Developing a decision support system for building project procurement

The growing need for improved construction procurement and managerial systems, point to the usefulness of a knowledge-based advisory system to help optimise such decisions, amidst the multiplicity of project variables. This new system would harness lessons learnt from past and present research and practice. A Hong Kong based study on a sample of different building projects and professionals, has yielded ‘knowledge’ that has been analysed and structured into pilot/sample core modules of a proposed knowledge-based decision support system. Results from statistical analysis of the data and an Artificial Neural Network model confirmed the value of the proposed system. An extended study to gather more data/knowledge is recommended to further develop the proposed system, using the methodology presented in this paper.     

Evaluation of enhanced design and build system a case study of a hospital project

This study involves an investigation of a hospital project which adopted an ‘enhanced design and build’ form of building procurement. The paper assesses the procurement system from the perspectives of the client, client's consultants, contractor, contractor's consultants, and contractor's subcontractors. A detailed case study of North District Hospital is described to illustrate the process of this procurement system. All the interviewees generally agreed that the hospital project was successful in meeting the time, cost, quality, functional and safety requirements set by the client. As the first project adopting the ‘enhanced design-build’ procurement system in Hong Kong, the benefits of applying this innovative procurement system were demonstrated.     

A study of the factors affecting construction durations in Hong Kong

This is the second phase of an investigation into the significant factors influencing construction duration of projects in Hong Kong. The results of the first phase led to the conclusion that larger samples were justified to investigate further the discerned relationships. Expanded samples were obtained in this second phase by adding some reported data from Hong Kong projects to the original surveyed sample. The second phase of this study also further investigates the relationships between different project characteristic variables such as the construction duration, construction cost, total gross floor area and the number of storeys in the case of buildings. Moreover, a case study on plant utilization level and site labour productivity was carried out on a building site to explore the ‘micro-factors’ that affect construction durations. The findings are of importance to all construction industry participants as the derived models help to estimate the construction duration of a project on the basis of significant macro project parameters. Additionally, the results of the case study indicate the contribution of significantly variable site productivity levels to overall construction duration and suggest an agenda for future investigations. A third phase of this study is planned incorporating more detailed data collection and analysis of significant factors, as well as international comparisons where possible.     

Competitive Advantage In Construction: Comment

Two approaches are described which aid the selection of the most appropriate procurement arrangements for a building project. The first is a multi-attribute technique based on the National Economic Development Office procurement path decision chart. A small study is described in which the utility factors involved were weighted by averaging the scores of five ‘experts’ for three hypothetical building projects.

A concordance analysis is used to provide some evidence of any abnormal data sources. When applied to the study data, one of the experts was seen to be atypical.

The second approach is by means of discriminant analysis. This was found to provide reasonably consistent predictions through three discriminant functions. The analysis also showed the quality criteria to have no significant impact on the decision process.

Both approaches provided identical and intuitively correct answers in the study described. Some concluding remarks are made on the potential of discriminant analysis for future research and development in procurement selection techniques.     

An empirical study of the benefits of construction partnering in Hong Kong

Many construction companies have adopted partnering in their construction projects over the past 10–15 years due to favourable project outcomes achieved. Its use in construction projects has been increasing rapidly as its benefits become more apparent and pervasive. This paper reviews the partnering literature within the construction field and tries to portray the comprehensive picture of benefits for the partnering practice. Through partnering and the active involvement of all key project parties, the project is more likely to be completed within budget, on time, and with the least number of conflicts, claims and work defects. Also, this paper reports upon the findings of a questionnaire survey of partnering benefits in Hong Kong. Seventy‐eight project participants completed a questionnaire to indicate the relative importance of partnering benefits. The perceived benefits were measured and ranked from the perspectives of the client, contractor and consultant for cross‐comparison. The results revealed that ‘Improved relationship amongst project participants’, ‘Improved communication amongst project participants’ and ‘More responsive to the short‐term emergency, changing project or business needs’ were the most significant benefits derived from the use of partnering. More partnering arrangements should be actively introduced into the construction procurement process so that every party can enjoy the full benefits of partnering.     

