Crime in the Architecture, Engineering and Construction (AEC) Industry—The Role of Subcontractors

Abstract

This article examines the challenges posed by criminal subcontractors in the construction industry. It aims to delineate the specific crimes committed by these subcontractors and assess their impact against the broader backdrop of industry-related criminality. Employing a scoping literature review, the study explores the existing research, summarizes key findings, and highlights gaps in the current knowledge. The construction industry’s inherent complexities and reliance on extensive subcontracting create an environment ripe for criminal activities. The research questions addressed are the following: (1) What crimes are carried out by subcontractors? (2) What are the consequences of crimes carried out by subcontractors? This study identifies several major concerns: (1) adverse impacts on project management in terms of timelines, quality, and budgetary control; (2) widespread exploitation within supply chains, ranging from wage disparities to modern slavery; (3) prevalent fraudulent practices, such as bribery, collusion, and embezzlement; and (4) the detrimental effect on Health, Environment, and Safety (HES) standards. The article underscores the diversity of legal frameworks across jurisdictions and signals the need for concerted efforts to enhance crime prevention measures, foster industry-wide collaboration, and establish robust control systems. There is an urgent need for a profound understanding of the contractor–subcontractor dynamic and procurement of substandard materials. The findings suggest that the construction industry faces formidable challenges due to criminal elements, profoundly affecting project efficiency, legal compliance, and worker welfare.

1. Introduction

In the realm of modern urban development and construction, the construction industry stands as a pivotal pillar. Yet, growing concerns about criminal activity within the industry cast shadows of doubt over its integrity [1,2]. A key insight from recent research is that the complex nature of the industry renders it particularly vulnerable to criminal behaviors, e.g., [3,4,5,6]. Disturbingly, malevolent actors find that the unique industry structures render it an inviting playground, e.g., [7,8,9]. Despite concerns, current countermeasures remain disappointingly inefficient [10,11].

The construction industry has in fact proven vulnerable to various forms of crime, with corruption being widespread [12]. Common types of crime include theft, extortion, vandalism [13], organized equipment theft [14], and the use of counterfeit, fraudulent, and substandard materials [15]. Economic crimes, particularly dealing in receipts, are prevalent [16]. Corrupt practices such as kickbacks, bribery, collusion, tender rigging, and conflicts of interest are frequently encountered [17]. These crimes often involve government officials, contractors, and subcontractors [12]. The industry’s susceptibility to crime is attributed to factors like lack of transparency, political connections, and the industry’s operational environment [17,18]. Corruption is most common during bid evaluation and tendering phases [19] and can significantly impact project costs and quality [17].

The challenge is thus multi-dimensional, warranting a comprehensive exploration of the opportunities for criminal behavior and subsequently devising robust strategies to intercept and diminish these activities, e.g., [3,20,21,22,23,24]. An overall conclusion from the literature is that an adequate management strategy is paramount to deter criminal activities [13].

This reality is not reflected in the university curricula of civil engineering students—at least within the Norwegian context [25]. Also internationally, similar observations are made, both for what concerns what students are supposed to learn before they enter industry organizations and for what occupies researchers within the field. As maintained by Vaughan [26], “[t]he irony here is that we learn much about how things go wrong, but absent the tools of organization theory, the full set of socially organized circumstances that produce these harmful outcomes remains obscure”. Little research is carried out—and little knowledge is being brought to the students.

An earlier analysis [9] confirmed that the coverage of several of the fields pertaining to crime in the Architecture, Engineering and Construction (AEC) industry was limited in the international research literature. One key lacuna observed was how the role of subcontractors was under-researched while still acknowledging that a significant root of problems related to crime in the construction industry can be understood in light of their role.

The analysis presented here aims to provide an understanding of the risks associated with criminal subcontractors. To be able to fulfill this purpose, the following research questions are addressed:

• What crimes are carried out by subcontractors?
• What are the consequences of crimes carried out by subcontractors?

