Evaluation of construction contractor performance: a critical analysis of some recent research

International comparisons of construction industry performance are notoriously difficult. A recent comparative study, extensive in scope and using an innovative approach, is reviewed and questions raised regarding various aspects of the methodology adopted, the validity of the conclusions drawn and manner in which outcomes were reported. Particular areas of concern include the unequivocal statement of conclusions that are based on a small sample, and the use of data from that sample that are, in fact, no more than estimates of project performance. Attention is drawn to the limitations of the research reported and the reliability of the methods used, and the data gathered is examined.

Client and contractor attitudes to prequalification

The article discusses the prequalification criteria that are believed to be good indicators of future construction performance by both clients and contractors. A crucial task in contractor prequalification is to establish a set of decision criteria through which the capabilities of contractors are measured and judged. The use of universal prequalification criteria seems to be a widely researched utopian" ideal. Standard prequalification criteria provides more consistency across the industry.

A comparison of client and contractor attitudes to prequalification criteria

Contractor prequalification is concerned with assessing the likelihood of contractors meeting client and project requirements. The criteria used in this assessment have been developed in a largely idiosyncratic manner to date and with little or no consultation with the contractors affected. As a result, contractors are faced with a variety of calls for information by prequalifiers, the collection of which can be quite costly. This is leading to expensive duplication of effort by contractors in providing what is often similar information but in different formats. Furthermore, previous research has shown that the benefits of the information to prequalifiers are uncertain - many prequalifiers analyse the information in only a cursory manner. What is needed is some form of cost-benefit analysis to be carried out which will establish a common set of criteria for all to use.

As a precursor to this, the research described in this paper compares the different attitudes of both prequalifiers and contractors to prequalification criteria commonly in use in the Australian building industry. This was carried out via a postal questionnaire involving 49 contractors and 15 prequalifiers across Australia. The respondents were divided into three groups; (1) contractors doing work for mainly private sector clients and (2) contractors doing work for mainly private sector clients, and (3) construction prequalifiers (clients).

The results show that both clients and contractors have divergent opinions on the importance and value of the criteria in use. The possible reasons for these differences are discussed and the likely implications for future research in the topic.

Contractor quantity surveyor using ERP system in cost reporting

Quantity surveying is the key profession in cost management for construction business. However, construction industry is notorious in using information technology that makes reporting inefficient. A construction company in Hong Kong has been using an enterprise resource planning system as the information communication technology in management and cost reporting backbone since 2003. This paper investigates if such system represents an efficient tool for quantity surveyors and any intervening actions are required to enhance its efficiency. In doing so, a team of surveyors interviewed and then the soft system methodology was used as the research approach to depict the situation. This leads to the improvement needs and list of actions. Participants have prioritized working closely with top/senior management to design a proper report format; avoiding unnecessary adjustments and undue influence to reporting, and ensuring accurate data as the top three critical actions crucial for reliable cost reporting.

The effectiveness of the bills of quantities in Australia

The research aimed to explore if the information in the Australian Bill of Quantities (BOQ) was presented in a manner that could be utilized effectively by the end user. Populations surveyed; contractor, subcontractor and quantity surveyor, agree that the BOQ is a document that should be retained and would be used if produced. The adequacy of information was found to be in question by the users of the BOQ. The locational information is not adequate for its purpose. The quantities are neither located in the structure nor broken down into zones so useful for material ordering, daily work production management and cost management tasks. This information provided was requested to be supplemented by the inclusion of drawings, drawing  numbers and the zonal breakdown of quantities in a smaller number of BOQ items. End users concluded that the current information contained within the BOQ is efficient but not effective. Not one participant — quantity surveyors, contractors and subcontractors — believed they were adequately consulted or represented in production of the latest StandardMethod of Measurement (SMM). It is concluded that there is a need for end-users such as contractors and subcontractors to have greater input into the design, development and implementation of the Australian SMM. The resultant “consensus document” could then be an effective communication tool that is used for estimating, planning, purchasing and site management.