The social procurement practices of tier-one construction contractors in Australia

Social procurement is becoming an increasingly important requirement in the delivery of private- and public- sector construction projects across the world, yet there is relatively little research done in this area. Mobilising Furneaux and Barraket’s social procurement typology, semi-structured interviews were conducted with senior managers from eight tier-one contractors in the Australian construction industry to explore and classify the types of social procurement strategies used in projects, the types of social value created and the barriers to implementation. Documentary data were collected in the form of company policies and contract requirements. Results demonstrate the conceptual merit of Furneaux and Barraket’s typology in a construction industry context by highlighting different constraints on social value creation for each type of social procurement. These results also indicate that approaches to social procurement in the Australian construction industry are generally driven by a philosophy of risk mitigation rather than opportunity maximisation, and are confined to low-value and low-risk construction activities and are constrained by a lack of existing and new supply chain social-value creation capacity. Construction industry social value chains are fragile in Australia, and it is concluded that in building the sector’s significant untapped capacity to deliver social value to the communities in which it builds, priority should be given to three main strategies: third sector capacity building; barrier-to-entry reduction and skills development in managing new cross-sector collaborations among public, private and third sector organisations.     

Development of a partnering performance index (PPI) for construction projects in Hong Kong: a Delphi study

Over the past decade, research studies on benefits, critical success factors, difficulties, process, conceptual and theoretical models of construction partnering have been ubiquitous in the construction management discipline. In fact, there is adequate evidence that an increasing number of client organizations are adopting a partnering approach to undertake their building and construction projects both locally and worldwide during the last decade. With the perceived benefits that partnering brings about, research into Key Performance Indicators (KPIs) to evaluate the success of partnering projects in construction becomes vital as it can help set a benchmark for measuring the performance level of partnering projects. However, although there are some related studies and papers on this research area, few, if any, comprehensive and systematic studies focus on developing a comprehensive, objective, reliable and practical performance evaluation model for partnering projects. A model has been developed using the Delphi survey technique to objectively measure the performance of partnering projects in Hong Kong based on a consolidated KPIs' conceptual framework previously developed for partnering projects. Four rounds of Delphi questionnaire survey were conducted with 31 construction experts in Hong Kong. The results reveal that the top seven weighted KPIs to evaluate the success of partnering projects in Hong Kong were: (1) time performance; (2) cost performance; (3) top management commitment; (4) trust and respect; (5) quality performance; (6) effective communications; and (7) innovation and improvement. A statistically significant consensus on the top seven weighted KPIs was also obtained. Finally, a composite Partnering Performance Index (PPI) for partnering projects in Hong Kong was derived to provide an all‐round assessment of partnering performance. Different partnering projects can now be assessed on the same basis for benchmarking purposes. Construction senior executives and project managers can thus use the Index to measure, evaluate and improve the performance of their partnering projects to strive for construction excellence. Although the PPI was developed locally in Hong Kong, the research method could be replicated in other parts of the world to produce similar indices for international comparison. Such an extension would aid the understanding of managing partnering projects across different geographic locations.     

Developing a procurement path determination chart SEM-based approach

The choice of an appropriate procurement system is crucial to construction project success. Procurement selection is largely based on path determination charts, with at least eight key criteria needing to be weighted by decision-makers. Including certain criteria whilst ignoring client-borne transaction costs (TCs) resulting from environmental uncertainties simplifies this process. TCs are ‘unseen’ costs associated with pre- and post-contract work. The effects of uncertainties in the transaction environment and procurement systems on TCs are investigated, comparing the traditional and design-build procurement systems. A cross-sectional sample approach was deployed, involving survey questionnaire and results verification through ‘real-world’ cases. Data was sought from construction professionals in management, design and operation of construction projects. The research participants evaluate their time spent on procurement activities using a five-point Likert scale. Hypotheses of the relations between environmental uncertainties, procurement systems, and pre- and post-contract TCs are tested using a structural equation modelling (SEM) approach. The study found that TCs account for about 46.75% and 42.88% of the daily time spent by project managers in traditional and design-build procurement systems in New Zealand respectively. The study concludes that the TC concept is a useful framework for determining objective instead of subjective opinions for procurement decisions.     

