Project Delivery System Research Articles

Making sense of the multi-party contractual arrangements of project partnering, project alliancing and integrated project delivery

Collaborative construction project arrangements have been the subject of many development efforts owing to the frustration felt toward the opportunism inherent in traditional contracting. Globally, three approaches have stood out: project partnering, project alliancing and integrated project delivery. These so-called relational project delivery arrangements have much in common. This study aims to clarify the similarities and differences between the arrangements by examining their key concepts and features one by one and in relation to each other; the motivation behind each is also examined. Early involvement of key parties, transparent financials, shared risk and reward, joint decision-making, and a collaborative multi-party agreement are some of the features incorporated in all the arrangements to a varying degree. Beyond the numerous details, divergent applications and constant evolution presented, the study also recognizes project alliancing as a project delivery system in its own right due to its contractual structure that integrated project delivery aims to imitate while introducing some management approaches not included in project alliancing. Project partnering, although developed in leaps and bounds since its introduction, takes a more conservative approach to work scope and liabilities. Similarly, project alliancing takes relational contracting to the extreme compared to the current forms of integrated project delivery and, especially, project partnering.

Using a design-build contract for Lean Integrated Project Delivery

Purpose: By making a distinction between design-build as a project delivery system and design-build as a contract type, I suggest that design-build contracts can be a useful vehicle for implementing Lean Integrated Project Delivery. Research Method: Experience, observations and personal insight. Findings: Not all owners are legally allowed or institutionally prepared to enter a threeparty relational contract that some consider the hallmark of Integrated Project Delivery™. Some of those owners are better suited to a design-build contract format. A design-build contract can be structured as a relational contract in order to more fully implement Lean IPD, or can be structured as a transactional contract using a traditional design-build form in which the supply chain chooses to implement Lean IPD principles without an owner mandate. Limitations: Design-build contracts do not displace the need for three-party relational contracts. Owners who have legal authority and suitable temperament may be better served by a three-party integrated agreement. Since not all owners fit that description, design-build contracts may be useful vehicles to deliver Lean IPD projects. Implications: Lean IPD can more deeply penetrate the industry if more owners are able to utilize it. Increasingly, public owners are gaining legal authority to use design-build procurement. Many private owners would have difficulty getting internal stakeholders to agree to a three-party integrated agreement, but may be able to implement Lean IPD using a design-build contract instead. Value for practitioners: Having an alternative contracting method opens up new avenues for practitioners to implement Lean IPD on projects that might not otherwise allow for it. Keywords: Lean; Integrated Project Delivery; design-build; contract type; relational contract Paper type: Forum essay

Implementing Integrated Project Delivery on Department of the Navy Construction Projects

Research Questions: 1) Which IPD techniques can be integrated into the Navy’s project delivery method, and how would Naval Facilities Engineering Command (NAVFAC) benefit from them? 2) How can NAVFAC determine which projects are potential candidates for using IPD techniques? Purpose: To determine which techniques contained within IPD and their associated efficiency improvements and waste reductions may directly benefit NAVFAC projects and public sector construction projects in general. Research Design/Method: This research employs case study analysis to asses IPD techniques that can be implemented on Navy projects. It reports research results from three construction projects employing various levels of IPD implementation. Findings: This research has identified numerous IPD techniques that could be successfully implemented on NAVFAC projects with no changes to contract laws. The research also resulted in a tool which can be helpful in identifying which projects are preferred for implementing the IPD techniques identified. Limitations: This research did not examine changing the Federal Acquisition Regulations. It focused strictly on identifying techniques that could be integrated into the current project delivery system. Implications: This research will allow for a greater understanding of IPD within NAVFAC and could accelerate efforts to bring IPD to Navy and other public sector construction projects. Value for practitioners: This paper provides an easy-to-understand list of IPD techniques that could be implemented on Navy projects as well as an easy-to-use IPD project selection tool. Both findings will allow those that have little experience with IPD to understand how IPD works, the implications of IPD, and how to identify projects that will benefit the most from IPD techniques. Keywords: US Navy, Public Sector, Integrated Project Delivery, Lean Construction Paper type: Full paper

