A knowledge-driven management approach to environmental-conscious construction

This paper aims to introduce a knowledge-based managemental prototype entitled Eþ for environmental-conscious construction relied on an integration of current environmental management tools in construction area. The overall objective of developing the Eþ prototype is to facilitate selectively reusing the retrievable knowledge in construction engineering and management areas assembled from previous projects for the best practice in environmental-conscious construction. The methodologies adopted in previous and ongoing research related to the development of the Eþ belong to the operations research area and the information technology area, including literature review, questionnaire survey and interview, statistical analysis, system analysis and development, experimental research and simulation, and so on. The content presented in this paper includes an advanced Eþ prototype, a comprehensive review of environmental management tools integrated to the Eþ prototype, and an experimental case study of the implementation of the Eþ prototype. It is expected that the adoption and implementation of the Eþ prototype can effectively facilitate contractors to improve their environmental performance in the lifecycle of projectbased construction and to reduce adverse environmental impacts due to the deployment of various engineering and management processes at each construction stage.

Understanding construction competitiveness: the initial results of a Delphi survey in Finland, Sweden and the UK

The competitiveness of the construction industry is an important issue for many countries as the industry makes up a substantial part of their GDP – about 8% in the UK. A number of competitiveness studies have been undertaken at company, industry and national levels. However, there has been little focus on sustainable competitiveness and the many factors that are involved. This paper addresses that need by investigating what construction industry experts consider to be the most important factors of construction industry competitiveness. It does so by conducting a Delphi survey among industry experts in Finland, Sweden and the UK. A list of 158 factors was compiled from competitiveness reports by institutions such as World Economic Forum and International Institute of Management Development, as well as from explorative workshops in the countries involved in the study. For each of the countries, experts with different perspectives of the industry, including, consultants, contractors and clients, were asked to select their 30 most influential factors. They then ranked their chosen factors in order of importance for the competitiveness of their construction industry. The findings after the first round of the Delphi process underline the complexity of the term competitiveness and the wide range of factors that are considered important contributors to competitiveness. The results also indicate that what are considered to be the most important factors of competitiveness is likely to differ from one country to another.

Modelling trade contractor information production

Design management research usually deals with the processes within the professional design team and yet, in the UK, the volume of the total project information produced by the specialist trade contractors equals or exceeds that produced by the design team. There is a need to understand the scale of this production task and to plan and manage it accordingly. The model of the process on which the plan is to be based, while generic, must be sufficiently robust to cover the majority of instances. An approach using design elements, in sufficient depth to possibly develop tools for a predictive model of the process, is described. The starting point is that each construction element and its components have a generic sequence of design activities. Specific requirements tailor the element's application to the building. Then there are the constraints produced due to the interaction with other elements. Therefore, the selection of a component within the element may impose a set of constraints that will affect the choice of other design elements. Thus, a design decision can be seen as an interrelated element-constraint-element (ECE) sub-net. To illustrate this approach, an example of the process within precast concrete cladding has been used.

Modelling trade contractor information production

Design management research usually deals with the processes within the professional design team and yet, in the UK, the volume of the total project information produced by the specialist trade contractors equals or exceeds that produced by the design team. There is a need to understand the scale of this production task and to plan and manage it accordingly. The model of the process on which the plan is to be based, while generic, must be sufficiently robust to cover the majority of instances. An approach using design elements, in sufficient depth to possibly develop tools for a predictive model of the process, is described. The starting point is that each construction element and its components have a generic sequence of design activities. Specific requirements tailor the element's application to the building. Then there are the constraints produced due to the interaction with other elements. Therefore, the selection of a component within the element may impose a set of constraints that will affect the choice of other design elements. Thus, a design decision can be seen as an interrelated element-constraint-element (ECE) sub-net. To illustrate this approach, an example of the process within precast concrete cladding has been used.

Learning across business sectors: Knowledge sharing between aerospace and construction