Solar energy in building renovation

The use of solar energy for existing buildings is in an early phase of development and there is a lack of common understanding about its advantages and disadvantages, including, for example thermal performance and cost. This article gives some general aspects about solar energy in building renovation, together with a summary evaluation of 15 case studies, i.e. existing solar renovation projects where the majority of the projects relate to renovation of multifamily buildings in central and northern European climates. The general discussion, as well as the case studies, deal with three major solar renovation concepts: 'glazed balconies and galleries', ‘solar walls’ and ‘solar collectors’, basically to meet two major renovation criteria: the need to repair or improve the ‘building envelope’ and the need to replace or improve ‘heating, ventilation and domestic hot water systems’. Most of the case studies are judged to be successful as demonstration projects. However, a major conclusion is that most case studies include mixed renovation activities like traditional wall insulation and replacement of windows in combination with one or two solar renovation concepts, which makes it hard to evaluate thermal energy savings and cost-effectiveness related to the solar renovation concept. Experiences concerning the different aspects of renovation, such as the various features employed, the renovation process itself, thermal performance and operational experiences, as well as economics are summarised. The need for further comprehensive efforts is expressed and recommendations concerning design, construction and evaluation of future demonstration projects are discussed, in order to guide future activities in this field.     

Representation in building

An industry report in Hong Kong calls for an agreed framework for appraising subcontractor performance. A set of performance appraisal criteria is developed that is agreeable to all key stakeholders in subcontracting. By examining the criteria being applied around the world and reviewing the available literature, a set of 31 subcontractor performance appraisal criteria was compiled. A questionnaire survey was conducted in Hong Kong to reveal the perception of relevant stakeholders on the most critical criteria for subcontractor appraisal. The independent samples t‐test confirmed that the main contractor and subcontractor groups had a significant agreement on the importance levels of most subcontractor performance appraisal criteria. Through factor analysis, the 15 most important subcontractor performance appraisal criteria and their underlying relationships are identified. The results indicate that the three overarching factors for subcontractor performance appraisal are ‘team interaction’, ‘accomplishment of project goals’ and ‘track record’. The identified appraisal criteria lay a solid foundation for the development of a centralized subcontractor performance appraisal system to facilitate performance reporting, data sharing and benchmarking.     

Professor Rodney Howes, 1943–2005

Strategic IT implementation decisions for major construction projects in Hong Kong are subject to various forces or factors identified in previous research—such as external forces, technological factors and organizational factors. The aim of this research was to examine the relationship (if any) between these families of forces and evaluate their impact, individually and collectively. A complex combination of several families of forces/factors that affect decision making was found to be ‘temporal’ with respect to project teams on major projects in Hong Kong. The research was underpinned by a broad questionnaire survey to establish ‘current practice’ before in‐depth analysis of the forces by means of a case study followed by interviews with industry leaders to confirm the results. It was found that respondents (n = 33) ordered cost, security and confidentiality as the most influential factors affecting IT implementation. A difference was found in the perceptions of ‘hired‐in’ project‐based staff in joint ventures and ‘permanent staff’ of single companies, the former evaluating IT performance more highly but evaluating the strategic use of, and user satisfaction with, IT significantly lower. The major constraint on IT implementation was found to be lack of budget, not cost per se. It is concluded that the temporal factors that apply to implementing innovative IT technology in project teams are relevant to different team members at different stages in the project life cycle and these factors are conditioned by a set of business conditions applying to project‐specific coalition organizations that are different from those that apply to single‐entity organizations.     

The state,property development and symbolic landscape in high‐rise Hong Kong

The symbolic landscape of high‐rise Hong Kong is examined through the development of four major buildings in order to assess real and symbolic relations between the state and private property developers in the production of the built environment. The theoretical perspective combines understanding of symbolic landscape as the production of geographically constituted social relations, especially in the evolution of Hong Kong producer services industries, with the concept of the ‘exhibitionary complex’, in which the state and élites deploy ‘object lessons in power’ to engender popular identification with state interests. By the 1990s local land development consortia increasingly capitalized high‐rise construction, and projects for harbourfront land reclamations enlarged in scale and scope. The International Finance Centre, Hong Kong's future tallest building, is designed to instantiate Hong Kong's place in the regional and international financial services industry, but had also challenged public acceptance. New landscape conservation legislation seeks to limit further harbour reclamation and protect viewscapes.     

