Project Delivery System Research Articles

RISK ASSESSMENT OF DESIGN-BID-BUILD AND DESIGN-BUILD BUILDING PROJECTS

Projects managers normally seek to lower the extent of risk by signing contracts, such as Design- Bid-Build (DBB) or Design-Build (DB) project delivery systems to transfer or share risk over to other project entities. The main purpose of this study is doing risk assessment from the perspective of clients, comparing project delivery systems mentioned above to see, firstly, what risk factors are, and, secondly, to analyze the ranking of risk factors and amount of risk with temporal sequencing change over dierent project stages (e.g. proposal surveying, scheme designing, procurement contracting, and construction receiving). Thus, identify risk factors using literature reviews and conduct survey with clients; utilize the fuzzy numbers with integral value to simulate the changes of ranking of risk factors and the amount of risk with temporal sequencing, given dierent the attitude of decision makers in risk management (pessimistic, neutral, or op- timistic) of the decision-makers towards risk, meanwhile, consider information accuracy in decision-making environment. The result shows that Design-Bid-Build mainly concern about quotation, cost, drawing spec- ification, etc. Furthermore, many risks arise in earlier stage, such as proposal surveying stage and scheme designing stage, that the practice of Design-Build should exert precaution to prevent likelihood of contrac- tors using inferior materials to cheat profit out of armed bidding assignment, drawings, etc., and that risks are higher in proposal surveying stage and procurement contracting stage.

Project Delivery System for Foreign Manufacturers in the United States

Foreign auto manufacturers and suppliers produce cars and parts in the United States not only in order to support the high demands of the U.S. market, but also to expand their market share in the largest market in the world. To produce their products, one of the first steps is to build a manufacturing plant while taking into account all the necessary rules and regulations and the different construction environment. Foreign auto manufacturers and suppliers therefore not only need to be familiar with the use of U.S. project delivery systems for the construction of new manufacturing plants and the expansion of existing manufacturing plants in the United States, but also to control potential additional risks associated with their construction caused by various factors such as cultural differences, changed laws, and regulations. This study applied a case study approach to demonstrate and compare the project delivery systems implemented for the construction of five automotive manufacturing plants in the Southeastern United States. The results of this study highlight the common practices and differences that exist with regard to project delivery systems. The conclusions derived from this case study can assist foreign manufacturers in the construction of new manufacturing plants and the expansion of existing plants in the United States, and will also provide valuable insights and considerations for U.S. construction participants who wish to work with foreign manufacturers.

Strategies for Design-Build in Korea Using System Dynamics Modeling

Increasingly adopted by both public and private organizations, design-build (DB) has become a favored construction project delivery system, outperforming other systems in terms of cost, schedule, and quality. However, DB has been especially criticized by the public sector for practicing subjective evaluation, for requiring excessive resources, and for providing only limited accessibility to small and medium-sized contractors. In Korea, similar critiques have been raised, as these qualities have prevented public owners from benefiting from the potential advantages of DB. In order to address these challenging issues, the present research systematically analyzes the characteristics of the DB delivery system in Korea. Based on industry surveys and an extensive literature review, a qualitative system dynamics model is developed and used to propose and test hypothetical DB policy alternatives which are expected to enhance DB performance. Furthermore, after the appropriate customization processes, these research findings can also be applied to the industry settings of different countries.

Analyzing Schedule Delay of Mega Project: Lessons Learned From Korea Train Express

In 2004, Korea became the fifth country in the world to own and operate a high-speed railway called Korea Train eXpress (KTX). Numerous uncertainties and challenges during planning and managing phase resulted in schedule delays and cost overruns. The delay causes of each activity along the 412 km Korea high-speed railway route were very difficult to identify because KTX project consisted of 11n141 different activities. This paper evaluates challenges, obstacles, and performances of KTX project. First, critical sections in the railway route that influenced significant delays to project completion were identified. Then, delay causes of these critical sections were investigated thoroughly. The analysis discovered five major delay causes for KTX project. They are lack of owner's abilities and strategies to manage hi-tech oriented mega project; frequent changes of routes triggered by conflicts between public agencies and growing public resistance from environmental concerns; the inappropriate project delivery system; a lack of proper scheduling tool tailored for a linear mega project; and redesign and change orders of main structures and tunnels for high-speed railway, which is fundamentally different from the traditional railway construction. Based on the in-depth analysis of KTX project, through which a conceptual framework was established to identify the various facets of mega projects, this paper suggests lessons learned for engineers to better prepare and respond to potential causes of schedule delays for mega projects.