Last Planner and Integrated Project Delivery

Research Questions: 1) Does the use of Last Planner (LP) improve project performance? 2) Does Integrated Project Delivery (IPD) show different project performance? 3) Do IPD projects use LP? Purpose: The first objective is to figure out the relationship between IPD, LP, and project performance. Research Method: survey of ‘Lean’ projects known to adopt LP, including IPD projects, to determine the correlation between LP implementation and Project performance (cost reduction + time reduction); and a T test between IPD and non-IPD projects. Findings: 1) There is significant correlation between the degree of implementation of LP and project performance; 2) IPD projects do not show significantly different performance from that of others not adopting IPD; and 3) IPD projects do not show significantly different implementation of LP from that of others but their implementation is near to significance Limitations: Limitations in sample size and data quality reduce the credibility of generalizations. Implications: This exploratory research revealed interesting and important relationships between project structures and practices on the one hand and project performance on the other. Value for practitioners: The findings from this paper can be used by industry practitioners to design project delivery systems for better performance.

Alternative methods for choosing an appropriate project delivery system (PDS)

Purpose – Recent literature has proposed many theoretical methods to help decision makers choose an appropriate project delivery system (PDS) in a rational manner. None of these articles however systematically compare and systematize the available PDS selection methods and guide decision makers in choosing a method that best meets their PDS decision‐making circumstances. This paper aims to bridge this gap.Design/methodology/approach – Four groups of PDS selection methods, namely, guidance (e.g. decision charts and guidelines), multi‐attribute analysis (e.g. multi‐attribute utility theory and analytical hierarchical process), knowledge‐ and experience‐based (e.g. case‐based reasoning), and mix‐method approaches are reviewed, compared and systematized.Findings – The discussed methods vary in their underlying concepts, complexities of implementation and levels of required information. They also differ in the ways how decision makers' preferences are elucidated, expressed and measured. A conceptual framework ...

Assessing the Effectiveness of Road Construction Project Delivery System in Indonesia

In today's ever increasing demand for transportation services, the national road agencies are finding themselves in mounting pressure to provide reliable road transportation system. Despite efforts to improve the programming and implementation by the central and regional road agencies, the quality of national road system is constantly decreasing. For years the government of Indonesia has relied on traditional design-bid-build approach for delivery of road and highway construction and maintenance projects. This paper reports the result of study on alternative project delivery methods for road construction in Indonesia as way to improve the quality of national road system. The study is the first step toward identifying the potential application of alternative delivery method for the national road network system. The paper also summarizes the survey results from road agencies and contractor concerning the current road project delivery system as well as attempts to assess the viability of implementing design-build and performance-based contract approach.

Risk-Neutral Pricing Approach for Evaluating BOT Highway Projects with Government Minimum Revenue Guarantee Options

AbstractBuild-operate-transfer (BOT) is a public-private partnership (PPP) project delivery system for the financing, development, and operations of highway projects around the world. Uncertainty about future traffic demands is one of the most important risk factors in the operations phase of a BOT project. There is a considerable amount of evidence indicating that the improper consideration of this uncertainty contributes to the financial failure of BOT projects. The inherent limitation of conventional economic analysis methods contributes to this uncertainty; most notably the net present value (NPV) approach that is typically used in the economic valuation of BOT projects. In addition, the NPV approach is insufficient to determine the correct market value of minimum revenue guarantee (MRG) options. The government offers MRG options to the concessionaire as a revenue risk-sharing strategy in BOT projects. The authors apply the real options theory from finance/decision science to explicitly price MRG opti...

