Cost Information Model for Managing Multiple Projects

Construction companies must deal with several projects at once, but a system to manage multiple projects is not fully developed yet. The first step towards developing such system is to design an information model that is suitable for managing multiple projects. This paper presents the cost-based project modeling (CBPM) method in contrast to the traditional activity-based project modeling methods. The CBPM uses cost as a core of the model along with other project information organized around it. The CBPM serves as a platform for integrating project information from multiple projects. Various types of construction costs are hierarchically modeled to generate corporate-wide information such as project performances, cash flows, and other predictive indicators. Based on the information model, an object-oriented database was developed to contain cost data across several projects. In the model, a module that connects to external systems is built into the model to enhance interactivity with the legacy systems and the industry standards. A prototype system was developed and tested with actual project data to validate the information processing capabilities of the model. The findings from the test indicate construction cost can be an excellent medium that can organize various types of information of multiple projects.     

Areas of Application for 3D and 4D Models on Construction Projects

In recent years more and more construction projects used three-dimensional/four-dimensional (3D/4D) models to support management tasks. However, project managers still struggle with evaluating how the 3D/4D model technology can be most efficiently applied on their specific project. One main reason for this struggle is that an account about how 3D/4D models have been used in the past is missing. This paper offers practitioners and researchers such an account of the application areas of 3D/4D model technologies including the purposes for which these technologies have been applied. The paper qualitatively aggregates the results of 26 case studies of 3D/4D model applications on construction projects to show researchers and practitioners how 3D/4D models have been applied to address project challenges. Using a “project challenge—3D/4D model application” matrix the paper explains each application area and describes why the application has been beneficial to the case study projects. The paper then analyzes the challenges that practitioners have faced with 3D/4D models on the test case projects. The main findings of this analysis are that practitioners on most of the test case projects have used the models for only one application area. The paper suggests that further research on the integration of 3D/4D model technologies into work and business processes of project teams is needed to address this opportunity for a more widespread use of 3D/4D models throughout the lifecycle of a project.     

Framework of Success Criteria for Design/Build Projects

Success has always been the ultimate goal of every activity, and a construction project is no exception. Due to the ambiguous definition of project success and the different perceptions of participants toward this concept, it may be difficult to tell whether a project is successful as there is a lack of consensus. Time, cost, and quality have long been the success criteria used to evaluate the performance of a construction project. However, such a list has been criticized as not being comprehensive. Even studies of the project success of a particular construction method, such as the design/build procurement system, are lacking in most previous research considering construction projects in general. This paper sets out to establish criteria for project success for a design/build project in construction, first by identifying relevant measures of project success for a construction project in past studies, with particular emphasis on design/build projects, and then by establishing a comprehensive assessment framework for project success for design/build projects. The significant impacts on the construction field of study, in terms of educational value and practical use, are also presented. With little research in the project success of design/build projects, the writers suggest a research focus for the study.     

Organizing Constructability Knowledge for Design

Construction contractors have significant constructability expertise to contribute to the design process of projects. To utilize this expertise most effectively, the right information must be made available to the design team at the proper point in time and at the appropriate level of detail. Current methods for utilizing construction knowledge in design have made significant advances to improving projects. However, they are typically rudimentary: unstructured, not very efficient, and rely heavily on reviews. Organizing constructability information according to its use in the design process will allow project teams to take the best advantage of the construction expertise. This paper introduces a model for organizing constructability information based on timing and levels of detail. The model differs from current approaches because of this focus. How the model was developed is described. It is tested on six case study projects to assess applicability on different projects. An illustrative example is provided using a detailed case study of the Pentagon renovation project to show how the model can be used as a metric to guide constructability input during design.     

