Relational Selection for Collaborative Working Arrangements

Procurement arrangements for collaborative working arrangements (CWAs) should arguably provide suitable protocols under which different project partners can interact effectively and maintain harmonious relationships and mobilize their collective efforts towards common project objectives. Technical abilities of different project partners for carrying out the works are important. Also critical are their “soft” or “relational” qualities to work jointly and synergistically in the project team. The aims of the reported study are to examine the importance of a single set of different factors for selecting consultants, contractors, subcontractors, suppliers, and clients for CWAs; and to assess the relative importance of various factors and strategies for building CWAs. Data were collected internationally from 17 countries through a questionnaire survey and statistical analyses were conducted. Results attribute varying degrees of importance to various factors for selecting different project partners and suggest an interrelated and consolidated selection approach in general, except for “selecting” clients. The study confirms that trust and business ethics related factors and strategies are more helpful for CWAs than some others. Outcomes of this study are expected to benefit both industry practitioners and researchers, in exploring, designing, and implementing suitable CWAs and selecting appropriate project partners.     

Reconstructing Cultures for Relational Contracting

Although previous research has pointed to potential performance gains through relational contracting (RC), reservations remain as to its value and viability. Even those who wish to use RC need guidelines for introducing it, especially where it clashes with prevalent project cultures. A study was launched from Hong Kong to identify the critical factors which promote RC and team building in the context of specific cultures. This paper consolidates the perceptions of 60 respondents to a questionnaire survey in Singapore, in relation to the hypothesized 24 factors facilitating RC, and 28 factors impeding/deterring RC. It indicates the evident readiness of the Singaporean contracting industry to embrace collaborative working practices. On the whole: (1) all the 24 factors facilitating RC, and 23 of the 28 factors deterring RC, are significant; (2) these two sets of factors could be represented by six and seven “broad factors,” respectively; and (3) except in a few cases, respondents from large and medium companies, as well as with and without experience in RC, have similar perceptions of the importance of different factors. It was perceived that trust should be at the core of RC approaches to construction procurement, but also seen that the current level of trust is low. Identifying the principal “facilitators” and “impediments”/ deterrents to RC, provides pointers to building relationally integrated teams to boost performance to much higher levels, as are now expected from the industry. The literature indicates that the outcome of the survey in Singapore reflects the trends in many countries that are moving toward RC. This research model and approach may be conveniently replicated in other contractual regimes, in order to reinforce these observations.     

Incorporating Contractual Incentives to Facilitate Relational Contracting

Construction projects are undertaken by many parties, all with their own goals and motivations which may not always be aligned. Furthermore, they are governed by contracts, which do not necessarily produce win-win outcomes. The aims of this study are (1) to compare the views of contractors, clients, and consultants on factors facilitating and deterring relational contracting (RC); and (2) to investigate the use of contractual incentives to increase the effectiveness of RC. Structured questionnaires were sent by post to randomly selected construction industry players in Singapore to find out factors that enable RC and the barriers that impede the formation of RC. The results show that RC can be facilitated by having top management support, alignment of project objectives, relationship building, and most importantly, appropriate contractual incentives. In most instances, contractors gave a lower level of importance to many of the factors than clients and consultants. It is concluded that more contractual incentives should be provided in contracts in order to evoke the desired relational approaches.     

Achieving Partnering Success through an Incentive Agreement: Lessons Learned from an Underground Railway Extension Project in Hong Kong

Over the years, it has been observed that partnering has been ineffectively implemented in the public sector of Hong Kong. Contributing factors to this lack of success are nature and the large size of bureaucratic organizations and commercial pressure compromising the partnering attitude. The Mass Transit Railway Corporation Limited (MTRCL), one of the prominent pioneers in adopting project partnering in the infrastructure sector of Hong Kong since 1999, however, implemented the partnering principle with significant success. This paper, based on a recently completed research project funded by the Construction Industry Institute?Hong Kong in late 2004 and a followup in-depth interview meeting with senior executives of MTRCL in early June 2005, analyzes the rationale behind the successful development of partnering culture in the infrastructure sector of Hong Kong through a case study—the Tseung Kwan O Railway Extension (TKE) Contract 654—platform screen doors. The project comprises the supply and installation of platform screen doors along the whole MTRCL’s TKE with five stations. This project was analyzed by means of the project documentation and face-to-face interviews with the project representatives, comparisons with another five partnering case studies, and a followup in-depth interview meeting with another two senior executives of MTRCL. After the analysis, it was found that the implementation of partnering together with an incentive agreement (IA), a kind of target cost (TC) contract, underpinned the partnering success of this project. Therefore, it is recommended that partnering together with TC contracts, such as IA, greatly assists in the achievement of construction excellence, and can provide a workable model for enhancing overall project performance in electrical and mechanical projects.     

