A needs based methodology for classifying construction clients and selecting contractors : comment

This note is a comment on Chinyio, E.A., Olomolaiye, P.O., Kometa, S.T. and Harris, F.C. (1998) A needs based methodology for classifying construction clients and selecting contractors, Construction Management and Economics, 16(1), 91± 8, which describes research aimed at classifying clients by their needs rather than by the traditional public/private/developer approach. The paper also proposes a new method of selecting contractors by matching clients’ needs to contractors’ ability to satisfy them. The note offers constructive criticism of some aspects of the analysis.

Benchmarking occupational health and safety performance of Australian construction companies.

It is mandatory for Australian construction companies to provide a safe working environment for their workers and sub-contractors. Consequently, occupational health and safety (OHS) is a major issue for construction firms mainly due to the fear of prosecution. The recent introduction of Zero Tolerance by the Victorian government WorkCover Authority provided even higher OHS safety standards for the construction industry. This has placed a increased burden on construction companies especially small firms that are not in a position of financial strength.

The size of the companies has been found to be a major contributing factor to the OHS performance of construction contractors. This research is based on benchmarking study of 44 construction companies in Victoria, Australia. The results show that the major factors influencing safety performance were; company size, and management commitment to OHS.

Measuring the occupational health and safety performance of construction companies in Australia

Many facility managers are now required to deal directly with small firms engaged in the maintenance, alteration and cleaning of physical infrastructure. Increasingly the performance of small firms reflects on the manager of the facility, and so an understanding of their operation is required. It is mandatory for all firms to provide a safe working environment for their workers and subcontractors. Consequently, occupational health and safety (OHS) is a major issue for companies mainly due to the fear of prosecution. The introduction of Zero Tolerance by the Victorian government WorkCover Authority in 1999 provided even higher OHS safety standards for the construction industry. This has placed an increased burden on construction and maintenance companies especially small firms that are not in a position of financial strength. The size of the company has been found to be a major contributing factor to the OHS performance of construction contractors. This research is based on a benchmarking study of 44 construction companies in Victoria, Australia. The results show that the major factors influencing safety performance were; company size, and management and employee commitment to OHS.

Market effects on forecasting construction prices using vector error correction models

Construction price forecasting is an essential component to facilitate decision-making for construction contractors, investors and related financial institutions. Construction economists are increasingly interested in seeking a more analytical method to forecast construction prices. Although many studies have focused on construction price modelling and forecasting, few have considered the impacts of large-scale economic events and seasonality. In this study, an advanced multivariate modelling technique, namely the vector correction (VEC) model with dummy variables, was employed. The impacts of global economic events and seasonality are factored into the model to forecast the construction price in the Australian construction market. Research findings suggest that both long-run and dynamic short-term causal relationships exist among the price and levels of supply and demand in the construction market. These relationships drive the construction price and supply and demand, which interact with one another as a loop system. The reliability of forecasting models was examined by the mean absolute percentage error (MAPE) and the Theil's inequality coefficient U tests. The test results suggest that the conventional VEC model and the VEC model with dummy variable are both acceptable for forecasting the construction price, while the VEC model considering external impacts achieves higher prediction accuracy than the conventional VEC model. © 2014 © 2014 Taylor & Francis.

2nd generation concrete construction: carbon footprint accounting

Purpose – Construction contractors and facility managers are being challenged to minimize the carbon footprint. Life cycle carbon‐equivalent (CO2‐e) accounting, whereby the potential emissions of greenhouse gases due to energy expenditure during construction and subsequent occupation of built infrastructure, generally ceases at the end of the service life. However, following demolition, recycling of demolition waste that becomes incorporated into 2nd generation construction is seldom considered within the management of the carbon footprint. This paper aims to focus on built concrete infrastructure, particularly the ability of recycled concrete to chemically react with airborne CO2, thereby significantly influencing CO2‐e estimates.

Design/methodology/approach – CO2‐e estimates were made in accordance with the methodology outlined in the Australian National Greenhouse Accounts (NGA) Factors and were based on the energy expended for each life cycle activity from audited records. Offsets to the CO2‐e estimates were based on the documented ability of concrete to chemically react with airborne carbon dioxide (“carbonation”) and predictions of CO2 uptake by concrete and recycled concrete was made using existing predictive diffusion models. The author's study focused on a built concrete bridge which was demolished and recycled at the end of the service life, and the recycled concrete was utilized towards 2nd generation construction. The sensitivity of CO2‐e and carbonation estimates were tested on several different types of source demolition waste as well as subsequent construction applications using recycled concrete (RCA). Whole‐of‐life CO2‐e estimates, including carbonation of RCA over the 1st and 2nd generations, were estimated and contrasted with conventional carbon footprints that end at the conclusion of the 1st generation.

