Framework for measuring success of construction projects

The construction industry is dynamic in nature. The concept of project success has remained ambiguously defined in the construction industry. Project success means different things to different people. While some authors consider time, cost and quality as the predominant targets, others suggest that success is something more complex. The aim of this report is to develop a framework for measuring success of construction projects. A range of Key Performance Indicators (KPIs), measured both objectively and subjectively is developed. The identification of KPIs helps set a benchmark for measuring the performance of a construction project and provides significant insights into developing a general and comprehensive base for further research.

Leveraging training outcomes on public construction projects

The paper explores the efficacy of public agencies using their contracting relationships with private firms to affect training outcomes in the construction industry. It develops a theoretical perspective on this issue by extending a framework that was originally developed by Hart, Schleifer and Vishny (1997) to study privatisation. This paper shows how their framework can also be applied to situations where the provision of public works is already privatised and the government is attempting to regulate training outcomes via a contracting arrangement. An empirical study of two training policies of the Western Australian government complements this theoretical discussion. We report the results of an analysis of data drawn from the government’s Tender Registration System between 1997 & 2006. As such we use a unique and comprehensive resource to examine the possible effects of new training policies on an important segment of the construction ‘market’.

Construction projects immediate health check : a CSF & KPI approach

Many factors have the potential to influence human health. These factors need to be monitored to maintain health. As is the case with human health, construction projects have a number of critical factors that can facilitate a broad evaluation of project health. In order to use these factors as an indication of health, they need to be assessed. This assessment can help to achieve desired outcomes for the project. This paper discusses the approach of assessing Critical Success Factors (CSFs) using Key Performance Indicators (KPIs) to ascertain the immediate health of a construction project. This approach is applicable to all phases of construction projects and many construction procurement methods. KPIs have been benchmarked on the basis of industry standards and historical data. The robustness of the KPIs to assess the immediate health of a project has been validated using Australian and international case studies.

Responding to sustainability challenge and cost implications in highway construction projects

Highway construction often requires a significant capital input; therefore it often causes serious financial implications for developers, owners and operators. The recent industry-wide focus on sustainability has added a new dimension to the evaluation of highway projects, particularly on the economical scale of ‘going green’. Comprehensive analysis of the whole-of-life highway development that responds to sustainability challenges is one of the primary concerns for stakeholders. Principles of engineering economics and life cycle costing have been used to determine the incremental capacity investments for highway projects. However, the consideration of costs and issues associated with sustainability is still very limited in current studies on highway projects. Previous studies have identified that highway project investments are primarily concerned with direct market costs that can be quantified through life cycle costing analysis (LCCA). But they tend to ignore costs that are difficult to calculate, as those related to environmental and social elements. On a more positive note, these studies proved that the inclusion of such costs is an essential part of the overall development investment and a primary concern for decision making by the stakeholders. This paper discusses a research attempt to identify and categorise sustainability cost elements for highway projects. Through questionnaire survey, a set of sustainability cost elements on highway projects has been proposed. These cost elements are incorporated into the extension of some of the existing Life Cycle Costing Analysis (LCCA) models in order to produce a holistic financial picture of the highway project. It is expected that a new LCCA model will be established to serve as a suitable tool for decision making for highway project stakeholders.

The management of transport construction projects : a survey of public sector organisations in Queensland Australia

Construction procurement organisations in the Australian framework provide broad guidelines on project management in setting benchmark performance measurements and processes for evaluating their projects. Despite this, little has been known in the project management practise in transport construction projects in Australia, in particular Queensland. Questionnaire data from 53 project management practitioners employed in State and City public sector organisations in Queensland,suggested that many practitioners in the public sector have little or a lack of understanding of government regulatory policies, which are used as economic evaluation tools for project options. Public sector project managers perceive socio-economic evaluation tools as inappropriate for public sector projects. The survey results also found conducting risk management analysis, developing a risk register and mitigation of risks were most effective way of managing risk. This study provides an opportunity for the public sector to review and provide training on project management practices and government regulatory policies governing public projects. This will improve project management practitioners’ understanding and interpretation of government regulatory policies.

Implementing value management as a decision-making tool in the design stages of design and build construction projects : a methodology for improved cost optimization

Value Management (VM) has been proven to provide a structured framework, together with other supporting tools and techniques, that facilitate effective decision-making in many types of projects, thus achieving ‘best value’ for clients. One of the major success factors of VM in achieving better project objectives for clients is through the provision of beneficial input by multi-disciplinary team members being involved in critical decision-making discussions during the early stage of construction projects. This paper describes a doctoral research proposal based on the application of VM in design and build construction projects, especially focusing on the design stage. The research aims to study the effects of implementing VM in design and build construction projects, in particular how well the methodology addresses issues related to cost overruns resulting from poor coordination and overlooking of critical constructability issues amongst team members in construction projects in Malaysia. It is proposed that through contractors’ early involvement during the design stage, combined with the use of the VM methodology, particularly as a decision-making tool, better optimization of construction cost can be achieved, thus promoting more efficient and effective constructability. The main methods used in this research involve a thorough literature study, semi-structured interviews, and a survey of major stakeholders, a detailed case study and a VM workshop and focus group discussions involving construction professionals in order to explore and possibly develop a framework and a specific methodology for the facilitating successful application of VM within design and build construction projects.

