Procurement Case Study and Decision-making Strategies

Objectives The procurement research of Sydney Opera House FM Exemplar Project aims to develop innovative methods and guidelines for the procurement of FM services, applicable to iconic and / or performing arts centre facilities, or facilities with similar FM functions. The initial procurement report in June 2005 analysed the strategic objectives and operational requirements that provide ‘demand statements’ as evaluation criteria in the service procurement process. The subsequent interim procurement report in September 2005 discussed the elements contributing to the criteria for decision-making in the service procurement process. This procurement report concentrates on the research on procurement strategies and innovative methods using a case study approach. The objectives of this report are: • to investigate service procurement methods and process in iconic and/or performing arts centre facilities; • to showcase FM innovation in Sydney Opera House through a case study; • to establish a preliminary decision-making framework and guidelines for selection of appropriate FM procurement routes to provide a useful model for FM community. Findings Findings from this procurement research are presented as follows. • FM innovation and experience of Sydney Opera House • Innovative procurement methods and processes, drawn from a case study of Sydney Opera House as exemplar • An integrated performance framework to link maintenance service functions to high level organisational objective and strategies • Procurement methods and contract outcomes, focusing on building maintenance and cleaning services of Sydney Opera House • Multi-dimensional assessment of Service Providers • General decision-making strategies and guidelines for selection of appropriate FM procurement routes Further Research Whilst the Sydney Opera House case study emphasises the experience of Sydney Opera House, a study of procurement strategies and methods from published research and FM good practice will supply facilities managers with alternative procurement routes. Further research on the procurement theme will develop a final decision-making model for the procurement of FM services, drawn from the evaluation of the case study outcomes, as well as FM good practice and findings from current published research.

Services Procurement

This Services Procurement Report incorporates the previous benchmarking research and aims to develop innovative methods and guidelines for the procurement of FM services, applicable to iconic and / or performing arts centre facilities, or facilities with similar FM functions. The FM Exemplar Project utilising the Sydney Opera House produced its initial procurement report in June 2005 which analysed the strategic objectives and operational requirements that provide ‘demand statements’ as evaluation criteria in the service procurement process. The subsequent interim procurement report in September 2005 discussed the elements contributing to the criteria for decision-making in the service procurement process. This procurement report concentrates on the research on procurement strategies and innovative methods using a case study approach. The objectives of this report are to: Investigate service procurement methods and process in iconic and/or performing arts centre facilities; Showcase FM innovation in Sydney Opera House through a case study; Establish a preliminary decision-making framework and guidelines for selection of appropriate FM procurement routes to provide a useful model for FM community

Building procurement methods

A plethora of methods for procuring building projects are available to meet the needs of clients. Deciding what method to use for a given project is a difficult and challenging task as a client’s objectives and priorities need to marry with the selected method so as to improve the likelihood of the project being procured successfully. The decision as to what procurement system to use should be made as early as possible and underpinned by the client’s business case for the project. The risks and how they can potentially affect the client’s business should also be considered. In this report, the need for client’s to develop a procurement strategy, which outlines the key means by which the objectives of the project are to be achieved is emphasised. Once a client has established a business case for a project, appointed a principal advisor, determined their requirements and brief, then consideration as to which procurement method to be adopted should be made. An understanding of the characteristics of various procurement options is required before a recommendation can be made to a client. Procurement systems can be categorised as traditional, design and construct, management and collaborative. The characteristics of these systems along with the procurement methods commonly used are described. The main advantages and disadvantages, and circumstances under which a system could be considered applicable for a given project are also identified.