The field of crime in the AEC industry is wide, so scope limitations are made. The identification of measures and the answers to the research questions are limited to the client’s perspective. This choice is partly pragmatic (the industry has a particularly wide range of actors, interphases between actors, and process-related challenges), and partly it is founded in particular challenges identified by Lohne et al. [27], where the client perspective is identified as being of particular importance. Equally, the scope is limited to the execution phase of construction projects, so none of the design, operations, or termination phases of construction projects are studied. This limitation means that our review might not adequately represent insights from other phases of construction or different stakeholder perspectives, such as those of subcontractors or regulatory authorities.

2. Methodology—Scoping Literature Review

Scoping literature reviews are particularly suited for bodies of literature that have not yet been comprehensively reviewed or that display a large, complex, or heterogeneous nature, which makes them less suitable for precise systematic reviews [28]. According to Mays et al. [29] and Arksey and O’Malley [30], four common reasons for undertaking a scoping study are (1) to examine the extent, range, and nature of research activity; (2) to determine the value of undertaking a full systematic review; (3) to summarize and disseminate the research findings; and (4) to identify research gaps in the existing literature. In this study, all of these goals are followed except for the second point, which is deemed irrelevant for such an underexplored field.

As noted by Levac et al. [31], scoping studies differ from systematic reviews because they typically do not assess the quality of included studies. Although this might be seen as a limitation, Levac et al. [31] also emphasized that “scoping studies may be particularly relevant in disciplines with emerging evidence”, such as research on crime in the AEC industry. Given the immaturity of the research field, scoping studies can address broader questions beyond intervention effectiveness, making this approach suitable for the current state of the literature on crime in the AEC industry.

2.1. Data Sources

The methodological approach outlined by Lohne et al. [9], a broader review article on crime in the construction industry, served as the foundation for this analysis. The following databases and search portals were utilized due to their international orientation and comprehensive coverage of relevant literature:

• Web of Science
• Scopus
• Google Scholar
• Engineering Village (including Compendex, GeoRef, and Inspec)
• ASCE Library
• Oria (Norwegian library database)
• ASCE Civil Engineering Database
• ResearchGate
• Digitala Vetenskapliga Arkivet (DIVA)

2.2. Search Strategy

The search terms used included key phrases such as “crime”, “clients”, “owners”, “contractors”, “subcontracting”, “ethics”, “construction industry”, “AEC industry”, “exploitation”, “materials”, “timelines”, “quality”, “project control”, “project management”, “fraud”, “fiscal”, “HES”, and “security”, along with relevant variants. The initial search yielded a significant number of duplicates with the analysis presented by Lohne et al. [9], which led to a continuous screening process based on titles and abstracts.

To complement traditional search methods, Scopus AI Beta and Elicit.org were used to explore current developments. Despite the limitations of these AI tools—namely, their lack of analytic depth and transparency in selection criteria—they contributed additional literature that supplemented the corpus. Scopus AI Beta draws from the Scopus database (post-2013 publications), while Elicit.org is less explicit about its sources but proved useful in detecting otherwise overlooked conference papers and niche journals, predominantly yielding publications from the past five years (2018–2023).

2.3. Inclusion and Exclusion Criteria

The inclusion criteria were as follows:

• Peer-reviewed journal and conference papers;
• Written in English;
• Published between 2010 and 2023;
• Focusing on criminal or unethical phenomena in the AEC industry;
• Empirical studies conducted within an industry setting.

The exclusion criteria eliminated the following:

• Non-peer-reviewed publications;
• Non-English publications;
• Publications focused on technical or technological aspects unrelated to the research aims;
• Studies with insufficient methodological or empirical descriptions.

2.4. Screening and Eligibility Assessment

The screening of titles and abstracts was conducted iteratively to ensure relevance. Duplicates and irrelevant studies were removed, and a thorough eligibility assessment was performed based on the inclusion and exclusion criteria. Studies were further evaluated to ensure they addressed relevant themes within the construction industry, focusing on unethical or criminal behaviors.