Forecasting construction durations for public housing projects: a Hong Kong perspective

The past thirty years have seen a great surge of international attention and discussion in the domain of construction time performance of building projects. Demand for residential construction has been continually increasing in Hong Kong since the 1950s, while an accelerated demand has been envisaged in the next few years up to 2001. This paper is based on the findings of the third survey in an investigation which aimed at determining a group of critical factors that affect construction durations of building projects in Hong Kong. This stage of the study attempted to generate standards (norms) for overall completion periods of public housing blocks, by modelling the durations of the primary work packages in the building construction process, i.e. piling, pile caps/raft, superstructure, EandM services, finishes and their respective sequential start-start lag times, in terms of the identified sets of critical factors (significant variables). Data from 15 case studies of standard New Cruciform type housing blocks was collected from the client and contractors. Multiple Linear Regression was applied in analyzing the project data and formulating a construction duration model. The forecasting performance of the model was next evaluated using an independent (new) set of project information from the client, in terms of a relative measure known as the Percentage Error. Both the general applications and drawbacks of the model are briefly presented and examined herein. The low values of percentage error (less than about ±10%) for overall construction durations confirmed that the model can be a reliable tool for predicting the construction durations of public housing projects in Hong Kong; and the research methodology used could well be extended to similar studies and duration forecasts in other sub-sectors in Hong Kong, as well as in other countries.     

Shifting from net-zero to net-positive energy buildings

Numerous building projects have been presented as having ‘net-zero’ energy performance. Such claims use a variety of different approaches: on- and off-site renewable energy technologies, purchasing green energy credits, etc. Efforts have subsequently been directed at formulating clear definitions of ‘net-zero’ that provide some degree of clarity and theoretical framing. The emerging notion of ‘net-positive energy’ buildings raises new theoretical and practical issues and introduces several new design considerations and possibilities. Net-positive energy is explored though viewing the role of a building for adding value to its context and systems in which it is part. Rather than considering only the generation of more exported energy versus its importation to individual buildings or the grid, the emphasis shifts to the maximization of energy performance in a system-based approach. Net-positive energy approaches open a host of new technical, behavioural, policy, and regulatory issues and opportunities not currently evident with net-zero energy buildings. These challenge the primacy of ‘individual’ buildings as the most effective unit to make significant energy gains and the current prevalent expectation that each and every new building should be required to attain net-zero performance. More generally, it highlights the importance of extending the systems limits of energy analysis.     

Perceptions of building professionals on sustainable development: A comparative study between Hong Kong and Shenyang

It is logical to believe that the building professionals (architect, structural engineers, building services engineers, etc.) are the relevant persons that may influence the decision-making process on a real estate development process. Accordingly, the attitudes and perception of building professionals should have a significant influence on sustainable development. This article describes a survey concerning the perceptions of different building professionals, which include architects, construction engineers and building services engineers, on the environment, resource sustainability, and green consumerism in two major cities in China: Hong Kong and Shenyang. It is recognized that energy is central to sustainable development and in 2006/2007, the United Nation Commission on Sustainable Development will focus on energy issue. The discussion in this article will concentrate on the building professionals’ perception on energy related issues. Nevertheless, the findings in respect of their awareness of the environment, resources sustainability and other related issues are also summarized. At global level, apart from the need to preserve historical buildings, the professionals in Shenyang feel that ‘exhaustion of natural resources’ is of major concern and energy preservation is significant. However, the Hong Kong professionals do not consider energy resource sustainability is of urgency.     