International practices in investment decision making in road sector

This document provides the findings of an international review of investment decision-making practices in road asset management. Efforts were concentrated on identifying the strategic objectives of agencies in road asset management, establishing and understanding criteria different organisations adopted and ascertaining the exact methodologies used by different countries and international organisations. Road assets are powerful drivers of economic development and social equity. They also have significant impacts on the natural and man-made environment. The traditional definition of asset management is “A systematic process of maintaining, upgrading and operating physical assets cost effectively. It combines engineering principles with sound business practices and economic theory and it provides tools to facilitate a more organised, logical approach to decision-making” (US Dept. of Transportation, 1999). In recent years, the concept has been broadened to cover the complexity of decision making, based on a wider variety of policy considerations as well as social and environmental issues rather than is covered by Benefit-Cost analysis and pure technical considerations. Current international practices are summarised in table 2. It was evident that Engineering-economic analysis methods are well advanced to support decision-making. A range of tools available supports performance predicting of road assets and associated cost/benefit in technical context. The need for considering triple plus one bottom line of social, environmental and economic as well as political factors in decision-making is well understood by road agencies around the world. The techniques used to incorporate these however, are limited. Most countries adopt a scoring method, a goal achievement matrix or information collected from surveys. The greater uncertainty associated with these non-quantitative factors has generally not been taken into consideration. There is a gap between the capacities of the decision-making support systems and the requirements from decision-makers to make more rational and transparent decisions. The challenges faced in developing an integrated decision making framework are both procedural and conceptual. In operational terms, the framework should be easy to be understood and employed. In philosophical terms, the framework should be able to deal with challenging issues, such as uncertainty, time frame, network effects, model changes, while integrating cost and non-cost values into the evaluation. The choice of evaluation techniques depends on the feature of the problem at hand, on the aims of the analysis, and on the underlying information base At different management levels, the complexity in considering social, environmental, economic and political factor in decision-making is different. At higher the strategic planning level, more non-cost factors are involved. The complexity also varies based on the scope of the investment proposals. Road agencies traditionally place less emphasis on evaluation of maintenance works. In some cases, social equity, safety, environmental issues have been used in maintenance project selection. However, there is not a common base for the applications.

Review of strengthening techniques using externally bonded fiber reinforced polymer composites

This report reviews the selection, design, and installation of fiber reinforced polymer systems for strengthening of reinforced concrete or pre-stressed concrete bridges and other structures. The report is prepared based on the knowledge gained from worldwide experimental research, analytical work, and field applications of FRP systems used to strengthen concrete structures. Information on material properties, design and installation methods of FRP systems used as external reinforcement are presented. This information can be used to select an FRP system for increasing the strength and stiffness of reinforced concrete beams or the ductility of columns, and other applications. Based on the available research, the design considerations and concepts are covered in this report. In the next stage of the project, these will be further developed as design tools. It is important to note, however, that the design concepts proposed in literature have not in many cases been thoroughly developed and proven. Therefore, a considerable amount of research work will be required prior to development of the design concepts into practical design tools, which is a major goal of the current research project. The durability and long-term performance of FRP materials has been the subject of much research, which still are on going. Long-term field data are not currently available, and it is still difficult to accurately predict the life of FRP strengthening systems. The report briefly addresses environmental degradation and long-term durability issues as well. A general overview of using FRP bars as primary reinforcement of concrete structures is presented in Chapter 8. In Chapter 9, a summary of strengthening techniques identified as part of this initial stage of the research project and the issues which require careful consideration prior to practical implementation of these identified techniques are presented.

Venture idea newness, relatedness and performance in nascent ventures

Principal Topic The study of the origin and characteristics of venture ideas - or ''opportunities'' as they are often called - and their contextual fit are key research goals in entrepreneurship (Davidsson, 2004). We define venture idea as ''the core ideas of an entrepreneur about what to sell, how to sell, whom to sell and how an entrepreneur acquire or produce the product or service which he/she sells'' for the purpose of this study. When realized the venture idea becomes a ''business model''. Even though venture ideas are central to entrepreneurship yet its characteristics and their effect to the entrepreneurial process is mysterious. According to Schumpeter (1934) entrepreneurs could creatively destruct the existing market condition by introducing new product/service, new production methods, new markets, and new sources of supply and reorganization of industries. The introduction, development and use of new ideas are generally called as ''innovation'' (Damanpour & Wischnevsky, 2006) and ''newness'' is a property of innovation and is a relative term which means that the degree of unfamiliarity of venture idea either to a firm or to a market. However Schumpeter's (1934) discusses five different types of newness, indicating that type of newness is an important issue. More recently, Shane and Venkataraman (2000) called for research taking into consideration not only the variation of characteristics of individuals but also heterogeneity of venture ideas, Empirically, Samuelson (2001, 2004) investigated process differences between innovative venture ideas and imitative venture ideas. However, he used only a crude dichotomy regarding the venture idea newness. According to Davidsson, (2004) as entrepreneurs could introduce new economic activities ranging from pure imitation to being new to the entire world market, highlighting that newness is a matter of degree. Dahlqvist (2007) examined the venture idea newness and made and attempt at more refined assessment of the degree and type of newness of venture idea. Building on these predecessors our study refines the assessment of venture idea newness by measuring the degree of venture idea newness (new to the world, new to the market, substantially improved while not entirely new, and imitation) for four different types of newness (product/service, method of production, method of promotion, and customer/target market). We then related type and degree of newness to the pace of progress in nascent venturing process. We hypothesize that newness will slow down the business creation process. Shane & Venkataraman (2000) introduced entrepreneurship as the nexus of opportunities and individuals. In line with this some scholars has investigated the relationship between individuals and opportunities. For example Shane (2000) investigates the relatedness between individuals' prior knowledge and identification of opportunities. Shepherd & DeTinne (2005) identified that there is a positive relationship between potential financial reward and the identification of innovative venture ideas. Sarasvathy's 'Effectuation Theory'' assumes high degree of relatedness with founders' skills, knowledge and resources in the selection of venture ideas. However entrepreneurship literature is scant with analyses of how this relatedness affects to the progress of venturing process. Therefore, we assess the venture ideas' degree of relatedness to prior knowledge and resources, and relate these, too, to the pace of progress in nascent venturing process. We hypothesize that relatedness will increase the speed of business creation. Methodology For this study we will compare early findings from data collected through the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE). CAUSEE is a longitudinal study whose primary objective is to uncover the factors that initiate, hinder and facilitate the process of emergence and development of new firms. Data were collected from a representative sample of some 30,000 households in Australia using random digit dialing (RDD) telephone survey interviews. Through the first round of data collection identified 600 entrepreneurs who are currently involved in the business start-up process. The unit of the analysis is the emerging venture, with the respondent acting as its spokesperson. The study methodology allows researchers to identify ventures in early stages of creation and to longitudinally follow their progression through data collection periods over time. Our measures of newness build on previous work by Dahlqvist (2007). Our adapted version was developed over two pre-tests with about 80 participants in each. The measures of relatedness were developed through the two rounds of pre-testing. The pace of progress in the venture creation process is assessed with the help of time-stamped gestation activities; a technique developed in the Panel Study of Entrepreneurial Dynamics (PSED). Results and Implications We hypothesized that venture idea newness slows down the venturing process whereas relatedness facilitates the venturing process. Results of 600 nascent entrepreneurs in Australia indicated that there is marginal support for the hypothesis that relatedness assists the gestation progress. Newness is significant but is the opposite sign to the hypothesized. The results give number of implications for researchers, business founders, consultants and policy makers in terms of better knowledge of the venture creation process.

