Harmonising procurement policy environment - identifying key themes towards the development of a conceptual model

Capital works procurement and its regulatory policy environment within a country can be complex entities. For example, by virtue of Australia’s governmental division between the Commonwealth, states and local jurisdictions and the associated procurement networks and responsibilities at each level, the tendering process is often convoluted. There are four inter-related key themes identified in the literature in relation to procurement disharmony, including decentralisation, risk & risk mitigation, free trade & competition, and tendering costs. This paper defines and discusses these key areas of conflict that adversely impact upon the business environments of industry through a literature review, policy analysis and consultation with capital works procurement stakeholders. The aim of this national study is to identify policy differences between jurisdictions in Australia, and ascertain whether those differences are a barrier to productivity and innovation. This research forms an element of a broader investigation with an aim of developing efficient, effective and nationally harmonised procurement systems. Keywords: capital works, procurement policy reform Acknowledgement: The research described in this paper carried out by the Australian Cooperative Research Centre for Construction Innovation.

Mapping the regulatory environment : implications for construction firms

As regulators, governments are often criticised for over‐regulating industries. This research project seeks to examine the regulation affecting the construction industry in a federal system of government. It uses a case study of the Australian system of government to focus on the question of the implications of regulation in the construction industry. Having established the extent of the regulatory environment, the research project considers the costs associated with this environment. Consequently, ways in which the regulatory burden on industry can be reduced are evaluated. The Construction Industry Business Environment project is working with industry and government agencies to improve regulatory harmonisation in Australia, and thereby reduce the regulatory burden on industry. It is found that while taxation and compliance costs are not likely to be reduced in the short term, costs arising from having to adapt to variation between regulatory regimes in a federal system of government, seem the most promising way of reducing regulatory costs. Identifying and reducing adaptive costs across jurisdictional are argued to present a novel approach to regulatory reform.

Construction supply chain economic policy implementation for sectoral change : moving beyond the rhetoric

Construction sector policy makers have the opportunity to create improvements and develop economic, social and environmental sustainability through supply chain economics. The idea of the supply chain concept to improve firm behaviour and industry performance is not new. However there has been limited application and little or no measurement to monitor successful implementation. Often purchasing policies have been developed with sound strategic procurement principles but even these have had limited penetration in to the processes and practices of infrastructure agencies. The research reported in this paper documents an action research study currently being undertaken in the Australian construction sector which aims to explore supply chain economic policy implementation for sectoral change by two government agencies. The theory which informs this study is the emerging area of construction supply chain economics. There are five stages to the project including; demand analysis, chain analysis, government agency organizational audit, supplier strategy and strategic alignment. The overall objective is towards the development of a Supplier Group Strategy Map for two public sector agencies. Two construction subsectors are examined in detail; construction and demolition waste and precast concrete. Both of these subsectors are critical to the economic and environmental sustainability performance of the construction sector and the community as a whole in the particular jurisdictions. The local and state government agencies who are at the core of the case studies rely individually on the performance of these sectors. The study is set within the context of a sound state purchasing policy that has however, had limited application by the two agencies. Partial results of the study are presented and early findings indicate that the standard risk versus expenditure procurement model does not capture the complexities of project, owner and government risk considerations. A new model is proposed in this paper, which incorporates the added dimension of time. The research results have numerous stakeholders; they will hold particular value for those interested in regional construction sector economics, government agencies who develop and implement policy and who have a large construction purchasing imprint and the players involved in the two subsectors. Even though this is a study in Australia it has widespread applicability as previous research indicates that procurement reform is of international significance and policy implementation is problematic.

Barriers to e-business adoption in construction: international literature review

The adoption of e-business by the Australian construction industry lags other service and product industries. It is assumed that slow adoption rate does not reflect the maturity of the technology but is due to adoption barriers peculiar to the nature of construction. This paper examines impediments to the uptake of e-business nationally and internationally. A systematic and extensive literature search of barriers (also referred to as obstacles, impediments or hindrances) to adoption has been undertaken and the findings discussed in this paper. This review included more that 200 documents and these have been published in a searchable database as part of a larger research initiative funded by the Cooperative Research Centre for Construction Innovation. The influence of levels of e-business maturity seen in other sectors such as retail, tourism and manufacturing was also captured and a number of major barriers were identified some including: privacy, trust, uncertainty of financial returns, lack of reliable measurement, fraud, lack of support and system maintenance. A total of 23 barriers were assessed in terms of impact to organisational type and size across reviewed documents. With this information it was possible to develop a reference framework for measuring maturity levels and readiness to uptake e-business in construction. Results have also shown that barriers to e-business adoption work differently according to organisational type and culture. Areas of training and people development need to be addressed. This would include a more sensitive approach to the nature of construction organisations, especially to those small and medium enterprises. Raising levels of awareness and creating trust for on-line collaboration are other aspects that need attention, which current studies confirm as lacking. An empirical study within construction, to validate these findings, forms the subsequent phase of this research.

