Development of a Composite Project Performance Index for the New Engineering Contract (NECPPI) of construction projects in Hong Kong: a Delphi study

Abstract

Over the past three decades, a basket of research studies on New Engineering Contract (NEC) has been conducted in the construction management discipline. In fact, there is adequate evidence that an increasing number of client organisations have been adopting a NEC approach to undertake their building and construction projects both locally and worldwide during the last three decades. With the perceived benefits that NEC brings about, research into the Key Performance Indicators (KPIs) to evaluate the success of NEC projects in construction becomes all the more important because it can help set a benchmark for measuring the overall performance level of NEC projects. Although there are some related studies and papers on this research area, few, if any, comprehensive and systematic studies have focused on developing a comprehensive, objective, reliable and practical performance evaluation model for NEC projects. A benchmarking model has been developed in this paper using the Delphi survey technique to objectively measure the performance of the Engineering and Construction Contract (ECC) of NEC projects in Hong Kong based on a consolidated KPIs’ conceptual framework for NEC projects. Four rounds of Delphi questionnaire survey were conducted with 16 construction experts in Hong Kong and the United Kingdom. The results revealed that the top seven weighted KPIs to evaluate the success of NEC projects in Hong Kong include: (1) time performance; (2) safety performance; (3) quality performance; (4) development of mutual trust and cooperation; (5) cost performance; (6) equitable risk management mechanism; and (7) project team satisfaction. A statistically significant consensus on the top seven weighted KPIs was also obtained. Finally, a composite Project Performance Index for NEC projects (NECPPI) in Hong Kong was derived to provide an all-round assessment of NEC project performance. Different NEC projects can now be assessed on the same basis for benchmarking purposes. Construction senior executives and project managers can thus use the Index to measure, evaluate and improve the performance of their NEC projects to strive for construction excellence. Although the NECPPI was established locally in Hong Kong, the research methodology could be replicated in other parts of the world such as the United Kingdom or other European countries to produce similar indices for international comparisons. Such and extension would aid the understanding of managing NEC projects across different geographic locations.