Risk under performance-based contracting in the UK construction sector

As a method of procuring the services of the built environment, performance-based contracting (PBC) seeks to link the building supplier to longer term commitments than has traditionally been the case in the construction sector. By rewarding the building producer according to the way that building or structure delivers the users' requirements, rather than according to a list of assembled parts, a number of additional risks are taken by contractors, including fitness for purpose, costs and briefing. The extent to which contractors recognize these risks and their methods of dealing with them vary considerably and are influenced by their attitudes towards risk. As the risks associated with PBC are seen as large, uninsurable, and vulnerable to changing client requirements, the majority of respondents would reject the use of PBC as a method of contracting. Nevertheless, PBC may be used under particular conditions, where rewards are deemed sufficient to compensate for the additional risk to the contractor of undertaking work on the basis of a stream of payments paid over the life of a structure depending on the satisfactory performance of the building or as part of a private finance initiative.

Ownership rights in performance-based contracting: A case study of English law

Clients and contractors need to be aware of the project’s legal environment because the viability of a procurement strategy can be vitiated by legal rules. This is particularly true regarding Performance-Based Contracting (PBC) whose viability may be threatened by rules of property law: while the PBC concept does not require that the contractor transfers the ownership in the building materials used to the client, the rules of property law often lead to an automatic transfer of ownership. But does the legal environment really render PBC unfeasible? In particular, is PBC unfeasible because contractors lose their materials as assets? These questions need to be answered with respect to the applicable property law. As a case study, English property law has been chosen. Under English law, the rule which governs the automatic transfer of ownership is called quicquid plantatur solo, solo credit (whatever is fixed to the soil belongs to the soil). An analysis of this rule reveals that not all materials which are affixed to land become part of the land. This fate only occurs in relation to materials which have been affixed with the intention of permanently improving the land. Five fictitious PBC cases have been considered in terms of the legal status of the materials involved, and several subsequent legal questions have been addressed. The results suggest that English law does actually threaten the feasibility of PBC in some cases. However, it is also shown that the law provides means to circumvent the unwanted results which flow from the rules of property law. In particular, contractors who are interested in keeping their materials as assets can insist on agreeing a property right in the client’s land, i.e. a contractor’s lien. Therefore, the outcome is that English property law does not render the implementation of the PBC concept unfeasible. At a broader level, the results contribute to the theoretical framework of PBC as an increasingly used procurement strategy.

Performance-based contracting in the construction sector

Construction procurement is complex and there is a very wide range of options available to procurers. Inappropriate choices about how to procure may limit practical opportunities for innovation. In particular, traditional approaches to construction procurement set up many obstacles for technology suppliers to provide innovative solutions. This is because they are often employed as sub-contractors simply to provide and install equipment to specifications developed before the point at which they become involved in a project. A research team at the University of Reading has developed a procurement framework that comprehensively defines the various options open to procurers in a more fine-grained way than has been known in the past. This enables informed decisions that can establish tailor-made procurement approaches that take into account the needs of specific clients. It enables risk and reward structures to be aligned so that contracts and payment mechanisms are aligned precisely with what a client seeks to achieve. This is not a “one-size-fits-all” approach. Rather, it is an approach that enables informed decisions about how to organize individual procurements that are appropriate to particular circumstances, acknowledging that they differ for each client and for each procurement exercise. Within this context, performance-based contracting (PBC) is explored in terms of the different ways in which technology suppliers within constructed facilities might be encouraged and rewarded for the kinds of innovation sought by the ultimate clients. Examples from various industry sectors are presented, from public sector and from private sector, with a commentary about what they sought to achieve and the extent to which they were successful. The lessons from these examples are presented in terms of feasibility in relation to financial issues, governance, economics, strategic issues, contractual issues and cash flow issues for clients and for contractors. Further background documents and more detailed readings are provided in an appendix for those who wish to find out more.

What is the right balance for performance and isolation with virtualization in HPC?

The use of virtualization in high-performance computing (HPC) has been suggested as a means to provide tailored services and added functionality that many users expect from full-featured Linux cluster environments. The use of virtual machines in HPC can offer several benefits, but maintaining performance is a crucial factor. In some instances the performance criteria are placed above the isolation properties. This selective relaxation of isolation for performance is an important characteristic when considering resilience for HPC environments that employ virtualization. In this paper we consider some of the factors associated with balancing performance and isolation in configurations that employ virtual machines. In this context, we propose a classification of errors based on the concept of “error zones”, as well as a detailed analysis of the trade-offs between resilience and performance based on the level of isolation provided by virtualization solutions. Finally, a set of experiments are performed using different virtualization solutions to elucidate the discussion.

Knowledge intensive processes characteristics and improvement: a banking best practice example

This paper identifies characteristics of knowledge intensive processes and a method to improve their performance based on analysis of investment banking front office processes. The inability to improve these processes using standard process improvement techniques confirmed that much of the process was not codified and depended on tacit knowledge and skills. This led to the use of a semi-structured analysis of the characteristics of the processes via a questionnaire to identify knowledge intensive processes characteristics that adds to existing theory. Further work identified innovative process analysis and change techniques that could generate improvements based on an analysis of their properties and the issue drivers. An improvement methodology was developed to harness a number of techniques that were found to effective in resolving the issue drivers and improving these knowledge intensive processes.