2.5. Data Extraction

The 65 studies that passed the screening and eligibility assessments were extracted into an Excel spreadsheet. The key characteristics of each article, such as thematic focus, methodology, and conclusions, were recorded for further analysis. This systematic categorization of articles allowed for an organized and efficient synthesis of the data.

2.6. Data Analysis

The thematic analysis was carried out iteratively by organizing the extracted studies into categories based on recurring themes. These categories emerged from the way various topics were treated across different articles and provided a framework for the final analysis. As a result, a comprehensive synthesis of themes related to crime and unethical behavior in the AEC industry was developed.

In total, 65 articles were included in the final analysis. Additionally, 24 articles were sourced through the use of Scopus AI Beta and Elicit.org, bringing the total number of analyzed articles to 89.

2.7. Limitations

A scoping review is primarily conducted to offer a broad overview of a field of research. This limits the depth of analysis since it does not involve a quality assessment of the included studies. As such, the reliability and validity of the findings will be influenced by the inclusion of studies of varying rigor. Equally, the emergent nature of research on crime in the construction industry means that our review may not cover the field comprehensively. For instance, apart from Owusu et al. [21,22], few high-quality review papers from which to gain overview and insight have been published. The selection of specific databases and search engines can equally influence the range of literature reviewed. This is especially true of publications not indexed in these databases or published in less accessible journals. Lastly, our study acknowledges an incomplete exploration of the comprehensive role of subcontractors in the industry’s criminal activities. The existing body of literature is limited and contains significant knowledge gaps. Consequently, not all facets of the issue will be comprehensively brought up in this exposé.

These limitations are inherent in both the methodological approach and the emerging nature of the research field. As such, they necessitate a cautious interpretation of the findings and underscore the importance of further research in this area.

3. Background for the Study

The AEC sector is often perceived as a realm with questionable ethics, where challenges posed by professional practices are not fully addressed by law enforcement, tax authorities, or professional groups e.g., [3,21,22,23,32]. The nature of the industry—in particular, concerning its multiple actors—offers avenues for dubious transactions [33], while ample research illustrates how dishonest business practices tarnish its reputation, e.g., [4,20]. A fortified ethical vision also seems absent [34]. Simply put, the AEC industry appears riddled with opportunistic criminal tendencies, with a limited understanding of what measures construction companies can implement to mitigate the risks.

3.1. Addressing Root Causes for Crime

Addressing this situation depends to a large degree on understanding the root causes of the situation. It is easy to follow Davies et al. [35], for whom “[t]o thoroughly understand the dynamics that lead to vulnerabilities within industries such as construction, it is necessary to consider their internal legitimate processes […] rather than viewing systemic problems as an external ‘crime’ problem that threatens otherwise unproblematic industries”. It is such a systemic perspective that underlies the analysis presented here. Still, addressing overarching structural challenges in an industry as complex as the construction industry requires in-depth analyses of particular phenomena of an ethically challenging nature. The research program “Mapping Opportunities for Criminal Behaviour in the Norwegian AEC [Architecture, Engineering, Construction] Industry” (in Norwegian: “Kartlegging av mulighetsrom for kriminell adferd i norsk BAE-næring”) has ambitioned to do exactly such a pairing of empirical data with overall structural analyses. From 2014 through 2023, backed by Project Norway (https://prosjektnorge.no/ (accessed on 10 September 2024)), the program has explored opportunities for criminality and unethical behavior in the Norwegian construction sector. Throughout its course, it has collaborated closely with leading Norwegian contractors, major clients, public entities, and control authorities, notably the Norwegian Police Force.

3.2. Empirical Data Collected Through the Research Program

Despite growing attention from the international research community, significant lacunae exist [23]. The research program has published several studies addressing these observed lacunae in the research literature.

Examples hereof are, firstly, studies on materials value-chain related subjects such as counterfeit materials [15,36,37], transparency issues in materials procurement (Lohne and Mohn, 2023), and traceability issues [38,39].

Secondly, studies on the potential for manipulating project outcomes have been produced, such as the value delivery of projects in challenging conditions [40,41], the outcome of prevalent principal/agent relationships in the industry [42], and “follow-the-money” analyses [27].