Financial analysis of road project delivery systems

PurposeA project delivery system (PDS) refers to the organizational framework of a project that defines the control mechanisms and the relationships between actors and their incentives. It is of major importance to the project owner as it, for instance, contributes to the project's level of efficiency. This paper aims to define indicative, relative cost performances of different PDSs in a road management context to support the road owner's strategy development.Design/methodology/approachThis study compares the costs of design‐bid‐build, construction management at‐fee, design‐build, design‐build‐operate and design‐build‐finance‐operate based on an international data capture focusing on the operational performance of these PDSs. A financial analysis was made to determine the systems' present costs to a road authority based on relevant market estimates. Moreover, a step towards understanding their overall efficiency was taken by focusing also on differences in speed of delivery which result in expenses or savings to the user community.FindingsAlthough the applicability of a PDS depends on project properties and constraints, the study concludes that, in general, the broader the scope of services supplied by a single contract, the lower the system's present cost to the owner. The inclusion of private finance and early commissioning advantage, however, change the ranking so that universal conclusions cannot be drawn. DBFO seems to be commonly in the middle category.Research limitations/implicationsHere, PDSs are applied to a relatively large project, minimum size €30‐60m, in well‐known conditions and involving no factors of uncertainty due to third parties. The results are not valid in smaller and/or more constrained projects.Originality/valueThe study provided new knowledge of the owner's and society's average comparable cost performances in the case of five different PDSs. Since a single‐value, exclusive solution hardly exists, the study on the sensitivity of different PDSs to key financial parameters is also valuable.

Monte Carlo Simulation Approach to Support Alliance Team Selection

The alliance concept is similar to the design build project delivery system. However, it is denoted by a special form of partnership between the owner and the design-build team, where the owner is very involved in the project. This type of delivery systems is gaining popularity as many infrastructure projects require the owner to order materials ahead of time, before engaging the design-build team in the project. As in design-build, the selection of the engineer-procure-construct team depends not only on the price but also on qualitative factors. This paper lays out the framework that facilitates selecting the best alliance team for a project by quantifying the evaluation factors and combining them into a single score. Using a Monte Carlo simulation and varying all the factors relevant to the decision problem can reveal biases present in the evaluation to assist in making the best possible decision. A case study dealing with a large utility project illustrates this methodology.

Grouping decomposition under constraints for design/build life cycle in project delivery system

The design/build project delivery system has been adopted in the construction industry for many years. The numerous iterations of activities (tasks) can result in a hierarchical structure that reflects the life cycle of this type of delivery system. The Design Structure Matrix (DSM) approach has been used for simplifying complex project activities by clarifying the relationships between activities through grouping. However, if there are a large number of coupled activities it can increase the design/build cycle time and it is difficult to apply grouping decomposition. This paper presents the Grouping Decomposition (GD) model that decomposes a large number of activities through grouping. It is used together with the K-means clustering algorithm which quantifies the relative coupling strength of the design/build activities. An example is proposed that demonstrates the GD modelling method. The results are compared with different grouping methods. These show that the proposed GD model performs well in partitioning and extremely well in clustering the coupled activities.

Lean Project Delivery System: An Update

The Lean Project Delivery System emerged in 2000 from theoretical and practical investigations, and is in process of on-going development through experimentation in many parts of the world. In recent years, experiments have focused on the definition and design phase of projects, applying concepts and methods drawn from the Toyota Product Development System, most especially target costing and set based design. These have been adapted for use in the construction industry and integrated with computer modeling and relational forms of contract. Although by no means a finished work, the Lean Project Delivery System has developed sufficiently to warrant an updated description and presentation to industry and academia, incorporating processes and practices that have emerged since earlier publications.

Analysis of Techniques Leading to Radical Reduction in Project Cycle Time

Today’s construction business relies on first-to-market product strategies to gain competitive advantages and increase profit margins. This has created an increased demand for a high performance capital project delivery system that can achieve a dramatic reduction in project cycle time. Very few decision tools and guidelines exist to assist owners in choosing appropriate delivery systems and project strategies to radically reduce the project cycle time from the preplanning stage through start up. The research presented in this paper surveyed the construction owners and architectural/engineering/construction firms to identify projects that have achieved greater than 25% reduction in overall project cycle time when compared to current industry standards. The data collected were analyzed to determine the techniques that facilitate radical reduction in project cycle time. These techniques include, best practices and schedule reduction techniques as well as the various management techniques employed on the projects identified by the Construction Industry Institute (CII). This research also identified the barriers to radical schedule reduction. The research concludes that radical schedule reduction well in excess of 25% can be achieved through the selective employment of management techniques, schedule reduction techniques and CII best practices. Almost every construction manager can utilize this research to improve project performance whether for radical reduction or simply more effective execution.

