Responsiveness to change by standard-form contract drafters: A case study of the FIDIC White Book

Purpose – The purpose of this paper is to focus on the Fédération Internationale des Ingénieurs-Conseils (FIDIC) White Book standard form of building contract. It tracks the changes to this contract over its four editions, and seeks to identify their underlying causes. Design/methodology/approach – The changes made to the White Book are quantified using a specific type of quantitative content analysis. The amended clauses are then examined to understand the nature of the changes made. Findings – The length of the contract increased by 34 per cent between 1990 and 2006. A large proportion of the overall increase can be attributed to the clauses dealing with “conflict of interest/corruption” and “dispute resolution”. In both instances, the FIDIC drafting committees have responded to international developments to discourage corruption, and to encourage the use of alternative dispute resolution. Between 1998 and 2006, the average length of the sentences increased slightly, raising the question of whether long sentences are easily understood by users of contracts. Research limitations/implications – Quantification of text appears to be particularly useful for the analysis of documents which are regularly updated because changes can be clearly identified and the length of sentences can be determined, leading to conclusions about the readability of the text. However, caution is needed because changes of great relevance can be made to contract clauses without actually affecting their length. Practical implications – The paper will be instructive for contract drafters and informative for users of FIDIC's White Book. Originality/value – Quantifying text has been rarely used regarding standard-form contracts in the field of construction.

Executive project management structure and the challenges acing its adoption in the Nigerian construction industry

Project management (PM) is a globally recognized discipline and has been widely adopted within the construction industry. Despite advancements in the PM discipline, the ineffective traditional management system, typical of the non-executive PM structure, is still widely used in the Nigerian construction industry. The aim of this paper is thus to explore the challenges facing the adoption of the executive PM structure in Nigeria. The paper first assesses the level of growth of PM in Nigeria using UK best practices as a benchmark and identifies the key PM characteristics in the two countries. Focus group interviews were used to collect the primary data for the study and content analysis was used to present the results in a thematic format. The study revealed the key barriers to the adoption of an executive PM structure in Nigeria as a lack of proper awareness, unfavorable policies, skill shortages, the traditional culture of stakeholders and the absence of a regulatory body. It is recommended that the government, as a major player/client in the Nigerian construction industry, should lead the campaign to change the traditional industry approach to project management. This is necessary if construction stakeholders in Nigeria are to be educated and encouraged towards adopting and putting into practice effective PM.

Financial protection in the UK building industry: bonds, retentions and guarantees

Financial Protection in the UK Building Industry provides comprehensive treatment of a complex aspect of construction management which is increasingly important in modern construction contracts. The term 'Financial Protection' refers to refers to the various mechanisms by which funds are made available to ensure the due performance of a partys contractual obligations. This book is based on material written for a research project funded by the Reading Construction Forum. Financial Protection in the UK Building Industry looks at the legal and economic background to the problem of providing financial protection to clients to guard against poor performance and or the insolvency of contractors, consultants and sub-contractors. The inclusion of practical guidance notes and summaries makes this a valuable guide for the construction professional as well as for the researcher. * provides in-depth analysis of financial protection measures * explores the ways in which financial protection can increase efficiency in the industry * financial protection in construction is beset with problems - this book points toward practical solutions

The impact of market and supply configurations on the costs of tendering in the construction industry

The cost of tendering in the construction industry is widely suspected to be excessive, but there is little robust empirical evidence to demonstrate this. It also seems that innovative working practices may reduce the costs of undertaking construction projects and the consequent improvement in relationships should increase overall value for money. The aim of this proposed research project is to develop mechanisms for measuring the true costs of tendering based upon extensive in-house data collection undertaken in a range of different construction firms. The output from this research will enable all participants in the construction process to make better decisions about how to select members of the team and identify the price and scope of their obligations.