Counting Her Dresses and other plays

Counting Her Dresses and other plays, devised by Lib Taylor, is a short, mixed-media, promenade performance based on theatre writings by Gertrude Stein. Gertrude Stein was an American writer who lived in Paris for most of her adult life and was a significant figure in the development of early twentieth century modernism. She was an artists’ patron and one of the first collectors of paintings by Picasso, Matisse, Cezanne and others. She wrote novels, short stories, poetry and criticism, as well as a number of very short ‘plays’ and opera libretti. Even though her plays are very rarely performed they have been very influential in the development of avant-garde theatre. The performance juxtaposes a soundcape of voices, live performance, an ‘exhibition’ of paintings and mediated images projected onto and across the space to evoke Stein’s sense of theatre as a place of experience and emotion, not as a place of story and action. The performance comprises five theatre fragments which have been combined in a collage that alludes to the experimental art that Stein promoted.

Building communities: reducing energy use in tenanted commercial property

Reducing energy use in tenanted commercial property requires a greater understanding of ‘buildings as communities’. Tenanted commercial properties represent: (1) the divergent communities that share specific buildings; and (2) the organizational communities represented by multi-site landlord and tenant companies. In any particular tenanted space the opportunity for environmental change is mediated (hindered or enabled) through the lease. This discussion draws on theoretical and practical understandings of (1) the socio-legal relationships of landlords, tenants and their advisors; (2) the real performance of engineering building services strategies to improve energy efficiency; (3) how organizational cultures affect the ability of the sector to engage with energy-efficiency strategies; and (4) the financial and economic basis of the relationship between owners and occupiers. The transformational complexity stems from: (1) the variety of commercial building stock; (2) the number of stakeholders (solicitors, investors, developers, agents, owners, tenants and facilities managers); (3) the fragmentation within the communities of practice; and (4) leasehold structures and language. An agenda is proposed for truly interdisciplinary research that brings together both the physical and the social sciences of energy use in buildings so that technological solutions are made effective by an understanding of the way that buildings are used and communities behave.

Surviving Objects

Surviving Objects (2012) is a devised multi-media practice-as-research performance based on extensive interviews conducted with my elderly mother and recorded on a hand-held device. Our conversations concern her experiences as a child refugee following violent deportation by the Soviet Army from Eastern Poland to Siberia (1941), and her subsequent route, via Persia, to a British-run refugee camp in Northern Rhodesia, where she remained for 6 years before arriving in the UK. In order to aid my mother’s reflections, our recorded conversations focus on the objects remaining from that period in her life – my ‘inheritance’. The material presence of this handful of objects is central to the ninety-minute performance. Surviving Objects constitutes my attempt to locate a theatrical form through which to root/re-route this engagement with my mother’s marginalised voice. The end-on performance haptically navigates themes of intimacy and failing memory – navigates, indeed, my constantly shifting relationship with my mother. It searches for new cross-medial pathways along which her experience, and my experience of her, can play-out. Surviving Objects involves: 1. live performance (two silent female actors handling/presenting my mother’s objects); 2. Film (two synchronously-playing, large-scale projections exploring the objects by means of a highly-magnifying macro lens); 3. Pre-recorded sound (my mother’s voice, taken from our recorded interviews, which were conducted in Polish, with my own verbal contribution meticulously editorially excised from those conversations); 4. My translation of her stories (appearing periodically as written text that ‘overlays’ - rather than sub- or surtitles - the projected imagery).

Neural basis of the undermining effect of monetary reward on intrinsic motivation

Contrary to the widespread belief that people are positively motivated by reward incentives, some studies have shown that performance-based extrinsic reward can actually undermine a person's intrinsic motivation to engage in a task. This “undermining effect” has timely practical implications, given the burgeoning of performance-based incentive systems in contemporary society. It also presents a theoretical challenge for economic and reinforcement learning theories, which tend to assume that monetary incentives monotonically increase motivation. Despite the practical and theoretical importance of this provocative phenomenon, however, little is known about its neural basis. Herein we induced the behavioral undermining effect using a newly developed task, and we tracked its neural correlates using functional MRI. Our results show that performance-based monetary reward indeed undermines intrinsic motivation, as assessed by the number of voluntary engagements in the task. We found that activity in the anterior striatum and the prefrontal areas decreased along with this behavioral undermining effect. These findings suggest that the corticobasal ganglia valuation system underlies the undermining effect through the integration of extrinsic reward value and intrinsic task value.

Effect of breed, gender, housing system and dietary crude protein content on performance of finishing beef cattle fed maize-silage-based diets

Maize silage-based diets with three dietary crude protein (CP) supplements were offered to 96 finishing cattle of contrasting breed (Holstein Friesian (HF) v. Simmental x HF (SHF)) and gender (bull v. steer) housed in two types of feeding system (group fed v. individually fed). The three protein supplements differed either in CP or protein degradability (degradable (LUDP) v. rumen undegradable (HUDP)) and provided CP concentrations of 142 (Con), 175 (LUDP) and 179 (HUDP) g/kg dry matter (DM) respectively, with ratios of degradable to undegradable of 3.0, 1.4 and 0.9:1 for diets Con, LOP and HUDP respectively. DM intakes were marginally higher (P = 0. 102) for LOP when compared with Con and HOP Rates of daily live-weight gain (DLWG) were higher (P = 0.005) in LUDP and HOP when compared with Con. HF had higher DM intakes than SHF although this did not result in any improvement in HF DLWG. Bulls had significantly better DM intakes, DLWG and feed conversion efficiency than steers. Conformation scores were better in SHF than HF (P < 0.001) and fat scores lower in bulls than steers (p < 0.001). There was a number of first order interactions established between dietary treatment, breed, gender and housing system with respect to rates of gain and carcass fat scores.