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.     

Contracting Relationship Trends and Transitions

Construction industry reports worldwide have called for radical cultural changes to reduce adversarial conflicts and increase productivity levels. These reports have recommended reintegration of fragmented function and teams through different teamworking approaches such as partnering and alliancing. The theoretical basis for such approaches can be tracked back to relational contracting (RC) principles. Recent teamworking initiatives have met with some success, based on structured cooperation between owners and contractors. However, the full benefits of these cooperative approaches may only materialize if (1) all potential team members/project partners are selected on the basis of relevant rationalized evaluation criteria; (2) all stakeholders work closely together as a coalesced team with common objectives, and (3) these arrangements are underpinned by government-sponsored, proper change initiatives. These approaches and arguments are analyzed in this paper, aiming at developing the required project culture through the application of RC principles for the joint management of risks during the entire project life cycle. Relevant observations from two recent Hong Kong-based industry surveys indicate a high motivation toward such approaches. Finally, examples of some potentially beneficial change initiatives are used to illustrate the potential synergies that are achievable.     

Potential Obstacles to Successful Implementation of Public-Private Partnerships in Beijing and the Hong Kong Special Administrative Region

Public-private partnership (PPP) has been practiced for quite some time around the world and there are numerous infrastructure, construction, and building projects which are employing the concepts. Unfortunately, not all of these PPP projects are equally successful and some of these projects have been exposed to formidable obstacles. The need to identify potential obstacles for PPP projects is therefore becoming an important issue for both research and practice. Despite the amount of interest vested in PPP, it is normally the advantages of PPP that are touched on rather than the potential obstacles. Both Beijing and the Hong Kong Special Administrative Region (referred to as Hong Kong from here onwards) have been keen to introduce more PPP projects. This paper presents part of the findings of an empirical questionnaire survey in relation to the prevailing barriers to PPP success conducted in these two administrative systems. It was anticipated that the obstacles would be similar for these jurisdictions. Respondents were asked to rate the level of severity of thirteen potential obstacles toward PPP projects identified from a literature review. The top three obstacles rated by the Beijing respondents were found to be “lengthy delays in negotiation,” “lack of experience and appropriate skills,” and “lengthy delays because of political debate.” Similarly the first and third obstacles ranked by the Beijing respondents were also ranked within top three by the Hong Kong respondents, together with “very few schemes have actually reached the contract stage (aborted before contract).” It was also discerned that “less employment positions,” “reduce the project accountability,” and “high project costs” were all ranked bottom by both of the Beijing and Hong Kong respondents. Moreover, the results obtained in the United Kingdom reported in other studies also shown consistency with those of Beijing and Hong Kong. Therefore the research hypothesis was proved to be true. Although the importance of the obstacles was similar it was realized that the scores obtained in the United Kingdom survey were much lower. This observation showed that the British respondents were less threatened by the obstacles, probably due to the fact that they are much more experienced and confident in undertaking PPP projects compared to Beijing and Hong Kong. Further analysis of the data reflected that the responses within each administrative system were consistent as revealed from the Kendall’s concordance analysis. Although the Spearman rank correlation test indicated that there was no significant disagreement on the rankings of obstacles between respondents of the two administrative systems, considerable difference was detected by the independent two-sample t-test in the mean value of their responses between the two administrative systems for the two obstacles lack of experience and appropriate skills and lengthy delays in negotiation. In Beijing, respondents felt that lack of experience and appropriate skills were highly important ranking it second place, but in Hong Kong this obstacle was ranked eighth, showing their confidence in experience and skills. For lengthy delays in negotiation, although the ranking between Beijing and Hong Kong was similar the difference in score showed a large variation. This represents a difference in tendering procedures between the two administrative regions. Triangulation with real cases largely supports the survey findings.     

