Partnering on Defense Contracts

Contracting on government construction projects has historically been structured and adversarial. The decade of the 1990s saw the advent of a new attitude in government contracting that emulated success stories from the private sector. After witnessing several high-profile success stories such as constructing the Atlanta Olympic Park, the government embraced the concept of partnering as a primary method of contract administration. The private sector consistently demonstrated an ability to contract for services while realizing a marked decrease in claims and litigation costs with partnering. Their success was founded in the building of trust within the project team by creating a common bond between previously dissociated parties. This was achieved through developing a mutual understanding of the other parties’ interests and goals in the project while maintaining a team focus on the ultimate goal of a successful project. The government espied partnering as a way to improve its relationships with contractors and reduce the volume of litigation that seemed to only be increasing in the industry. The government began a paradigm shift by instilling a new attitude of openness and communication with contractors as well as implementing several broad contract administration changes. This paper examines the process of partnering, its key elements and core competencies, and how various agencies apply these principles in their construction management. The paper further researches stakeholder goals and important issues when entering into a partnering relationship on government contracts and what barriers are perceived that preclude the process from working as effectively as possible.     

在建工程项目管理信息系统的开发与应用

在建工程项目管理信息系统以各级工程项目为主体,以各类合同为主要切入点,以工程项目资金流为主线,以实现工程项目协同管理、信息共享为目标,通过对在建工程项目全过程大量的、动态的数据和信息及时、准确的分析和处理,采用软构件、中间件、WEBSERVICE、XML等新技术实现整个建设项目资金、物资、成本事先计划、事中控制和事后反馈,从而达到合理利用资源,增强企业应变能力,提高资金使用效益的目的。     

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.     

Process Model for Administrating Construction Claims

Claims for additional costs and time extensions result from a variety of events occurring during the course of construction. To enhance the chances of success, contractors submitting claims must closely follow the steps stipulated in the contract conditions, provide a breakdown of alleged additional costs and time, and present sufficient documentation. On the other hand, project owners need to follow an overall comprehensive step-by-step procedure for tracking and managing the claims submitted by contractors. The paper presents a claims-management process that could be used by all parties involved in construction. The process identifies the major information-gathering and decision-making milestones as well as the notice and substantiation compliance checkpoints, which are critical to the development of defense arguments as claims are addressed. It further emphasizes the use of tools such as simulation, scheduling, productivity, and economic analysis and other modeling techniques in judging the level of justification and reasonableness of submitted claims.     

Estimation of Cost Contingency for Air Force Construction Projects

Risk and associated cost overruns are critical problems for construction projects, yet the most common practice for dealing with them is the assignment of an arbitrary flat percentage of the construction budget as a contingency fund. Therefore, our goal was to identify significant variables that may influence, or serve as indicators of, potential cost overruns. We analyzed data from 203 Air Force construction projects over a full range of project types and scopes using multiple linear regression to develop a model to predict the amount of required contingency funds. The proposed model uses only data that would be available prior to the award of a construction contract. The variables in the model were categorized as project characteristics, design performance metrics, and contract award process influences. Based on the performance metric used, the model captures 44% of actual cost overruns versus the 20% captured by the current practice. Furthermore, application of the model reduces the average contingency budgeting error from 11.2 to only 0.3%.     

Project Alliancing at National Museum of Australia—Collaborative Process

Project alliancing is a new alternative to traditional project delivery systems, especially in the commercial building sector. The Collaborative Process is a theoretical model of people and systems characteristics that are required to reduce the adversarial nature of most construction projects. Although developed separately, both are responses to the same pressures. Project alliancing was just used successfully to complete the National Museum of Australia. This project was analyzed as a case study to determine the extent to which it could be classified as a “collaborative project.” Five key elements of The Collaborative Process were reviewed and numerous examples from the management of this project were cited that support the theoretical recommendations of this model. In the case of this project, significant added value was delivered to the client and many innovations resulted from the collective work of the parties to the contract. It was concluded that project alliances for commercial buildings offer many advantages over traditional project delivery systems, which are related to increasing the levels of collaboration among a project management team.     

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.     

浅谈清单计价模式下的工程变更结算

工程变更结算,是承发包双方确定投资增减的一项关键工作,它直接影响投资的控制目标。只有加强工程变更管理,严格控制工程变更,采用科学的方法,本着合同优先,公平、合理,兼顾工程综合效益的原则,才能做好工程量清单模式下的工程变更结算工作。     

Highway Construction Data Collection and Treatment in Preparation for Statistical Regression Analysis

Currently, there is not an understanding of the project factors having a statistically significant relationship with highway construction duration. Other industry sectors have successfully used statistical regression analysis to identify and model the project parameters related to construction duration. While the need is seen for such work in highway construction, there are very few studies which attempt to identify duration-influential parameters and their relationship with the highway construction duration. The purpose of this work is to describe the highway construction data needed for such a study, identify a data source, collect early-design project data, and prepare the data for statistical regression analysis. The Virginia Department of Transportation is identified as the optimal data source. The data collected include historical contract and project level parameters. To prepare for statistical regression analysis, the contract duration collected is converted to construction duration by a seasonal adjustment process which removes historically typical nonworking days.     

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.     

