Using Benchmarks and Metrics to Evaluate Project Delivery of Environmental Restoration Programs

The United States is in the middle of a large environmental restoration effort that is hampered by a lack of knowledge on how to measure the performance of the project delivery process. This study evaluates one environmental restoration program’s ability to deliver projects: the Environmental Management Program (EMP), a federally sponsored program managed by the U.S. Army Corps of Engineers. Project performance metrics are compiled and used to measure two types of program improvements made in project delivery: trend improvements over time, and the ability to reach established benchmarks. The benchmarks come from both agency guidance and construction industry benchmarks. The metrics measure the program’s ability to accurately estimate the required resources (time and money) to accomplish the project, estimate the cost to operate and maintain the project, and meet the customers’ design requirements. To build the metrics, estimates from the project planning documents are compared against the actual results. Currently, the Corps of Engineers has established some benchmarks and does evaluate projects for design success, but the benchmarks do not include all aspects of project delivery and are not universally applied. Analysis of the metrics shows that the Corps has made improvements in the delivery of projects, but some major components of the process should be improved. Establishing benchmarks would provide the Corps with information to improve the project delivery of the EMP and other environmental restoration programs across the country. This study provides an example of applying business principles to a governmental program.     

SIM-UTILITY: Model for Project Ceiling Price Determination

Before considering bids submitted by competing contractors for a public procurement project, the owner should determine a project ceiling price or cost estimate to use as a reference point for evaluating the bids. A high ceiling price conflicts with the owner’s interests in minimizing costs. Meanwhile, a low ceiling price can jeopardize the project if all bids exceed the ceiling price. This paper proposes a model for determining a reasonable project ceiling price. The model, called SIM-UTILITY, is based on a utility theory and facilitated by a cost simulation approach. The utility theory is applied to reflect the owner’s preferences regarding the determination criteria, while the simulation approach is used to generate more objective project cost data to support execution of the utility theory. The advantages of SIM-UTILITY are proven by its successful application to three construction projects in Taiwan. A computerized SIM-UTILITY is expected to be broadly applicable to public construction projects in Taiwan.     

One Company's Experience with Design∕Build: Labor Cost Risk and Profit Potential

This paper offers the data from one construction company's experiences with design∕build. Specifically, the paper presents an analysis of the company's labor cost risk based on a case study of two similar projects. One project was a typical design∕bid∕build job and the other was a design∕build job. The design∕build project experienced consistently greater fluctuations in the labor cost. These fluctuations seem to indicate that it is very difficult to accurately estimate labor costs for design∕build projects, thus adding to the risk of such projects. The second half of the paper presents an account of this same company's overall profit experience with design∕build work. Profit margins were analyzed using three categories—design∕build versus non-design∕build, client-specific design∕build, and design∕build construction types. The design∕build projects' average profit margin was 3.5 percentage points greater than that for the non-design∕build work.     

Design Engineers' Responsibilities During Construction

A dilemma can face design engineers if they have to choose between their perceived and actual responsibilities during construction of the project they designed. This dilemma can be particularly significant for specialized underground construction involving soild‐structure interaction. Such construction represents unique and unusual situations in which design, inspection, and construction functions cannot be separated. Two cases in which specialized construction quality control was not provided by the designer of subsurface structures are reviewed. In both cases defective construction was later discovered and the projects were abandoned. The design engineer is placed at risk when the owner does not agree to engage a knowledgeable specialist for quality control of the construction work. The engineer should identify in writing the risks the owner is electing to accept by contracting for a lower level of quality control than, in the engineer's judgment, is less than prudent for the project.     

Discriminant Analysis for Predicting Ranges of Cost Variance in International Construction Projects

Unanticipated market conditions as well as project-related risks can easily lead to cost overruns in international construction projects. For a contractor to be financially successful in international projects, a careful examination of the project is a prerequisite to understanding the cost variance characteristics. Based on the reasonably accurate characterization of the cost performance, the markup or contingency amount is determined to ensure both a decent level of profit and a good chance of winning the contract. This paper presents a classification model to categorize international construction projects, particularly faced by Korean contractors, into five cost-variation classes: extreme cost overrun, moderate cost overrun, neutral, moderate cost saving, and extreme cost saving. The model is able to characterize an international project for its cost performance prediction in comparison to the contractor’s initial cost estimate. A linear discriminant analysis is utilized to develop the predictive classification model with the support of the bootstrap method. Tests show that the proposed model is able to help cost estimators determine a proper level of cost contingency before bidding on an international project.     