Case study of demolition costs of residential buildings

Building demolition is one of the most common activities in the construction industry. Several demolition techniques are commonly used, including mechanical demolition, deconstruction and hybrid demolition. Although deconstruction has been advocated for its environmentally friendly approaches, the cost comparison of a demolition project under different techniques is rarely researched. In this paper, the cost of a demolition project is broken down to input and output costs, which are further broken down to more countable sections. Through an empirical study in Victoria, Australia, project costs of mechanical demolition, hybrid demolition and deconstruction are investigated. It is found that deconstruction has the greatest profitability among the three techniques. Hybrid demolition, which is the actual technique adopted by the contractor, has a slightly lower profit, and mechanical demolition is the most expensive. Although deconstruction has the best overall economical performance, the small extra gain comes with increased complexity and risk that deters demolition contractors from its attempt. It is found in the paper that an optimized demolition project strategy exists between hybrid demolition and deconstruction with the greatest profitability among various building demolition techniques.

A framework for material management in the building demolition industry

Conventional mechanical building demolition produces numerous solid wastes, most of which are sent to landfill directly and severely degrade the living environment. Just-in-time building demolition has been developed recently with a management strategy to facilitate waste reuse. Procurement management plays a significant role in just-in-time building demolition. In particular, the demolition tendering selection needs to consider contractors' environmental performance in addition to project costs. Moreover, the flow of building materials in a demolition project may be regarded as a supply chain involving the building owner, demolition contractor and material demanders. This paper develops a framework for salvaged materials management in the emerging demolition industry. The research is to promote the recycling and reuse of building demolition materials in order to achieve better environmental and financial performance for building demolition projects.

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.

Design management in a design-construct organization

As clients have become more aware and demanding of the construction industry, they are also less tolerant of the management of its problems and the risks involved in the delivery of major projects. Identification and allocation of risk is one of the most critical processes in the early stages of project development. Often it is the deciding factor in the selection of the building process and of the type of procurement method adopted to manage the various project risks. The emergence of different forms of procurement, and in particular, design-construct and novation, requires the design construct contractor to not only accept the risks associated with the construction of the works, but also of the design management during the design development of the project. With the increasing requirement for design-construct contractors to balance the cost management issues and design development through the various stages, the role of the design manager as information manager has evolved and expanded in importance. This paper presents a case study of design management within a design-construct organization on a large residential apartment project. It identifies and analyses issues concerned with the organization, responsibilities, relationships and stages of development in a typical design-construct project.

A qualitative investigation of the safety culture of two organisations

A qualitative investigation of the safety culture of two contrasting organisations was undertaken. The research sought to identify categories and themes in the data that highlighted similarities and differences in salient safety issues for employees from the two organisations. The participants were 131 employees attending safety training sessions in a large national retail organisation and a heavy manufacturing organisation. Unobtrusive observation was used to collect data during the safety training sessions. Thematic analysis was used to identify emergent categories and themes from the data. Ten broad categories with relevant themes were identified and provided some insight into the safety culture of the two organisations, with both similarities and differences being evident. Participants from both organisations mentioned management issues in relation to safety, discussed the impact of employee risk- taking behaviour on safety, made reference to a blame culture, and raised integrity issues regarding safety. For the manufacturing organisation, a number of themes focused on contractor issues, while in the retail organisation, several themes highlighted differences in safety attitudes between head office and store-level employees.