Life-cycle management of construction projects based on virtual prototyping technology

Life-cycle management (LCM) has been employed in the management of construction projects for many years in order to reduce whole life cost, time, risk and improve the service to owners. However, owing to lack of an effective information sharing platform, the current LCM of construction projects is not effectively used in the construction industry. Based upon the analysis of the information flow of LCM, a virutal prototyping (VP)-based communication and collaboration information platform is proposed. Following this, the platform is customized using DASSAULT sofware. The whole process of implementing the VP-based LCM are also discussed and, from a simple case study, it is demonstrated that the VP-based communication and collaboration information platform is an effective tool to support the LCM of construction projects.

Evaluation of risk factors leading to cost overrun in delivery of highway construction projects

Accurate owner budget estimates are critical to the initial decision-to-build process for highway construction projects. However, transportation projects have historically experienced significant construction cost overruns from the time the decision to build has been taken by the owner. This paper addresses the problem of why highway projects overrun their predicted costs. It identifies the owner risk variables that contribute to significant cost overrun and then uses factor analysis, expert elicitation, and the nominal group technique to establish groups of importance ranked owner risks. Stepwise multivariate regression analysis is also used to investigate any correlation of the percentage of cost overrun with risks, together with attributes such as highway project type, indexed cost, geographics location, and project delivery method. The research results indicate a correlation between the reciprocal of project budgets size and percentage cost overrun. This can be useful for owners in determining more realistic decision-to-build highway budget estimates by taking into account the economies of scale associated with larger projects.

Client recommendations for financial incentives on construction projects

Purpose: To provide recommendations for construction clients who design and implement financial incentive mechanisms (FIMs) on projects. ---------- Methodology: Four large Australian building projects commissioned by government clients under managing contractor contracts and completed between 2001 and 2005 were examined to explore the ‘drivers’ that promoted motivation toward financial incentive goals. The results were triangulated across data sources, projects and stakeholder types. ---------- Findings: FIM design should incorporate: 1. flexibility to modify goals and measurement procedures over time, 2. multiple goals covering different project areas, 3. distribution of rewards across all the key organizations contributing to team performance (e.g. potentially not just the contractor, but the subcontractors and consultants) and a reward amount sufficient to be valued by potential recipients. FIM benefits are maximized through the following complementary procurement initiatives: 4. equitable contract risk allocation, 5. early contractor involvement in design, 6. value-driven tender selection, 7. relationship workshops, and 8. future work opportunities.---------- Research Limitations: This paper provides practical recommendations to industry and hence does not emphasize theoretical aspects.---------- Practical Implications: The uptake of these recommendations is likely to increase the impact of FIMs on motivation and improve project and industry outcomes. Although the study focuses on government clients of building projects, all the recommendations would seem to apply equally to private-sector clients and to non-building projects.---------- Originality: In order to improve motivation and reward high performance, clients are increasingly using FIM in their construction contracts. Despite the rising use of financial incentives, there is a lack of comprehensive construction-specific knowledge available to help clients maximize outcomes. The study addresses this gap in the literature.

Motivation toward financial incentive goals on construction projects

Construction industry observers tout the use of financial incentives as promoters of motivation and commitment on projects. Yet, little empirical evidence exists concerning their effectiveness. What are the drivers of motivation on construction projects? The reasons that construction project participants are motivated to pursue voluntary incentive goals are examined through four Australian case studies. The results demonstrate the critical role played by project relationships and equitable contract conditions in promoting the effectiveness of financial incentives. In the context of a construction project, this study finds financial incentives to be less important to motivation and performance than relationship enhancement initiatives. This finding is unexpected and has implications for the design of project procurement strategies. These results suggest if project clients ignore the importance of relationship quality between participants, the impact of any financial incentive will be compromised.

Sustainability performance of construction : conceptual models of satisfaction levels in construction projects

In general, the performance of construction projects, including their sustainability performance, does not meet optimal expectations. One aspect of this is the performance of the participants who are independent and make a significance impact on overall project outcomes. Of these participants, the client is traditionally the owner of the project, the architect or engineer is engaged as the lead designer and a contractor is selected to construct the facilities. Generally, the performance of the participants is gauged by considering three main factors, namely, time, cost and quality. As the level of satisfaction is a subjective issue, it is rarely used in the performance evaluation of construction work. Recently, various approaches to the measurement of satisfaction have been made in an attempt to determine the performance of construction project outcomes - for instance, client satisfaction, customer satisfaction, contractor satisfaction, occupant satisfaction and home buyer satisfaction. These not only identify the performance of the construction project but are also used to improve and maintain relationships. In addition, these assessments are necessary for the continuous improvement and enhanced cooperation of participants. The measurement of satisfaction levels primarily involves expectations and perceptions. An expectation can be regarded as a comparative standard of different needs, motives and beliefs, while a perception is a subjective interpretation that is influenced by moods, experiences and values. This suggests that the disparity between perceptions and expectations may possibly be used to represent different levels of satisfaction. However, this concept is rather new and in need of further investigation. This chapter examines the methods commonly practised in measuring satisfaction levels today and the advantages of promoting these methods. The results provide a preliminary review of the advantages of satisfaction measurement in the construction industry and recommendations are made concerning the most appropriate methods to use in identifying the performance of project outcomes.