Best-Value Model Based on Project Specific Characteristics

Best-value becomes a well known procurement practice in many states in the country. The objective of this transformation from the old practice of lowest bid to best-value is to increase the value added to the project for each dollar added. This paper discusses a new concept of best-value modeling that is unique and tailored to each project. The model uses records of past projects to obtain specific evaluation criteria, from which a best-value score is determined for each contractor. Primary parameters that impact contractor selection are identified and analyzed based on which best-value model is designed. Data are collected from groups of experts in the Minnesota Department of Transportation. Two application methods are used to assess the best-value: (1) the weighted average method; and (2) the analytic hierarchy process. Although the paper is written to assist government agencies in selecting the best contractor(s), the research results shared in this paper are relevant to both academics and practitioners. The paper provides practitioners with a tool for ranking contractors based on best-value and provides academics with selection parameters, a model to evaluate this best-value, and a methodology of quantifying the qualitative effect of subjective factors.     

Contractor Selection for Design∕Build Projects

As traditional construction procurement approaches are found to be inadequate in meeting the demands and challenges of recent times, alternative procurement routes such as through management contracting or build-operate-transfer are increasingly being adopted. Although design∕build is one of the more popular alternative procurement methods that also has a long history, it does not appear to have well-established contractor selection procedures. This paper focuses on developing a model for contractor prequalification and bid evaluation in design∕build projects. For this purpose, it presents a comparative overview of some international practices in the design∕build contractor selection process. The overall objective is to identify the core aspects of selecting a suitable bidder in order to achieve the best “value for money.” The strengths and weaknesses of current practices of contractor selection are highlighted while identifying some of the best practices followed in design∕build projects by various clients.     

Comparing Procurement Methods for Design-Build Projects

The design-build delivery method is increasingly used in the United States due to numerous advantages it can offer a project. An important issue associated with design-build delivery is the procurement method used to select the design-build team. It is a critical decision that involves several key project team members, including the owner, designer, and contractor organizations, and requires the owner to carefully choose the design-build procurement method that will be used to select the team that will deliver the project. This research quantitatively analyzed the correlation between the design-build procurement method and the performance of the design-build project with regard to cost, time, and quality metrics. The procurement methods studied were sole source, qualifications-based, best value, and low bid selection. Data were collected through surveys from 76 design-build projects in the United States. Based on the patterns and relationships identified from these data, a better understanding of the procurement process and how it influences project performance is achieved. The impact of project-specific factors and guidelines are presented to assist owners in selecting the design-build team procurement method that responds to their project goals.     

Quality-Based Contractor Rating Model for Qualification and Bidding Purposes

A quality contractor on every construction project would make project management simpler for Department of Transportation (DOT) project engineers and strategic planning more accurate for DOT executives. A qualification model that includes the quality of a contractor’s past work would be invaluable in assuring that each project had a quality contractor. Including the quality of past work in the bidding process would further help in this goal. Implementation of such a model for both its potential uses would require business process reengineering for the DOT in two important areas: qualification of contractors and contract award procedures. The research team has produced an innovative model, called the Quality-Based Performance Rating (QBPR) system. This model receives inputs from traditional subjective sources and integrates them with totally objective data input from the results of tests of the project’s materials and workmanship, then uses these inputs to produce a score for each project that is further used by the system to generate an index for each contractor reflecting that contractor’s quality of work over a specified time frame.     

Testing of Minimization of Subjectivity in Best Value Procurement by Using Artificial Intelligence Systems in State of Utah Procurement

The Performance Information Procurement System (PIPS) was tested on the procurement of the $2.96 million Bridgerland Academic Training Center (ATC) for the state of Utah Division of Facilities Construction Management. The artificial intelligence (AI) information based PIPS was run two ways—selection with biased subjectivity (similar to current best value processes) and without biased subjectivity. Unlike other best value processes, PIPS minimizes the decision-making and subjective bias of the owner’s representatives. The procurement test at Bridgerland ATC provides a comparison between the AI selection versus the user agency’s subjective prioritization. The result of the system was one of the “best” construction projects procured at the state of Utah (on time, on budget, high quality), with no contractor generated change orders for additional cost, minimized construction management requirements, and high customer satisfaction.     