Findings – Following demolition, CO2 capture by RCA is significant due to the more permeable nature of the crushed RCA compared with the original built infrastructure. RCA also has considerably greater exposed surface area, relative to volume, than a built concrete structure, and therefore more highly exposed surface to react with CO2: it therefore carbonates more comprehensively. CO2‐e estimates can be offset by as much as 55‐65 per cent when including the contribution of carbonation of RCA built within 2nd generation infrastructure. Further offsets are achievable using blended fly ash or slag cement binders; however, this study has focused on concrete composed of 100 per cent OPC binders and the effects of RCA.

Originality/value – Construction project estimates of life cycle CO2‐e emissions should include 2nd generation applications that follow the demolition of the 1st generation infrastructure. Life cycle estimates generally end at the time of demolition. However, by incorporating the recycled concrete demolition waste into the construction of 2nd generation infrastructure, the estimated CO2‐e is significantly offset during the 2nd generation life cycle by chemical uptake of CO2 (carbonation). This paper provides an approach towards inclusion of 2nd generation construction applications into whole‐of‐life estimates of CO2‐e.

Attitudinal and behavioural approaches to improving waste management on construction projects in Australia: Benefits and limitations

This research aims to understand the attitudes and behaviours of stakeholders towards waste management and consequently identify ways of improving waste management practices in construction projects. Semi-structured interviews were conducted. The findings reveal that most of the decisions in construction projects are based on their financial returns unless there is a special requirement to comply with Green Star or any other sustainable building rating system. Even though there is a trend towards environment-friendly construction, contractors are favourable towards methods involving financial incentives. Results also indicate that private developers are more price-driven compared with government clients. Findings reveal the necessity of enforcing legislation to improve waste management practices until such practices become culturally embedded in organizations across the supply chain. Similarly, end users' motivation towards waste management was also identified as a key to encouraging stakeholders of construction projects and improving their attitudes and behaviours towards waste management practices.

International market selection model for large Chinese contractors

An increasing number of construction contractors are actively participating in international markets. One of the most fundamental issues confronting contractors moving offshore is where to do business. Although international market selection is a much studied topic, the market choices made by construction firms have attracted little attention. This paper aims to identify factors that influence internationalmarket selection and to develop an international market selection model for construction firms. The market entry choices of 39 large international Chinese contractors across 87 countries were investigated through logistic regression analysis. The results indicate that international contractors prefer to enter countries with large market potential, small culture distance, and, surprisingly, high country risk and high competitive intensity. Moreover, large, experienced contractors are more willing to compete in international markets. Contrary to generally accepted belief, geographic distance is not revealed to have any significant influence on international market selections by Chinese contractors. This paper will be of interest to contractors considering international market selection as part of their global expansion strategy.

Critical operational management in international construction

The construction activities of a contractor may physically take place in the home country or overseas, and the latter, particularly of a large company, has an increasing proportion with the globalisation. Globalisation of the construction industry and its market is a trend in every country, Which increases the opportunities of both international construction, and competition or collaboration with foreign construction companies. International construction project management is undertaken in a complicated circumstance, and requires a synthetic management approach. This research aims to establish a primary framework for the critical operational management in achieving international construction projects in a novel construction market.

A process model to support design and construction

This research is focused on developing a highly detailed understanding of current organisational interactions and information flows leading to a definition of the process model for the environment into which information and communication technology (ICT) applications will be placed. The authors of this paper propose a theoretical process model and the associated detailed information structure which reflects the complexity of information, stakeholder interaction and intellectual property concerns which are currently seen in the construction industry. This is being developed and tested against a field study renovation project. The field study project identifies information flows and interactions between stakeholders such as designers, project managers, clients, contractors, subcontractors and suppliers. The process model which is being established shows very high levels of complexity in dependencies and interdependencies between implicit and explicit information within the project design and construction teams. Without an understanding of these detailed and complex process interactions, proposals for the application of ICT to the construction industry will not reflect the requirements of those for whom they are being developed.

Building a symbiotic relationship between academia and industry: expectations and observations of construction management graduates

Construction management graduates are employed in job functions such as building and civil engineering contracting, construction and project management consulting, client organisations (public and private) and developer organisations. Considering the diversity of employment opportunities for construction management graduates, they increasingly need to have a portfolio of skills to work effectively and efficiently with other professions in the industry. In exploring this, the objective of the research presented in this paper is to determine if construction management graduates are meeting the expectations of their employers. In considering the competitive forces impacting the construction industry, the authors of this paper sought to establish whether construction managers are able to identify those key skills needed for the future success of the industry. In turn, this information is considered critical for the successful formulation of curricula. Therefore, to establish whether construction management graduates are meeting the expectations of contractors, a survey was distributed to managers to establish their expectations and observations of recent graduates. The survey results indicate that managers are generally satisfied with the skill level of graduate students. The survey also highlighted several important skills that were considered to be lacking in graduates. cknowledging that there is always a need to improve the skill level of graduates, the authors propose a number of recommendations that are considered to improve the content construction management curricula.

