaie 12S1468
3.Maryam Amran Al Amri 12S14101
4.Rajaa Hilal Al Jabri 12S14143
5.Reham Hilal Al Husaini 12J15191
Report Submitted by
Under the Supervision of
Mrs. Shakila Javed
HIGHER COLLEGE OF TECHNOLOGY
Muscat, Sultanate of Oman.

June 2018
Engineering Department
Student Declaration Form
Semester 3 Academic Year (2017-2018)
To: The Head, Department of Engineering
We are students of Diploma second year Level and Quantity Surveying Specialization in the Civil and Architectural section, Engineering Department, hereby declare that all our submissions, as requirements for the course Final Year Project, are results of our own original work except for source materials explicitly acknowledge by proper citations.
We also understand that plagiarism is an offense that can lead to disciplinary action depending on the seriousness of the case.

-3810321310Name ID No: Signature
1.Anood Moosa Al Zadjali 16S1445
2.Ghaida Abdullah Al Yahyaie 12S1468
3.Maryam Amran Al Amri 12S14101
4.Rajaa Hilal Al Jabri 12S14143
5.Reham Hilal Al Husaini 12J15191
Date
00Name ID No: Signature
1.Anood Moosa Al Zadjali 16S1445
2.Ghaida Abdullah Al Yahyaie 12S1468
3.Maryam Amran Al Amri 12S14101
4.Rajaa Hilal Al Jabri 12S14143
5.Reham Hilal Al Husaini 12J15191
Date

BONAFIDE CERTIFICATE
Certified that this project report titled “Gauging Levels of Stakeholders Compliance to Rules and Regulations in Commercial Projects in Muscat”, is the bona fide work of the following students who carried out the project under my supervision. Certified further, that to the best of my knowledge the work reported herein does not form part of any other thesis or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other student.
-3810394970Name ID No: Signature
1.Anood Moosa Al Zadjali 16S1445
2.Ghaida Abdullah Al Yahyaie 12S1468
3.Maryam Amran Al Amri 12S14101
4.Rajaa Hilal Al Jabri 12S14143
5.Reham Hilal Al Husaini 12J15191
00Name ID No: Signature
1.Anood Moosa Al Zadjali 16S1445
2.Ghaida Abdullah Al Yahyaie 12S1468
3.Maryam Amran Al Amri 12S14101
4.Rajaa Hilal Al Jabri 12S14143
5.Reham Hilal Al Husaini 12J15191

Ms. Khulood Saif Al Danaqi Mrs. Shakila Javed
HOS- CAE Supervisor
Date:
ABSTRACT
Report on ”Gauging levels of stakeholders’ compliance to Rules and Regulations in Commercial Projects in Muscat”. Encloses the detailed information about the importance of providing suitable solution for fraud cases which may happen in commercial projects due to the participant who are involved on it which to overcome on the failure of the project and lead to it’s success by increasing the productivity also decreasing the impediment during construction process. This report illustrates the different types of hoax which exercised by various team members, explain how to develop the security strategy during construction and implement the right rules to reduce the fraud levels. Furthermore, focusing on information about whether client, design team or construction team following the rules and regulations in construction process.

A questionnaire was distributed to 30 members who work in different areas to compare between each vision/opinion from their point of view the actual event that happened during the progress of work in many types of projects. However, the data was collected by the help of the distributed questionnaire which support our study. This research can help to develop the future construction projects.

ACKNOWLEDGMENT
We would like to express special thanks to Mr. Jamal Abid who have given us advise and help for choosing a title for this research and Ms. Shakila Javed, the one who helped us and supervised to get more information and ideas for the project.

Acknowledgment is also for the project coordinator Ms. Raquel C. Lappay

-343535244475Chapter No. Title Page No.

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TABLE OF CONTENTS
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1.1
1.2
1.3
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2.3
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2.5
2.6
2.7
2.8
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2.10
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1.2
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2.2
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1141730190098ABSTRACT
ACKNOWLEGMENT
LIST OF TABLES
LIST OF FIGURES
INTRODUCTION
Background of the project
Objective / Aim of the Project
Importance of the Project
LITERATURE REVIEW
Introduction
Definitions of Terms
Types of Fraud
How the fraud can be exercised?
How each participant exercises the Fraud?
The reason of Fraud in Commercial Projects
Negative impact of Fraud
A Contract
The commercial Law
Real Fraudulent Cases around the World
METHODOLOGY
0ABSTRACT
ACKNOWLEGMENT
LIST OF TABLES
LIST OF FIGURES
INTRODUCTION
Background of the project
Objective / Aim of the Project
Importance of the Project
LITERATURE REVIEW
Introduction
Definitions of Terms
Types of Fraud
How the fraud can be exercised?
How each participant exercises the Fraud?
The reason of Fraud in Commercial Projects
Negative impact of Fraud
A Contract
The commercial Law
Real Fraudulent Cases around the World
METHODOLOGY

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1142204245464RESULTS AND DISCUSSION
CONCLUISON AND RECOMMENDATIONS
REFERENCES
APPENDICES
00RESULTS AND DISCUSSION
CONCLUISON AND RECOMMENDATIONS
REFERENCES
APPENDICES
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LIST OF TABLES
-339725368935Table No. Title Page No.