A Fuzzy Decision Framework for Contractor Selection

Contractor selection is the process of selecting the most appropriate contractor to deliver the project as specified so that the achievement of the best value for money is ensured. Construction clients are becoming more aware of the fact that selection of a contractor based on tender price alone is quite risky and may lead to the failure of the project in terms of time delay and poor quality standards. Evaluation of contractors based on multiple criteria is, therefore, becoming more popular. Contractor selection in a multicriteria environment is, in essence, largely dependent on the uncertainty inherent in the nature of construction projects and subjective judgment of decision makers (DMs). This paper presents a systematic procedure based on fuzzy set theory to evaluate the capability of a contractor to deliver the project as per the owner’s requirements. The notion of Shapley value is used to determine the global value or relative importance of each criterion in accomplishing the overall objective of the decision-making process. The research reported upon forms part of a larger study that aims to develop a fuzzy decision model for construction contractor selection involving investigating multiple criteria selection tendencies of construction clients, relationship among decision criteria, and construction clients’ preferences of criteria in the contractor selection process. An illustration with a bid evaluation exercise is presented to demonstrate the data requirements and the application of the method in selecting the most appropriate contractor for the project under uncertainty. The proposed model is not intended to supplant the work of decision-making teams in the contractor selection process, but rather to help them make quality evaluations of the available candidate contractors. One major advantage of the proposed method is that it makes the selection process more systematic and realistic as the use of fuzzy set theory allows the DMs to express their assessment of contractors’ performance on decision criteria in linguistic terms rather than as crisp values.     

Concessionaire Selection for Build-Operate-Transfer Tunnel Projects in Hong Kong

A significant realignment of risks between project participants is a fundamental facet of the new procurement paradigm of BOT (build-operate-transfer). A BOT concessionaire assumes far more and deeper risks than a contractor. One critical contributor to the success of a BOT project is the selection of an appropriate concessionaire who has the necessary capacity to provide the best overall deal throughout the build-operate-transfer process. However, various BOT-type procurement protocols are not yet proven and are still being tried and tested. Many countries are at the lower ends of their learning curves. Therefore, there is a need to benchmark the best practices that have been emerging. The Hong Kong government has developed a well-structured concessionaire selection framework supported by the Kepner-Tregoe decision analysis technique. This paper analyzes and draws experiences and lessons from this concessionaire selection practice. Current concessionaire selection practices worldwide are also discussed with a view to improve the procurement process of regions lacking in such experiences or expertise.     

Computer Applications in Intelligent Compaction

The term “intelligent compaction” is now heard so often one might believe that the method used for documenting and controlling the quality of hot-mix asphalt pavement has evolved to a state of total commercial and engineering acceptance. In fact, today’s most-used process for determining the density of an asphalt mat uses 1960’s technology. Now, however, the responsibility for quality control (QC) of the paving and compaction process has largely been given to the contractor. This shift in responsibility comes at a time when the construction industry as a whole is faced with the worst labor shortage in history, limiting the number of qualified QC technicians and equipment operators. Recently, researchers introduced a patented system that, when mounted on a vibratory asphalt compactor, can render an asphalt density reading (in pounds per cubic foot) every 1?s in real time. This paper briefly describes the system and details the essential contributions made by computer hardware and software to a successful onboard asphalt density measuring system.     

Contractor Performance Prediction Model for the United Kingdom Construction Contractor: Study of Logistic Regression Approach

An accurate prediction of contractor potential is of vital importance during contractor selection and evaluation process. Such prediction enables identification and classification of contractor performance to ease the selection process. This paper outlines the use of clients' tender evaluation preferences for predicting a contractor performance via a logistic regression (LR) approach. A total of 31 clients’ tender evaluation criteria were selected to develop a LR model for predicting contractor performance. The proposed model was developed based on 48 of United Kingdom public and private construction projects and validated in 20 independent cases. It was found that 75% of the cases correctly and the model statistically accurate for contractor performance prediction, where the input variables consist of nominal and interval data. The paper summarized techniques and advantages of LR analysis and discussed literature findings of contractor selection and evaluation methodologies undertaken by construction researchers and commentators from the United Kingdom and Northern America.     