A45 ICT curriculum design to bridge the gap between industry and academia

Building Information Model (BIM) software, collaboration platforms and 5D Construction Management software is now commercially available and presents the opportunity for construction project teams to design more cost effectively, plan construction earlier, manage costs throughout the life cycle of a building project and provide a central asset management register for facilities managers. This paper outlines the merits of taking a holistic view of ICT in curriculum design. The educational barriers to implementation of these models and planning tools are highlighted. Careful choice of computer software can make a significant difference to how quickly students can master skills; how easy it is to study and how much they enjoy learning and be prepared for employment. An argument for BIM and 5D planning tools to be introduced into the curriculum to assist industry increase productivity and efficiencies are outlined by the authors.

Construction projects immediate health check : a CSF & KPI approach

Many factors have the potential to influence human health. These factors need to be monitored to maintain health. As is the case with human health, construction projects have a number of critical factors that can facilitate a broad evaluation of project health. In order to use these factors as an indication of health, they need to be assessed. This assessment can help to achieve desired outcomes for the project. This paper discusses the approach of assessing Critical Success Factors (CSFs) using Key Performance Indicators (KPIs) to ascertain the immediate health of a construction project. This approach is applicable to all phases of construction projects and many construction procurement methods. KPIs have been benchmarked on the basis of industry standards and historical data. The robustness of the KPIs to assess the immediate health of a project has been validated using Australian and international case studies.

A soft approach to solving hard problems in construction project management

Construction projects are faced with a challenge that must not be underestimated. These projects are increasingly becoming highly competitive, more complex, and difficult to manage. They become ‘wicked problems’, which are difficult to solve using traditional approaches. Soft Systems Methodology (SSM) is a systems approach that is used for analysis and problem solving in such complex and messy situations. SSM uses “systems thinking” in a cycle of action research, learning and reflection to help understand the various perceptions that exist in the minds of the different people involved in the situation. This paper examines the benefits of applying SSM to wicked problems in construction project management, especially those situations that are challenging to understand and difficult to act upon. It includes relevant examples of its use in dealing with the confusing situations that incorporate human, organizational and technical aspects.

Re-valuing construction through project delivery

In moving from lowest cost adversarial based traditional procurement towards value driven methodologies the challenges range from re-engineering the process, to metrics and team alignment. This paper describes research into methodologies which encourage alignment of project partners towards achieving mutually beneficial goals. The research identifies nine variables which influence the achievement of successful projects delivering value. Results from case studies illustrate that not all parties can achieve value for themselves which directs attention to the balance between deliverables and the interests of team members. Re- valuing construction demands refocusing towards the delivery of operational assets and their place in the value system whilst recognising the need to manage the delivery process and the team to align the value to the parties. The objective of the project was to develop tools and recommendations for reform of project delivery in the building and construction industry to transform business-as-usual performance into exceptional performance. Benefits flow not only to the construction industry, but to the community as a whole because a more sophisticated industry can deliver more effective use of assets, financing, operating and maintenance of facilities to suit the community’s needs. This research was funded by the Australian Cooperative Research Centre for Construction Innovation.

