The Australian built environment : current challenges and innovative responses

The exploratory research presented in this discussion paper was undertaken as input to a major research grant application for the Australian Research Council. The research looks at the contribution of the Australian built environment to meet social and environmental needs. The paper examines the following research questions: What are the main challenges facing the Australian built environment? What types of building innovations might address those challenges? The research questions were addressed through desk-top research, involving an international review of (1) relevant academic literature in top-tier construction management and general management journals, and (2) high profile industry reports published internationally. Future research will involve assessing the diffusion of the identified building innovations and gauging their impact on social and environmental goals.

Improving quality management system implementation in Indonesian construction companies

As the Indonesian construction industry is now promising to become the engine of national economic development, achieving quality and higher performance, not only domestically but also in the international market, are becoming crucial issues. Implementing quality management systems (QMSs) based on ISO 9001 are important in helping Indonesian construction companies become more competitive, for it is acknowledged that quality in construction is a major concern in the global construction industry. However, the possession of ISO 9001 certification does not reflect the presence of a well-operated QMS, which is capable of giving customer and project end-users satisfaction. The review of literature found that there is a significant correlation between a company.s organisational culture and the quality performance of contractors. While research into this area has involved many researchers, there is no critical mass of information specifically related to the Indonesian situation. Studies based on contemporary perspectives of the characteristics of the Indonesian construction organisational culture using Cameron and Quinn.s Organizational Culture Assessment Instrument (OCAI) and its relationship with the contractor.s ISO 9001 practices, have not been previously undertaken. This thesis research, therefore, investigated the culture profiles in Indonesian construction organisations, together with the current implementation of ISO 9001 and their performance during implementing QMSs, as information in these areas has a bearing on the poor performance and low levels of competitiveness of Indonesian construction companies. Questionnaire surveys were distributed to selected representative grade 7 civil engineering contractors located in the two provincial capitals of Makassar and Manado, and the national capital, Jakarta, in order to collect responses designed to examine the effectiveness of their QMSs implementation. The survey also aimed to identify current problems within the systems, and examine the performance of companies while implementing their QMSs. The questionnaire contained questions to assess the organisational culture profiles of Indonesian construction companies, adopting the OCAI. The survey results were then used to analyse the influence of different organisational culture profiles on QMSs implementation among respondent companies. The results from the questionnaire survey supported the development of a Culture-based Quality Management System Improvement Implementation Framework, designed to help Indonesian construction companies identify some typical barriers associated with impacting on effective QMSs implementation; to assist them to develop cultural values that can drive effective QMSs implementation; to undertake effective QMSs practices; and to recognise the potential results and longer-term benefits obtainable from implementing effective QMSs. A Focus Group Discussion was conducted with the assistance of a panel of professional construction practitioners, policy makers and academic experts, which further considered and validated the usefulness and applicability of the framework. Based on the outcome from this discussion and on the results of the earlier data analysis, a final version of the framework was developed to assist Indonesian construction companies in improving their capability of construction project delivery, and thereby contribute to providing or improving the competitive advantage of Indonesian construction companies in the local, national and global construction market.