Web-Based Project Management Framework for Dredging Projects

This paper describes a project management framework for dredging projects (PMFD) developed to facilitate the performance of dredging projects. The framework uses established project management techniques, a Web-based project management system (WPMS) environment, the Project Management Institute's project management body of knowledge project life-cycle concept, and a project delivery system commonly used to procure dredging projects to analyze and optimize project management processes in dredging operations. These processes are intended to be aligned with the project contracting organization's business rules to create a practical framework to manage the project. The presented framework addresses WPMS limitations reported in previous research. The paper describes the principles of applying the PMFD to the management of dredging projects. Finally, the paper presents a case study describing a specific project scenario to illustrate the application of the principles and provides a cost-benefit analysis for the implementation of the WPMS. This presented framework can be adapted to manage other types of construction projects, and it may be implemented by a project owner who supervises and controls an entire project life cycle. DOI: 10.1061/(ASCE)ME.1943-5479.0000070. © 2012 American Society of Civil Engineers.

The way towards cooperative project delivery

PurposeLean construction enhances cooperative project delivery with a focus on customer needs and the optimization of the project as a whole rather than pieces during the design phase, as well as, during construction. The purpose of this paper is to show that by using the lean approach, project results will be positively influenced by a cooperative project delivery, in the areas of cost, time and quality. Also, the full application of the lean cooperative model is limited by strict design‐bid‐build tender regulations required for public clients.Design/methodology/approachThe existing lean project delivery system in the USA and the corresponding contract – the integrated form of agreement – and, the Australian alliance agreements have been analysed. The main focus of the analysis has been to identify the fundamental characteristics and factors of success concerning a cooperative project delivery. As a result, a lean system which includes the key parts for cooperative project delivery from the client's perspective will be presented in this paper. It identifies which procurement rules are impediments to early cooperation and – hence – would have to be modified. The reasons for those modifications are given on the basis of the case studies.FindingsIt was difficult to compare the results of different projects and to allocate the influence of different tools to the outcomes in terms of cost, time and quality.Originality/valueA matrix has been developed that measures qualitative results and correlates it to the use of the tools and is presented in the paper.

Project Alliancing – The Process Architecture of a Relationship Based Project Delivery System for Complex Infrastructure Projects

Project Alliancing is a relationship based project delivery system designed for complex infrastructure projects. A unique feature of its process architecture is that all parties including the owner expressly agree to resolve all conflict internally, on the spot and without recourse to litigation or arbitration. Its foundations are built on selecting people who have the ability to develop a robust working relationship and who can thrive in a no blame integrated team culture. Project Alliancing is something more than just a new approach to delivering complex infrastructure projects. It is a reflection of our changing society and the need to find drivers and processes that are compatible with the complexity of life in the 21st Century. It is also recognition that technology alone will not be sufficient, of itself, to guide, commerce, politics and society through the challenges and complexities of modern commercial activity. Project Alliancing also challenges the 20th century approach to competition. It is not a rejection of competition per se but a re-direction of the power of competition. It removes it from between the owner and the non- owner parties and places it between the Alliance as a whole and whatever the key performance indicators, including price and timing, that the owner believes will add value to the project. Successful Project Alliances have resulted in project savings exceeding 20% of the estimated gross budget. It is a project delivery system that is compatible with and reflective of the emerging commercial, political and social dynamics of the 21st Century. The following are examples of the core principles incorporated into most project alliances: • a change in culture from a ‘master-servant’ to a peer relationship. • all risks and rewards are shared on an agreed equitable basis- sharing the pain and the gain. • outcomes where all parties either win or lose. • a collective responsibility for the project. • all parties have an equal say and all decisions must be ones that are the best for the project. • a ‘no-blame’ integrated team culture. • full access to the resources, skills and expertise of all parties. • a philosophy of delivering optimum commercial benefits and outstanding outcomes to all parties. • a high performance culture with encouragement for innovative thinking. • open and honest communication with no hidden agendas. • support rather than blame and the honouring of all commitments made. • an express commitment to resolve all issues within the alliance without recourse to litigation except in the case of wilful default. • all transactions to be fully open book. • unconditional and visible support from the top level of the participating organisations.

