The distribution of construction project bids

This paper describes an analysis of construction project bids to determine (a) the global distribution and (b) factors influencing the distribution of bids. The global distribution of bids was found, by using a battery of ll test statistics, to be approximated by a three-parameter log normal distribution. No global spread parameter was found. A multivariate analysis revealed the year of tender to be the major influencing factor. Consideration of the construction order, tender price and output indices lead to the conclusion that distributional spread reflected the degree of difference in pricing policies between bidders and the skewness of the distributions reflected the degree of competition. The paper concludes with a tentative model of the causal relationships between the factors and distributional characteristics involved.

The impact of construction organisations’ learning capabilities on collaborative projects

Dynamic capability theory asserts that the learning capabilities of construction organisations influence the degree to which value-for-money (VfM) is achieved on collaborative projects. However, there has been little study conducted to verify this relationship. The evidence is particularly limited within the empirical context of infrastructure delivery in Australia. Primarily drawing on the theoretical perspectives of the resource-based view of the firm (e.g. Barney 1991), dynamic capabilities (e.g. Helfat et al. 2007), absorptive capacity (e.g. Lane et al. 2006) and knowledge management (e.g. Nonaka 1994), this paper conceptualises learning capability as a knowledge-based dynamic capability. Learning capability builds on the micro-foundations of high-order learning routines, which are deliberately developed by construction organisations for managing collaborative projects. Based on this conceptualisation of learning capability, an exploratory case study was conducted. The study investigated the operational and higher-order learning routines adopted by a project alliance team to successfully achieve VfM. The case study demonstrated that the learning routines of the alliance project were developed and modified by the continual joint learning activities of participant organisations. Project-level learning routines were found to significantly influence the development of organisational-level learning routines. In turn, the learning outcomes generated from the alliance project appeared to significantly influence the development of project management routines and contractual arrangements applied by the participant organisations in subsequent collaborative projects. The case study findings imply that the higher-order learning routines that underpin the learning capability of construction organisations have the potential to influence the VfM achieved on both current and future collaborative projects.

Empirical analysis of knowledge management activities in construction organisations

Knowledge is a commodity. It is a by-product of learning that involves the creation, sharing, processing and possible use of information in the mind of an individual. Knowledge management (KM) is, therefore, concerned with the effective implementation of such activities within the organisation. It is simply the process of leveraging organisational knowledge to deliver a long-term competitive advantage. This paper presents the results of an empirical research investigation into the interaction between different KM activities within the context of construction contracting organisations. The different KM activities include: responsiveness to the knowledge of business environment, knowledge acquisition, knowledge dissemination, and knowledge application. A questionnaire survey was administered to investigate the opinions of construction professionals regarding the intensity of activities currently implemented by their organisations to facilitate knowledge capturing, sharing and application. A total of 149 responses were then used to statistically examine the inter-relationships between the different KM activities as practised by contracting organisations in Hong Kong. The paper presents and discusses the survey findings and proposes recommendations for improving the effectiveness of current KM practices.

Impacts of foreign direct investment on China’s construction industry

China’s national construction industry is now preparing to face the challenges, and to seize the opportunities, resulting from China’s entry to the World Trade Organisation (WTO). With the foreign direct investment (FDI) hitting a record high of around US$52.7 billion in 2002, China is believed to have now surpassed the USA as the world’s favorite destination for foreign investment. This fact, coupled with the huge potential for infrastructure development, indicates that the relatively large proportion of FDI flowing into the national construction industry will continue to increase in the foreseeable future. Positive aspects of FDI flowing will definitely help forging new industrial capabilities for China’s construction industry, thus helping it to achieve the ambitious strategic targets set by the Government for exporting construction goods and services. To shed some light on the position of the national industry in the global economy, this paper briefly presents the current international standing of China’s construction industry and qualitatively appraises potential positive influences of, and challenges associated with, FDI on the national industry.