Thirdly, the research program has examined production-oriented (building site) challenges, such as identity abuse [43], the follow-up of doubtful subcontractors [44,45,46,47], and the influence of innovative technological solutions on ethical challenges [24].

Fourthly, temporal aspects of the industry have been examined, with (among others) studies on the design phase [48,49], handover [50,51,52], and the use phase [53].

Fifthly, contextual challenges have been examined in several contexts, such as in obtaining building permits [54] and education efforts within Norwegian civil engineering studies [25,48]. Finally, several studies have addressed effective measures against crime in the construction industry, most prevalently by Lohne et al. [5] but also by Lohne et al. [11]. Engebø et al. [55] analyze reputation management for construction industry businesses touched by crime; the ethical frameworks’ role has equally been scrutinized [56].

Still, even if many of the above analyses address questions about subcontractors within the context of crime in the AEC industry, and even if Skovly et al. [44], Gunnerud et al. [45], and Evjen et al. [46] address specific questions pertaining to subcontractors, there exists a lack of knowledge concerning the role of subcontractors within the general picture of crime in the construction industry. Exceptions exist, such as the analysis of corruption by Soni and Smallwood [57], pointing to the challenges coming from the employment of incompetent subcontractors, and the analysis by Oluseye et al. [58], addressing building ’contractors’ current value system and their limitations. Still, little overarching analyses of the role of subcontractors in criminal activities in the AEC industry have been conducted.

4. Results and Discussion

The construction industry is home to an array of criminal activities. Thematically, crime has predominantly been explored through lenses such as corruption [3,20,21,22,33], workplace-related offenses [59,60,61], so-called social dumping [62,63,64], workman exploitation [23], tax evasion tactics [65], and psychological and ethical motives for unscrupulous behavior [66].

Some suggest that the very characteristics of the industry seem to provide fertile ground for criminal elements to flourish [5,18,35]. Of particular interest within the context of this analysis are studies that delve into how construction projects encourage illicit acts in practice. For example, Rizk et al. [67] highlight that the intertwined complexity of projects and organizational setups and the lack of stringent penalties for corrupt actions can facilitate unwanted behaviors. However, there is a discernible lack of studies investigating how core structures of the industry catalyze crime. Analyzing the exploitation of workers within the context of Finland, Davies et al. [35] underline this lacuna, maintaining that “overlooking a wider range of exploitation could unwittingly mean that forms of structural exploitation are left unchallenged”. Yet, as Walker [68] observes, there remains a scarcity of studies on ethics within the construction industry. This is true even though the challenges have been observed over decades; see, for instance, ref. [14].

In the literature, theft is a recurrent issue, involving criminals targeting construction materials and equipment [59]. The pilfering of such vital resources can result in sudden unavailability or shortages, causing turmoil in construction projects and imperiling their timely completion [1]. Quality assurers (QAs), entrusted with ensuring the integrity of construction projects, have been identified as potential culprits, permitting such actions. Their ability to manipulate quality assurance systems can open doors for criminal actors—for mutual benefit [24]. This point proves essential—yet largely overseen—since these quality assurance systems constitute effective stage gates for actors providing insufficient work. The example of such potential for wrongdoing by seemingly innocent actors as QAs underscores the intricate nature of work-related crime within the industry.

Lohne et al. [9] propose that a key to properly understanding the roots of the above challenges lies in understanding the role of subcontractors. An overall impression from the research literature is that the role of subcontractors is considered problematic—but that there is little research effort carried out to understand their role.

4.1. Subcontractors—Key Overall Challenges

The number of publications on the theme is limited. As maintained by Martin and Benson [69], “[s]urprisingly, despite the criticality of the subcontractor/principal contractor relationship to successful project outcomes, research into this important relationship has been fragmented, disorganised and under-theorised”.