Construction Prices : the Market Effect

Teachers of construction economics and estimating have for a long time recognised that there is more to construction pricing than detailed calculation of costs (to the contractor). We always get to the point where we have to say "of course, experience or familiarity of the market is very important and this needs judgement, intuition, etc". Quite how important is the matter in construction pricing is not known and we tend to trivialise its effect. If judgement of the market has a minimal effect, little harm would be done, but if it is really important then some quite serious consequences arise which go well beyond the teaching environment. Major areas of concern for the quantity surveyor are in cost modelling and cost planning - neither of which pay any significant attention to the market effect. There are currently two schools of thought about the market effect issue. The first school is prepared to ignore possible effects until more is known. This may be called the pragmatic school. The second school exists solely to criticise the first school. We will call this the antagonistic school. Neither the pragmatic nor the antagonistic schools seem to be particularly keen to resolve the issue one way or the other. The founder and leader of the antagonistic school is Brian Fine whose paper in 1974 is still the basic text on the subject, and in which he coined the term 'socially acceptable' price to describe what we now recognise as the market effect. Mr Fine's argument was then, and is since, that the uncertainty surrounding the contractors' costing and cost estimating process is such that the uncertainty surrounding the contractors' cost that it logically leads to a market-orientated pricing approach. Very little factual evidence, however, seems to be available to support these arguments in any conclusive manner. A further, and more important point for the pragmatic school, is that, even if the market effect is as important as Mr Fine believes, there are no indications of how it can be measured, evaluated or predicted. Since 1974 evidence has been accumulating which tends to reinforce the antagonists' view. A review of the literature covering both contractors' and designers' estimates found many references to the use of value judgements in construction pricing (Ashworth & Skitmore, 1985), which supports the antagonistic view in implying the existence of uncertainty overload. The most convincing evidence emerged quite by accident in some research we recently completed with practicing quantity surveyors in estimating accuracy (Skitmore, 1985). In addition to demonstrating that individual quantity surveyors and certain types of buildings had significant effect on estimating accuracy, one surprise result was that only a very small amount of information was used by the most expert surveyors for relatively very accurate estimates. Only the type and size of building, it seemed, was really relevant in determining accuracy. More detailed information about the buildings' specification, and even a sight to the drawings, did not significantly improve their accuracy level. This seemed to offer clear evidence that the constructional aspects of the project were largely irrelevant and that the expert surveyors were somehow tuning in to the market price of the building. The obvious next step is to feed our expert surveyors with more relevant 'market' information in order to assess its effect. The problem with this is that our experts do not seem able to verbalise their requirements in this respect - a common occurrence in research of this nature. The lack of research into the nature of market effects on prices also means the literature provides little of benefit. Hence the need for this study. It was felt that a clearer picture of the nature of construction markets would be obtained in an environment where free enterprise was a truly ideological force. For this reason, the United States of America was chosen for the next stage of our investigations. Several people were interviewed in an informal and unstructured manner to elicit their views on the action of market forces on construction prices. Although a small number of people were involved, they were thought to be reasonably representative of knowledge in construction pricing. They were also very well able to articulate their views. Our initial reaction to the interviews was that our USA subjects held very close views to those held in the UK. However, detailed analysis revealed the existence of remarkably clear and consistent insights that would not have been obtained in the UK. Further evidence was also obtained from literature relating to the subject and some of the interviewees very kindly expanded on their views in later postal correspondence. We have now analysed all the evidence received and, although a great deal is of an anecdotal nature, we feel that our findings enable at least the basic nature of the subject to be understood and that the factors and their interrelationships can now be examined more formally in relation to construction price levels. I must express my gratitude to the Royal Institution of Chartered Surveyors' Educational Trust and the University of Salford's Department of Civil Engineering for collectively funding this study. My sincere thanks also go to our American participants who freely gave their time and valuable knowledge to us in our enquiries. Finally, I must record my thanks to Tim and Anne for their remarkable ability to produce an intelligible typescript from my unintelligible writing.

Learning opportunities : a partnership, connecting learning with projects

Major construction projects undertaken on university campuses are an ideal opportunity to connect learners in related disciplines to the real thing. How often do universities take that opportunity, make the connection and value add to projects being carried out? Discussion with students and academic staff will consistently generate enthusiasm for creating learning activities and resources related to projects. Some typical disciplines are project management, all fields of engineering, architecture, interior design and information technology. Some other areas that may not at first seem obvious are business, marketing, communication and public relations. The authors will provide a case study based on the new Queensland University of Technology (QUT) Science and Engineering Centre project of how the partnership between QUT and Leighton Contractors, the managing contractor, has delivered excellent learning opportunities through the design and construction phases of the Science and Engineering Centre project.

Innovative methods for assessing viability of diversification into new markets : a study based on an engineering consultancy

This study resulted in the development of a decision making tool for engineering consultancies looking to diversify into new markets. It reviewed existing decision tools used by contractor's entering new markets to develop a bespoke tool for engineering consultants to establish more rigor around the decision making process rather than rely purely on the intuition of company executives. The tool can be used for developing medium and long term company strategies or as a quick and efficient way to assess the viability of new market opportunities when they arise. A combination of Delphi and Analytical Hierarchy Process was selected as the basis of the decision theory.

