Development of Project Logistics in Engineering, Procurement and Construction Projects

The aim of this Master’s Thesis is to develop project logistics functions in large scale en-gineering, procurement and construction projects. The background of the research topic is compounded from two separate subjects; OPAL Program and case study of an actual EPC project. The purpose is to examine Project Logistics process in accordance with OPAL Program as well as logistics process in focus EPC project. Both entities are researched by using the case study research methodology. Logistics process of the focus EPC project is described as well as presented and in addi-tion, logistics related findings and observations are introduced. Significant findings and observations are found from logistics costs as well as shipment volume estimations in the early phase of the focus ECP project. A notable finding is also that because goods were transported as readily assembled as possible it caused expensive oversized cargo deliveries. From findings and observation of the focus EPC project it can be derived that logistics has to be involved in the early sales phase in order to receive more accurate logistics cost esti-mations for project deliveries. It is also noticed that in order to obtain savings in logistics costs, oversized deliveries must be avoided.

Best practice in the training, appointment and remuneration of members of dispute boards for large infrastructure projects

This paper reports part of a qualitative study into evolving practice in the implementation of the Dispute Adjudication Board (DAB) construction dispute resolution technique, a variant of the Dispute Review Board (DRB) concept used in the US and Canada. Data was collected through a focus group interview of 20 highly experienced dispute resolution practitioners from engineering and the law. The group was assembled from members of FIDIC-NET with direct experience of project DABs. The part reported here concerns practice and procedure for establishing DABs. The main findings are that: constitution of the DABs is often delayed because of either project owners' ignorance of the DAB process or deterrence by the cost of the DABs; such owners also tend to insist on appointing DAB members from local engineers and lawyers without sufficient understanding of the DAB process; rates of remuneration of DAB members vary widely; the training provision for DAB membership and advocacy skills is inadequate; the process of selecting candidates for DAB membership and negotiating the tripartite agreement between each member and the contractual parties needs to be navigated with great care to avoid raising ethical problems. The research contribution is threefold. First, it highlights the importance of realistic fees for DAB members within a standard framework in achieving timely establishment of a board that works well as a team. Second, it illustrates the use of qualitative focus group interview to study the impact of new contract terms from multiple stakeholder perspectives. Finally, it identifies areas where further research is needed.

Montecarlo method applied to comparison of tenders in construction projects.

La comparación de las diferentes ofertas presentadas en la licitación de un proyecto,con el sistema de contratación tradicional de medición abierta y precio unitario cerrado, requiere herramientas de análisis que sean capaces de discriminar propuestas que teniendo un importe global parecido pueden presentar un impacto económico muy diferente durante la ejecución. Una de las situaciones que no se detecta fácilmente con los métodos tradicionales es el comportamiento del coste real frente a las variaciones de las cantidades realmente ejecutadas en obra respecto de las estimadas en el proyecto. Este texto propone abordar esta situación mediante un sistema de análisis cuantitativo del riesgo como el método de Montecarlo. Este procedimiento, como es sabido, consiste en permitir que los datos de entrada que definen el problema varíen unas funciones de probabilidad definidas, generar un gran número de casos de prueba y tratar los resultados estadísticamente para obtener los valores finales más probables,con los parámetros necesarios para medir la fiabilidad de la estimación. Se presenta un modelo para la comparación de ofertas, desarrollado de manera que puede aplicarse en casos reales aplicando a los datos conocidos unas condiciones de variación que sean fáciles de establecer por los profesionales que realizan estas tareas. ABSTRACT: The comparison of the different bids in the tender for a project, with the traditional contract system based on unit rates open to and re-measurement, requires analysis tools that are able to discriminate proposals having a similar overall economic impact, but that might show a very different behaviour during the execution of the works. One situation not easily detected by traditional methods is the reaction of the actual cost to the changes in the exact quantity of works finally executed respect of the work estimated in the project. This paper intends to address this situation through the Monte Carlo method, a system of quantitative risk analysis. This procedure, as is known, is allows the input data defining the problem to vary some within well defined probability functions, generating a large number of test cases, the results being statistically treated to obtain the most probable final values, with the rest of the parameters needed to measure the reliability of the estimate. We present a model for the comparison of bids, designed in a way that it can be applied in real cases, based on data and assumptions that are easy to understand and set up by professionals who wish to perform these tasks.