Fuzzy Analytical Hierarchy Process Risk Assessment Approach for Joint Venture Construction Projects in China

Research and practice show that construction joint venture (JV) activities in China are opportunities that can bring potential benefits but at the same time may generate many risks. While research has studied these risks and presented useful advice for managing individual risks, the methodologies used to analyze the risks were mainly qualitatively based, and there is a gap in using the quantitative method that can integrate a risk expert’s knowledge to assess the risks associated with JV projects. This paper sets up a hierarchy structure of the risks and then develops a fuzzy analytical hierarchy process (AHP) model for the appraisal of the risk environment pertaining to the JVs to support the rational decision making of project stakeholders. An empirical case study is used to demonstrate the application of the proposed fuzzy AHP model. It is concluded that the fuzzy AHP model is effective in tackling the risks involved in JV projects. The information presented in this paper should be shown to all parties considering JV business opportunities in China, and the proposed approach should be applicable to the research and analysis of risks associated with any type of construction projects.     

Construction Engineering—Reinvigorating the Discipline

Construction engineering is all about production, and producing something useful is the very reason for projects to exist. How then to explain why construction engineering has progressively fallen out of focus in construction project management education and research? For an answer, the development of the discipline of construction management since the 1950s must be understood, a development that yielded a non-production-oriented approach to project management, one that provides the currently accepted operating system for managing the work in projects. This paper first traces the history of the development of the traditional operating system and related commercial terms and organizational practices. It argues that traditional practices rest on an assumption that careful development of a project schedule, managing the critical path, and maximizing productivity within each activity will optimize project delivery in terms of cost and duration. Subsequently, an alternative operating system, developed and proposed by the Lean Construction community, is described. In contrast to the traditional approach, lean defers detailed planning until closer to the point of action, involves those who are to do the work in designing the production system and planning how to do it, aims to maximize project performance (not the pieces), and exploits breakdowns as opportunities for learning. The history of this development will be traced in broad strokes.     

Construction Project Network Evaluation with Correlated Schedule Risk Analysis Model

Schedules are the means of determining project duration accurately, controlling project progress, and allocating resources efficiently in managing construction projects. It is not sufficient in today’s conditions to evaluate the construction schedules that are affected widely by risks, uncertainties, unexpected situations, deviations, and surprises with well-known deterministic or probabilistic methods such as the critical path method, bar chart (Gantt chart), line of balance, or program evaluation and review technique. In this regard, this paper presents a new simulation-based model—the correlated schedule risk analysis model (CSRAM)—to evaluate construction activity networks under uncertainty when activity durations and risk factors are correlated. An example of a CSRAM application to a single-story house project is presented in the paper. The findings of this application show that CSRAM operates well and produces realistic results in capturing correlation indirectly between activity durations and risk factors regarding the extent of uncertainty inherent in the schedule.     

Work Sampling Can Predict Unit Rate Productivity

Various methods are employed to measure labor utilization during power plant construction, one of which is work sampling. Work sampling attempts to evaluate how the work force spends its time at work. This provides timely information to management in order to determine whether corrective action or detailed study is needed to achieve a higher degree of efficiency. However, the effectiveness of work sampling in demonstrating true labor performance has not been statistically verified using data collected at construction sites. This study collects 45 work sampling data points from 11 nuclear power projects and 4 fossil fuel power projects. the relationship between work sampling and productivity has been strongly supported by this statistical analysis. This study also verifies that work sampling is a good labor productivity indicator as well as a useful predictor in a productivity projection model.     

Optimal Capital Structure Model for BOT Power Projects in Turkey

Interest in the Build/Operate/Transfer (BOT) scheme for infrastructure projects has been growing rapidly, and numerous projects have been implemented around the world. Through BOT projects, a government reallocates the risks and rewards in the development of large infrastructure projects to the private sector. One key aspect to the successful implementation of the BOT concept in any country is the raising of finance by project sponsors. Financial engineering techniques and capital structuring skills are required to find the proper mix of debt and equity and to achieve successful financing for the proposed project. The objective of this paper is to present a simplified model to determine the optimum equity level for decisionmakers at the evaluation stage of a BOT hydroelectric power plant (HEPP) project in Turkey, which takes place immediately after the completion of the feasibility study. The resulting model is the combination of a financial model and a linear programming model that incorporates an objective of maximizing the return of the project from the equity holder’s point of view. To show versatility of the model, a real case study is conducted. Thus, this research is concerned with the determination of an equity funding level in BOT project finance. There are different equity levels found in BOT HEPP projects, and there is a need for such a model to determine optimal capital structure, which would assist the project sponsors to ensure that the equity level necessary for optimal capital structure is available prior to the project implementation stage.     