How Relational are Construction Contracts?

For many years, the construction industry has relied on formal contracts to define and enforce the obligations and rights of contracting parties. Legal scholars have suggested that, based on their transaction characteristics, there are three different forms of contracts: classical, neoclassical, and relational. Of these, which form is more appropriate for use in construction projects? With increasing awareness of the importance of teamwork in construction, there is clear evidence of a rising trend in adopting a partnering approach to construction project delivery. For projects that seek to achieve a partnering relationship, relational contracts that value relationships, trust, and communication appear to be the appropriate form of contract. This paper discusses the application of relational contracts in construction by examining the fundamental question “How relational are construction contracts?” The degree of relationalism is assessed using a relational index comprising eight factors: cooperation, organizational culture, risk, trust, good faith, flexibility, the use of alternative dispute resolution, and contract duration. It was found that in the traditional design–bid–build form of delivery, the main contract and domestic subcontract forms are more relational than those of the nominated subcontract and the direct labor contract. The study was conducted in Hong Kong.     

Exploratory Study of Knowledge Sharing in Contracting Companies: A Sociotechnical Perspective

According to Dede Bonner in 2000, employees hold a wealth of knowledge and experience about their companies, including the products, customers, internal processes, histories, technologies, and competitors. But this knowledge is usually dispersed across scattered individuals and locations. Although learning happens at an individual level, it is usually as a one-time event, without an organizational context or a sense of continuity. Knowledge is kept in people’s minds but not shared in an organization. Not until the 20th century did people start to realize that knowledge is critical to the success of a company and considered to be the pivotal point for aggressive organizational growth in today’s highly competitive marketplace. This is also true for the Hong Kong construction industry. In order to gain a deeper understanding of the current situation of knowledge sharing at the departmental level in contracting companies, this research was carried out with the aims of investigating the main barriers to and finding out the critical factors for and benefits resulting from effective knowledge sharing in the tendering departments of contracting companies in Hong Kong and the United Kingdom. The research reviews existing theories of knowledge and knowledge sharing. It seeks to contribute to the theory of organizational knowledge sharing by providing an explorative account supported by empirical evidence. It also allows management to continuously anticipate and support knowledge sharing activities related to the successful management of construction projects within their particular organizations.     

Model for Financial Renegotiation in Public-Private Partnership Projects and Its Policy Implications: Game Theoretic View

Today, government is no longer considered the sole provider of public works or services. Public-private partnership (PPP) has been recognized as an important approach to solving problems for governments in providing infrastructure systems. However, the joint ownership or partnership in PPP complicates the administration of PPP projects. Too often, in PPP, many serious problems occur mainly because of bad administration policies. In particular, the fact that government may rescue a distressed project and renegotiate with the developer causes major problems in project procurement and management. This paper aims to study when and how government will rescue a distressed project and what impacts government’s rescue behavior has on project procurement and management. A game-theory based model for government rescue dynamics is developed. Propositions, corollaries, and important policy implications are then derived from the model. This pilot study, the writer hopes, may provide theoretic foundations to policy makers for prescribing effective PPP procurement and management policies and for examining the quality of PPP policies. The study can also offer researchers a framework and a methodology to understand the behavioral dynamics of the parties in PPP.     

Exploring Critical Success Factors for Partnering in Construction Projects

The construction industry is a very competitive high-risk business. Many problems, such as little cooperation, lack of trust, and ineffective communication resulting in adversarial relationships between contracting parties, are facing the construction industry. Partnering is perhaps one of the most innovative developments in delivering a project efficiently and reducing construction disputes. It provides a sound basis for a “win-win” climate and synergistic teamwork. Project partnering in the Hong Kong construction industry has gained in popularity since 1994. A number of potential factors contributing to partnering success have emerged and deserve further study. This paper presents a review of the development of the partnering concept in general and identifies critical success factors for partnering projects from the Hong Kong perspective in particular. Through a postal questionnaire survey geared toward project participants with hands-on partnering experience, the opinions of various parties—clients, consultants, and contractors were sought and evaluated in relation to partnering success factors. The relationship between the perception of partnering success and a set of success factors hypothesized in the study was derived using factor analysis and multiple regression. The results indicated that certain requirements must be met for partnering to succeed. In particular, the establishment and communication of a conflict resolution strategy, a willingness to share resources among project participants, a clear definition of responsibilities, a commitment to a win-win attitude, and regular monitoring of partnering process were believed to be the significant underlying factors for partnering success. Such an identification of success factors could well formulate effective strategies for minimizing construction conflicts and improving project performance.     

