Theoretical comparison of alternative delivery systems for projects in unpredictable environments

Abstract

A project delivery process simulation is presented based upon empirical studies in the design‐build environment of semiconductor fabrication facilities (‘fabs’). The model captures key tasks and decisions in design, procurement and construction, as well as design criteria changes along the delivery of a R&D fab utility system. Simulation shows that to involve the specialty contractor from the project start on average expedites project delivery since it prevents delays caused by bidding and by contractors' unfamiliarity with the design product definition. Yet, in unpredictable project environments – environments in which design criteria are likely to change irrespectively of the project progress status – simulation reveals that the averages of construction rework and waste increase if design is prematurely frozen. Assuming that work methods do not change and design criteria remain uncertain, results indicate that a system that combines early contractor involvement with judicious postponement of the design start reduces the average duration of the fab utility delivery in relation to the expected duration if competitive bidding was used, with limited increase in the averages of construction rework and waste. Additional efficiency is gained when specialty contractors relax conservative assumptions on anticipated site conditions. An economic model uses simulation results to assess the tradeoffs between alternative project delivery systems for the case of R&D fabs.