This report addresses the extent that managerial practices can be shared between the aerospace and construction sectors. Current recipes for learning from other industries tend to be oversimplistic and often fail to recognise the embedded and contextual nature of managerial knowledge. Knowledge sharing between business sectors is best understood as an essential source of innovation. The process of comparison challenges assumptions and better equips managers to cope with future change. Comparisons between the aerospace and construction sectors are especially useful because they are so different. The two sectors differ hugely in terms of their institutional context, structure and technological intensity. The aerospace sector has experienced extensive consolidation and is dominated by a small number of global companies. Aerospace companies operate within complex networks of global interdependency such that collaborative working is a commercial imperative. In contrast, the construction sector remains highly fragmented and is characterised by a continued reliance on small firms. The vast majority of construction firms compete within localised markets that are too often characterised by opportunistic behaviour. Comparing construction to aerospace highlights the unique characteristics of both sectors and helps explain how managerial practices are mediated by context. Detailed comparisons between the two sectors are made in a range of areas and guidance is provided for the implementation of knowledge sharing strategies within and across organisations. The commonly accepted notion of ‘best practice’ is exposed as a myth. Indeed, universal models of best practice can be detrimental to performance by deflecting from the need to adapt continuously to changing circumstances. Competitiveness in the construction sector too often rests on efficiency in managing contracts, with a particular emphasis on the allocation of risk. Innovation in construction tends to be problem-driven and is rarely shared from project to project. In aerospace, the dominant model of competitiveness means that firms have little choice other than to invest in continuous innovation, despite difficult trading conditions. Research and development (R&D) expenditure in aerospace continues to rise as a percentage of turnovers. A sustained capacity for innovation within the aerospace sector depends crucially upon stability and continuity of work. In the construction sector, the emergence of the ‘hollowed-out’ firm has undermined the industry’s capacity for innovation. Integrated procurement contexts such as prime contracting in construction potentially provide a more supportive climate for an innovation-based model of competitiveness. However, investment in new ways of working depends upon a shift in thinking not only amongst construction contractors, but also amongst the industry’s major clients.

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.

Developing a system for assessing the costs associated with different procurement routes in the construction industry

In developing techniques for monitoring the costs associated with different procurement routes, the central task is disentangling the various project costs incurred by organizations taking part in construction projects. While all firms are familiar with the need to analyse their own costs, it is unusual to apply the same kind of analysis to projects. The purpose of this research is to examine the claims that new, ways of working such as strategic alliancing and partnering bring positive business benefits. This requires that costs associated with marketing, estimating, pricing, negotiation of terms, monitoring of performance and enforcement of contract are collected for a cross-section of projects under differing arrangements, and from those in the supply, chain from clients to consultants, contractors, subcontractors and suppliers. Collaboration with industrial partners forms the basis for developing a research instrument, bused on time sheets, which will be relevant for all those taking part in the work. The signs are that costs associated with,with tendering are highly variable, 1-15%, depending upon what precisely, is taken into account. The research to date reveals that there are mechanisms for measuring the costs of transactions and these will generate useful data for subsequent analysis.

Innovative approach to building systems integration problems: Using systems theory, technological forecasting and scenario planning

Building services are worth about 2% GDP and are essential for the effective and efficient operations of the building. It is increasingly recognised that the value of a building is related to the way it supports the client organisation’s ongoing business operations. Building services are central to the functional performance of buildings and provide the necessary conditions for health, well-being, safety and security of the occupants. They frequently comprise several technologically distinct sub-systems and their design and construction requires the involvement of numerous disciplines and trades. Designers and contractors working on the same project are frequently employed by different companies. Materials and equipment is supplied by a diverse range of manufacturers. Facilities managers are responsible for operation of the building service in use. The coordination between these participants is crucially important to achieve optimum performance, but too often is neglected. This leaves room for serious faults. The need for effective integration is important. Modern technology offers increasing opportunities for integrated personal-control systems for lighting, ventilation and security as well as interoperability between systems. Opportunities for a new mode of systems integration are provided by the emergence of PFI/PPP procurements frameworks. This paper attempts to establish how systems integration can be achieved in the process of designing, constructing and operating building services. The essence of the paper therefore is to envisage the emergent organisational responses to the realisation of building services as an interactive systems network.

Partnering in flight: From being to becoming

Current literature offers little understanding about how procurement methods are enacted in practice. Developments in procurement are often viewed as the result of responding to recommendations from particular constituents within the sector. The research seeks to remove itself from such deterministic leaning, counselling instead that procurement should not be viewed in static terms, but dynamically manifesting over time within a complex web of interconnections between various actors, their situated context and the broader industrial structure. Attention is given to how a client and construction firm engaged in a collusive interaction to realise an innovative procurement method that derived its legitimacy from a backcloth of initiatives promoted by various commentators. A case study of a medium-size regional contractor demonstrates how the first partnering arrangement was enacted within the UK affordable housing maintenance sector in the UK. The case study finds that the enactment of new procurement methods strongly relies on iterative learning between clients and contractors. It is further suggested that construction firms need to initiate new procurement in order to remain competitive within the sector. The findings point towards a pro-active initiative by the contractor and client to enact a ‘procurement first’. Encouragement may be drawn from this example by other contractors seeking to offer more than simply responsive procurement solutions.