“Lean” Comparison Using Process Charts of Complex Seismic Retrofit Projects

This paper compares the delivery of two retrofit projects where seismic isolation bearings were installed. The comparison is retrospective. The design teams on these projects did not implement “lean” thinking to develop their approach, nevertheless, observed process differences are characterized using a “lean” process evaluation and optimization tool, and then gauged and rationalized from that perspective. Cross-functional process charts identify functional parties with interrelated material or information handoffs. They help to identify (un)necessary steps or complexity as measured by number of handoffs and interacting parties. Analysis of these charts shows that project value may stem from the owner integrating design development with product procurement and construction method selection. On one project, integration was made possible by structural engineers evaluating the impacts of product procurement on overall project performance, expert consultants providing construction process reviews, and experienced contractors participating in installation sequence development. This paper illustrates the value of developing a symbiotic relationship between designers and suppliers in a niche market. It stresses the need for work structuring early on in the delivery process, integrating process with product development, to improve project delivery.     

Flow Production of Pipe Spool Fabrication: Simulation to Support Implementation of Lean Technique

Pipe spool fabrication is an important stage in industrial construction project delivery. It is a complex production system characterized by product uniqueness and high product mix, which pose challenges to the analysis and improvement of this system. This research applies lean production principles and flow production to shop fabrication, and uses a simulation-based approach as a tool to facilitate its implementation. The work described in the paper is based on a real case study undertaken with an Edmonton-based industrial construction contractor. The traditional batch-and-queue fabrication system and the new cell-based work flow fabrication systems were compared and analyzed. Simulation models were built to experiment with the old and new production systems and quantitatively test the effects of lean principles on the performance of the systems. The developed simulation-based approach proves a practical and more powerful tool than the value stream map for modeling and for quantitatively evaluating the performance of a complex and dynamic spool fabrication shop.     

Performance Modeling for Contractor Selection

This paper proposes a contractor selection system that incorporates the contractor’s performance prediction as one of the criteria for selection. This research was developed working with an owner organization that was interested in developing a framework for evaluating contractors for future work. A modeling framework, developed in previous research, was used to develop a conceptual model of a project that depicts a causal structure of the variables, risks, and interactions that affect a contractor’s performance for a specific project from the owner’s point of view. The conceptual model helps to identify information needed for a comprehensive evaluation; some information can be readily available from historical records, while other can be unavailable and can be replaced by estimates based on experience. Ideally, over time, the owner should collect most of the information required for future evaluations. A mathematical component of the model can generate predictions of multiple project performance outcomes for each contractor under evaluation; these predictions and a contractors’ bid prices are then used for contractor evaluation purposes.     

Empirical Study of the Risks and Difficulties in Implementing Guaranteed Maximum Price and Target Cost Contracts in Construction

Over the past few decades, both the guaranteed maximum price (GMP) and target cost contracting (TCC) arrangements have been regarded as alternative integrated procurement strategies for clients to mitigate risks, minimize claims, integrate the diverse interests of a complex construction project, and offer incentives to provide value-added services. However, the adoption of GMP/TCC contracts may also generate significant risks and difficulties that merit considerable attention. This paper aims to provide a concise review of the potential pitfalls of the GMP/TCC scheme in general and identifies the key risk factors and potential difficulties associated with GMP/TCC in comparison with other procurement strategies in construction in particular via an empirical survey of clients, contractors, and consultants in Hong Kong. The survey data gleaned from 45 valid replies were analyzed using the mean score ranking technique, Kendall’s concordance test, and Spearman’s rank correlation test. The survey results indicated that “involvement of inexperienced or claim-conscious contractors in a project procured by a GMP/TCC contract” was considered to be the most significant risk factor; while “design development must keep pace with main contractor’s program for tendering the domestic subcontractors’ works packages” as the major difficulty in implementing GMP/TCC projects. The research findings derived from this study are particularly essential in assisting the contracting parties to mitigate the detriments brought about by potential risks or difficulties when embarking on GMP/TCC contracts. It has also generated valuable insights into developing effective recommendations for alleviating the barriers to GMP/TCC success for future construction projects.     

Cost Performance Comparison of Two Public Sector Project Procurement Techniques

Increased industry discussion of the potential benefits of alternative forms of construction project delivery often presents little cost analysis of options. This work presents the results of a cost comparison study of completed public sector municipal facilities design and construction projects—a portion of which delivered using a traditional design-bid-build procurement approach and a portion of which delivered using the procurement technique of a negotiated lump sum construction contracts with in-house construction forces. The study compares costs for all phases of all the projects (design, bid and award, construction, and total project cost) across both methods of project procurement. Conclusions examine the cost trade-offs of using negotiated contracts with in-house forces, outline key success factors identified through this study in order to optimize the use of this form of project procurement, and identify areas for future research.     