Exceptions exist. The extant literature identifies various challenges inherent in using subcontractors within the construction industry. Alzoubi et al. [70] underline the importance of complex supply chains with corresponding multi-layer contracting levels and forms. These complexities render transactions challenging to supervise. Also, the multitude of subcontracting models introduces an additional layer of complexity to the organization of construction projects [42,71]. Selecting and managing subcontractors emerge as the key to project success [72], depending upon judicious project management [73].

Research has shown, however, a disturbing willingness to contract subcontractors with doubtful reputations [46]. Several authors indicate that subcontractors in the construction industry are involved in various types of crimes, including theft, bullying, and economic crimes related to receipts [74].

As Locatelli et al. [3] point out, companies will typically be keen to assure profit by subcontracting at the lowest cost, losing out on quality and value for money. In other words, when profits are in focus, the involvement of subcontractors is a key issue [29]. As maintained by Davies et al. [35], “[t]his is underlined by the dynamics of construction supply networks, which are frequently dominated by a small number of large multi-national companies serving as main contractors, who typically use numerous smaller subcontractors to achieve smaller project objectives related to materials supply and work tasks requiring skilled or unskilled labour”. Industry structures, then, render subcontractors to potential preys to the consequences of economic pressures.

From a principal/agent perspective, the relationships between contractors and subcontractors can ease the road to doubtful practices for the latter [42]. The analysis by Lohne et al. [9] follows in the same vein, underlining how the characteristics of the construction industry facilitate the embedding of criminal actors and activities leading to crime. Among other factors here is the on–off nature of construction projects, paving the way for the continuous changing of team structures from project to project. Combined with extensive subcontracting, this underlines the need for management control and proper governance.

van Duyne and Houtzager [75], on their side, underline the reciprocity in the relationship between criminal subcontractors and their employers in light of the term “black labour market”. Given that both employers and employees contribute to social insurance, “both have an economic incentive to evade these expenses”. As the authors continue, the “black labour market” has long been “broadly ingrained” in industrialised countries. It is such incentives that make construction firms use fraudulent subcontractors to reduce their costs and maintain competitive advantage, excusing such behavior using the familiar references to “cut-throat competition”. Acknowledging such a mutual incentive for circumventing taxes is recognising the intrinsic challenges in eradicating such actors from the industry.

From a client perspective, the role of contractual drivers is essential to note. As outlined by Russell et al. [76], “the construction industry has been dominated over the last 30 years by the development of a subcontracting culture […] and leading to work allocated primarily through competitive tendering”. Russell et al. [76] cite Green [77], for whom the result is “hollowed out conglomerates”, and Cherns and Bryant [78], for whom the result is best characterised as “temporary multiple organisations”. A result coming out of competitive tendering is thus a plethora of organizations, which together form a highly complex supply network. It seems reasonable to maintain that extensive subcontracting significantly increases the need for management control and governance.

Apart from these overall challenges, four main areas of concern stand out from the scrutiny of the literature presented here. The first is concerned with project outputs (time, cost, and quality); the second with the room for exploitation in supply chains that stems from the employment of criminal subcontractors; the third with the exposure to fraudulent activities that comport significant challenges for clients and main contractors alike; and the fourth with the challenges concerning HES-related issues.

4.2. Project Output—Timelines, Quality and Budgets

The practice of multi-layer subcontracting has been found to contribute to poor performance and quality deficiencies in construction projects [79]. Subcontractors are often used to produce fast and effective solutions, which can impact the overall success of a project [72]. Still, the use of criminal subcontractors can have a negative impact on project timelines, having been found to lead to delays and disruptions [45]. A key driver for such delays and disruptions to take place is the agency challenges that are characteristic of the industry [42,80].

Regarding quality parameters, the presence of criminal network pressure in a firm’s environment can reduce technical efficiency, substandard work quality, and propensity to invest [45,81]. On the other hand, the challenges involved in the involvement of such actors can be positive for the performance and turnover of competing firms (a positive spillover effect) [82].

For what concerns financial issues, the engagement of such actors has been found to foster a potentially detrimental impact on project budgets. Damaging activities encompass the misallocation of resources and fiscal irregularities [45]. It is incumbent upon organizations to implement robust measures to prevent, detect, and mitigate such fraudulent behavior to safeguard their financial interests.