Building information modelling project decision support framework

Building Information Modelling (BIM) is an information technology [IT] enabled approach to managing design data in the AEC/FM (Architecture, Engineering and Construction/ Facilities Management) industry. BIM enables improved interdisciplinary collaboration across distributed teams, intelligent documentation and information retrieval, greater consistency in building data, better conflict detection and enhanced facilities management. Despite the apparent benefits the adoption of BIM in practice has been slow. Workshops with industry focus groups were conducted to identify the industry needs, concerns and expectations from participants who had implemented BIM or were BIM “ready”. Factors inhibiting BIM adoption include lack of training, low business incentives, perception of lack of rewards, technological concerns, industry fragmentation related to uneven ICT adoption practices, contractual matters and resistance to changing current work practice. Successful BIM usage depends on collective adoption of BIM across the different disciplines and support by the client. The relationship of current work practices to future BIM scenarios was identified as an important strategy as the participants believed that BIM cannot be efficiently used with traditional practices and methods. The key to successful implementation is to explore the extent to which current work practices must change. Currently there is a perception that all work practices and processes must adopt and change for effective usage of BIM. It is acknowledged that new roles and responsibilities are emerging and that different parties will lead BIM on different projects. A contingency based approach to the problem of implementation was taken which relies upon integration of BIM project champion, procurement strategy, team capability analysis, commercial software availability/applicability and phase decision making and event analysis. Organizations need to understand: (a) their own work processes and requirements; (b) the range of BIM applications available in the market and their capabilities (c) the potential benefits of different BIM applications and their roles in different phases of the project lifecycle, and (d) collective supply chain adoption capabilities. A framework is proposed to support organizations selection of BIM usage strategies that meet their project requirements. Case studies are being conducted to develop the framework. The results of the preliminary design management case study is presented for contractor led BIM specific to the design and construct procurement strategy.

Occupational health provision in UK universities

Background Very few studies have been done of occupational health provision across an entire employment sector and universities are particularly understudied. The British government published updated guidance on university occupational health in 2006.

Aim To describe the occupational health services to all the universities in the UK.

Methods All 117 universities in the UK were included. Detailed surveys were carried out in 2002, 2003 and 2004 requesting self-completed information from each university occupational health service. This paper presents information on general characteristics of the service, staffing, services provided and outcome reporting.

Results There was variation in the type of occupational health provision; half the universities had an in-house occupational health service, 32% used a contractor, 9% relied on the campus primary care or student health service and 9% had ad hoc or no arrangements. In all, 93 of the 117 (79%) universities responded to the detailed questionnaire, the response rate being higher from in-house services and from larger universities. There was a wide variation in staffing levels but the average service was small, staffed by one full-time nurse with one half-day of doctor time per week and a part-time clerical or administrative member of staff. A range of services was provided but, again, there was wide variation between universities.

Conclusions It is unclear if the occupational health provision to universities is proportional to their needs. The wide variation suggests that some universities may have less adequate services than others.

The use of contracting out : a case study of decision-making and organisational learning in local government

One objective of government is to provide services at least cost whilst maintaining or improving service quality. While this may be an important objective, questions are being asked whether services can be provided more efficiently and effectively by the private rather than by the government sector. The shift of service provision from the public to the private sector is known as outsourcing or contracting out. The objective in this study is to critically examine whether the contracting out of services by local government to the private sector is an efficient management practice.

The contracting out of Parks and Grounds Maintenance services for the City of Kingston in the State of Victoria, Australia, is used as an exploratory case study to identify the variables associated with management decision-making in the contracting out process. Factors relevant to the contracting out decision such as the criteria used in selecting a contractor; the evaluation of a contractor’s performance; and any subsequent changes to management practice relating to the contracting out of the services are identified and discussed.

Political forces were found to be an important consideration in the initial contracting out decision, and the selection of a contractor was influenced by the potential to avoid costs. It was also found that under-bidding and associated cost /profit constraints lead to contractors engaging in non-sustainable environmental practices which resulted in the degradation of the local government’s Parks and Gardens assets. A sustainable asset management philosophy as opposed to an avoidable costs approach now underpins the contracting out process to ensure the preservation of such assets. Further, administrative processes have been revised to make tender specifications more prescriptive, critical components of services have been brought back in-house, and management practices have been amended so that a greater degree of control is exercised over contractors’ activities.