Contemporary organizational theory in the management of construction projects

The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there are financial models that can be used to predict failure, they are based on company accounts, which have been shown to be an unreliable source of data. There are models available for cash flow management and forecasting and these could be used as a starting point for managers in rethinking their cash flow management practices. The research reported here has reached the stage of formulating researchable questions for an in-depth study including issues such as how contractors manage their cash flow, how payment practices can be managed without damaging others in the supply chain and the relationships between companies" financial structures and the payment regimes to which they are subjected.

Cash flow management in construction firms

The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there are financial models that can be used to predict failure, they are based on company accounts, which have been shown to be an unreliable source of data. There are models available for cash flow management and forecasting and these could be used as a starting point for managers in rethinking their cash flow management practices. The research reported here has reached the stage of formulating researchable questions for an in-depth study including issues such as how contractors manage their cash flow, how payment practices can be managed without damaging others in the supply chain and the relationships between companies’ financial structures and the payment regimes to which they are subjected.

Autopoietic organization of firm: an illustration for the construction industry

Generally poor productivity, delays, low profitability and exceeded budgets are Common problems in modern construction management, however it seems that a basic obstacle lies far deeper in the understanding of a firm's fundamental mission, its existence. The main objective of this paper therefore is to examine the operational living of a construction firm and by doing that to reveal the key problem or the solution for a construction firm - its organization. A firm as a social system in which interactions between its constitutive components (employees) are surordinated to its maintenance (keeping a system alive) is an autopoietic social system. Two domains of external perturbations are uncovered to which a construction firm has to adapt (market driven and project driven perturbations). Constructed conceptual model of an autopoietic organization is based upon two necessary and sufficient operational domains that a firm has to create in order to become an autopoietic, adaptive social system. The first one is a domain of interactions between employees and other operationally external systems, which is representing an idea-generating domain of interactions. The second is employee's autonomous operational domain, which embodies employee's autonomy and individuality and represents a necessary condition for the establishment of an idea-generating domain. Finally, it is recognized that interactions within these four domains keep a construction firm alive.

The impact of multiskilling on UK construction manpower

The overall significance of the construction and building services sector internationally cannot be overemphasised. In the UK, the industry currently accounts for 10% gross domestic product (GDP) and employs 2 million people, which is more than 1 in 14 of the total workforce. However, regardless of its output (approximately £65 billion annually) there has been a steady decline in the number of trade entrants into the construction and building services sector. Consequently, the available ‘pool of labour’ is inadequately resourced; productivity is low; the existing labour force is overstressed; there is an increase in site deaths; and a long-term labour shortage is envisaged. Today, the evidence seems to suggest that multiskilling is a tentative redress for ameliorating the skills crisis in the construction and building sectors. A 43-year time-series of data on 23 manpower attributes was evaluated as part of this investigation. The developed linear regression models show that the concept of multiskilling obeys the ‘law of diminishing returns'. That is, a weak relation was found between construction output and a three or more combination of manpower attributes. An optimisation model is prescribed for traditional trades.

Lean construction: Arenas of enactment, models of diffusion and the meaning of 'leanness'

The existing literature on lean construction is overwhelmingly prescriptive with little recognition of the social and politicised nature of the diffusion process. The prevailing production-engineering perspective too often assumes that organizations are unitary entities where all parties strive for the common goal of 'improved performance'. An alternative perspective is developed that considers the diffusion of lean construction across contested pluralistic arenas. Different actors mobilize different storylines to suit their own localized political agendas. Multiple storylines of lean construction continuously compete for attention with other management fashions. The conceptualization and enactment of lean construction therefore differs across contexts, often taking on different manifestations from those envisaged. However, such localized enactments of lean construction are patterned and conditioned by pre-existing social and economic structures over which individual managers have limited influence. Taking a broader view, 'leanness' can be conceptualized in terms of a quest for structural flexibility involving restructuring, downsizing and outsourcing. From this perspective, the UK construction industry can be seen to have embarked upon leaner ways of working in the mid-1970s, long before the terminology of lean thinking came into vogue. Semi-structured interviews with construction sector policy-makers provide empirical support for the view that lean construction is a multifaceted concept that defies universal definition.