The significance of owner participation for a successful detached housing development in Malaysia

The detached housing scheme is a unique and exclusive segment of the residential property market in Malaysia. Generally, the product is expensive and for many Malaysians who can afford them, owning a detached house is a once in a lifetime opportunity. In spite of this, most of the owners failed to fully comprehend the specific need of this type of housing scheme, increasing the risk of it being a problematic undertaking. Unlike other types of pre-designed "mass housing" schemes, the detached housing scheme may be built specifically to cater the needs and demands of its owner. Therefore, owner participation during critical development stages is vital to guarantee the success of the development as a whole. In addition, due to its unique design the house would have to individually comply with the requirements and regulations of relevant authorities. Failure by the owner to recognise this will result in delays, penalties, disputes and ultimately cost overruns. These circumstances highlight the need for a research to guide the owner through participation during the critical development stages of a detached house. Therefore, this research aims to develop a guideline to improve owner participation for a successful detached house development in Malaysia. To achieve the aim, questionnaire surveys and semi-structured interviews were employed to collect the detached house owners' and consultants' & contractors' responses through their experiences in developing detached houses in Malaysia. Stratified and random sampling were utilised to gather information from both parties to represent Malaysian detached house participants. The questionnaire responses were analysed through the application of quantitative analysis such as descriptive analysis, factor analysis and structural equation modelling which were substantiated through qualitative analysis procedure such as content analysis. This research had identified that in order to produce a successful outcome detached house owners are required to participate during critical stages of the development. In the planning stage, the owner needs to provide proper specific input to the consultant regarding his/her expectations of the cost for the entire development, its detailed specification and general idea of the internal and external design of the detached house and its compound. In the contracting stage, the owner must make the appropriate choice of selecting the right contractor for the job. This decision may be taken after recommendations from the consultants or from the owner's personal contacts or experiences but it is not recommended for the owner to select a contractor primarily on the basis of the lowest bid. In the completion stage, the owner may need to attend a number of important site meetings to ensure that the progress of the works is according to what had been planned and the completion date is achievable. By having the owners undertake an active role during critical stages of the development, not only the quality and delivery of the development improved but also there is an increase in satisfaction to the owners themselves.

Achieving world leadership in sustainable buildings - a Brisbane case study

In Australia, the building and construction industry is taking significant steps towards the enhancement of environmental performance of the built environment. A large number of world class sustainable buildings have been constructed in recent years, offering researchers and practitioners alike a good opportunity to identify the best practices and real life experiences in delivering high performance buildings. A case study of ONE ONE ONE Eagle Street, a 6 Star Green Star office building in Brisbane, was conducted to investigate the best practice in achieving this “world leader” green office building. The study identified a number of key factors relating to project delivery system, contractor selection method, client’s early commitment, design integration, communication as major contributors to the successful delivery of this project. Additionally, key environmentally sustainable features and their cost implications were explored through in-depth interviews with the main contractor. The findings of this study will shed lights on the successful delivery of sustainable buildings and provide practical implications for different stakeholders.

Relationship between head contractors and subcontractors in the construction industry : a critical review

The interaction between head contractor and subcontractor in modern construction often contributes to the degree of success or failure of any large-scale construction project. In this paper, previous research on the relationship and interaction between head contractor and subcontractor is examined in order to establish how these relationships will affect the overall performance of a project. Based on the review, research questions on how to best manage the interaction and relationship between these two vital project participants are proposed and future research direction discussed.

Client and consultant perspectives of prequalification criteria

A crucial task in contractor prequalification is to establish a set of decision criteria through which the capabilities of contractors are measured and judged. However, in the UK, there are no nationwide standards or guidelines governing the selection of decision criteria for contractor prequalification. The decision criteria are usually established by individual clients on an ad hoc basis. This paper investigates the divergence of decision criteria used by different client and consultant organisations in contractor prequalification through a large empirical survey conducted in the UK. The results indicate that there are significant differences in the selection and use of decision criteria for prequalification.