Multiple Claims in Construction Law: Educational Case Study

A construction case is analyzed where there is a potential for involvement of multiple claims between owner, architect, contractor, subcontractor, and manufacturer. A particular event at a building site causes disturbances where multiple parties are affected. Different questions arise as to the duties and liabilities of the different parties. How does this situation of multiple claims affect the parties responsible? This hypothetical case study used in an educational setting analyzes the liabilities and responsibilities of different parties. Case law support is provided. The study of such a case encourages student learning of the application of contract law in practice.     

建造合同准则在施工企业中的实践

依据建造合同准则,在工程施工企业当中,建立二级仓库财务动态监控模式,实现材料耗用过程的有效控制;建立内外部收入成本配比模型,厘定资本性支出与收益性支出;创新应用完工百分比法,依合同额划分工程类型,合理确认合同费用与合同收入。加强了工程造价管理、工程监理管理、工程财务管理,强化了成本控制,提高了管理效能。     

Collaborative Negotiation Behaviors in Thai Construction Projects

When construction contractors encounter difficulties and changes from what was originally stated in contract documents, fair and equitable adjustments are required. Owners use construction management (CM) consultants to act as primary negotiators on their behalf. Throughout project execution, seamless negotiations take place that are intended to improve the relationships that are critical to successful project delivery. This study investigates the collaborative behaviors between CM consultants and contractors acting as negotiators in adverse situations. Characteristics of collaborative negotiations are identified as being rational, goal-oriented, reactive, cooperative, and adaptive. Four negotiable situations were investigated: change orders, errors in drawings and specifications, differing site conditions, and delayed progress payments. The research for this study used a questionnaire survey of 83 project managers from 51 CM consultants and 32 contractor companies focused on building construction in Thailand. The results show significant differences in collaborative behavior between CM consultants and contractors. Contractors were much more aware of the outcome of negotiations, which could lead them to be less collaborative. Both parties strongly regarded rationality as normal practice. Adaptability to new approaches proved difficult in negotiations. This study also proposes strategies and tactics for better collaboration to achieve win-win results in negotiations.     

Assessing Construction Engineering-Related Delays: Egyptian Perspective

The sources of construction delays include engineering, construction, financial/economic, management/administrative, and force majeure. This paper presents a knowledge-based expert system dedicated to engineering-related delays. Three categories of engineering-related delays are considered in the proposed system. These are: (1) design development; (2) workshop drawings; and (3) project parties changes delays. The knowledge of the system is acquired from literature, Federation International des Ingenieurs-Conseils (FIDIC) contract forms, domain experts, as well as a questionnaire survey. Three classes of participants (consultants, contractors, and employers) have been approached to get their feedback on the cases of engineering-related delays. The design of the questionnaire and criteria for selecting participants are described. The feedback of the participants is analyzed to draw the main causes of engineering-related delays. The proposed system’s built-in rules utilize the procedure of FIDIC contract forms for both design-bid-build and design-build projects. In addition, it provides flexibility in utilizing other customized procedures. The system advises on the claim entitlement, responsibility, and compensability of claims. A case study is presented to demonstrate the capabilities of the proposed expert system.     

总承包项目的工程费用控制

做好工程费用的控制工作,对确保总承包项目的顺利运行具有非常重要的意义。提出应在总承包项目管理的全过程对工程费用进行有效控制,并通过案例着重论述了项目实施和竣工结算阶段如何控制工程费用。     

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.     

Demystifying Moderate Variables of the Interrelationships among Affective Commitment, Job Performance, and Job Satisfaction of Construction Professionals

Project goals expressed in terms of time, cost, and quality requirements are seldom disputed. However, it is not easy to ensure that the defined goals will be implemented by all parties involved in the implementation process as goal commitment is one of the key variables in project success and participant satisfaction in construction projects. In order to ensure professional commitment in the management process and optimize construction performance in the complex situation, it is necessary to identify the moderate variables and clarify the interactions among affective commitment, job performance, and job satisfaction of construction professionals. A questionnaire survey was conducted in Hong Kong. Both correlation analysis and hierarchical regression models were applied. The results revealed that both job acceptance/contribution and specificity/teamwork are moderate variables influencing the relationships between affective commitment and job performance and between job performance and job satisfaction. A series of conditional relationships is revealed in detail in this study and some suggestions, such as formal briefing sessions, regular formal meeting, and value engineering workshop, are recommended.     

Float Allocation Using the Total Risk Approach

Float ownership is one of the controversial issues in the litigation of delay claims. As float time does not always affect the overall project completion time, many believe that this time can be used by any of the project parties and that it does not belong to a particular party. This study introduces the “total risk approach” for float allocation, a new approach that integrates several current approaches to allocate float among project parties. The approach is based on the basic concept that the party who has the greatest risk in a project should be entitled to float ownership and deserves compensation from other project parties who increase the risk associated with the project by consuming the float. This new approach takes into consideration the changes in float that may occur as a result of actions that delay or accelerate the project’s schedule.     

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.     

浅谈建设工程项目的合同管理

在工程项目管理过程中,合同管理可以说是整个项目管理的核心。文章针对建设工程合同的特征与作用,阐述了建设项目合同管理的主要内容,并对目前工程合同管理存在的主要问题,提出了几点加强工程合同管理的对策,旨在提高工程项目管理水平,从而促进企业的经济效益的增长。