Evaluation of Risk Factors Leading to Cost Overrun in Delivery of Highway Construction Projects

Accurate owner budget estimates are critical to the initial decision-to-build process for highway construction projects. However, transportation projects have historically experienced significant construction cost overruns from the time the decision to build has been taken by the owner. This paper addresses the problem of why highway projects overrun their predicted costs. It identifies the owner risk variables that contribute to significant cost overrun and then uses factor analysis, expert elicitation, and the nominal group technique to establish groups of importance ranked owner risks. Stepwise multivariate regression analysis is also used to investigate any correlation of the percentage of cost overrun with risks, together with attributes such as highway project type, indexed cost, geographic location, and project delivery method. The research results indicate a correlation between the reciprocal of project budget size and percentage cost overrun. This can be useful for owners in determining more realistic decision-to-build highway budget estimates by taking into account the economies of scale associated with larger projects.     

Collapse of the Quebec Bridge, 1907

In the late 19th century, the transportation needs of Quebec led to proposals for bridging the St. Lawrence River. The Quebec Bridge was the longest cantilever structure attempted until that time. In its final design, the clear span was 548.6 m (1,800 ft) long. The bridge project was financially troubled from the beginning. This caused many setbacks in the design and construction. Construction finally began in October 1900. In August 1907, the bridge collapsed suddenly. Seventy five workers were killed in the accident, and there were only 11 survivors from the workers on the span. A distinguished panel was assembled to investigate the disaster. The panel’s report found that the main cause of the bridge’s failure was improper design of the latticing on the compression chords. The collapse was initiated by the buckling failure of Chord A9L, on the anchor arm near the pier, immediately followed by Chord A9R. Theodore Cooper had been the consulting engineer for the Quebec Bridge project, and most of the blame for the disaster fell on his shoulders. He mandated unusually high allowable stresses, and failed to require recalculation of the bridge dead load when the span was lengthened.     

Method to Determine Minimum Contract Bid for A+B+I?/D Highway Projects

More and more state highway agencies (SHAs) have begun to consider the value of time in highway construction. The “A?(cost)+B?(time?cost)+I/D?(incentive/disincentive)” bidding concept is designed to shorten the total contract time by allowing each contractor to bid the number of days in which the work can be accomplished, in addition to the traditional cost bid. I/D are not only used to provide an incentive to the contractor for earlier completion, but also to provide a disincentive for late completion of a project. Contractors are then presented with the problem of determining the best strategy of bid estimation, including construction cost, time cost, and incentive/disincentive. SHAs are also faced with the problem of placing a maximum and/or minimum on the time bid. To provide users a useful tool to estimate project time more accurately using this advanced method, this study develops a quantified model of the price-time bidding contract. The functional relationship between the construction cost and time duration is developed based on data from the Florida Department of Transportation (FDOT). The contractor’s construction cost “A” is then combined with the road user cost and incentive/disincentive to determine the optimum low bid price and time. This optimum can then be used by the SHA to set limits on the range of acceptable time bids. Finally, several projects completed by the FDOT will be used to illustrate the validity of this model.     

Design Fees, the State of the Profession, and a Time for Corrective Action

Abstract: There has been considerable consternation over the years about the disintegration of the status of civil engineers, as well as significant distress over the profitability of engineering firms in view of a continuing decline in the compensation of civil engineers relative to other professionals. This paper studies the impact of government agencies’ use of outdated percentage of construction fee schedules for determination of professional compensation. Research has found that, due to the application of stagnant fee curves without adjustment for the effects of inflation on project costs, fees over the last several decades have dropped on the order of 20% or more. Prior to the early 1970s, fee curves published by the professional societies were regularly updated to reflect inflationary trends in project costs. However, since that time, few government agencies have adopted any meaningful deviation from the fee curves of the pre-Justice Department antitrust settlement with the professional societies. The settlement agreement was that the professional societies would no longer publish minimum fee curves to establish appropriate compensation of their members. The paper discusses the erosive financial implications of these policies for the design professions’ compensation.     

Design and Build Project Success Factors: Multivariate Analysis

This study aimed to identify a set of project success factors for design and build (D&B) projects and examine the relative importance of these factors on project outcome. Six project success factors (project team commitment, contractor's competencies, risk and liability assessment, client's competencies, end-users' needs, and constraints imposed by end-users) were extracted from factor analysis of data provided by 53 participants of public-sector D&B projects through a questionnaire survey. Project team commitment, client's competencies, and contractor's competencies were found to be important to bring successful project outcome from the multiple regression findings. Contractor's competencies also contributed to project time performance. Project team members should also recognize that time and cost performance as well as quality of design and workmanship represent the key elements of overall success of D&B projects. Practitioners are advised to focus on teamwork and partnering for successful project completion. More research should be conducted to further explore the relationship between procurement method and project success factors.     