Trust and strong ties in the selection and evaluation of business advisors by small firms

Principal Topic A small firm is unlikely to possess internally the full range of knowledge and skills that it requires or could benefit from for the development of its business. The ability to acquire suitable external expertise - defined as knowledge or competence that is rare in the firm and acquired from the outside - when needed thus becomes a competitive factor in itself. Access to external expertise enables the firm to focus on its core competencies and removes the necessity to internalize every skill and competence. However, research on how small firms access external expertise is still scarce. The present study contributes to this under-developed discussion by analysing the role of trust and strong ties in the small firm's selection and evaluation of sources of external expertise (henceforth referred to as the 'business advisor' or 'advisor'). Granovetter (1973, 1361) defines the strength of a network tie as 'a (probably linear) combination of the amount of time, the emotional intensity, the intimacy (mutual confiding) and the reciprocal services which characterize the tie'. Strong ties in the context of the present investigation refer to sources of external expertise who are well known to the owner-manager, and who may be either informal (e.g., family, friends) or professional advisors (e.g., consultants, enterprise support officers, accountants or solicitors). Previous research has suggested that strong and weak ties have different fortes and the choice of business advisors could thus be critical to business performance) While previous research results suggest that small businesses favour previously well known business advisors, prior studies have also pointed out that an excessive reliance on a network of well known actors might hamper business development, as the range of expertise available through strong ties is limited. But are owner-managers of small businesses aware of this limitation and does it matter to them? Or does working with a well-known advisor compensate for it? Hence, our research model first examines the impact of the strength of tie on the business advisor's perceived performance. Next, we ask what encourages a small business owner-manager to seek advice from a strong tie. A recent exploratory study by Welter and Kautonen (2005) drew attention to the central role of trust in this context. However, while their study found support for the general proposition that trust plays an important role in the choice of advisors, how trust and its different dimensions actually affect this choice remained ambiguous. The present paper develops this discussion by considering the impact of the different dimensions of perceived trustworthiness, defined as benevolence, integrity and ability, on the strength of tie. Further, we suggest that the dimensions of perceived trustworthiness relevant in the choice of a strong tie vary between professional and informal advisors. Methodology/Key Propositions Our propositions are examined empirically based on survey data comprising 153 Finnish small businesses. The data are analysed utilizing the partial least squares (PLS) approach to structural equation modelling with SmartPLS 2.0. Being non-parametric, the PLS algorithm is particularly well-suited to analysing small datasets with non-normally distributed variables. Results and Implications The path model shows that the stronger the tie, the more positively the advisor's performance is perceived. Hypothesis 1, that strong ties will be associated with higher perceptions of performance is clearly supported. Benevolence is clearly the most significant predictor of the choice of a strong tie for external expertise. While ability also reaches a moderate level of statistical significance, integrity does not have a statistically significant impact on the choice of a strong tie. Hence, we found support for two out of three independent variables included in Hypothesis 2. Path coefficients differed between the professional and informal advisor subsamples. The results of the exploratory group comparison show that Hypothesis 3a regarding ability being associated with strong ties more pronouncedly when choosing a professional advisor was not supported. Hypothesis 3b arguing that benevolence is more strongly associated with strong ties in the context of choosing an informal advisor received some support because the path coefficient in the informal advisor subsample was much larger than in the professional advisor subsample. Hypothesis 3c postulating that integrity would be more strongly associated with strong ties in the choice of a professional advisor was supported. Integrity is the most important dimension of trustworthiness in this context. However, integrity is of no concern, or even negative, when using strong ties to choose an informal advisor. The findings of this study have practical relevance to the enterprise support community. First of all, given that the strength of tie has a significant positive impact on the advisor's perceived performance, this implies that small business owners appreciate working with advisors in long-term relationships. Therefore, advisors are well advised to invest into relationship building and maintenance in their work with small firms. Secondly, the results show that, especially in the context of professional advisors, the advisor's perceived integrity and benevolence weigh more than ability. This again emphasizes the need to invest time and effort into building a personal relationship with the owner-manager, rather than merely maintaining a professional image and credentials. Finally, this study demonstrates that the dimensions of perceived trustworthiness are orthogonal with different effects on the strength of tie and ultimately perceived performance. This means that entrepreneurs and advisors should consider the specific dimensions of ability, benevolence and integrity, rather than rely on general perceptions of trustworthiness in their advice relationships.