Sustainability reporting in construction contractors : a case study

Construction activities have significant impacts on the environment, economy and society. As a result, sustainability has become an agenda in construction related business. This is evidenced by an increasingly number of construction related companies adopting sustainability reporting practice. Construction contractors are no exception. This study aims to investigate the sustainability reporting practices adopted by top Chinese contractors active in the international arena. The focus is placed on those Chinese contractors ranked top 50 by the Engineering News Record (ENR) top 225 international contractors. The results showed that the sustainability reporting practices of these top Chinese contractors, in terms of both approaches and the depth, varied significantly however there is a clear trend of growing level of disclosure of sustainability related information. Similarly, environmental sustainability seems the predominate focus of sustainability reporting exercises of top international contractors from China. These findings help to assist senior management of construction contractors to form business strategies to facilitate disclosure and other sustainability related practices.

Analyzing and defining information requirements of knowledge intensive construction management tasks on BIM

With the increasing popularity and adoption of building information modeling (BIM), the amount of digital information available about a building is overwhelming. Enormous challenges remain however in identifying meaningful and required information from a complex BIM model to support a particular construction management (CM) task. Detailed specifications of information required by different construction domains and expressive and easy-to-use BIM reasoning mechanisms are seen as an important means in addressing these challenges. This paper analyzes some of the characteristics and requirements of component-specific construction knowledge in relation to the current work practice and BIM-based applications. It is argued that domain ontologies and information extraction approaches, such as queries could significantly bring much needed support for knowledge sharing and integration of information between design, construction and facility management.

Equal employment opportunity and its links to the participation of women in the construction industry : the case of Australia

Australia is currently experiencing a resources boom and jobs in the male dominated fields of construction and engineering are at a premium. Employment in the construction industry, historically and today, is overwhelmingly male and, with an ageing population this predominately older male workforce will be retiring in greater numbers in the coming decade. Despite more that 25 years of anti- discrimination legislation and equal opportunity legislation these industries still employ few women in operational roles. This paper investigates the issue of the low representation of women in the construction industry. Our investigation involves the analysis of 95 organisation progress reports on the equal opportunity strategic programs in the construction industry. Findings indicate that this industry is not engaging with equal employment opportunity programs and further that equity outcomes for women in the industry are not evident.

Of dogs, fish, birds and turds : the social construction of sewage pollution by recreational boaters

Animals are often used as ‘evidence’ of marine pollution. Take for instance the ubiquitous images of miserable oil-soaked marine birds following high profile oil spills such as the Exxon Valdez, Pacific Adventurer and Deepwater Horizon incidents or the images of bloated floating fish carcasses which are used to signal the presence of toxic pollutants. In recent years waste discharges from vessels have come under increased public and regulatory scrutiny both in Australia and around the world. International, regional, national and local restrictions are becoming more stringent for high profile marine pollutants such as oil as well as previously overlooked vessel-sourced pollutants such as sewage. Drawing upon media reports and recreational boater responses to government attempts to regulate the discharge of sewage from recreational vessels, this paper considers the important role played by animals in constructions of marine pollution by sewage and attributions of blame for this pollution. Specifically, this study found that recreational boat owners disputed claims their sewage management practices posed an environmental threat arguing that the sewage discharged was readily and eagerly consumed by fish in the receiving environment. Boat owners also argued that increased levels of bacteria which indicate the presence of faeces within the marine environment could be directly attributed to the excrement of marine mammals and birds or were the result of dog faeces being washed through municipal storm water systems rather than the result of vessel discharges. By contrast the contamination of oysters was provided as evidence of sewage pollution by other stakeholders.

Ten basic factors to identify suitable subcontractors for construction projects

With unpredictable workloads and a need for a multitude of specialized skills, many main contractors rely heavily on subcontracting to reduce their risks (Bresnen et al., 1985; Beardsworth et al., 1988). This is especially the case In Hong Kong, where the average direct labour content accounts for only around 1% of the total contract sum (Lai, 1987). Extensive usage of subcontracting is also reported in many other countries, including the UK (Gray and Flanagan, 1989) and Japan (Bennett et al., 1987). In addition, and depending upon the scale and complexity of works, it is not uncommon for subcontractors to further sublet their works to lower tier(s) subcontractors. Richter and Mitchell (1982) argued that main contractors can obtain a higher profit margin by reducing their performance costs by subcontracting work to those who have the necessary resources to perform the work more efficiently and economically. Subcontracting is also used strategically to allow firms to employ a minimum work force under fluctuating demand (Usdiken and Sözen, 1985). Through subcontracting, the risks of main contractors are also reduced, as errors in estimating or additional costs caused by delays or extra labour requirements can be absorbed by the subcontractors involved (Woon and Ofori, 2000). Despite these benefits, the quality of work can suffer when incapable or inexperienced subcontractors are employed. Additional problems also exist in the form of bid shopping, unclear accountability, and high fragmentation (Palaneeswaran et al., 2002). A recent CIB TG 23 International Conference, October 2003, Hong Kong report produced by the Hong Kong Construction Industry Review Committee (CIRC) points to development of a framework to help distinguish between capable and incapable subcontractors (Tang, 2001). This paper describes research aims at identifying and prioritising criteria for use in such a framework.