2.1 Different types of fraud suffered in the construction, engineering 5
and infrastructure sector.
00Table No. Title Page No.

2.1 Different types of fraud suffered in the construction, engineering 5
and infrastructure sector.

LIST OF FIGURES
-339725293370Figure No. Title Page No.

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57086539370Methodology
The Participants
Type of the project
Do you think fraud is a problem for construction in general?
Analysis of Problem of fraud in Construction
Employees, managers, or others are working but depending more on fraud
participant in a construction project is following fraud
Have you ever been deceived? And from which stakeholder?
Analysis of the participants who are deceives.

What are the types of fraud that can be followed in a project?
What are the influences or effects rising out
If you had a chance of following fraud would you follow it?
Can a company loose a contract due to deceptive activities?
Have you ever been involved in any litigation cases?
Is there can be a fraud activity which can never be caught?
Is it a must from a fraudulent member to have experience from before?
What are the common or easiest ways of cheating in construction?
How to reduce such issues?
What is your advice for fraudulent members?
00Methodology
The Participants
Type of the project
Do you think fraud is a problem for construction in general?
Analysis of Problem of fraud in Construction
Employees, managers, or others are working but depending more on fraud
participant in a construction project is following fraud
Have you ever been deceived? And from which stakeholder?
Analysis of the participants who are deceives.

What are the types of fraud that can be followed in a project?
What are the influences or effects rising out
If you had a chance of following fraud would you follow it?
Can a company loose a contract due to deceptive activities?
Have you ever been involved in any litigation cases?
Is there can be a fraud activity which can never be caught?
Is it a must from a fraudulent member to have experience from before?
What are the common or easiest ways of cheating in construction?
How to reduce such issues?
What is your advice for fraudulent members?

CHAPTER 1: INTRODUCTION
Background of the Project
Fraud in construction is the essential element that affects the improvement of the construction and the individuals who are involved. As the backbone of a country’s construction system to improve the economy, creating best working environment for people and deliver higher return of investment for the client. Grant thornton international, a global advisory firm, recently issued a report on fraud in the construction industry in Australia, Canada, India, the US and UK the statistics are sobering:
3.4% of all fraud cases reported over a two-year period were in construction.

The median average loss was US$300,000 which approximately equal to 115,400 OMR.

Fraud impacts 10% of the industry’s total revenues in the UK.

Applying these data pints to global construction and its projected growth suggest that fraud and corruption could account for US$860 billion which approximately equal to 330 OMR billion today and US$1.5 trillion which approximately equal to 0.60 OMR trillion by 2025.
Grant thornton adds an accelerating factor: https://www.grantthornton.com
”As the global economy recovers, activity across the construction industry will increase. This will bring more opportunities for fraud.” Grant thornton cites project complexity and project team diversity as fraud risks:
”the longer the number of stakeholders involved in a project, the more opportunity there are for fraud. In addition to, perpetration from inside the company suppliers such as: contractors, sub-contractors and even lending organization must be considered risks to be addressed as part of company’s fraud exposure management policy.”
Cheating is an illegal act committed by stakeholders, also known as stakeholder fraud. There are many cheating cases by stakeholder which can be defined as the people who are involved in the project or directly affected by the project activities. Commercial projects are the ones mostly affected by this issue, because most of the projects in Muscat are commercial projects, and this leads them to earn more profit. (High-scale projects can be like Avenues mall – (145,000 m2), medium-sized projects such as: panorama mall – (10,000-50,000 m2), and small projects for example: Al-Seeb mall-(9,000 m2).)
The presentation will illustrate the effect of cheating by the project participants: “the owner, Construction team, and the design team”, commercial projects which may lead to it’s failure. Also help and contribute other members to get rid of problems.

Through the points mentioned in the previous paragraph, as one of the project members, obtaining a well-organized, successful, and integrated project is present, which makes the project participants proud of the work that have been done. This can give others a positive vision, a good idea and also an excellent background undertaken for future projects.

1.2 Objective / Aim of the Project:
Contribute to reduce the fraud in the projects.

To know the cheating participants before hand, and be careful.

To avoid cheating that can occur in / during the project which can lead to it’s failure and over cost.

Be well-prepared to face any problems that may rise during construction.

Having a well-organized and successful project.

Evaluate the factors influencing in a project which is free from cheating.

1.3 Importance of the Project:
Achieving a project which is free from all kinds of fraud and deception, which helps to improve commercial projects in Muscat. However, to reach this goal it may or may not be easy, but for neither way a strict rule has to be followed which overcomes to stop this issue.

It’s also important to put some penalties and punishments for hoaxers, and hose punishments must be in a way that teaches those fraudulent or dishonest members a lesson which makes them never even think of repeating such cheating again. They can also advice people who try to cheat through what they have learnt from their experience and the punishments that they have got, which in return leads to reduce these issues/problems.

CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
On account of deception by the participants of the projects, the commercial projects are affected negatively, seeking for suggested solutions to avoid the deception among the participants. The superior way is to detect how each participant exercise the fraud, the reasons of that and the consequences at the end of the project.

2.2 Definitions of Terms:
2.2.1 Stakeholder: Is the person or party that has relevant knowledge of, is able to influence, or is affected by the proposed services. Stakeholders can include current or potential service providers, service users, peak bodies, the community (where services are to be delivered), service experts, technical experts and consumer representatives. There may be additional internal or external stakeholders depending on the nature of the services.

2.2.2 The Client: “Is the organization which owns the projects. It is interested in the plan of the overall project from the of the acquisition of the land to the productive use of facilities. Also it is interested in determining the times of outflows of cash for which it has to make provision and in the overall strategic decisions of the project management.” Abid,J . Tender & Contracts. Higher College of Technology, 2017
2.2.3 The Consultant (Design Team): “Is the organization which carry the responsibilities for preparing the plans used by the client in taking the strategic decisions.” Abid, J. Tender & Contracts. Higher College of Technology, 2017
2.2.4 The Contractor: “A firm which undertakes to complete a project in consider with a contract document on behalf of the employer. It is a most important party of the building contract and should have full control of all operations on site.” Abid, J. Tender & Contracts. Higher College of Technology, 2017
2.2.5 Building Contract: A contract between an owner of land and building contractor, setting forth the terms under which construction is to be carried out, the basis of remuneration, the time scale and the penalties (for failure to comply with terms of the contract).

2.2.6 Commercial projects: The construction of structure and facilities for commerce and business. They include retail shops, restaurants, industrial shops and offices. They are more complex because they need to comply with stricter requirements when it comes to royal government approval and registration. Due to the fact that more people will use the facilities, therefor, they need more stable components, detailed plan and developments.

2.2.7 Construction Fraud: Construction fraud involves deceit in the performance of construction work. Basically, promises are made that are intended to be relied on, and that reliance leads to harm or loss when the promise fails to be fulfilled.

2.2.8 Subcontractor: A person who or business that contracts to provide some service or material necessary for the performance of another’s contract.

2.3 Types of Fraud
A 2015 Kroll Global Fraud Report indicated that 75% of construction, engineering and infrastructure companies have experienced a fraud incident in the past year. In addition, 92% of construction industry respondents said their exposure to fraud has increased in the last year.

The construction industry has the second highest incidence rate of any sector after the retail industry and has experienced the highest increase in fraud exposure of any sector.

The most common fraud types the sector experienced were:
Theft of physical assets or stock (36% of construction companies experienced)
Vendor, supplier or procurement fraud (24%)
Regulatory or compliance breach fraud (18%)
Table 2.1: Different types of fraud suffered in the construction, engineering and infrastructure sector.

Type of Fraud Percentage of respondents in this sector reporting this in 2016, globally
Theft of physical assets 19%
Vendor, supplier or procurement fraud 28%
Information theft 18%
Management conflict of interest 14%
Regulatory or compliance breach 18%
Internal financial fraud 21%
Misappropriation of company funds 19%
Market collusion 16%
Intellectual property (IP) theft 7%
Corruption and bribery 19%
Money laundering 11%
Types of fraud exercised in Commercial projects in Muscat:
Always the owner has a willing to have a project with a high quality materials and performance. On the other hand, the aim of the contractor is to get more profit from the project rather than focusing on the high performance of the construction process which may create some issues such as:
The Quality of painting: There are many types of paints with different costs and level of quality, the contractor provides a low quality paints which is cheap to gain more money. He can do that by many ways and one of them is changing the container of the paint (put the low quality one in the container of the high quality one). The percentage of painting fraud is about 5%.

Reinforcement steel: This type of fraud is done by using a small diameter reinforcement steel in structure members which require a bigger one. Cheating in the specifications of reinforcing steel where the contractor used the old iron for buildings that are exposed to rust as a result of weather factors for more than a year and resell the owner and use it in the construction work.. The percentage of reinforcement steel is about 9%.

Billing for Unperformed Work: A subcontractor, for example, might overstate the units of production accomplished, the units of labor or the equipment actually used. This would be considered a false claim under the federal False Claims Act if the project were a government contract. If the contractor passes on a subcontractor’s false claim, he or she will likely be treated the same as the offending subcontractor if the false claim is discovered. The percentage of this type of fraud is about 28%
The quality of the concrete: Some contractors agree with the drivers of concrete cars to transport the excess concrete from one building to another after more than 4 hours of manufacturing in violation of the engineering specifications. It is known technically and geometrically that when the concrete period of the car is prolonged, it loses much of its quality and characteristics, More than 4 hours in a car then they are used after they have lost their quality. The percentage of using low quality of the concrete is about 25%.

Not following the contract requirement: The appearance of defects due to the use of building materials in the final finishes are not conforming to the specifications and not the quality required to prolong the life of the standard, both on the level of electricity and water or tiles or condoms, and this type of fraud and exploitation of the lack of knowledge of the owner. The percentage of this type of fraud is about 28%.