A combination of cyclone and vert techniques for the management of construction projects

Many planning and control tools, especially network analysis, have been developed in the last four decades. The majority of them were created in military organization to solve the problem of planning and controlling research and development projects. The original version of the network model (i.e. C.P.M/PERT) was transplanted to the construction industry without the consideration of the special nature and environment of construction projects. It suited the purpose of setting up targets and defining objectives, but it failed in satisfying the requirement of detailed planning and control at the site level. Several analytical and heuristic rules based methods were designed and combined with the structure of C.P.M. to eliminate its deficiencies. None of them provides a complete solution to the problem of resource, time and cost control. VERT was designed to deal with new ventures. It is suitable for project evaluation at the development stage. CYCLONE, on the other hand, is concerned with the design and micro-analysis of the production process. This work introduces an extensive critical review of the available planning techniques and addresses the problem of planning for site operation and control. Based on the outline of the nature of site control, this research developed a simulation based network model which combines part of the logics of both VERT and CYCLONE. Several new nodes were designed to model the availability and flow of resources, the overhead and operating cost and special nodes for evaluating time and cost. A large software package is written to handle the input, the simulation process and the output of the model. This package is designed to be used on any microcomputer using MS-DOS operating system. Data from real life projects were used to demonstrate the capability of the technique. Finally, a set of conclusions are drawn regarding the features and limitations of the proposed model, and recommendations for future work are outlined at the end of this thesis.

Privity of Contract and Third Party Rights in European Construction Projects

Privity of contract has lately been criticized in several European jurisdictions, particu-larly due to the onerous consequences it gives rise to in arrangements typical for the modern exchange such as chains of contracts. Privity of contract is a classical premise of contract law, which prohibits a third party to acquire or enforce rights under a contract to which he is not a party. Such a premise is usually seen to be manifested in the doctrine of privity of contract developed under common law, however, the jurisdictions of continental Europe do recognize a corresponding starting point in contract law. One of the traditional industry sectors affected by this premise is the construction industry. A typical large construction project includes a contractual chain comprised of an employer, a main contractor and a subcontractor. The employer is usually dependent on the subcontractor's performance, however, no contractual nexus exists between the two. Accordingly, the employer might want to circumvent the privity of contract in order to reach the subcontractor and to mitigate any risks imposed by such a chain of contracts. From this starting point, the study endeavors to examine the concept of privity of con-tract in European jurisdictions and particularly the methods used to circumvent the rule in the construction industry practice. For this purpose, the study employs both a com-parative and a legal dogmatic method. The principal aim is to discover general principles not just from a theoretical perspective, but from a practical angle as well. Consequently, a considerable amount of legal praxis as well as international industry forms have been used as references. The most important include inter alia the model forms produced by FIDIC as well as Olli Norros' doctoral thesis "Vastuu sopimusketjussa". According to the conclusions of this study, the four principal ways to circumvent privity of contract in European construction projects include liability in a chain of contracts, collateral contracts, assignment of rights as well as security instruments. The contempo-rary European jurisdictions recognize these concepts and the references suggest that they are an integral part of the current market practice. Despite the fact that such means of circumventing privity of contract raise a number of legal questions and affect the risk position of particularly a subcontractor considerably, it seems that the impairment of the premise of privity of contract is an increasing trend in the construction industry.

Development of web services to help risk management of construction projects

Dissertação apresentada na Faculdade de Ciências e Tecnologia da Universidade Nova de Lisboa para obtenção do grau de Mestre em Engenharia Electrotécnica e de Computadores

A critical study of major construction projects in kerala vis-a-vis effectiveness in project implementation

Chapter 1 presents a brief note on the state at which the construction industry stands at present, bringing into focus the significance of the critical study. Relevance of the study, area of investigation and objectives of the study are outlined in this chapter. The 2nd chapter presents a review of the literature on the relevant areas. In the third chapter an analysis on time and cost overrun in construction highlighting the major factors responsible for it has been done. A couple of case studies to estimate loss to the nation on account of delay in construction have been presented in the chapter. The need for an appropriate estimate and a competent contractor has been emphasised for improving effectiveness in the project implementation. Certain useful equations and thoughts have been formulated on this area in this chapter that can be followed in State PWD and other Govt. organisations. Case studies on project implementation of major projects undertaken by Government sponsored/supported organizations in Kerala have been dealt with in Chapter 4. A detailed description of the project of Kerala Legislature Complex with a critical analysis has been given in this chapter. A detailed account of the investigations carried out on the construction of International Stadium, a sports project of Greater Cochin Development Authority is included here. The project details of Cochin International Airport at Nedumbassery, its promoters and contractors are also discussed in Chapter 4. Various aspects of implementation which led the above projects successful have been discussed in chapter 5. The data collected were analysed through discussion and perceptions to arrive at certain conclusions. The emergence of front-loaded contract and its impact on economics of the project execution are dealt with in this chapter. Analysis of delays in respect of the various project narrated in chapter 3 has been done here. The root causes of the project time and overrun and its remedial measures are also enlisted in this chapter. Study of cost and time overrun of any construction project IS a part of construction management. Under the present environment of heavy investment on construction activities in India, the consequences of mismanagement many a time lead to excessive expenditure which are not be avoidable. Cost consciousness, therefore has to be keener than ever before. Optimization in investment can be achieved by improved dynamism in construction management. The successful completion of coristruction projects within the specified programme, optimizing three major attributes of the process - quality, schedule and costs - has become the most valuable and challenging task for the engineer - managers to perform. So, the various aspects of construction management such as cost control, schedule control, quality assurance, management techniques etc. have also been discussed in this fifth chapter. Chapter 6 summarises the conclusions drawn from the above criticalr1 of rhajor construction projects in Kerala.