The literature on these subjects is meager; however, given the above, it again seems reasonable to maintain that the negative effects of subcontracting in terms of timelines, quality and budgets will be exacerbated by the presence of criminal actors. Correspondingly, the need for managerial control and overall governance will increase.

4.3. Exploitation in Supply Chains

Subcontracting creates hierarchical structures that increase the vulnerability of workers [83]. Such structures create a power imbalance between employers and employees, paving the way for the exploitation of workers in several ways. The silencing of workers and a lack of organizational lucidity are key factors contributing to this vulnerability [84].

The exploitation created by such systemic structures can come in several forms. Subcontracting can result in deep wage inequities between regular and subcontractor-mediated hires [85]. Subcontracting can lead to so-called parasitic exploitation; for instance, agents misuse the system to obtain additional profit at the expense of the weaker party [86]. On the other hand, this relationship is not univocal. Tang and Yao [87], Tang et al. [88], for instance, underline how subcontracting can foster opportunistic behavior by subcontractors. The exploitation of workers and undermining of client interests alike can, in this light, be carried out by opportunistic subcontractors operating under the radar of the main contractor.

Recently, even more disturbing themes, such as the role of subcontractors in modern slavery within the industry, have raised concern [70]. Modern slavery is put on the research agenda among other so-called “dark side” phenomena by Locatelli et al. [32]. The investigations of the phenomena assembled under this heading in the international research literature have mainly come out of the engagement—both from private and public actors—from the UK Modern Slavery Act 2015.

In the context of client control, hard evidence is in demand concerning what actors are doing what. Russell et al. [76] maintain that in the supply chain, it is “difficult to get beyond [in terms of control] Tiers 1 & 2, especially in global networks”; still, such control over sub-subcontractors proves crucial, given that “modern slavery [is] most likely to occur in tiers 4, 5 and beyond”.

In sum, clients without sufficient governance mechanisms to remove criminal subcontractors from their projects run the risk of severe exploitation of workers in their supply chains.

4.4. Fraud

Forms of fraud in the construction industry include bribery, fraud, collusion, embezzlement, nepotism, and extortion [20]. The “fraud triangle” model, which includes pressure, rationalization, and opportunity, has been used to identify factors that influence attitudes and behavior in fraudulent situations in the construction industry [70,89].

Circumstances of financial distress, often precipitated by economic crises or unanticipated project setbacks, can exacerbate the susceptibility to fraudulent behavior among industry participants [90]. In such exigent scenarios, individuals and entities may resort to fraudulent activities to mitigate financial losses, further compounding the adverse fiscal implications. Contracting criminal subcontractors can, in this light, be interpreted as stemming from a need to alleviate financial distress.

Criminal actors in the construction industry are found to employ a range of fraudulent practices. Firstly, such actors are found to intentionally exploit the latitude available in contracting to engage in illicit activities, which can have a cascading effect on project outcomes [45]. Involvement in illegal activities, like bribery and embezzlement, often extends to tax evasion and fraud [91]. Secondly, there is evidence of the misreporting of project information, involving falsifying project data, progress reports, or financial records, leading to inaccurate assessments and potential fraud [92]. Thirdly, criminal subcontractors have been found to be involved in collusion. Collusion, such as bid-rigging and auction manipulation, distorts the competitive landscape and may result in the awarding of contracts to non-competitive actors [7,93]. Fourthly, it has been found that criminal subcontractors contribute to fraud, corruption, and collusion in public procurement. Such practices can siphon public funds and undermine the integrity of public projects [94].