Analysing governance categories used on project alliances in the construction industry

In Australia, collaborative contracts, and in particular, project alliances, have been increasingly used to govern infrastructure projects. These contracts use formal and informal governance mechanisms to manage the delivery of infrastructure projects. Formal mechanisms such as financial risk sharing are specified in the contract, while informal mechanisms such as integrated teams are not. Given that the literature contains a multiplicity of often untestable definitions, this paper reports on a review of the literature to operationalize the concepts of formal and informal governance. This work is the first phase of a study that will examine the optimal balance of formal and informal governance structures. Desk-top review of leading journals in the areas of construction management and business management, as well as recent government documents and industry guidelines, was undertaken to to conceptualise and operationalize formal and informal governance mechanisms. The study primarily draws on transaction-cost economics (e.g. Williamson 1979; Williamson 1991), relational contract theory (Feinman 2000; Macneil 2000) and social psychology theory (e.g. Gulati 1995). Content analysis of the literature was undertaken to identify key governance mechanisms. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. A previous study by the authors identified that formal governance mechanisms can be classified into seven measurable categories: (1) negotiated cost, (2) competitive cost, (3) commercial framework, (4) risk and reward sharing, (5) qualitative performance, (6) collaborative multi-party agreement, and (7) early contractor involvement. Similarly, informal governance mechanisms can be classified into four measureable categories: (1) leadership structure, (2) integrated team, (3) team workshops, and (4) joint management system. This paper explores and further defines the key operational characteristics of each mechanism category, highlighting its impact on value for money in alliance project delivery. The paper’s contribution is that it provides the basis for future research to compare the impact of a range of individual mechanisms within each category, as a means of improving the performance of construction projects.

Learning routines used by firms during construction of infrastructure projects using the alliance procurement method

Collaborative contracting has emerged over the past 15 years as an innovative project delivery framework that is particularly suited to infrastructure projects. Australia leads the world in the development of project and program alliance approaches to collaborative delivery. These approaches are considered to promise superior project results. However, very little is known about the learning routines that are most widely used in support of collaborative projects in general and alliance projects in particular. The literature on absorptive capacity and dynamic capabilities indicates that such learning enhances project performance. The learning routines employed at corporate level during the operation of collaborative infrastructure projects in Australia were examined through a large survey conducted in 2013. This paper presents a descriptive summary of the preliminary findings. The survey captured the experiences of 320 practitioners of collaborative construction projects, including public and private sector clients, contractors, consultants and suppliers (three per cent of projects were located in New Zealand, but for brevity’s sake the sample is referred to as Australian). The majority of projects identified used alliances (78.6%); whilst 9% used Early Contractor Involvement (ECI) contracts and 2.7% used Early Tender Involvement contracts, which are ‘slimmer’ types of collaborative contract. The remaining 9.7% of respondents used traditional contracts that employed some collaborative elements. The majority of projects were delivered for public sector clients (86.3%), and/or clients experienced with asset procurement (89.6%). All of the projects delivered infrastructure assets; one third in the road sector, one third in the water sector, one fifth in the rail sector, and the rest spread across energy, building and mining. Learning routines were explored within three interconnected phases: knowledge exploration, transformation and exploitation. The results show that explorative and exploitative learning routines were applied to a similar extent. Transformative routines were applied to a relatively low extent. It was also found that the most highly applied routine is ‘regularly applying new knowledge to collaborative projects’; and the least popular routine was ‘staff incentives to encourage information sharing about collaborative projects’. Future research planned by the authors will examine the impact of these routines on project performance.

How public owners communicate the sustainability requirements of green design-build projects

The design-build (DB) system is regarded as an effective means of delivering sustainable buildings. Specifying clear sustainability requirements to potential contractors is of great importance to project success. This research investigates the current state-of-the-practice for the definition of sustainability requirements within the public sectors of the U.S. construction market using a robust content analysis of 49 DB requests for proposals (RFPs). The results reveal that owners predominantly communicate their desired level of sustainability through the LEED certification system. The sustainability requirement has become an important dimension for the best-value evaluation of DB contractors with specific importance weightings of up to 25%. Additionally, owners of larger projects and who provide less design information in their RFPs generally allocate significantly higher importance weightings to sustainability requirements. The primary knowledge contribution of this study to the construction industry is the reveal of current trend in DB procurement for green projects. The findings also provide owners, architects, engineers, and constructors with an effective means of communicating sustainability objectives in solicitation documents.