2.4 How the fraud can be exercised?
the majority of occupational frauds in all of the industries examined were committed by staff at the employee or managerial level, most often in accounting, operations, sales, and executive or upper management. The higher the fraudster’s authority level, the greater the losses. Overall, more than half were with their firms for more than five years. As the study points out, billing and corruption schemes ranked among the three most common forms of fraud in nearly every industry. In construction, these schemes can take a number of forms:
Corruption ? This umbrella category rates the highest in frequency for the construction industry, and includes conflicts of interest, bribery, illegal gratuities and economic extortion.

Bidding – Contractors take advantage of weaknesses in a system or the lack of internal controls to view the bids being submitted and adjust their own bid accordingly. Internal personnel with access to the bid submissions may also pass on this information to bidding contractors. With so much bidding for projects being done online, unauthorized access to bidding information can be even easier to accomplish.

Billing ? This type of fraud can take a number of forms, such as invoices submitted for costs that were inflated or not allowable under the terms of the contract; invoices for labor that was not completed or even performed; or invoices for work performed on personal projects.

Creating fictitious vendors – dummy companies from which nonexistent services or materials are being purchased
Check tampering – altering payee, altering amount, forging signature, forging endorsement
Taking kickbacks, inflating invoices from subcontractors
Stealing job materials, tools and equipment or by making unauthorized scrap sales
Payroll – creating ghost employees, overstating hours worked
2.5 How each participant exercises the Fraud
2.5.1 The client
The fraud of client is rarely happened because at the end he will harm himself and he will loss his money. But in some cases, the client breaks the rules of local authority by making some changes in measurements or designs.

2.5.2 The Contractor:
The contractor/builder can exercise the fraud by many ways whether before construction process or during construction process. There are many ways the contractor frauds through:
The contractor is not following the conditions of the contract
The quality of the concrete mix
The thickness of floors and ceilings
The quality and quantity of reinforced steel
Violation of find finishing specification
Use of poor or law quantity materials
2.5.3 The consultant
Most of the time the consultant frauds with the help of the contractor. The consultant can deceive the client to be paid a bribe by the contractor to hide any fault done by the contractor.

2.6 The reason of Fraud in Commercial Projects
The aim of the contractor is to obtain substantial financial profits.

The construction process is not properly monitored by the consultant.

Availability of poor Quality materials in markets.

The client is not surveillance the construction process regularly.

2.7 Negative impact of Fraud
The most affected person in fraud is the owner, so that he loses a lot of money to get an acceptable and perfect finishing. Also because of fraud, there will be delay in completing the project which impact negatively.

2.8 A Contract
contract is an agreement between two or more parties, creating an obligation upon them to fulfill or not to fulfill some duties laid down specifically in the agreement. The main advantages to the drawing up of contracts are that it reduces the risk that the company issuing the contracts will be sued. By making sure all the parties agree on the term of a particular agreement and making everyone sign a contract will reduce the chance of fraud in a particular deal because every party will have grounds for legal action later on.Contracts often outline what’s expected of each party and provide clarity to employees and the partners in their mission. Confidentiality and non-disclosure agreements are often part of the business contract between prospective partners and part of the employment contract. They bind the parties to hold market-sensitive, technical and commercial information strictly within transactions that affect the business.

When entering into contracts in Oman, complications may arise when the parties begin performing the obligations under a “contract” while the final terms are still being negotiated. What happens under Omani law when a dispute arises over the incomplete “contract”?
When does a contract become a contract that is binding on both parties?
In some cases, the Oman Court (or arbitrator, if there is an arbitration clause) will be willing to impute the existence of a contract even when the parties do not have a signed agreement. For example, if an employer in Oman does not sign a written contract with his employee, the Oman Courts would still impute a contractual relationship based on evidence such as pay slips, or transfers made regularly to the employee’s bank account by the employer.

2.9 The commercial Law
General provisions
Article 1:
The provisiotls of this Law shall apply to merchants and all commercial activities engaged in by any person even if such person is not a merchant.

Article 2:
In defining the rules which apply to merchants and commercial activities. due account shall be taken or legally recognized contracts. The said contracts shall become effective upon the mere congruence of offer and acceptance unless the Articles of this Code provide otherwise.

Article 3:
The principle in respect of commercial contracts is that they may be proven by all means of so doing whatever their value unless the Articles of this Law provide otherwise.

Article 4:
If no contract exists or if it exists and is silent with respect to a provision or if a provision contained therein is invalid. the legislative provisions comprised within this and other laws shall apply to all matters which these provisions deal with in word or meaning.

Article 5:
If no legislative provisions exists, the rules of custom shall apply with particular or local custom taking precedence over general custom. In the absence of custom, the provisions of the noble Islamic Sharia shall apply and thereafter the rules of justice.

Article 6:
The meaning Of Court in this Law is the Authority for the Settlement of Commercial Disputes or any other Court subsequently formed by law to examine commercial matters.

Article 7:
Commercial companies, trademarks, trade descriptions. the Commercial Register, the Oman Chamber of Commerce ; Industry and the Muscat Securities’ Market shall be regulated by their own law.