Fraudulent practices employed can inflict a range of damaging consequences. Firstly, the deliberate misreporting of project information can expose construction companies and their officers to legal jeopardy and regulatory sanctions [94]. In the United States, research exhibits a complex legal landscape for the construction industry, with a multitude of statutes, codes, regulations, and common law doctrines at both the state and federal levels [95]. Secondly, fraudulent practices shape attitudes and behaviors within the construction industry [96]. Thirdly, the financial repercussions can be significant, ranging from legal fees and penalties to losses stemming from misconduct. These financial setbacks are compounded by reputational damage [45]. Fourthly, overlooking the criminal background of subcontractors can lead to severe repercussions for clients. A primary risk is criminal liability, which goes beyond direct illegal acts. Companies may inadvertently become complicit in criminal activities if they fail to conduct thorough background checks on subcontractors. This risk escalates when companies deliberately engage with known criminal entities, leading to potential legal entanglements [94].

The presence of fraudulent activity perpetrated by criminal subcontractors thus exerts a deleterious influence on project budgets, invoking legal ramifications and impinging upon financial stability [90,94]. Fraudulent activities by these can precipitate common financial losses for companies, ranging from financial statement fraud and internal fraud losses to the exacerbation of financial distress [90,97,98].

In sum: clients willing to accept the involvement of criminal actors in their projects run the risk of being exposed to severe fraudulent behavior. Maintaining transparent and competitive financial management policies and practices is crucial to prevent fraudulent activities and ensure the financial stability of construction projects [99]. Apart from the above examples, however, the available information is too limited to understand the diversity of legal frameworks across jurisdictions.

4.5. Health, Environment, and Safety

Criminal subcontractors have a detrimental effect on project HES (Health, Environment, Safety) standards, compromising the integrity and safety of construction projects [45,84]. The literature on such actors and their influence on HES is very limited; so to understand the challenges involved, insights from the literature on subcontracting in general need to be brought to the foreground.

Work-related accidents are of significant concern within the construction sector. Statistics reveal high rates of incidents and fatalities [100]. These accidents can strike at various stages of construction and are influenced by a constellation of factors, including the prevailing safety culture, the efficacy of health and safety policies—and criminal actors [100].

Subcontracting arrangements are found to exacerbate health and safety risks for workers, including injury rates, exposure to harmful substances, and negative impacts on mental well-being [83]. Evidence suggests that accident rates for subcontractor employees are higher than those of the site owner employees [101]. Factors such as failure to use personal protective equipment and lack of worker training have been identified as impacting the safety performance of subcontractors [79].

In addition, a persistent challenge of under-reporting incidents in projects where subcontractors are involved has been identified. Factors such as doubts about the accuracy of reporting by the project safety team have been found to contribute to under-reporting, which hinders safety performance both in the short and long terms [102].

The research stresses the urgent need for measures that not only thwart unwarranted activities but also to thereby enhance safety and security within construction environments. Using dubious subcontractors thus can reinforce the already acknowledged risks in terms of safety when using subcontractors, such as institutional safety mechanisms not coping with the variability introduced by subcontractors and a lack of expertise in safety among subcontractors [83,103].

Furthering this line of argument, Walter [84] discusses abuses within subcontracting networks, focusing on health and safety consequences. Although not explicitly defined as crimes, these abuses may involve safety violations or negligence, which could be considered criminal in some cases.

In sum, HES-related issues constitute a real challenge for the construction industry. Subcontracting has been found to exacerbate this challenge. And, given the above-described modus operandi of criminal subcontractors, their presence will further deteriorate the health, environment and safety standards at workplaces. Consequently, even though little research is oriented directly towards this field, it seems reasonable to conclude that clients willing to accept the involvement of such actors in their projects run the risk of being exposed to significantly increased HES-related challenges.

4.6. Summary of Key Findings

Table 1. Summary of key findings by theme.