Impact of Change Orders on Small Labor-Intensive Projects

In today’s construction, small projects can be just as important if not more important than the larger projects. However, small projects are usually fast track projects, which often involve overlapping design and construction time. Subsequent modifications may be required for the sections that are already under construction. These disruptions to the ongoing project are labeled as change orders. The impact due to changes has been described as the adverse effect upon the unchanged work due to changes in the contract. For this study, 34 projects were selected to develop a statistical model that estimates the amount of labor efficiency lost due to change orders for small projects. The variables in the final model are percent design related changes, percent owner initiated changes, the ratio of actual peak labor to estimated peak labor, the ratio of actual project duration to estimated project duration, and project manager’s percent time on the project. The results of this paper are of value to owners, electrical and mechanical contractors, and construction managers. The model quantifies the impact of change orders by introducing the most important variables that bring the largest disruptions.     

Cumulative Effect of Project Changes for Electrical and Mechanical Construction

Change is inevitable on construction projects, primarily because of the uniqueness of each project and the limited resources of time and money that can be spent on planning, executing, and delivering the project. Change clauses, which authorize the owner to alter work performed by the contractor, are included in most construction contracts and provide a mechanism for equitable adjustment to the contract price and duration. Even so, owners and contractors do not always agree on the adjusted contract price or the time it will take to incorporate the change. What is needed is a method to quantify the impact that the adjustments required by the change will have on the changed and unchanged work. Owners and our legal system recognize that contractors have a right to an adjustment in contract price for owner changes, including the cost associated with materials, labor, lost profit, and increased overhead due to changes. However, the actions of a contractor can impact a project just as easily as those of an owner. A more complex issue is that of determining the cumulative impact that single or multiple change orders may have over the life of a project. This paper presents a method to quantify the cumulative impact on labor productivity for mechanical and electrical construction resulting from changes in the project. Statistical hypothesis testing and correlation analysis were made to identify factors that affect productivity loss resulting from change orders. A multiple regression model was developed to estimate the cumulative impact of change orders. The model includes six significant factors, namely: Percent change, change order processing time, overmanning, percentage of time the project manager spent on the project, percentage of the changes initiated by the owner, and whether the contractor tracks productivity or not. Sensitivity analysis was performed on the model to study the impact of one factor on the productivity loss (%delta). The model can be used proactively to determine the impacts that management decisions will have on the overall project productivity. They may also be used at the conclusion of the project as a dispute resolution tool. It should be noted that every project is unique, so these tools need to be applied with caution.     

Cost Analysis between SABER and Design Bid Build Contracting Methods

The majority of Air Force construction is performed by two main contractual methods, design bid build (DBB) and simplified acquisition of base engineering requirements (SABER). DBB is the traditional contracting method in which each project is competitively bid. SABER uses one contractor to complete multiple projects using unit prices established in the original contract. This research performs a cost analysis between DBB and SABER construction projects. The research involved finding appropriate, comparable projects completed by the two contractual methods. Two diverse Air Force bases were used to gather project information, and a total of 46 interior renovation projects were used. Project comparability was demonstrated by evaluating the similarity of type and scope of work. Data from the projects was used to calculate unit cost per dimensional characteristic and time and cost growth for each project. The results indicated SABER contracting had a lower cost per square meter, although not at a statistical level of significance. SABER performed better in time growth. Cost growth was similar for both methods.     

SERC—A Model for Estimating Construction Inputs

One of the main problems in the process of design and management of construction projects is obtaining accurate information for preliminary estimates. This information is crucial for the development of integrated systems for construction management because of the relationship between construction input data and subjects such as estimating, cost control, scheduling, resource management, etc. Existing methods for estimating input that originated in industrial engineering are inadequate for the unique conditions of the construction industry. The model described in this paper applies statistical analysis of data from past projects, and enables the user to estimate the data needed for the construction of a new project. The model is based on the following components: Project items and their quantities; inputs needed to produce those items; and factors that affect inputs of a specific project. The model equation was calculated using multiple regression techniques. The paper concludes with a case study of a construction input configuration for a concrete structure.     

Multiobjective Linear Programming Model for Scheduling Linear Repetitive Projects

Linear repetitive construction projects require large amounts of resources which are used in a sequential manner and therefore effective resource management is very important both in terms of project cost and duration. Existing methodologies such as the critical path method and the repetitive scheduling method optimize the schedule with respect to a single factor, to achieve minimum duration or minimize resource work breaks, respectively. However real life scheduling decisions are more complicated and project managers must make decisions that address the various cost elements in a holistic way. To respond to this need, new methodologies that can be applied through the use of decision support systems should be developed. This paper introduces a multiobjective linear programming model for scheduling linear repetitive projects, which takes into consideration cost elements regarding the project’s duration, the idle time of resources, and the delivery time of the project’s units. The proposed model can be used to generate alternative schedules based on the relative magnitude and importance of the different cost elements. In this sense, it provides managers with the capability to consider alternative schedules besides those defined by minimum duration or maximizing work continuity of resources. The application of the model to a well known example in the literature demonstrates its use in providing explicatory analysis of the results.     