Linking early design decisions across multiple disciplines

The early stages of the building design process are when the most far reaching decisions are made regarding the configuration of the proposed project. This paper examines methods of providing decision support to building designers across multiple disciplines during the early stage of design. The level of detail supported is at the massing study stage where the basic envelope of the project is being defined. The block outlines on the building envelope are sliced into floors. Within a floor the only spatial divisions supported are the “user” space and the building core. The building core includes vertical transportation systems, emergency egress and vertical duct runs. The current focus of the project described in the paper is multi-storey mixed use office/residential buildings with car parking. This is a common type of building in redevelopment projects within and adjacent to the central business districts of major Australian cities. The key design parameters for system selection across the major systems in multi-storey building projects - architectural, structural, HVAC, vertical transportation, electrical distribution, fire protection, hydraulics and cost – are examined. These have been identified through literature research and discussions with building designers from various disciplines. This information is being encoded in decision support tools. The decision support tools communicate through a shared database to ensure that the relevant information is shared across all of the disciplines. An internal data model has been developed to support the very early design phase and the high level system descriptions required. A mapping to IFC 2x2 has also been defined to ensure that this early information is available at later stages of the design process.

Concurrent multi-scale modeling of civil infrastructures for analyses on structural deteriorating—Part II : Model updating and verification

This paper is a continuation of the paper titled “Concurrent multi-scale modeling of civil infrastructure for analyses on structural deteriorating—Part I: Modeling methodology and strategy” with the emphasis on model updating and verification for the developed concurrent multi-scale model. The sensitivity-based parameter updating method was applied and some important issues such as selection of reference data and model parameters, and model updating procedures on the multi-scale model were investigated based on the sensitivity analysis of the selected model parameters. The experimental modal data as well as static response in terms of component nominal stresses and hot-spot stresses at the concerned locations were used for dynamic response- and static response-oriented model updating, respectively. The updated multi-scale model was further verified to act as the baseline model which is assumed to be finite-element model closest to the real situation of the structure available for the subsequent arbitrary numerical simulation. The comparison of dynamic and static responses between the calculated results by the final model and measured data indicated the updating and verification methods applied in this paper are reliable and accurate for the multi-scale model of frame-like structure. The general procedures of multi-scale model updating and verification were finally proposed for nonlinear physical-based modeling of large civil infrastructure, and it was applied to the model verification of a long-span bridge as an actual engineering practice of the proposed procedures.