Theme	Number of Studies	Key Findings	References
Subcontractors—key overall challenges	7	Complex supply chains and multi-layer subcontracting complicate supervision. Willingness to contract with questionable subcontractors due to cost pressures. Subcontracting drives issues related to agency challenges and governance.	[35,42,46,69,70,71,75]
Project output—timelines, quality, and budgets	5	Subcontracting leads to poor performance, quality deficiencies, and delays. Criminal subcontractors exacerbate these issues, leading to project disruptions, quality compromises, and increased costs.	[42,45,72,79,80]
Exploitation in supply chains	4	Subcontracting increases worker vulnerability and fosters exploitation. Workers face wage inequities, and some subcontractors engage in opportunistic behavior. Modern slavery is also an emerging concern in supply chains.	[70,83,84,85,88]
Fraud	6	Fraud in the construction industry includes bribery, misreporting, tax evasion, and collusion. Criminal subcontractors contribute to fraudulent practices, leading to financial losses and legal risks for clients.	[7,20,45,89,90,94]
Health, Environment, and Safety	3	Criminal subcontractors deteriorate HES standards. Higher injury rates and under-reporting of incidents are common with subcontractors, contributing to significant risks in worker safety and environmental impacts.	[45,84,103]

summarizes the key findings from the scoping review, categorizing the results into five major themes. For each theme, the table presents the most relevant studies, key findings related to each topic, and the associated references.

4.7. Research Lacunae

As such, though limited in publications, the literature on the theme outlines several areas where criminal subcontractors harm the construction industry. Still, there seem to be areas that need further development. When Alzoubi et al. [70] underline how the heterogeneity of international supply chains for goods and services is challenging from a crime prevention perspective, they tend to focus narrowly on the services side, with issues such as slavery. Very little research seems to have been carried out concerning the goods side of the supply chain challenges. Given the financial pressure construction projects typically experience, actors will be tempted to procure substandard materials to cut costs. Though exceptions exist [15,36,104,105], this theme is surprisingly little examined in the literature.

4.8. Implications of Methodological Limitations

As noted in the limitations section of the methodology chapter, the methodological approach chosen in the analysis presented here does not assure comprehensive covering of the field. The relative lack of good overview papers, for instance, underlines this. The study has, however, arrived at identifying a clear knowledge gap in the literature, notably, that the influence of subcontractor involvement in projects can influence the risk of substandard materials use. This challenge seems not to have been noted in the literature. As such, the methodological approach chosen in this article seems sufficient to identify key challenges, and has not, as such, weakened neither the validity nor the reliability of the analysis significantly.

5. Conclusions

The extensive review of literature on criminal activities within the construction industry reveals several key themes and areas of concern. The industry’s inherent characteristics, such as the complexity of projects and organizational setups, create a fertile environment for criminal activities. The extensive use of subcontracting exacerbates the effects of these characteristics. The criminal activities identified include corruption, workplace-related offenses, social dumping, worker exploitation, tax evasion, and various psychological and ethical issues. The literature suggests that the subcontractor–principal contractor relationship is critical but under-researched and often problematic.

Firstly, the research highlights issues with project management, particularly regarding timelines, quality, and budgets. The use of criminal subcontractors can negatively impact project outcomes, leading to delays, substandard work, and financial irregularities. Secondly, exploitation in supply chains is another major concern, where hierarchical structures and power imbalances lead to various forms of worker exploitation. This can range from wage inequities to more severe forms like modern slavery. Clients lacking governance mechanisms to manage subcontractors risk severe exploitation in their projects. Thirdly, fraud is also prevalent, with actors engaging in practices like bribery, collusion, and embezzlement. These fraudulent activities can have significant financial and legal repercussions for construction projects. Fourthly, Health, Environment, and Safety (HES) standards are adversely affected by criminal subcontractors. This exacerbates the already existing safety risks in construction projects.

The analysis underlines a research gap concerning the materials side of supply chains, where there’s a lack of focus on the procurement of substandard materials due to financial pressures. This area, among others, requires further exploration to fully understand and address the challenges posed by criminal activities in the construction industry.

Criminal activities, particularly involving subcontractors, require robust preventive measures. Strengthening governance through regular audits, due diligence, and transparent procurement is critical to prevent corruption and fraud. Improved worker protections are needed to combat exploitation, with stricter labor laws, fair wage enforcement, and confidential whistleblowing systems.

Finally, closer collaboration between construction companies, law enforcement, and regulatory bodies, along with a centralized compliance database, can further reduce criminal activities and promote ethical standards in the industry.