2.10 Real Fraudulent Cases around the World
The American Society of Civil Engineers claim that corruption accounts for an estimated $340,000,000,000 of worldwide construction costs each year. The following stories are real examples of Fraudulent:
2.10.1 Inspectors Accept Bribes to Pass Unsafe Buildings
What happens when New York Mayor launches an aggressive affordable housing plan (aggressive meaning around 50,000 new apartments in New York City by 2024)?
Contractors start to rush on the job and bribe building inspectors to the tune of $450,000. Inspectors can make or break building; one inspection rejection can force construction to crash into a halt “until further notice,” costing construction companies and their clients time and extraneous amounts of money.

In this particular case the New York Buildings Department approved buildings made for low-income families. The inspectors largely received gifts for their approval, including a Nissan Rogue SUV and a GMC Terrain SUV, child tuition payments, and cruises.

To put this all into perspective, New York spent around $33 billion on city construction in 2014. Of those homes built under these inspectors’ “supervision,” the Department of Buildings Commissioner Rick Chandler has said all the “tainted” buildings were re-inspected and deemed safe or stopped production and shut down.

2.10.2 China Collapses Corruption-Fueled Skyscrapers
What do you do when you commission three buildings — two 31-stories tall and one 35-stories tall and the final products are buildings that are 41 stories, 58 stories, and 65 stories tall, respectively?
The Chinese Government says: knock it down.

IBT also reports that:
Chinese media said it was not yet clear whether the adjusted size of the development was approved at some point by corrupt officials, or whether the developer simply changed the plan and persuaded officials to turn a blind eye. Either way, The Paper a Shanghai newspaper said the case was one of “blatant corruption,” adding that the construction of such buildings in the center of one of China’s biggest cities demonstrated “jaw-dropping arrogance.”
China Times (Chinese publication) explains that there are two reasons why demolishing the buildings are the government’s only options. Firstly, there are major fire concerns. Each floor of these high-end apartments are designed to host 70 families; should there be a fire emergency, the stairwells and fire exits would not be able to usher everyone to safety in a timely manner.

Secondly, the developer changed the size of the apartment units, leading to “too high population density,” affecting community properties (aka: sewage) and tenants’ “quality of life.”
2.10.3 Kenya Suffocates Under Lax Safety Regulations on Ventilation and Materials
Kenya’s National Construction Authority (NCA) is taking note of construction safety errors after a one-day old baby died with three other people in a collapsed six-story building and another seven people were killed in a separate collapse over the course of a month.

Voice of America reports that the NCA has shut down “500 sites since August 2014, sometimes for safety violations, sometimes because of substandard building materials.”
The inspector in charge of this investigation, Police Inspector General Samuel Arachi, says that those responsible for this shoddy workmanship may face criminal charges. He says, For this incident, everybody who was involved in the construction, right from the engineers, the architects, the contractor and the owner — for us this is criminal negligence and it will not be condoned.

Alfred Omenya of the Technical University of Kenya believes that commercial construction companies are not the sole entities to blame. He points out that all of Nairobi’s building collapses happen in the city’s poorest areas. Structures are quickly put up without regard to health hazards, like poor ventilation and open sewer lines. He says, “Even when regulators are there, they are able to allow a whole lot of substandard practices, a whole lot of illegal practices, because of course they’re able to extort bribes and are not serious about doing their work.”
CHAPTER 3: METHODOLOGY
Overview:
32409119445470042570401410970Methodology
0Methodology
4191635381916Preparing Introduction
00Preparing Introduction

251396591440Gathering Information
00Gathering Information
90487591440Selection of the Project Topic
00Selection of the Project Topic
41865555382895Getting
Solutions
00Getting
Solutions
41097204345940Analyzing The
Data
00Analyzing The
Data

8991604103193Conclusion ; Recommendation
00Conclusion ; Recommendation
25025353069590Identifying The Issue
00Identifying The Issue
9048752039620Preparing Questionnaire
00Preparing Questionnaire
908685781613Website and Journals Research
0Website and Journals Research
18364206618356Figure 3.1: Methodology
00Figure 3.1: Methodology
7607305812155Preparing Questionnaire
00Preparing Questionnaire
22841596109970Distributing Questionnaire
00Distributing Questionnaire
23672805472326Approving Questionnaire
00Approving Questionnaire
8934453253563Finding Results
00Finding Results
25831802104390Collection of Data
00Collection of Data
2505710964669Literature Review
0Literature Review

Research characteristics:
Aim:
The major aim of research is to come up with ways on how to cut-off the negative effects of fraud in commercial projects in Muscat. The goal of our study was to establish new ways on how to reduce or limit deceptive activities that happen in a construction industry particularly in Oman.

Type:
Type of the project is choosing on the basis as such to get different various information which represent different aspects of the Omani construction industry. Basically, in commercial projects. The survey is quantitative and takes into account the degree to which the success of commercial projects is affected by dishonesty of the participants. It is well-known that data cannot be gathered from a single source, therefore, variety of stakeholders and companies were chosen to take the questionnaire.