Civil Engineers as Master Builders and the Professionalization of Construction

The introduction of new technology, depletion of natural resources, and aging infrastructure drive the need for innovation in project delivery systems within the architect, engineer, and contractor (AEC) community. Current practices of AEC industries will inevitably change as clients seek more innovative solutions and better services. How civil engineering’s current practices and future vision fit into that evolving reality remains a question. In ASCE’s Vision 2025, civil engineers will function as master builders, which raises several questions concerning what exactly it means to be a master builder in the context of current and future AEC practices and how an engineer serving as a master builder will affect other AEC practitioners. This paper discusses the master builder concept and its implications from the perspectives of (1) current AEC practices and business models, (2) bodies of knowledge, and (3) professionalization. The basic research approach includes a qualitative analysis of the AEC industry’s...

Using Integrated Student Teams to Advance Education in Sustainable Design and Construction

This article describes a case study involving a Midwestern public university that incorporated an integrated, cross-disciplinary project delivery activity to create an effective framework for sustainable design and construction education. The article first provides an overview of sustainable construction and its advantages, describes how sustainable design and construction requires a modernized project delivery system to work effectively, and discusses the primary impacts of sustainable design and construction on the construction industry. The article then describes how one large Midwestern university has attempted to use integrated, multidisciplinary student teams to advance the concept of sustainable design and construction in the classroom environment. Curricula that include interdisciplinary courses on integrated delivery and leadership in construction, engineering and architecture could better prepare students for their future careers in the building industry and develop better managers and colleagues.

Performance Based Contract Application Opportunity and Challenges in Indonesian National Roads Management

In the framework of the Indonesian national roads’ service quality improvement, Performance Based Contract (PBC), with a Design (D) – Build (B) – Operate (O) – Maintenance (M) project delivery system, deserves to be seriously considered. This paper analyzes the opportunity and challenges of PBC implementation that suits the Indonesian national road management system. It is revealed that the benefits of PBC will be gained if contractors are allowed to develop their creativity and innovation during design and construction, improve their productivity and efficiency during operation, and identify accurately the risks transferred to them by service users. It is also described that national roads have to be operated as planned according to the design Annual Average Daily Traffic (AADT) and control on overloading should be exercised during the roads’ design life in order to benefit from PBC. As long as these requirements are fulfilled, simulations on unpaved national roads have shown promising results, which include lower investment compared to DBB project delivery system, better guarantee of road condition during design life, and only a slightly higher monthly performance cost compared to the usual maintenance cost.

Correlation between Construction Procurement Methods and Lean Principles

Different procurement methods have been developed and applied in the construction industry for improving performance. At the same time, novel management concepts have been adopted for performance improvement based on new production methodologies. The lean principle is one such methodology being applied in the construction industry. This paper proposes that with the right combination of objectives, principles and techniques, this can form the basis for a new project delivery system. The paper has as its objective the identification of an appropriate procurement method that incorporates lean principles. It reviews extant literature on the lean concept and its application in the construction industry, as well as construction procurement methods, and their individual characteristics. The study finds that partnership arrangements have a higher correlation with lean principles compared to other procurement methods because of the emphasis on collaboration and teamwork through construction partnerships.

Fuzzy Preference Relations Consensus Approach to Reduce Conflicts on Shared Responsibilities in the Owner Managing Contractor Delivery System

This paper proposes a fuzzy preference relations consensus (FPRC) approach that helps owners and contractors reach consensus on their responsibilities and reduce conflicts in shared tasks. A fuzzy similarity consensus (FSC) model was developed to aggregate experts’ opinions on roles and responsibilities in the owner managing contractor (OMC) project delivery system. The FSC model categorized 324 generic OMC tasks into three responsibility task lists: owner, contractor, and shared. In a consensus-reaching process, the FPRC approach is applied to shared tasks, where expert opinions on responsibility conflict are expressed, to achieve an aggregated responsibility decision for each task. Experts compare the three responsibility alternatives in pairs by using linguistic preferences, defined on a fuzzy preference scale, to select a preferred responsibility alternative for each of the conflicting tasks. A computed linguistic consensus degree guides the experts on their level of consensus in every round of the process. The quality of experts is defined with a fuzzy expert system–determined importance weight factor for each expert. The FPRC approach is relevant to the construction industry, as it incorporates consistency in decision making by allowing experts to measure and reach an adequate level of consensus linguistically when deciding on responsibilities. The proposed approach provides a method of reducing conflicts in the assignment of task responsibility between the owner and its contractors as early as the project initiation phase; thus, the project teams can concentrate on the work to be done rather than deal with responsibility conflicts during project execution.