Drivers for Adopting Public Private Partnerships—Empirical Comparison between China and Hong Kong Special Administrative Region

The private sector has long been involved in delivering public sector projects, whether its role has been as a partner or just as a contractor for the government. Over recent years the interest in adopting public private partnerships (PPPs) has increased internationally. Many research studies have presented positive reasons for the governments and the private sector to welcome this form of procurement, rather than continue adopting the traditional options. This paper aims to explore and compare the key drivers for adopting PPP in China and the Hong Kong Special Administrative Region (referred to as Hong Kong from here onwards). An empirical questionnaire survey was conducted in both of these administrative systems and survey respondents were invited to rate their perceptions on the importance of 15 different drivers identified. Eighty-seven completed survey questionnaires were returned for analysis. The findings indicated that respondents from China rated economy-related drivers higher, whereas Hong Kong respondents tended to rate efficiency-related drivers higher. China’s demand for more public infrastructure and services has imposed great pressure on the government’s budget, and therefore economic drivers were rated higher. On the other hand, with adequate financial reserve in hand and budget surplus over recent years, Hong Kong has tended to prefer paying for projects upfront, and hence efficiency was regarded more significantly. Among the 15 drivers, both of the respondents from China and Hong Kong selected, “provide an integrated solution (for public infrastructure/services)” and “solve the problem of public sector budget restraint” to be within the top three drivers. Despite the general agreement on the ranking pattern, the results of independent two-sample t-test showed that China and Hong Kong shared very different views on the driver “reduce the total project cost.” This driver was ranked rather high by the mainland Chinese respondents, but much lower by the Hong Kong respondents. This finding can be construed that economic drivers are in general rated higher in China as compared to that in Hong Kong.     

Constructing Relationally Integrated Teams

Worldwide initiatives to improve construction industry performance converge on the common need for more effective teamworking. This is increasingly critical in the context of complex multiparticipant construction projects. Clashes of organizational, operational, national, and/or professional cultures point to the need for “relational integration” as a prerequisite for such synergistic teamworking. This paper draws on recent approaches to promoting trust and cooperation through (1) basic teambuilding techniques in general and (2) partnering and alliancing in construction projects. It then focuses on analyzing the views of Singapore-based contractors as derived from a survey to elicit the hypothesized 28 factors facilitating relationally integrated teambuilding, and 31 factors deterring such integration in construction project teams. On the whole: (1) 27 of the 28 factors facilitating integrated project team, and 26 of the 31 factors deterring integrated project team, are significant; (2) these two sets of factors could be represented by four and five “broad factors,” respectively; and (3) except in a few cases, respondents from large and medium companies, as well as with and without experience in RC, have similar perceptions of the importance levels of different factors. These two sets of critical factors, as identified in this paper, complement two other previously isolated sets of factors that facilitate or deter a “relational contracting” culture. Taken together, they feed into a consolidated strategy for releasing the latent energies and potential synergies that should yield the much higher construction project performance levels that have been called for worldwide.     

Perception of Financial Institutions toward Financing PFI Projects in Hong Kong

Private finance initiative (PFI) has emerged to be a viable strategy for governments to transfer financial risks in public projects to the private sector. It does not only help tap the efficiency and finances of the private sector but it also promises to deliver better public services to the community. Despite these obvious incentives, there is still a low PFI diffusion in Hong Kong. Based on this understanding, we have undertaken this exploratory study, which is probably the first of its kind, to investigate the PFI’s financial issues from the perspective of financial suppliers. This study was intended to identify factors that may affect the perception of the supplier side and to explore ways to facilitate their participation in PFI projects. The findings suggest that respondents had low level of understanding and knowledge of the PFI and they perceived that PFI public projects had an average risk and performance. To increase their involvement, several enablers are provided in this paper.     