Identifying the environments of construction projects

A systematic technique for identifying the environments of construction projects is described. It provides a method for isolating the major variables surrounding construction projects, and is briefly applied to the industries of Britain and Jamaica to illustrate its application. From this, it is inferred that the environment of a Jamaican construction project in systems terms is broadly similar to the environment of a construction project in Britain.

Modelling the construction projects using plans of work

An overview of organization in the construction industry is identified from plans of work published in the UK. This provides a basis for identifying the essential steps through which any construction project must pass. It is shown that all construction projects pass through a set of stages of work, consisting of inception, feasibility, scheme design, detail design, contract formation, construction and commissioning. Although there may be changes to the sequence and importance of these stages, their identification helps in making judgements about organizational structure on construction projects.

Reactive crisis management in construction projects

Patterns of communication and behaviour emerge within a construction project in response to a construction crisis. This paper investigates, within a grounded theory framework, the nature of these patterns, the sociological and psychological forces which shape them and their relationship with crisis management efficiency. A grounded theory is presented in four parts. The first part conceives a construction crisis as a period of social instability, arising from conflicting interest groups, seeking to exercise power in the pursuit of social structures which suit their political and economic interests. The second part sees a construction crisis as a de-sensitizing phenomenon which results in a period of behavioural instability and conflict which is self-perpetuating. The third part cites social structure as an important influence upon construction crisis management efficiency, in determining the efficiency of information flow, and the level of uncertainty between those affected. The fourth part points to the in-built defence mechanisms which construction crises have and to three managerial ironies which make construction crisis management difficult.

Roles in construction projects: analysis and terminology

Standard form contracts are typically developed through a negotiated consensus, unless they are proffered by one specific interest group. Previously published plans of work and other descriptions of the processes in construction projects tend to focus on operational issues, or they tend to be prepared from the point of view of one or other of the dominant interest groups. Legal practice in the UK permits those who draft contracts to define their terms as they choose. There are no definitive rulings from the courts that give an indication as to the detailed responsibilities of project participants. The science of terminology offers useful guidance for discovering and describing terms and their meanings in their practical context, but has never been used for defining terms for responsibilities of participants in the construction project management process. Organizational analysis enables the management task to be deconstructed into its elemental parts in order that effective organizational structures can be developed. Organizational mapping offers a useful technique for reducing text-based descriptions of project management roles and responsibilities to a comparable basis. Research was carried out by means of a desk study, detailed analysis of nine plans of work and focus groups representing all aspects of the construction industry. No published plan of work offers definitive guidance. There is an enormous amount of variety in the way that terms are used for identifying responsibilities of project participants. A catalogue of concepts and terms (a “Terminology”) has been compiled and indexed to enable those who draft contracts to choose the most appropriate titles for project participants. The purpose of this terminology is to enable the selection and justification of appropriate terms in order to help define roles. The terminology brings an unprecedented clarity to the description of roles and responsibilities in construction projects and, as such, will be helpful for anyone seeking to assemble a team and specify roles for project participants.

Contemporary organizational theory in the management of construction projects

The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there are financial models that can be used to predict failure, they are based on company accounts, which have been shown to be an unreliable source of data. There are models available for cash flow management and forecasting and these could be used as a starting point for managers in rethinking their cash flow management practices. The research reported here has reached the stage of formulating researchable questions for an in-depth study including issues such as how contractors manage their cash flow, how payment practices can be managed without damaging others in the supply chain and the relationships between companies" financial structures and the payment regimes to which they are subjected.

Mathematical modelling of decision making processes in construction projects

Many different individuals, who have their own expertise and criteria for decision making, are involved in making decisions on construction projects. Decision-making processes are thus significantly affected by communication, in which a dynamic performance of human intentions leads to unpredictable outcomes. In order to theorise the decision making processes including communication, it is argued here that the decision making processes resemble evolutionary dynamics in terms of both selection and mutation, which can be expressed by the replicator-mutator equation. To support this argument, a mathematical model of decision making has been made from an analogy with evolutionary dynamics, in which there are three variables: initial support rate, business hierarchy, and power of persuasion. On the other hand, a survey of patterns in decision making in construction projects has also been performed through self-administered mail questionnaire to construction practitioners. Consequently, comparison between the numerical analysis of mathematical model and the statistical analysis of empirical data has shown a significant potential of the replicator-mutator equation as a tool to study dynamic properties of intentions in communication.