A game theoretical approach to construction safety in the Repair, Maintenance, Alteration and Addition (RMAA) sector

Safety has long been a problem in the construction industry. Repair, maintenance, alteration and addition (RMAA) sector has emerged to play an important role in the construction industry. It accounted for 53% of the total construction market in Hong Kong in 2007. Safety performance of the RMAA words has been alarming. Statistics indicate that the percentage of fatal industrial accidents arising from RMAA work in Hong Kong was over 56% in 2006 while the remaining 44% was from new works. Effective safety measures to address the safety problems and improve safety performance of the RMAA sector are urgently needed. Unsafe behaviour has been attributed to one of the major causes of accidents. Traditional cost-benefit analysis of workers' safety behaviour seems to be inadequate. This paper proposes to adopt a game theoretical approach to analyse safety behaviour of RMAA workers. Game theory is concerned with the decision-making process in situations where outcomes depend upon choices made by one or more players. A game theoretical model between contractor and worker has been proffered. Mathematical analysis of this game model has been done and implications of the analysis have been discussed.

Australian boarding school supervisors : a voluntary position?

This paper aims to examine how Australian boarding supervisors (particularly non-teachers) are defined in regards to employment. The practices of Queensland’s School X (real name withheld) are used as an example of the difficult issues involved – although whether this case study is repeated elsewhere in the industry would take further research. The paper illustrates that the employment of boarding supervisors is dealt with at a basic level by a modern award, however its provisions do not represent what occurs in practice. If there is no enterprise bargain which improves upon the award, two possible explanations are put forward to explain the difference between award conditions and practice. The first is that the contract between boarding supervisors may not be one of employment. Relevant case law regarding whether a person is an employee or independent contractor is examined, and when applied to a typical boarding situation, it is concluded that any contract should be one of employment. The second explanation is that there is no legal contract at all between boarding supervisors and a school. Drawing on School X’s example where supervisors were classed as ‘volunteers’, the paper examines what the legal effect of that term might be. It could be seen to be a denial of an intention to create legal relations, a critical element in contract formation. Again, important cases are analysed on the topic of intention, and applied to a boarding context. It is argued that given the objective circumstances of a typical agreement, there is an intention to create legal relations. In particular, a little known Queensland case involving the non-employment status of boarding supervisors, which may be the cause of the confusion, is critically examined to determine its usefulness in answering the issue. Finally, the implications of not classifying boarding supervisors as employees are briefly discussed.

Take me to your employer: the organisational reach of occupational health and safety regulation

[Conclusion] We have explored two dimensions of the Australian OHS statutes which enable statutory OHS duties to reach more than one employer or self-employed person within a corporate group or network. First, most of the OHS statutes contain provisions extending the reach of employer’s duty beyond the employer’s employees. One legislative technique is to deem contractors and their employees to be employees of the principal contractor. Another imposes duties on employers and self-employed persons to persons who are not employees, so that employers and self-employed persons can be responsible for the OHS of firms, and those they engage, lower in the contractual chain. These duties are non-delegable, meaning that the principal contractor cannot seek to delegate OHS duties to firms lower in the contractual chain. Second, new Victorian ‘shadow officer’ provisions can be applied to remove difficulties and doubt as to the liability of partners in a partnership, officers of unincorporated associations, joint venturers, and holding and subsidiary companies within corporate groups. While the provisions can be argued simply to confirm that a partner who fails to take reasonable care in relation to OHS will be guilty of an offence, we demonstrate that there are very real benefits to having ‘shadow officer’ provisions which remove uncertainties about the liability of unincorporated associations, joint ventures and corporate groups. Perhaps most significantly, the Victorian corporate officer provisions have the potential to extend liability to individuals and other entities within organisational structures, where those individuals and entities make or participate in making decisions that affect the whole or a substantial part of the organisation’s business, and are responsible for an OHS offence having been committed, due to their failure to take reasonable care. We suggest that similar provisions should be included in all OHS statutes, to overcome at least some of the barriers limiting group responsibility for OHS statutory duties.