Contractor key competitiveness indicators: A China study

A proper method to assess contractor competitiveness is important both for assisting clients in the selection of proper contractors and for assisting contractors in the development of more competitive bidding strategies. Previous studies have identified various indicators for assessing contractor competitiveness, and several assessment methods have been introduced. Nevertheless, these studies are limited because they are unable to tell which indicators are more important in different market environments. This paper identifies the key competitiveness indicators �KCIs� for assessing contractor competitiveness in the Chinese construction market. An index value is used to indicate the relative significance of various competitiveness indicators based on which KCIs are identified. The data applied in this study are from a survey of the construction industry in mainland China. The research findings provide valuable information for both existing businesses and the construction professionals who plan to compete for construction works in the Chinese market. The study provides useful references for further studies that compare the KCIs used in the Chinese construction industry and those used in other construction industries.

Contractor project estimates vs. consultant project estimates in Ghana

Ten projects constructed in Ghana between 2003 and 2010 are examined and analysed to ascertain the reliability of estimated costs provided for the projects. Cost estimates for five of the projects were calculated by consultants and cost estimates for the five remaining projects were calculated by contractors. Cost estimates prepared by contractors seemed to be closer to actual costs than estimates calculated by consultants. Projects estimated by consultants experienced an average cost overrun of 40% and time overrun of 62% whereas projects priced by contractors experienced an average cost overrun of 6% and time overrun of 41%. It seemed that contractors had a better understanding of the actual construction processes and a clearer expectation of the needs of the client hence an ability to calculate estimates that were closer to reality. Construction clients in Ghana should rely on contractors for more realistic cost estimates as estimates by consultants may be inaccurate. Where consultants are employed, an allowance of up 40% should be added to the estimated costs as a margin for inaccuracy.

Risk pricing practices in finance, insurance and construction

A review of current risk pricing practices in the financial, insurance and construction sectors is conducted through a comprehensive literature review. The purpose was to inform a study on risk and price in the tendering processes of contractors: specifically, how contractors take account of risk when they are calculating their bids for construction work. The reference to mainstream literature was in view of construction management research as a field of application rather than a fundamental academic discipline. Analytical models are used for risk pricing in the financial sector. Certain mathematical laws and principles of insurance are used to price risk in the insurance sector. construction contractors and practitioners are described to traditionally price allowances for project risk using mechanisms such as intuition and experience. Project risk analysis models have proliferated in recent years. However, they are rarely used because of problems practitioners face when confronted with them. A discussion of practices across the three sectors shows that the construction industry does not approach risk according to the sophisticated mechanisms of the two other sectors. This is not a poor situation in itself. However, knowledge transfer from finance and insurance can help construction practitioners. But also, formal risk models for contractors should be informed by the commercial exigencies and unique characteristics of the construction sector.

The tendering process and performance analysis of a public building project in Ghana

A case study on the tendering process and cost/time performance of a public building project in Ghana is conducted. Competitive bids submitted by five contractors for the project, in which contractors were required to prepare their own quantities, were analyzed to compare differences in their pricing levels and risk/requirement perceptions. Queries sent to the consultants at the tender stage were also analyzed to identify the significant areas of concern to contractors in relation to the tender documentation. The five bidding prices were significantly different. The queries submitted for clarifications were significantly different, although a few were similar. Using a before-and-after experiment, the expected cost/time estimate at the start of the project was compared to the actual cost/time values, i.e. what happened in the actual construction phase. The analysis showed that the project exceeded its expected cost by 18% and its planned time by 210%. Variations and inadequate design were the major reasons. Following an exploration of these issues, an alternative tendering mechanism is recommended to clients. A shift away from the conventional approach of awarding work based on price, and serious consideration of alternative procurement routes can help clients in Ghana obtain better value for money on their projects.

An experimental approach to project risk identification and prioritization

One of the aims of a broad ethnographic study into how the apportionment of risk influences pricing levels of contactors was to ascertain the significant risks affecting contractors in Ghana, and their impact on prices. To do this, in the context of contractors, the difference between expected and realized return on a project is the key dependent variable examined using documentary analyses and semi-structured interviews. Most work in this has focused on identifying and prioritising risks using relative importance indices generated from the analysis of questionnaire survey responses. However, this approach may be argued to constitute perceptions rather than direct measures of the project risk. Here, instead, project risk is investigated by examining two measures of the same quantity; one ‘before’ and one ‘after’ construction of a project has taken place. Risks events are identified by ascertaining the independent variables causing deviations between expected and actual rates of return. Risk impact is then measured by ascertaining additions or reductions to expected costs due to the occurrence of risk events. So far, data from eight substantially complete building projects indicates that consultants’ inefficiency, payment delays, subcontractor-related problems and changes in macroeconomic factors are significant risks affecting contractors in Ghana.