Project delivery system selection of construction projects in China

AbstractThe suitability of the project delivery system (PDS) selected for a project greatly influences the efficiency to conduct a project. It is not an easy task to select an appropriate PDS as a large amount of ambiguous information exists. The paper aims to develop a PDS selection model to help owners to make a decision. The similar projects are identified through the similarity metrics between the target project to be predicted and those in the database. In addition, some of the indicator values are examined and modified through DEA-BND model, and then they are trained by ANN model to predict an appropriate PDS for the target project. A survey was conducted by postal questionnaire to empirically validate the reliability of the model in China. The indicator system for the selection of an appropriate PDS is established. Through the comparison of results predicted by different models, it is found that the PDS selection model developed in this paper can predict PDS precisely, and shows higher reliability than the ANN model. A PDS selection model is developed by inputting project-specific data, which proves to be more accurate and less dependent on experts’ judgment. Its practical application will benefit the owner’s decision making in the selection of the PDS.

Analysis of project delivery systems in Chinese construction industry with data envelopment analysis (DEA)

PurposeSelecting a proper project delivery system is one of the critical issues for the success of a project. This paper discusses the application of project delivery systems in China and the existing project delivery system selection methods, analyzes project objectives and indicators influencing the selection of project delivery systems, and aims at finding an appropriate method to select project delivery systems.Design/methodology/approachA survey was conducted by postal questionnaire and Multivariate Statistical Analysis was applied to analyze the project data. A robust model was developed to analyze the selection of project delivery systems.FindingsThe results of survey and analysis show that design‐bid‐build (DBB)/project management (DBB+PM), design‐build (DB)/engineering, procurement and construction (EPC)/Turnkey, multi‐stage DB/EPC and EP+C are commonly used in China. The differences between DBB and DBB+PM, and differences between DB/EPC and Turnkey in China are not significant. Weights of project objectives in each project delivery system and the ranking of indicators influencing the selection of project delivery systems are acquired.Originality/valueAnalysis was conducted with a robust model instead of traditional model in consideration of efficiency. This research may assist owners in Mainland China in selecting project delivery systems, improve project performance, and encourage efficiency in project delivery process.