Civil Engineers in Public-Private Partnerships and as Master Planners for Infrastructure Development

Public-private partnerships (PPP) have been actively implemented around the world since the 1980s, including projects in both developed and developing countries. Among the reasons for the growing use of this project delivery system are the deterioration of the basic infrastructure systems, the lack of public funding, and the interest of private investors for discovering attractive investment opportunities. Because of public-private partnerships as a project delivery system, civil engineers have been exposed to knowledge areas such as finance, risk analysis, public policy, and conflict resolution, which traditionally have not been taught in civil engineering curricula. Therefore, civil engineers now have opportunities to play a major role in PPP projects as master planners of infrastructure development. This paper analyzes the basic skills that a civil engineer must have in order to be an active participant in the development and implementation of PPP projects. We gathered input from industry practitioners...

The private finance initiative, project form and design innovation: The UK's hospitals programme

This paper discusses the role of public demand, in the form of a government procurement policy, in generating innovative solutions for healthcare infrastructure. It considers the effects of the project delivery system (planning, finance, construction and operation) for new hospitals on design innovation. It focuses on hospitals built under the UK's private finance initiative (PFI), which was partly introduced to inject increased innovation into hospital delivery. We use case studies of six early PFI hospitals to argue that the introduction of PFI has increased the complexity at the interface between project delivery and hospital operational functions. The result is a project delivery model which yields less innovative outcomes and produces facilities that might not be able to cope with future changes in demand. The paper suggests that new public procurement models do not automatically provide efficiency and innovation benefits.

Incentives in the Chinese Construction Industry

Incentives have been increasingly applied to align the objectives of participants in the delivery of construction projects. However, little research has been undertaken to systematically study the use of such incentives. This paper reports the findings of an empirical survey of the Chinese construction industry on: the need to apply incentives; frequency of the usage of incentives; how the incentive schemes are decided; and their effectiveness in application. The incentive schemes of the Three Gorges Project is also studied, from which an incentive matrix is presented that has measures tied not only to the final results but also extended to the whole construction process to facilitate providing early warnings, obtain continuous improvement, and ultimately achieve satisfactory project results for participants. It is recommended that future studies be encouraged to develop incentives according to project features such as project type, delivery system, project risk, and participants’ needs and their experience, enabling incentives to be applied broadly by participants to improve the efficiency of project delivery.

Comparative Analysis of Project Delivery Systems Cost Performance in Pacific Northwest Public Schools

Alternative project delivery systems such as construction management at risk (CMR) are increasingly used in public school construction in the United States. CMR is expected to benefit owners with a guaranteed maximum price (GMP), decreased change order cost, and increased cost “certainty.” This paper empirically compares cost growth performance of the CMR and design-bid-build (DBB) methods in Pacific Northwest public school projects. Data were collected from state records and previous studies on 297 completed schools in Oregon and Washington. The analysis of the data shows no statistically significant difference between CMR and DBB in construction change order costs, school project costs exceeding the GMP in 75% of the cases, and a statistically significant difference in cost growth between CMR and DBB projects during buy out, making CMR projects less efficient at controlling cost growth at buy out. These results counter some of the traditional expectations of the CMR delivery method.

Development of a benchmarking framework for pharmaceutical capital projects

Benchmarking is a proven technique for improving project performance and, as such, is a critical component of any mature project delivery system. Competitive benchmarking requires industry‐specific metrics in absolute terms since processes vary by industry, and any metrics used within a single industry must be attuned to its particular processes. A framework is developed for evaluating pharmaceutical capital facility projects using metrics specific to the characteristics of these unique projects. Establishment of the framework made possible the development of a set of industry‐specific metrics and a flexible data collection and reporting system for measuring project performance. Preliminary findings from an initial sample of 40 pharmaceutical projects confirm that meaningful industry‐specific metrics can be produced for pharmaceutical capital facilities benchmarking. Developing such a framework enables the industry to measure project performance more accurately, get meaningful project performance comparisons, and ultimately establish credible norms for project performance.

Alternative Project Delivery Systems: Applications and Legal Limits in Transportation Projects

This paper presents the results of a comprehensive survey of the legal codes of all the 50 states in the United States regarding alternative project delivery systems in transportation projects. In the past decade there has been a surge of legislation allowing state transportation officials much more flexibility regarding the choice of project delivery systems. These delivery systems are usually selected based on a combination of price and quality. Specific delivery systems studied in this paper are Design-Build, Construction Management at Risk, and Public-Private-Partnership. The background and history of the emergence of these new delivery systems are studied in this paper. The research showed that in many states, alternative delivery systems may be allowed but with specific restrictions. For each state, all of these delivery systems have been researched and placed into one of the following distinguishable categories: (1) fully authorized; (2) authorized but needs extra approvals; (3) authorized for a pi...