Height and construction costs of residential buildings in Hong Kong and Shanghai

A widely recognised theme of construction economics suggests that the cost of construction per square metre increases as building height rises. However, after many years, research conducted regarding the height and cost issue have established a classic relationship between those two, well known as a U-shaped curve. This paper describes the study of height-cost relationship of high-rise residential buildings in Shanghai and Hong Kong. Initial findings indicated that the curved relationships of height-cost of residential buildings in Shanghai and Hong Kong exhibit different profiles. The differences suggest that, Hong Kong contractors have more expertise in multi-storey and high-rise construction than contractors in Shanghai. The dissimilarities also imply that different sets of criteria should be applied in the judgement of height affects cost in different locations. Many factors could be contributors, such as the history and experience in constructing residential high-rise buildings, location, linkage and relationships to the neighbourhood provinces, design and construction regulations, and government policy on residential construction.

Investigating relationships of construction prices in Australia using cointegration analysis

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Finds of this study reveal that the economic system in which the construction industry participants operate is characterized by a highly competitive, integrated marketplace, Especially in Melbourne and Sydney. But exclude Northern Territory and Queensland. Furthermore, the results of long term relationships estimation suggest that there are 15 pairs of regional construction prices have long term equilibrium relationships. Additionally, the causalities and diffusion among the construction price indices in six states and two territories of Australia are estimated in this study. These outcomes suggest that causal links between regions mainly exist among adjoining states.

An economic analysis of construction industries producer prices in Australia

Research on construction prices is significant for contractors and traders. A comprehensive understanding of construction prices may influence crucial decisions in business operation and arbitrage activities. This study focuses on the cointegration relationships of regional construction prices in Australia by using a range of econometric techniques including the stationarity test, the Engle-Granger cointegration approach and error correction model. The cointegration relationships amongst the regional construction prices are detected in this study. The application of the Engle-Granger cointegration approach examines the long run equilibrium relationships within the regional markets, and the error correction models explore the short run disequilibrium relationships. Results of this study suggest that the economic system in which construction industry participants operate is characterised by a highly competitive integrated marketplace. Furthermore, the causalities and diffusion patterns among the construction price indices in six states and two territories of Australia are drawn by the cointegration analysis. These outcomes reveal a pattern of diffusion paths and network linkages among the six states and two territories, and then expose the regional price linkages.

The impact of client attitudes on the selection of contractors

This research is concerned with identifying prequalification criteria that both clients and contractors believe are good indicators of future construction performance. Criteria used in the past have been developed by clients in a largely idiosyncratic manner with little or no consultation with the contractors affected. The methodology chosen for the research was a survey which probed stakeholder attitudes to commonly used prequalification criteria. This was carried out via a postal questionnaire involving contactors and clients across Australia. The data was analysed using Discriminant Analysis, which is a multivariate statistical approach that determines the differences between groups. The research is structured around 39 criteria that were developed as part of a whole-of–government task force into best practice in procurement. The findings identified the most important criteria from both a client’s perspective, and a contractor’s perspective. The purpose was to discover if those differences reduce the effectiveness of the procurement process. This paper contributes to a more clarified understanding of the impact or contrasting views between the stakeholders involved in the prequalification process. This work is innovative because it is one of a few pieces of research that showed that clients and contractors do actually have divergent opinions on the importance of some criteria currently relied upon in the decision making process. The most important prequalification criteria are identified and possible reasons for these differences are discussed.

Cost and time overruns in commercial construction projects : an Australian study

Cost and schedule are two of most important performance indicators of construction projects. Cost escalation and time overruns are typically associated with poor management practices. Cost overruns and delays have huge impacts on construction projects in relation to the costs of a project, the reputation of the parties involved, and the satisfaction of the final product. Therefore, it is imperative to understand the causes of cost and time overruns so that mitigation measures can be set in place. A group of industry professionals in South Australia were surveyed on their perceptions of the factors contributing towards the cost and time overruns in commercial construction projects. The results showed that timeliness of decision making is ranked as the top factor contributing towards delays whereas problems with design is perceived as most influential to the cost overruns. In addition, the questionnaire survey found that different parties, i.e. clients, contractors and consultants have different perceptions on the impacts of these factors. Similarly, the structural frame stage was considered the most critical stage for controlling the time and cost performance during the construction process. Implications are discussed.