MARKETING MANAGEMENT FUNCTIONS OF CONSTRUCTION COMPANIES: EVIDENCE FROM TURKISH CONTRACTORS

Globalization, the restructuring of the world economy, changes experienced in project financing and delivery systems, the pervasive utilization of information and communication technologies (ICT), and the intensity of the competition prevailing in the market compel contractors to rethink the competitive forces and client expectations, which in turn necessitate a well planned marketing orientation for business planning. The Turkish construction industry is not different from the global construction industry in the context of intense competitiveness as Turkish contractors do not only undertake projects in the domestic market but also in foreign markets including the Commonwealth of Independent States, Africa, Middle East, Europe, Asia, etc. They also often face intense competition from local and foreign companies such as U.S., Chinese, Japanese, French, Spanish, German, U.K., and Korean contractors. Given the intense competition, effective marketing of their services is imperative for Turkish contractors in achieving competitive advantage. This study explores the marketing management functions of Turkish construction companies and the extent to which they carry out traditional marketing practices via a questionnaire survey of 71 Turkish contractors. The survey results revealed that Turkish contractors made use of marketing management functions to some extent, yet responding contractors did not attach adequate importance to differentiating their products/services from the products/services offered by their competitors. Since achieving client satisfaction by means of product and/or service differentiation is the ultimate goal, Turkish contractors should carry out all of the traditional marketing practices in order to differentiate themselves in the market, and thereby create competitive advantage. Santrauka Globalizacija, persitvarkanti pasaulio ekonomika, kvalifikacijos pokyčiai projektu finansavimo ir tiekimo sistemose, plačiai naudojamos informacines ir ryšiu technologijos bei konkurencijos rinkoje vyraujantis intensyvumas verčia rangovus persvarstyti konkurencines jegas ir vartotoju lūkesčius, o tam reikia gerai suplanuotos valdymo orientacijos verslui planuoti. Turkijos statybos pramone nesiskiria nuo pasaulines statybos pramones intensyvaus konkurencingumo kontekste. Turkijos rangovai ne vieni imasi projektu vidaus bei užsienio rinkose, iskaitant Nepriklausomu valstybiu sandrauga, Afrika, Vidurio Rytus, Europa, Azija ir t. t. Jie taip pat dažnai susiduria su didele vietiniu ir užsienio kompaniju konkurencija, tokiu kaip JAV, Kinijos, Japonijos, Prancūzijos, Ispanijos, Vokietijos, Didžiosios Britanijos ir Korejos rangovai. Atsižvelgiant i intensyvia konkurencija, efektyvu ju paslaugu valdyma, Turkijos rangovams būtina pasiekti konkurencini prana‐šuma. Šiuo tyrimu analizuojamos Turkijos statybos bendroviu rinkodaros valdymo funkcijos ir apimtys, taikant tradicine rinkodara. Apklausoje apžvelgta daugiau nei 70 Turkijos rangovu anketu. Apklausos rezultatai atskleide, kad Turkijos rangovai tam tikru mastu pasinaudojo rinkodaros valdymo funkcijomis, tačiau jie neskyre pakankamai svarbos išskirdami savo produktus ir paslaugas, konkurentus ir ju teikiamas paslaugas. Kadangi pagrindinis tikslas ‐ vartotoju, naudojančiu produkta, pasitenkinimas ir (arba) paslaugu išskirtinumas, Turkijos rangovai turetu ištirti visus tradicines rinkodaros ipročius, noredami išskirti save rinkoje ir taip sukurti konkurencini pranašuma.

Quantitative Methods for Design-Build Team Selection

The use of design/build (DB) contracting by transportation agencies has been steadily increasing as a project delivery system for large complex highway projects. However, moving to DB from traditional design-bid-build procurement can be a challenge. One significant barrier is gaining acceptance of a best-value selection process in which technical aspects of a proposal are considered separately and then combined with price to determine the winning proposal. These technical aspects mostly consist of qualitative criteria, thus making room for human errors or biases. Any perceived presence of bias or influence in the selection process can lead to public mistrust and protests by bidders. It is important that a rigorous quantitative mathematical analysis of the evaluation process be conducted to determine whether bias exists and to eliminate it. The paper discusses two potential sources of bias—evaluators and weighting model—in the DB selection process and presents mathematical models to detect and remove biase...

Selecting Appropriate Project Delivery System: Fuzzy Approach with Risk Analysis

The selection of an appropriate project delivery system that suits all project and owner needs is one of the key decisions to a successful project. Therefore, this decision should be made based on thorough analysis. In this paper, a fuzzy multiattribute decision-making (FMADM) model is developed. The model accounts for uncertainties and imprecision in the decision space as well as fuzziness in the nature of the decision attributes. The model utilizes fuzzy decision-making approach in order to evaluate the membership function corresponding to the utility of each project delivery alternative. Project delivery system alternatives are ranked using fuzzy technique for order preference by similarity to ideal solution (TOPSIS) method based on their utility membership functions and by evaluating the distance of each project delivery alternative from fuzzy ideal solutions. In the TOPSIS method, alternatives are ranked based on their closeness coefficient (CC). In addition, the risk attitude of the decision maker is considered in the model by using derived utility membership functions corresponding to the risk attitude of the decision maker. The model is applied to a petrochemical project as a case study. In the case study, the model outcome that ranked Turnkey system as the best system conforms to the lessons learned by the decision maker from several past projects. Moreover, sensitivity analysis is done in the case study. The results show the significant value of the FMADM model for selecting appropriate project delivery system for projects.