Sample:
After completing the design of samples, then selecting the sample size, we select randomly (30) stakeholders from different organizations in Muscat. In general, in any study researchers face some issues and restrictions. For instance, when collecting secondary data the information collected from the websites may not be accurate or updated. In addition, research topic is a unique topic, as a result have difficulty in finding the required information. In addition, there will be some problems while collecting primary data. Like refusing to take the survey or not completing it.

In this study, the group have agreed on conducting an electronic questionnaire to collect the needed data. This arrangement was implemented for time and cost saving purposes. Furthermore, electronic questionnaires are much easier to analyze the responses. One of the most crucial parts of the survey process is the formation of the questions in a way that measure experiences, behaviors and opinions of the targeted parties accurately.

The types of questions that were included in the questionnaire are open questions, in order the sensitive nature of the information asked from the respondent. In addition, the format of factual question was adopted, where the respondents are asked to inter a specific percentage to measure different variables regarding projects performance. The questionnaire was divided into three parts each part represents a specific period of time. The questionnaire contained a total of 17 questions distributed equally among the three parts. A sample of the questionnaire is shown in index.

Once the data is collected, the data analyzed according to the objective of the research. Answers to each question in the questionnaire is analyzed and the findings are presented numerically and throughout charts analysis. The results of each question are then taken, analyzed to arrive at the final conclusion and recommendations. After literature is reviewed, based on the major problems were constructed so that they can be tested to prove whether they’re true or fault. The effect of hoax in commercial projects in Muscat, represented by many ministries.

Scope:
The methods chosen to get information were from different sources, such as: engineers who are working in construction projects related to commercial buildings. Due to the nature and size of the project, the scope will focus on determining the effects of fraud in a project based on the participants involved in the work.

The impact of the commercial problems in a construction project is influenced by the main participants: the employer, the design team, and the construction team. After identifying the issue it was important to try reducing it’s impact by implementing new ideas that will break down the problem.

A questionnaire was formed depending on these issues, and were distributed to different workers, which are working both in private and public companies, to help in collection different opinions as possible by giving the questionnaire to many stakeholders who are working in different organizations.

Limitations:
Difficult to manage data collection.

Dis-honesty from stakeholders in answering the questionnaire.

Finding few information in the research area.

Not getting accurate results; if the sample size is too small.

Lack of identifying the relationship with the data set in the questionnaire.

CHAPTER 4: RESULTS AND DISCUSSION
This part provides interpretation of our results and supporting ideas by the use of evidence from our experience and knowledge. This discussion shows our data in the acceptable path.

By converting the original data provided by google from to the Microsoft Excel to analysis data from the electronically survey which was done for participants who are working in different organizations to evaluate the percentage of fraud in commercial projects at their companies.

From these various companies apply of hoax in different cases. However, according to our research and the results from the conducted survey it shows the significant effect of breaking rules and regulations by stakeholders in the workplace.

To evaluate the most suitable solutions for our study and initiate to reduce this huge problem, which actually has spread entirely all around the world with it’s bad effects, and its different types. We have basically divided our questionnaire into parts:
Yes /No
Short descriptive questions
The questionnaire answers will depend upon the stakeholders which were divided as follows:
The owner
The design team
The construction team
To know the effect of each kind of fraud undertaken by different stakeholders in commercial projects, the graphs and charts will illustrate what are the different types of fraud and how these types can be exercised easily. In addition, taking as many resolutions as possible to minimize the rising level of such problem.

Analysis:
28511512255500
Figure 4.1 The Participant
1-Owner: The employer, or the one who owns the project.

2- Design team: Architects, Engineers, Designers, etc.
3- Construction team: Contractors, sub-contractors, etc.
4- Others such as: cost consultant, Design and supervision team, etc.

23368014859000
Figure 4.2: Type of the Project
From figure 4.2 it can be clearly seen that most of the projects or the highest percentage is for large-scale projects, which means fraud is mostly exercised in big projects, because it is much easier than cheating in small projects. Big projects include more companies and a huge number of workers where it’s difficult to manage every single thing separately whereas in small projects everything can be clearly seen and the chance of knowing fraudulent members is very high.

-12114219200Figure 4.3: When we talk about fraud in construction, we are referring to a whole range of activities where people steal from the organization, lie to the management, or take unfair advantage of the organization. Do you think fraud is a problem for construction?
-405757-75692000
1714187426398Figure 4.4: Analysis of Problem of fraud in Construction
00Figure 4.4: Analysis of Problem of fraud in Construction

In figure 4.4 above it actually shows that 100% of the people agree that fraud is a problem in construction. To be more specified 52% agreed that it will destroy the reputation of the company which can result in closing the company due to it’s bad reflect to people so most of the people will avoid working with that company and this got the highest percentage which reflects to us that this is an important point. 22% thought that it will present a defect in the construction which can result to cracking and leakage. Next, 16% said it will have a major impact on the project quality, stability, and delay. Around 6% who have agreed that it may convert to safety issues like life fatal or injuries. The least percentage was 4% which says it may contribute to damage the project or collapse the building which can rarely happen.