Pricing strategy in the US construction industry

This paper presents several issues related to pricing in construction. First, problems with current pricing strategy in construction are explored. Second, pricing strategies based on a market-based approach are proposed. Third, survey findings of the top 400 US contractors are presented regarding their current pricing practices and the applicability of the proposed pricing strategies. In conclusion, the belief that current pricing strategy in construction is predominantly cost-based is confirmed by the survey findings; indeed, in setting the markup, most contractors rely on their intuition after subjectively assessing the competition. The three internal pricing variables that have the largest statistically significant contingency coefficients with pricing strategy are ‘marketing intelligence capabilities’, ‘annual contract value’, and ‘the type of client in most projects’. ‘Owner's characteristics’, ‘competitors'characteristics’, and ‘market demand’ are statistically significant external variables in making pricing strategy decisions. A change of bidding procedure is proposed so that all parties in construction can maximize the benefits of market-based pricing strategies.     

Critical success factors for PPP/PFI projects in the UK construction industry

Public–private partnerships (PPPs) are increasingly used in the United Kingdom's public facilities and services provision through the Private Finance Initiative (PFI). Despite some casualties, PPP/PFI projects have been undertaken successfully, but the reasons for success are not entirely clear. Questionnaire survey research examined the relative importance of 18 potential critical success factors (CSF) for PPP/PFI construction projects in the UK. The results show that the three most important factors are: ‘a strong and good private consortium’, ‘appropriate risk allocation’ and ‘available financial market’. Factor analysis revealed that appropriate factor groupings for the 18 CSFs are: effective procurement, project implementability, government guarantee, favourable economic conditions and available financial market. These findings should influence policy development towards PPPs and the manner in which partners go about the development of PFI projects.     

The effect of political unrest on construction time for food grain warehouses in Bangladesh

A range of poorly understood factors affect actual construction time in the context of food sector projects in Bangladesh. One factor of particular interest is political unrest. The data for this study were obtained from a leading design and construction management company in Bangladesh. The sample size consisted of data for 104 food grain warehouse projects scattered all over the country. The effect of political unrest on construction time was analysed in conjunction with other known variables for actual construction time, such as increase in project cost and delay in procurement of construction materials. The effect of local political unrest on construction time was statistically significant even in the presence of project cost and procurement of materials variables. Political unrest could be included in prediction models used for finding out actual construction time of food grain warehouse projects in Bangladesh. Based on these findings, a prediction model for construction time for such projects is developed.     

Defining the environmental performance of neighbourhoods in high-density cities

ABSTRACT

The regenerative design framework aims to ‘engage a broader range of possibilities by moving beyond the immediate building and site boundaries’. It implies that the environmental performance of buildings requires a revised definition so that it considers not only the building itself, but also its contribution beyond its own boundary, i.e. neighbourhoods. In high-density cities, outdoor spaces are culturally considered as the extension of one’s living spaces. The environmental performance of neighbourhoods is particularly important to the health and wellbeing of urban inhabitants. This paper aims to define the environmental performance of neighbourhoods in high-density urban context based on the experience acquired in previous studies in Hong Kong over the last 15 years. These studies cover a wide range of environmental issues including urban climate, outdoor thermal comfort, and daylighting design in high-density cities. Subsequent development of the assessment tools for environmental performance of neighbourhoods in Hong Kong is also presented. The framework of stakeholder engagement, as an integral part of the neighbourhood assessment tool, is discussed. This paper highlights the distinctive features of the environmental performance of neighbourhoods in high-density urban context and how it influences the professional practices in Hong Kong.     

Parameter prediction for cash flow forecasting models

The paper describes the application of the DHSS formula to 27 completed construction projects comprising four types - steel-framed low rise buildings, new build housing developments, housing refurbishment projects, and multi-house ‘pre-paint’ maintenance contracts. Application of the formula to individual projects indicates that the ‘best’ parameter values offer a ten-fold improvement over the published values based on project size. Similar results occur when using the best parameter values for other two parameter models.

Various approaches are considered in attempting to predict the best parameter values of the models based on known characteristics of the project. A multiple linear regression with project value, duration, and type independent variables is shown not to produce any significant improvement on standard DHSS formula predictions. However, a reduction in the number of independent variables by cross validation produces an approximately 25% improvement on standard DHSS formula forecasts outside the data base. Examination of the models derived from this analysis indicate the type of project to be of major importance.