Supporting ICT diffusion in Australian construction organisations

Construction organisations comprise geographically dispersed virtually-linked suborganisations that work together to realise projects. They increasingly do so using information and communication technology (ICT) to communicate, coordinate their activities and to solve complex problems. One salient problem they face is how to effectively use requisite ICT tools. One important tool at their disposal is the self-help group, a body of people that organically spring up to solve shared problems. The more recognised term for this organisational form is a community of practice (COP). COPs generate knowledge networks that enhance and sustain competitive advantage and they are also used to help COP members actually use ICT tools. Etienne Wenger defines communities of practice as “groups of people informally bound together by shared expertise and passion for a joint enterprise” (Wenger and Snyder 2000, p139). This ‘chicken-or-egg’ issue about needing a COP to use the tools that are needed to effective broaden COPs (beyond co-located these groups) led us to explore how best to improve the process of ICT diffusion through construction organisations— primarily using people supported by technology that improves knowledge sharing. We present insights gained from recent PhD research results in this area. A semistructured interview approach was used to collect data from ICT strategists and users in the three large Australian construction organisations that are among the 10 or so first tier companies by annual dollar turnover in Australia. The interviewees were categorised into five organisational levels: IT strategist, implementer, project or engineering manager, site engineer and foreman. The focus of the study was on the organisation and the way that it implements ICT diffusion of a groupware ICT diffusion initiative. Several types of COP networks from the three Australian cases are identified: withinorganisation COP; institutional, implementer or technical support; project manager/engineer focussed; and collegial support. Also, there are cross-organisational COPs that organically emerge as a result of people sharing an interest or experience in something significant. Firstly, an institutional network is defined as a strategic group, interested in development of technology innovation within an organisation. This COP principally links business process domain experts with an ICT strategist.

Factors affecting ICT diffusion in Australian construction organisations – the storey from the big end

Our survey findings confirm that 11 factors influence information and communication technology (ICT) diffusion for experienced ICT users. We offer a model that consists of 4 groups of categories: management (M); individual (I); technology (T); and environment (E). Our conclusions reinforce the importance of a coherent ICT diffusion strategy and supportive environment. This requires substantial investment in training and collegial learning support mechanisms. This paper provides an overview of the work undertaken and an analysis of its implications for the construction industry and we provide useful insights that a wide range of construction industry professionals and contractors may find useful.

Best Practice Guide : Generic Overview

The construction industry is a key national economic component. It tends to be at the forefront of cyclic changes in the Australian economy. It has a significant impact, both directly and indirectly, on the efficiency and productivity of other industries. Moreover it affects everyone to a greater or lesser extent; through its products whether they are manifested in the physical infrastructure that supports the operation of the economy or through the built environment that directly impacts on the quality of life experienced by individuals. In financial terms the industry makes one of the largest contributions to the Australian economy, accounting for 4.7 per cent of GDP 1 which was worth over $30B in 20012. The construction industry is comprised of a myriad of small firms, across several important sectors including, o Residential building, o Commercial building, o Building services, o Engineering, o Infrastructure o Facilities Management o Property Development Each sector is typified by firms that have distinctive characteristics such as the number of employees, size and value of contracts, number of jobs, and so forth. It tends to be the case that firms operating in commercial building are larger than those involved in residential construction. The largest contractors are found in engineering and infrastructure, as well as in the commercial building sub-sectors. However all sectors are characterised by their reliance upon sub-contractors to carry out on-site operations. Professionals from the various design consultant groups operate across all of these sectors. This description masks one of the most significant underlying causes of inefficiency in the construction industry, namely its fragmentation. The Construction Industry chapter of the 2004 Australian Year Book3, published by the Australian Bureau of Statistics unmasks the industry’s fragmented structure, typified by the large number of operating businesses within it, the vast majority of which are small companies employing less than 5 people. It identifies over 190,000 firms, of which over 90 percent employ less than 5 people. At the other end of the spectrum, firms employing 20 or more people account for fractionally more than one percent of businesses in the industry.

The efficacy of waste management plans in Australian commercial construction refurbishment projects

Renovation and refurbishment of the existing commercial building stock is a growing area of total construction activity and a significant generator of waste sent to landfill in Australia. A written waste management plan (WMP) is a widespread regulatory requirement for commercial office redevelopment projects. There is little evidence, however, that WMPs actually increase the quantity of waste that is ultimately diverted from landfill. Some reports indicate an absence of any formal verification or monitoring process by regulators to assess the efficacy of the plans. In order to gauge the extent of the problem a survey was conducted of twenty four consultants and practitioners involved in commercial office building refurbishment projects to determine the state of current practice with regard to WMPs and to elicit suggestions with regard to ways of making the process more effective. Considerable variation in commitment to recycling policies was encountered indicating a need to revisit waste minimisation practices if the environmental performance of refurbishment projects is to be improved.