Figure 4.5: If employees, managers, or others are working but depending more on cheating/fraud, why do you think they would do that?
According to figure 4.5 above, the major reason that allow to exercise hoaxing in a working place is getting more benefit by using different ways during construction such things usually done by stakeholders in different type of projects. The percentage of the most fraud activity that may done in construction can be defined as 60%. The remaining 40% was divided into equal four party 10% for other different reasons that made by all participants who whether involved in design team, construction team or from the client side in construction process which are as follows:
Getting more profit
Low experience
Not having sufficient responsibility to carry out the work properly
Being dishonest person
There is no fraud practices

Figure 4.6: If a participant in a construction project is following fraud and you knew that, what would you do in this case?
Figure 4.6 shows that there are many causes which help to exercise fraud, but what should be implemented to stop the fraudulent. The majority said that they will gain some evidence against the person who exercise fraud and inform his case to the competent authorities to take strict action against him. As well, there are many actions that may be undertaken to overcome this problem such as:
Inform the top manager about the case
Stopping the hoaxer and report his case to the employer
Advising the person who exercise fraud

Figure 4.7: Have you ever been deceived? And from which stakeholder (client, contractor or consultant)?
91376523304500
80378980034Figure 4.8: Analysis of the participants who are deceives.

00Figure 4.8: Analysis of the participants who are deceives.

From figure 4.7 and 4.8 show, that the most deceptive actions can be undertaken by the design and construction team because they have the power to audit anything during construction especially when the client is not involved in construction process.

Figure 4.9: What are the types of fraud and deceptive activities that can be followed the most in the project?
From figure 4.9 it is evident that there are different types of fraud and deceptive activities exist in the project. The result of questionnaire showed that it is frequent with the low quality. However, they are the not working as per the specifications and drawing which has least number. “Non-compliance with project space is the one of type fraud that the contractor or consultant probably did.”

Figure 4.10: What are influences or effects rising out based o the previous question?
According to figure 4.10 shown above, the major reason that influences or effects fraud in the project is getting material and human losses leading to waste of money by replacing the synergies and losses which has percentage 47%. However, the loss effect in the project is the bed reputation of the occupier which has 5%.

Figure 4.11: If you had a chance of following fraud, and getting an incredible profit in return, would you follow it?
From figure 4.11 it can be clearly seen that 90% of the respondents said “if they have chance to do fraud they won’t do it. However, 10% of the respondents said if they have chance of excersing fraud will go for it. This indicates a large proportion of people are committed.

Figure 4.12: Can a company lose a contract due to deceptive activities?
From figure 4.12, it is clear that the majority of people agree i.e.95% that a company may lose a contract due to deceptive activities, where as 5% of them do not agreed.

Figure 4.13: Have you ever been involved in any litigation cases?
Figure 4.13 above shows that 100% of people have not ever been involved in any litigation cases.

Figure 4.14: Is there can be a fraud activity which can never be caught?
Figure 4.14 illustrates that 70% of people agree that the activity of fraud can be caught. On the other hand, 30% of them do not agree.

Figure 4.15: Is it a must from a fraudulent member to have experience from before?
Figure 4.15 shows that 55% of people agree that a fraudulent member must have experience from before to exercise the fraud and 45% of them do not agree.

Figure 4.16: What are the common or easiest ways of cheating in construction?
According to the different answers we got from different participants, the common way of cheating in construction project which was given by 34% of the people, is using materials with low quality. 30% of the people agree that lack monitoring of the work is one way of cheating. 16% of them said; giving incorrect information and dates. 15% answered bid / contract rigging is cheating way in construction.

Figure 4.17: How to reduce such issues? (based on question 14)
As it can be seen from figure 4.17 above, 50% of the people agree that to reduce those cheating cases, the work must be monitored step by step by the client. However, 40% of them said the client should provide all the requirements (e.g. materials) by himself to avoid such fraud problems. 10% of the people answered that they have no idea.

Figure 4.18: What is your advice for fraudulent members?
As it is shown in figure 4.18, 65% of the people advise the fraudulent members to stay away from these activities to avoid such problems they or others may fall in. In contrast, 24% of them, gave the advice making sure everyone is working clearly in the organization, understanding the consequences of engaging in or overlooking fraud. 11% of people, don’t have any advices for those members.

CHAPTER 5: CONCLUISON AND RECOMMENDATIONS
Fraud in construction is the essential element that affects the improvement of the construction and the individuals who are involved. Providing rules and policies to reduce this issue within the organization is not enough, because any of the participants may ignore reading these rules or they can read it but without focusing on it, without knowing that this is a big problem which may result to failure. As a proof that this may result to the failure of the project/work is that 95% believe that a company can lose a contract due to deceptive activities which is actually a large present, and unfortunately more than the half.