A process-oriented approach to supporting Off-site Manufacture in construction projects

It is well-known that the use of off-site manufacture (OSM) techniques can assist in timely completion of a construction project though the utilisation of such techniques may have other disadvantages. Currently, OSM uptake within the Australian construction industry is limited. To successfully incorporate OSM practices within a construction project, it is crucial to understand the impact of OSM adoption on the processes used during a construction project. This paper presents how a systematic process-oriented approach may be able to support OSM utilisation within a construction project. Process modelling, analysis and automation techniques which are well-known within the Business Process Management (BPM) discipline have been applied to develop a collection of construction process models that represent the end-to-end generic construction value chain. The construction value chain enables researchers to identify key activities, resources, data, and stakeholders involved in construction processes in each defined construction phase. The collection of construction process models is then used as a basis for identification of potential OSM intervention points in collaboration with domain experts from the Australian construction industry. This ensures that the resulting changes reflect the needs of various stakeholders within the construction industry and have relevance in practice. Based on the input from the domain experts, these process models are further refined and operational requirements are taken into account to develop a prototype process automation (workflow) system that can support and coordinate OSM-related process activities. The resulting workflow system also has the potential to integrate with other IT solutions used within the construction industry (e.g., BIM, Acconex). As such, the paper illustrates the role that process-oriented thinking can play in assisting OSM adoption within the industry.

Relationship between head contractors and subcontractors in the construction industry : a critical review

The interaction between head contractor and subcontractor in modern construction often contributes to the degree of success or failure of any large-scale construction project. In this paper, previous research on the relationship and interaction between head contractor and subcontractor is examined in order to establish how these relationships will affect the overall performance of a project. Based on the review, research questions on how to best manage the interaction and relationship between these two vital project participants are proposed and future research direction discussed.

Analysing governance categories used on project alliances in the construction industry

In Australia, collaborative contracts, and in particular, project alliances, have been increasingly used to govern infrastructure projects. These contracts use formal and informal governance mechanisms to manage the delivery of infrastructure projects. Formal mechanisms such as financial risk sharing are specified in the contract, while informal mechanisms such as integrated teams are not. Given that the literature contains a multiplicity of often untestable definitions, this paper reports on a review of the literature to operationalize the concepts of formal and informal governance. This work is the first phase of a study that will examine the optimal balance of formal and informal governance structures. Desk-top review of leading journals in the areas of construction management and business management, as well as recent government documents and industry guidelines, was undertaken to to conceptualise and operationalize formal and informal governance mechanisms. The study primarily draws on transaction-cost economics (e.g. Williamson 1979; Williamson 1991), relational contract theory (Feinman 2000; Macneil 2000) and social psychology theory (e.g. Gulati 1995). Content analysis of the literature was undertaken to identify key governance mechanisms. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. A previous study by the authors identified that formal governance mechanisms can be classified into seven measurable categories: (1) negotiated cost, (2) competitive cost, (3) commercial framework, (4) risk and reward sharing, (5) qualitative performance, (6) collaborative multi-party agreement, and (7) early contractor involvement. Similarly, informal governance mechanisms can be classified into four measureable categories: (1) leadership structure, (2) integrated team, (3) team workshops, and (4) joint management system. This paper explores and further defines the key operational characteristics of each mechanism category, highlighting its impact on value for money in alliance project delivery. The paper’s contribution is that it provides the basis for future research to compare the impact of a range of individual mechanisms within each category, as a means of improving the performance of construction projects.