Realized Economic Efficiency of Road Project Delivery Systems

Lately project delivery methods where the implementer offers broader service packages are increasingly used in infrastructure projects worldwide. At the same time, the number of alternative project delivery methods has increased making selection of the best one difficult. The road authority must understand the features of the methods in order to select the most effective ones in terms of economic efficiency. To assist in the selection, this research compared the operating principles and performance of design–bid–build, construction management, design–build (DB), and design–build–maintain (DBM) based on an international interview survey and an extensive literature review. Opinions presented by the interviewees and literature review all pointed to the same direction. Based on the analysis of road procurement, broader service packages give, on average, better value for the money and enable clients to attain their goals better than more traditional methods. DB and DBM seem to outperform more conservative proc...

Virtual Project Delivery System Adviser

The selection of an appropriate project delivery system (PDS) is of paramount importance to an infrastructure project, as it could affect the success of the plan in terms of time, cost, and quality. Researchers have advocated that the development and application of a systematic approach to the selection of PDS is needed. To achieve that, not only is a reliable analytical framework necessary, but a platform that would allow users to freely access and share their experience on various PDSs would also be indispensable. The World Wide Web, a powerful tool for collecting and disseminating knowledge and information, is a suitable platform for developing the PDS selection model. The purpose of this paper is, therefore, to examine the suitability of applying internet technologies to selecting appropriate project delivery approaches for infrastructure projects. The paper begins by describing the conceptual framework of the virtual project delivery system adviser for infrastructure facilities (VPDSA-IF), and the de...

Project Delivery System Selection under Uncertainty: Multicriteria Multilevel Decision Aid Model

Selecting an optimal project delivery system is a critical task that owners should do to ensure project success. This selection is a complex decision-making process. The complexity arises from the uncertain or not well-defined parameters and/or the multiple criteria structure of such decisions. In this study, a decision aid model using the analytical hierarchy process (AHP) coupled with rough approximation concepts is developed to assist the owners. The selection criteria are determined by studying a number of benchmarks. The model ranks the alternative delivery systems by considering both benchmark results and owner's opinion. In interval AHP, an optimization procedure is performed via obtaining the upper and the lower linear programming models to determine the interval priorities for alternative project delivery systems. In cases having incomparable alternatives, which is the most likely case in uncertain decision making, the model uses rough set-based measures to reduce the number of decision criteria to a subset, which is able to fully rank the alternatives. To illustrate the applicability and usefulness of this methodology, a real world case study will be demonstrated.

A survey of the payment mechanisms for transportation DBFO projects in British Columbia

In traditional project delivery systems, payment mechanisms provide compensation for the work performed using construction capital payments. In the alternative public–private partnership (PPP) systems, payment mechanisms follow the selected PPP system. For example, the build–operate–transfer system provides compensation based on project demand using real‐tolls usage payments; the design–build–finance–operate (DBFO) system provides shadow‐tolls usage payments; and the performance‐based DBFO system provides compensation based on contractor's performance using service availability payments. Designing the payment structure is an important task where several factors have to be considered. This paper analyses the implementation of payment mechanisms in a number of DBFO transportation projects in BC, Canada, in terms of payment structure, payment types and characteristics, determination and funding. The analysis provides insights for the design of payment mechanisms. The analysis shows that more payment types are being used and that the mechanisms are designed to achieve specific government objectives. The analysis refers to a new ‘hybrid’ payment mechanism with elements derived from the traditional and the PPP systems. The hybrid system may have potential to minimize the overall project cost; however, agencies have to be flexible in the delivery concepts as combinations of payments for inputs, usage and services might have to be used.

Alternative Project Delivery Systems for Public Transportation Projects

Most public construction projects have traditionally used the Design-Bid-Build (DBB) method of project delivery. This is the familiar process in which the public entity hires an architect/engineer to design the required facility. The fully designed project is then put out for bid, and the lowest bidder is awarded the contract for construction. Facilitated by legislation passed primarily within the last 5 years, public entities have made increasing use of several Alternate Project Delivery Systems (APDS), including Design Build (DB), Construction Management at Risk (CM@R), and Job Order Contracting (JOC). A nationwide survey of DOTs was conducted to compare the impact of APDS on project quality, project cost, and timeliness of project delivery versus the traditional DBB approach. The survey shows that DB is the most popular APDS delivery system among all the departments of transportation. The different DB award methods are covered in detail. The results of the survey indicate that certain types of transportation projects can be delivered more efficiently using APDS.