Optimizing Owner∕Contractor Core Competencies for Capital Programs

This paper proposes a process to help managers of capital project organizations, within owner companies, select key competencies for their capital programs and, where appropriate, leverage contractor personnel and expertise. The process involves evaluation of owner and contractor competencies and determination of the best possible sourcing strategy for each competency required in the owner's capital program. The sourcing strategy is defined in terms of work relationships that clearly identify primary and secondary roles and responsibilities. The resulting work structure helps owners and contractors avoid gaps and eliminate overlaps in their work relationships. The proposed process also provides an approach to evaluate alignment of work structures between owner's corporate objectives and their capital programs. Work structure and alignment indicators consider project delivery approaches, contract types, organizational relationships, and other relevant factors such as proprietary technology. Thus, this paper provides a decision process that can help managers optimize owner and contractor competencies for capital program success.     

Whole Life Performance Assessment: Critical Success Factors

Whole life costing (WLC) has become the best practice in construction procurement and it is likely to be a major issue in predicting whole life costs of a construction project accurately. However, different expectations from different organizations throughout a project’s life and the lack of data, monitoring targets, and long-term interest for many key players are obstacles to be overcome if WLC is to be implemented. A questionnaire survey was undertaken to investigate a set of ten common factors and 188 individual factors. These were grouped into eight critical categories (project scope, time, cost, quality, contract/administration, human resource, risk, and health and safety) by project phase, as perceived by the clients, contractors and subcontractors in order to identify critical success factors for whole life performance assessment (WLPA). Using a relative importance index, the top ten critical factors for each category, from the perspective of project participants, were analyzed and ranked. Their agreement on those categories and factors were analyzed using Spearman’s rank correlation. All participants identify “Type of Project” as the most common critical factor in the eight categories for WLPA. Using the relative index ranking technique and weighted average methods, it was found that the most critical individual factors in each category were: “clarity of contract” (scope); “fixed construction period” (time); “precise project budget estimate” (cost); “material quality” (quality); “mutual/trusting relationships” (contract/administration); “leadership/team management” (human resource); and “management of work safety on site” (health and safety). There was relatively a high agreement on these categories among all participants. Obviously, with 80 critical factors of WLPA, there is a stronger positive relationship between client and contactor rather than contractor and subcontractor, client and subcontractor. Putting these critical factors into a criteria matrix can facilitate an initial framework of WLPA in order to aid decision making in the public sector in South Korea for evaluation/selection process of a construction project at the bid stage.     

工程总承包在湘钢燃气电厂项目建设中的应用

业主要求总承包商在超短工期条件下,用10个月的时间完成从合同签订、设计、采购、施工到投产运行全过程。该文详细分析与总结了总承包商是如何运用工程总承包项目管理模式来完成这项工作的。其成功经验可在同类工程中应用。     

Factors That Influence Safety Performance of Specialty Contractors

In the construction industry specialty contractors perform most of the construction work. Given their impact on the industry, the safety performance of specialty contractors should be of concern to the construction industry. This paper describes a study conducted to identify factors that significantly influence the safety performance of specialty contractors. The study was composed of separate surveys of three different specialty contractor populations—a variety of trade contractors located primarily in southern Nevada, roofing contractors in the state of Florida, and the regional offices of a large, nationwide mechanical contractor. While there appeared to be contradictions between the surveys in some areas, the study concluded that specialty contractor safety performance was consistently influenced, in part, by a number of factors. The factors shown to positively affect safety performance include minimizing worker turnover, implementing employee drug testing with various factors initiating the testing, and training with the assistance of contractor associations. Safety incentive programs were not necessarily associated with better safety performance. Growth in company size was found to be associated with improved safety performance as well.     

浅谈QC小组活动在企业中的开展与应用

QC小组是质量改进的一种行之有效的组织形式,也是企业全面质量管理的重要组成部分。通过组建QC小组进行了质量改进,取得了良好的成效。介绍了企业内开展的QC小组活动情况,并以实例说明如何运用QC小组解决生产中出现的问题,实现产品质量的持续改进。