Comparative costs of the commercial process in different construction procurement methods

The commercial process in construction projects is an expensive and highly variable overhead. Collaborative working practices carry many benefits, which are widely disseminated, but little information is available about their costs. Transaction Cost Economics is a theoretical framework that seeks explanations for why there are firms and how the boundaries of firms are defined through the “make-or-buy” decision. However, it is not a framework that offers explanations for the relative costs of procuring construction projects in different ways. The idea that different methods of procurement will have characteristically different costs is tested by way of a survey. The relevance of transaction cost economics to the study of commercial costs in procurement is doubtful. The survey shows that collaborative working methods cost neither more nor less than traditional methods. But the benefits of collaboration mean that there is a great deal of enthusiasm for collaboration rather than competition.

The impact of contractor selection method on transaction costs: a review

The basic premise of transaction-cost theory is that the decision to outsource, rather than to undertake work in-house, is determined by the relative costs incurred in each of these forms of economic organization. In construction the "make or buy" decision invariably leads to a contract. Reducing the costs of entering into a contractual relationship (transaction costs) raises the value of production and is therefore desirable. Commonly applied methods of contractor selection may not minimise the costs of contracting. Research evidence suggests that although competitive tendering typically results in the lowest bidder winning the contract this may not represent the lowest project cost after completion. Multi-parameter and quantitative models for contractor selection have been developed to identify the best (or least risky) among bidders. A major area in which research is still needed is in investigating the impact of different methods of contractor selection on the costs of entering into a contract and the decision to outsource.

Financing road transport infrastructure

In the UK, public expenditure on transport infrastructure is nearly £6 billion for the past few years. Over £500 million per year were spent on bridge assessment and strengthening and reducing the backlog of road requiring maintenance. A further £200 million a year will be spent on keeping the safe operation of the network and efficiently through day to day maintenance, lighting and signing . The Department of Transport is planning to extend private sector experience in road management and operation by introducing Design, Build, Finance and Operate (DBFO) This paper investigates the different ways of financing road transport infrastructure including road pricing, private finance in transport infrastructure, the role of the private sector, Design, Build, Finance and Operate (DBFO) schemes, the benefits and problems of such schemes. The paper considers planning gain as a means of financing transport infrastructure with examples of developers to fund link road building and improvements to the local planning system

The business case development process in the delivery of NHS infrastructure

There is a lack of knowledge base in relation to experiences gained and lessons learnt from previously executed National Health Service (NHS) infrastructure projects in the UK. This is in part a feature of one-off construction projects, which typify healthcare infrastructure, and in part due to the absence of a suitable method for conveying such information. The complexity of infrastructure delivery process in the NHS makes the construction of healthcare buildings a formidable task. This is particularly the case for the NHS trusts who have little or no experience of construction projects. To facilitate understanding a most important aspect of the delivery process, which is the preparation of a capital investment proposal; steps taken in developing the business case for an NHS healthcare facility are examined. The context for such examination is provided by the planning process of a healthcare project, studied retrospectively. The process is analysed using a social science based method called ‘building stories’, developed at the University of California-Berkeley. By applying this method, stories or narratives are constructed around the data captured on the case study. The findings indicate that the business case process may be used to justify, rather than identify, trusts’ requirements. The study is useful for UK public sector clients as well as consultants and professionals who aim to participate in the delivery of healthcare infrastructure projects in the UK.

Dynamic correlations across REIT sub-sectors

The issue of whether Real Estate Investment Trusts should pursue a focused or diversified investment strategy remains an ongoing debate within both the academic and industry communities. This paper considers the relationship between REITs focused on different property sectors in a GARCH-DCC framework. The daily conditional correlations reveal that since 1990 there has been a marked upward trend in the coefficients between US REIT sub-sectors. The findings imply that REITs are behaving in a far more homogeneous manner than in the past. Furthermore, the argument that REITs should be focused in order that investors can make the diversification decision is reduced.

Dynamic correlations between REIT sub-sectors and the implications for diversification

The issue of whether Real Estate Investment Trusts (REITs) should pursue a focused or diversified investment strategy remains an ongoing debate within both the academic and industry communities. This article considers the relationship between REITs focused on different property sectors in a Generalized Autoregressive Conditional Heteroscedasticity-Dynamic Control Correlation (GARCH-DCC) framework. The daily conditional correlations reveal that since 1990 there has been a marked upward trend in the coefficients between US REIT sub-sectors. The findings imply that REITs are behaving in a far more homogeneous manner than in the past. Furthermore, the argument that REITs should be focused in order that investors can make the diversification decision is reduced.

Psychophysics of emotion: the QUEST for emotional attention

To investigate the mechanisms involved in automatic processing of facial expressions, we used the QUEST procedure to measure the display durations needed to make a gender decision on emotional faces portraying fearful, happy, or neutral facial expressions. In line with predictions of appraisal theories of emotion, our results showed greater processing priority of emotional stimuli regardless of their valence. Whereas all experimental conditions led to an averaged threshold of about 50 ms, fearful and happy facial expressions led to significantly less variability in the responses than neutral faces. Results suggest that attention may have been automatically drawn by the emotion portrayed by face targets, yielding more informative perceptions and less variable responses. The temporal resolution of the perceptual system (expressed by the thresholds) and the processing priority of the stimuli (expressed by the variability in the responses) may influence subjective and objective measures of awareness, respectively.

The Léger ruling as another example of the ECJ’s disappointingly reticent approach to the protection of the rights of LGB persons under EU law

In the 1980s, in the midst of the AIDS epidemic, many countries introduced lifetime bans on blood donations by men who had sexual relations with men (MSM). These blanket bans have, recently, begun to be challenged and, as a result, many countries have either relaxed them or completely abolished them. The case under examination (Léger ) is another instance of questioning the legality of such a ban. In particular, in this case, the European Court of Justice was called on to rule on whether a measure such as the French lifetime exclusion from blood donation of the MSM population that was at issue before the referring court is contrary to EU law. The Court ruled that although discriminatory on the ground of sexual orientation, such a ban may be justified in certain circumstances, and left it to the national court to make the final decision. This article seeks to analyse the case and to explain why, in the author’s view, the Court can be accused of—once more—not going far enough in the protection of lesbian, gay and bisexual (LGB) rights.

How big is your neighbourhood? Spatial implications of market participation among Filipino smallholders

We present a procedure for estimating two quantities defining the spatial externality in discrete-choice commonly referred to as 'the neighbourhood effect'. One quantity, the propensity for neighbours to make the same decision, reflects traditional preoccupations; the other quantity, the magnitude of the neighbourhood itself, is novel. Because both quantities have fundamental bearing on the magnitude of the spatial externality, it is desirable to have a robust algorithm for their estimation. Using recent advances in Bayesian estimation and model comparison, we devise such an algorithm and illustrate its application to a sample of northern-Filipino smallholders. We determine that a significant, positive, neighbourhood effect exists; that, among the 12 geographical units comprising the sample, the neighbourhood spans a three-unit radius; and that policy prescriptions are significantly altered when calculations account for the spatial externality.

Relative values: residential leasehold reform in England and Wales - valuation of lease extension and enfranchisement

This research report was commissioned by the DETR and examines valuation issues relating to leasehold enfanchisement and lease extension - the right for flat owners to collectively purchase the freehold or buy a longer lease. The two factors examined examined in detail are the yield to be applied when capitalising the ground rent and the relative value of leases with a relatively short period left to run as against the value of the freehold or a new long lease, which determines the level of 'marriage level'. The research report will be of interest to all those involved in the valuation of residential leasehold property and those with an interest in legislative proposals for leasehold reform.