Learning routines used by firms during construction of infrastructure projects using the alliance procurement method

Collaborative contracting has emerged over the past 15 years as an innovative project delivery framework that is particularly suited to infrastructure projects. Australia leads the world in the development of project and program alliance approaches to collaborative delivery. These approaches are considered to promise superior project results. However, very little is known about the learning routines that are most widely used in support of collaborative projects in general and alliance projects in particular. The literature on absorptive capacity and dynamic capabilities indicates that such learning enhances project performance. The learning routines employed at corporate level during the operation of collaborative infrastructure projects in Australia were examined through a large survey conducted in 2013. This paper presents a descriptive summary of the preliminary findings. The survey captured the experiences of 320 practitioners of collaborative construction projects, including public and private sector clients, contractors, consultants and suppliers (three per cent of projects were located in New Zealand, but for brevity’s sake the sample is referred to as Australian). The majority of projects identified used alliances (78.6%); whilst 9% used Early Contractor Involvement (ECI) contracts and 2.7% used Early Tender Involvement contracts, which are ‘slimmer’ types of collaborative contract. The remaining 9.7% of respondents used traditional contracts that employed some collaborative elements. The majority of projects were delivered for public sector clients (86.3%), and/or clients experienced with asset procurement (89.6%). All of the projects delivered infrastructure assets; one third in the road sector, one third in the water sector, one fifth in the rail sector, and the rest spread across energy, building and mining. Learning routines were explored within three interconnected phases: knowledge exploration, transformation and exploitation. The results show that explorative and exploitative learning routines were applied to a similar extent. Transformative routines were applied to a relatively low extent. It was also found that the most highly applied routine is ‘regularly applying new knowledge to collaborative projects’; and the least popular routine was ‘staff incentives to encourage information sharing about collaborative projects’. Future research planned by the authors will examine the impact of these routines on project performance.

The distribution of absorptive capacity among construction supply chain participants

The absorptive capacity of organisations is one of the key drivers of innovation performance in any industry. This research seeks to refine our understanding of the relationship between absorptive capacity and innovation performance, with a focus on characterising the absorptive capacity of the different participant groups within the Australian road industry supply chain. One of the largest and most comprehensive surveys ever undertaken of innovation in road construction was completed in 2011 by the Queensland University of Technology (QUT), based on the Australian road industry. The survey of over 200 construction industry participants covered four sectors, comprising suppliers (manufacturers and distributors), consultants (engineering consultants), contractors (head and subcontractors) and clients (state government road agencies). The survey measured the absorptive capacity and innovation activity exhibited by organisations within each of these participant groups, using the perceived importance of addressing innovation obstacles as a proxy for innovation activity. One of the key findings of the survey is about the impact of participant competency on product innovation activity. The survey found that the absorptive capacity of industry participants had a significant and positive relationship with innovation activity. Regarding the distribution of absorptive capacity, the results indicate that suppliers are more likely to have high levels of absorptive capacity than the other participant groups, with 32% of suppliers showing high absorptive capacity, ahead of contractors (18%), consultants (11%), and clients (7%). These results support the findings of previous studies in the literature and suggest the importance of policies to enhance organisational learning, particularly in relation to openness to new product ideas.

Export readiness index : construction and analysis

The internationalisation process of firms has attracted much research interest since the 1970s. It is noted, however, that a significant research gap exists in studies with a primary focus on the pre-internationalisation behaviour of firms. This paper proposes the incorporation of a pre-internationalisation phase into the traditional Uppsala model of firm internationalisation to address the issue of export readiness. Through extensive literature review, the concepts fundamental to the ability of an Uppsala type firm to begin internationalisation through an export entry mode are identified: exposure to stimuli factors, attitudinal commitment of decision makers towards exporting, the firm’s resource capabilities, as well as the moderating effect of lateral rigidity. The concept of export readiness is operationalised in this study through the construction of an export readiness index (ERI) using exploratory and confirmatory factor analysis. The index is then applied to some representative cases and tested using logistic regression to establish its validity as a diagnostic tool. The proposed ERI presents not only a more practical approach towards analysing firms’ export readiness but has also major public policy implications as a possible tool for government export promotion agencies.