Modeling Weather-Sensitive Construction Activity Using Simulation

This paper proposes a framework for simulating weather-sensitive construction projects that are executed under extreme weather conditions. It applies the framework steps to enable simulating and planning pipeline construction activities under severe cold weather conditions. The uncertainties caused by weather, such as extreme cold, heat, wind, or precipitation, can significantly affect a project’s schedule and produce significant deviations from the baseline schedule. The proposed framework structures a project in the way an engineer would approach it, setting out a breakdown of work activities to quantify weather effects and account for their impact on the project baseline. The proposed weather-sensitive construction simulation framework is employed to determine the effects of weather on the construction process of high-density polyethylene (HDPE) pipe installation. The relevant simulation findings are reported to clarify the impact of extreme weather events on construction projects and to assist in project planning and decision support.     

Factors Affecting Construction Project Outcomes: Case Study of Vietnam

Due to the demand for built products from foreign investors and the growing economy, Vietnam’s construction industry experiences strong growth. While some of the construction projects are successfully executed, others faced difficulties. The aim of this study is to examine the factors that lead to successful outcomes in construction projects in Vietnam. Using the case study research design, three successful projects and another three unsuccessful projects were investigated. Data were collected from face-to-face interviews with several project participants in each project and archival data. The results show that major enablers that lead to project success are foreign experts’ involvement in the project, government officials inspecting the project, and very close supervision when new construction techniques are employed. A factor which leads to poor performance is the lack of accurate data on soil, weather, and traffic conditions. The findings may be useful to construction professionals operating in Vietnam to put in place factors that can lead to good project performance. For foreign practitioners entering Vietnam’s market, the study may assist them in focusing on the more important factors to achieve good project outcomes.     

Empirical Comparison of Design/Build and Design/Bid/Build Project Delivery Methods

This study compares the performance of design/bid/build and design/build to see if one project delivery method is superior in regards to time and cost. Similar military buildings were used to identify two samples of projects delivered with each of the two delivery methods. These projects provide a meaningful comparison because they include buildings of the same typology (i.e., U.S. Navy Bachelor Enlisted Quarters) delivered using similar design models. Project duration, project duration per bed, project time growth, cost growth and cost per bed were statistically compared. Upon completion of the analysis, the hypothesis that design/build projects are superior to design/bid/build projects in regards to time and cost was tested. Design/build projects were proven superior in performance in almost every measure. Other findings, including recommendations to practitioners and researchers, will be provided as well.     

Here Comes the Judge—Duties and Responsibilities of Design Professionals When Deciding Disputes

Frequently during the progression of a construction project, the design professional is forced into the role of a judge of project disputes between the owner and contractor. These disputes generally involve substantial claims for extra compensation or extra time and have significant impact on the owner and contractor’s financial position on the project. The architect or engineer will be pressured by the owner, who controls whether the design professional gets paid. The contractor, however, may threaten to pursue legal claims against design professionals if they make the contractor’s job more expensive or fail to give it the appropriate time extension. In many cases, design professionals must admit or deny whether their services were defective in some nature. In addition to these pressures, the design professional is not necessarily trained or comfortable with acting as a judge and interpreting the meaning of contract terms. Generally, when an architect or engineer performs this judicial function, they are immune from any liability for the results of decisions. However, the design professional must make the decision in good faith and with impartiality. In addition, design professionals must only decide those matters that their contract obligates design professionals to decide. This paper will address the nature of the designer’s role as judge and the limits of the designer’s immunity with respect to the designer’s contract obligations and good faith and impartiality requirements.     

Multiple Simulation Analysis for Probabilistic Cost and Schedule Integration

One of the major goals of the construction industry today is the quantification and minimization of the risk associated with construction engineering performance. When specifically considering the planning of construction projects, one way to control risk is through the development of reliable project cost estimates and schedules. Two techniques available for achieving this goal are range estimating and probabilistic scheduling. This paper looks at the integration of these techniques as a means of further controlling the risk inherent in the undertaking of construction projects. Least-squares linear regression is first considered as a means of relating the data obtained from the application of these techniques. However, because of various limitations, the application of linear regression was not considered the most appropriate means of relating the results of range estimating and probabilistic scheduling. Integration of these techniques was, therefore, achieved through the development of a new procedure called the multiple simulation analysis technique. This new procedure combines the results of range estimating and probabilistic scheduling in order to quantify the relationship existing between them. Having the ability to accurately quantify this relationship enables the selection of high percentile level values for the project cost estimate and schedule simultaneously.