The role of decision-maker preferences in tenancy selection of CBD office accommodation – preliminary literature review

The literature and anecdotal evidence suggests that that there is more to tenancy selection (firm location) than the profit maximisation drive that traditional neo-classical economic location theory suggests. In the first instance these models assume property markets are rational and perfectly competitive; the CBD office market is clearly neither rational nor perfectly competitive. This fact alone relegates such models to the margins of usefulness for an industry that seeks to satisfy tenant demand in order to optimise returns on capital invested. Acknowledgment of property market imperfections are universally accepted to the extent that all contemporary texts discuss the lack of a coherent centralised market place and incomplete and poorly disseminated information processes as fundamental inadequacies which characterise the property market inefficiencies. Less well researched are the facets of the market which allow the observer to determine market activity to be significantly irrational. One such facet is that of ‘decision maker preferences’. The decision to locate a business operation at one location as opposed to another seems ostensibly a routine choice based on short, medium and long term business objectives. These objectives are derived from a process of strategic planning by one or more individuals whose goal is held to be to optimise outcomes which benefit the business (and presumably those employed within it). However the decision making processes appear bounded by how firms function, the institutional context in which they operate, as well as by opportunistic behaviour by individual decision makers who allow personal preferences to infiltrate and ‘corrupt’ the process. In this way, history, culture, geography, as well as institutions all become significant to the extent that these influence and shape individual behaviour which in turn determine the morphology of individual preferences, as well as providing a conduit for them to take effect. This paper exams historical and current literature on the impact of individual behaviour in the decision making process within organisations as a precursor to an investigation of the tenancy decision making process within the CBD office market. Literature on the topic falls within a number of research disciplines, philosophy, psychology and economics to name a few.

Selection method for sustainable building

For a sustainable building industry, not only should the environmental and economic indicators be evaluated but also the societal indicators for building. Current indicators can be in conflict with each other, thus decision making is difficult to clearly quantify and assess sustainability. For the sustainable building, the objectives of decreasing both adverse environmental impact and cost are in conflict. In addition, even though both objectives may be satisfied, building management systems may present other problems such as convenience of occupants, flexibility of building, or technical maintenance, which are difficult to quantify as exact assessment data. These conflicting problems confronting building managers or planners render building management more difficult. This paper presents a methodology to evaluate a sustainable building considering socio-economic and environmental characteristics of buildings, and is intended to assist the decision making for building planners or practitioners. The suggested methodology employs three main concepts: linguistic variables, fuzzy numbers, and an analytic hierarchy process. The linguistic variables are used to represent the degree of appropriateness of qualitative indicators, which are vague or uncertain. These linguistic variables are then translated into fuzzy numbers to reflect their uncertainties and aggregated into the final fuzzy decision value using a hierarchical structure. Through a case study, the suggested methodology is applied to the evaluation of a building. The result demonstrates that the suggested approach can be a useful tool for evaluating a building for sustainability.

Dismantling the public sector bastion : evaluation capital works

Purpose: The determination of the most appropriate procurement system for a capital works project is a challenging task for public sector clients considering the array of assessment criteria that are considered and the procurement methods that are available. This is particularly pertinent to the Western Australian public sector where they have had a propensity to use traditional lump sum as the default procurement solution despite knowing that the selection of an inappropriate procurement method may lead to cost and time overruns, claims, and disputes’ on projects. This paper presents a six step procurement method evaluation approach that requires public sector agencies to consider in detail an array of options so as to obtain value for money. Design/methodology/approach: A procurement evaluation approach is developed and is examined using a focus group of 12 participants comprising of a public sector client, project team and key stakeholders. The focus group was used to examine the developed approach in the context of a real-life capital works project. Findings: The procurement method evaluation approach was deemed to be pragmatic and enabled decision-makers to re-evaluate outcomes from previous steps in the process. All focus group participants stated the six step process enabled a recommendation that was grounded in reflection and detailed evaluation. Practical implications: The developed procurement approach has enabled the public sector client evaluate the way in which they view procurement method selection and examine how they obtain ‘value for money’. Originality/value: The six step procurement approach makes use of quantitative and qualitative techniques and is reliant on discourse and reflection in making a procurement method recommendation. Consequently, the approach enables public sector clients to account for the complexities often associated with procurement selection.

Modeling study on transport organization methods choice of highway rapid passenger transport in China

Some new types of mathematical model among four key techno - economic indexes of highway rapid passenger through transportation were established based on the principles of transportation economics. According to the research on the feasible solutions to the associated parameters which were then compared to the actual value, found some limitation in the existing transport organization method. In order to conquer that, two new types of transport organization method, namely CD (Collecting and Distributing) Method and Relay Method were brought forward. What’s more, a further research was down to estimate their characteristics, such as feasibilities, operation flows, applicability fields, etc. This analysis proves the two methods can offset the shortage of rapid passenger through transportation. To ensure highway rapid passenger transport develop harmoniously, a three-stage development targets was suggested to fuse different organization methods.