60% of the participants think that the major reason a fraudulent member would exercise deceptive activities is to get more profit or benefit by using different ways during construction, and the others believe that it may be because of lack of responsibility, lack of experience, and dishonesty, which can be exercised by many ways like: bringing materials with low quality as a high quality materials or giving incorrect information, drawings, specifications, and dates, it can also be by contract rigging. However, it is the responsibility of each party which is participating in the project to cooperate and try to reduce or stop this major problem.
To minimize the frauds in construction the work must be monitored on each step from the very starting point until the end of the project. Adding to that, the client may bring all his requirements by himself for example: the materials needed to be used during construction, etc. so that he doesn’t get cheated while giving this responsibility to another party.
Workers who are working at private companies have less number of fraud compared to government companies. This may be because in a private place they are stricter about these things, and they give several instructions, they also provide a dedicated team to watch these issues that may affect the reputation of the company. Government companies may not provide such strict rule as a private company. Actually based on some opinions taken from different stakeholders worked in both sectors they agreed that in a private company fraud can be less exercised whereas in a government company there may be less rules and less censorship too.

However in both sectors having a good reputation would put the company in a very high level and would have a clear rising number of projects depending on the way of working, experience, and the showing of the companies previous successful projects. Actually most of the problems whether cheating or not can be solved without ruining the reputation of the company but if it was a big problem and destroys the reputation of the company it means that the company or organization is really in trouble that is why most of the people before approaching or heading to a specific organization the first thing they do is asking and searching to get as many useful information as possible about the reputation and the successful achievements of that specific company. As a human being we can’t stop all fraudulent activities in a sudden to be honest, it needs time and accurate thinking for reaching to the best and most efficient solutions.
As it’s mentioned above sometimes it’s hard to deal with some of the deceptive activities and the fraudulent members but at least trying to solve it would make an improve to move forward with success, hoping one day with some of the solutions mentioned in the previous paragraphs this problem reaches a certain extent/limit and reduces or stops.
RECOMMENDATIONS:
Monitor the progress of the construction regularly.

Make the penalties stricter.

Specify compulsory meeting for all contractors in Sultanate of Oman to aware them about regulations and penalties.

Declare any fraud cases exercised before or during construction process, to aware people.

Laboratory test reports should be accompanied with all materials supplied on the site. If possible should be confirmed by testing on site with the same physical and lab tests.

Reference:
Abid,J . Tender & Contracts. Higher College of Technology, 2017
SOHAIL, M. and CAVILL, S., 2006. Corruption in construction projects.
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.851.8478&rep=rep1&type=pdfhttp://2015.omandaily.om/?p=89940http://architectureideas.info/2008/09/building-contract-definitionhttps://www.ilrg.com/forms/comml-rules.htmlhttps://esub.com/resources/how-to-prevent-construction-fraud/https://www.abexinsurance.com/5-common-types-construction-fraud/?doing_wp_cron=1526732010.3960840702056884765625https://definitions.uslegal.com/c/construction-fraud/https://www.forconstructionpros.com/business/news/12142794/construction-industry-second-highest-fraud-rate-of-all-industrieshttp://www.raya.com/home/print/f6451603-4dff-4ca1-9c10-122741d17432/06dd0cc8-6ba9-4634-899a-4ee49da7f9e2https://blog.capterra.com/construction-fraud-stories/http://www.dictionary.com/browse/subcontractor30480030480000APPENDIX: Questionnaire
Gauging Levels of Stakeholders Compliance to Rules and Regulations in Commercial Projects in Muscat
We are the Quantity Surveying students from Engineering department at Higher College of Technology and are currently conducting a project on the “Effects of fraud by the project participants in commercial projects”.

Note: Please be ensured to answer accurately and honestly. This survey will be used purely for educational purposes only and the information collected from this survey will not be shared publically.

Questions:
The participant:OwnerDesign TeamConstruction TeamOther

510349515621000414909017018000314452015557500Type of the project:LargeMediumSmall
1465580101092000When we talk about fraud in construction, we are referring to a whole range of activities where people steal from the organization, lie to the management, or take unfair advantage of the organization. Do you think fraud is a problem for construction in general? Why/ why not?
If employees, managers, or others are working but depending more on cheating/fraud, why do you think they would do that?

141351048641000If a participant in a construction project is following fraud and you knew that, what would you do in this case?
30480030480000Have you ever been deceived? And from which stakeholder?
136271012446000
In your opinion, what are the types of fraud and deceptive activities that can be followed the most in a project?

140398530289500What are the influences or effects rising out based on the previous question?
If you had a chance of following fraud, and getting an incredible profit in return, would you follow it?
416560027813000322897527178000YesNo
Can a company loose a contract due to deceptive activities?
416560015430500322897514795500YesNo
Have you ever been involved in any litigation cases?
416560015494000322897514859000YesNo
Comments (if any): ……………………………………………………………………………………………………
……………………………………………………………………………………………………
Is there can be a fraud activity which can never be caught?
416560015430500322897514795500YesNo
Comments (if any): ……………………………………………………………………………………………………
……………………………………………………………………………………………………
30480030480000Is it a must from a fraudulent member to have experience from before?
416560015557500322897514922500YesNo
134810521971000What are the common or easiest ways of cheating in construction?
How to reduce such issues? {based on the previous question No. 14}

134810526987500What is your advice for fraudulent members?
Is there any other information you wish to furnish regarding this problem?
416560015430500322897514795500YesNo
If yes : ……………………………………………………………………………………………………
……………………………………………………………………………………………………