Contractual Management in PPP Projects: Evaluation of Legal versus Relational Contracting for Service Delivery

The paper explores the extent to which effective relationships and legal factors are used to determine performance outcomes in public–private-partnership (PPP) procurement in the United Kingdom. The purpose is to demonstrate means for service improvement on PPP projects. PPP was formerly the public finance initiative for the construction and operation of complex services and facilities. Design, build, finance, and operate and design, build, and operate type contracts are considered. A legal-relational continuum is developed, relationships being assessed in terms of trust as an indicator of robustness, data being mobilized through action research and quantitative survey methods. It was found that there is variance in the perceived trustworthiness of clients in the context of their understanding and experience of PPP, and variance in support given to staff by their departments in developing relations was found to affect performance. A long-term tendency was identified to relinquish partnership relations in favor of legal and potentially adversarial contracting. Relationship management principles were also found to be lacking in both the public and private sector, relational contracting being predominantly reliant upon the behavior of individuals in their teams.     

Structural Equation Model of Trust and Partnering Success

The establishment of trust has been identified as the most critical factor that facilitates partnering success. As such, management should direct their efforts and energy to enhance trust effectively and systematically. It is hypothesized that partners’ trust level is positively related to their performance, permeability, and relational bonding and can be system based. This paper reports the use of the structural equation modeling technique to test this hypothesis. Project-based data on partnering success and the relative importance of the four trust factors were collected through a questionnaire survey, and the level of partnering success was assessed by the achievement of the preset project targets. The findings of the study support the hypothesized positive relationship between the partners’ trust level and partnering success. In addition, performance, permeability, and relational bonding were found to make significant contributions toward parties’ trust level.     

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.     

Participation, Barriers, and Opportunities in PFI: The United Kingdom Experience

Private finance initiative (PFI) projects play an increasingly important role for both the United Kingdom government and the construction sector. It is still a relatively new form of procurement that requires a wide range of specialist advice during the bidding stage and in-depth knowledge of how the facility will perform in the long term. This paper investigates the level of participation in PFI projects in the United Kingdom, the opportunities available for the construction sector, the types of problems experienced, and the challenges for the future. It achieves this by analyzing the results of a questionnaire survey of a large number of client and construction organizations. The study finds that there is a wide gap in the level of PFI experience between client and construction organizations, affordability of PFI projects, and high bidding costs are key issues for client and construction organizations, respectively, and, given the nature of PFI projects, there is considerable scope for knowledge transfer both during the project and between different PFI projects.     

Play therapy in Hong Kong: Opportunities and challenges.

Play therapy is a well-established therapeutic approach for working with children and families in the West. This article describes the current situation of play therapy in Hong Kong—a cosmopolitan city where East meets West. The strengths, weaknesses, opportunities, and threats confronting the development of play therapy as an extension of core graduate-level mental health training are analyzed. Through this process, a number of strategic issues central to the growth and development of professionalism in play therapy are identified and discussed. A path for the future development of play therapy for mental health professionals in Hong Kong over the next decade is presented. Possibilities for collaboration in research and practice among play therapists from all over the world are also suggested. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Adjudication: Temporary Binding and Tiered Dispute Resolution in Construction and Engineering: Hong Kong Experience

Hong Kong (under the “One Country Two Systems” Policy, Hong Kong, although an administrative region of the PRC operates a separate legal system, whose roots lie in the English common law system) has a justified reputation for being at the forefront of developments in techniques to avoid and resolve disputes in the construction industry. [This is illustrated by the adoption of the UNITRCAL Model Law by the Arbitration (Amendment) Ordinance 1996, specific powers given to Arbitral Tribunals under the Arbitration Ordinance (Cap. 341) including powers to consolidate, and the development of the dispute resolution adviser system. See the genesis, development and future use of the dispute resolution adviser system by Colin J Wall, Hong Kong Society of Construction Law dated November 17, 2004]. However, it has not, to date, seen the widespread adoption of adjudication as a means of resolving disputes. This article examines the history of the use of adjudication in Hong Kong, current trends, and offers some possible reasons for the limited adoption of adjudication.