Master Builder Project Delivery System and Designer Construction Knowledge

The master builder system for designing and building construction projects was the dominant project delivery system in the construction industry during the early part of the 20th century. Master builders were generally charged with both design and construction services for a project. During the last half of the 20th century, many different systems for project delivery with fragmented responsibilities have replaced the master builder system. Reducing the use of the master builder system has led to the creation of elaborate systems for managing projects in the construction industry. In order to investigate the use of the master builder delivery system and other systems, a research project was conducted that included reviewing (1) the history of the construction industry, (2) project delivery systems, (3) constructability issues, (4) construction industry fragmentation, (5) the results of a survey of architecture, engineering, and construction professionals from the San Francisco Bay Area in California on the current processes they use for training engineers and architects, (6) an analysis of the survey results, (7) construction industry recommendations, and (8) conclusions based on the survey results and analysis. The information obtained from the research project, including the survey and an analysis of the results, is included in this document. The results of the research indicate that reduction in the use of the master builder project delivery system and the rise of numerous fragmented delivery systems have limited the designer’s knowledge of construction processes.     

Quality and Change Management Model for Large Scale Concurrent Design and Construction Projects

Concurrent design and construction has been lauded for streamlining projects in terms of time. However, such an approach may actually make projects more uncertain and complex than the traditional sequential design and construction process. The main sources of risk that have been identified with concurrent design and construction are iterative cycles that result from unanticipated errors and changes and their subsequent impacts on project performance. As an effort to address these detrimental impacts, a framework for quality and change management that identifies those negative iterative cycles is proposed. The proposed framework is incorporated into the system dynamics model of dynamic planning and control methodology (DPM), which has been developed to evaluate negative impacts of errors and changes on construction performance. Relevant to practitioners and researchers, the potential of DPM as a robust design and construction planning methodology that could effectively deal with errors and changes inherent in the design and construction process is demonstrated through a case study involving the Treble Cove road bridge in Massachusetts.     

Models for Managing Contingency Construction Operations

A contingency is a crisis situation such as a national disaster, civil disorder, or military invasion that creates a major threat to the safety and security of a population. Essentially all contingencies require construction support that is generally mission critical and inherently challenging due to the dynamics and uncertainty with the availability of resources and the demands for the projects. This paper considers a military contingency for which all construction projects must be completed within a fixed time to achieve mission success. The effectiveness in accomplishing the construction mission is based on mission time reliability assessed using the probability of interference between load measured in the number of days required for the project, and the capacity which is taken as the available allotted resources. Two models are developed to assist in managing the allocation of resources for the construction operations; one based on conditions of moderate risk with randomly occurring repetitive loads, and the other a Markov chain model for high risk conditions. Examples are provided.     

Impact of Change Orders on Small Labor-Intensive Projects

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

Optimal Planning and Scheduling for Repetitive Construction Projects

This paper presents a multiobjective optimization model for the planning and scheduling of repetitive construction projects. The model enables construction planners to generate and evaluate optimal construction plans that minimize project duration and maximize crew work continuity, simultaneously. The computations in the present model are organized in three major modules: scheduling, optimization, and ranking modules. First, the scheduling module uses a resource-driven scheduling algorithm to develop practical schedules for repetitive construction projects. Second, the optimization module utilizes multiobjective genetic algorithms to search for and identify feasible construction plans that establish optimal tradeoffs between project duration and crew work continuity. Third, the ranking module uses multiattribute utility theory to rank the generated plans in order to facilitate the selection and execution of the best overall plan for the project being considered. An application example is analyzed to illustrate the use of the model demonstrate its new capabilities in optimizing the planning and scheduling of repetitive construction projects.     

Understanding and Managing Three-Dimensional/ Four-Dimensional Model Implementations at the Project Team Level

This paper introduces an extant, theoretical, social-psychological model that explains the sense-making processes of project managers confronted with a new technology to improve our understanding of project-based innovation processes. The model represents the interlinked processes through which project managers decide to implement new technologies on their projects according to the outcomes of these sense-making processes. The paper validates the model against observations gathered in four case studies of technology implementation on construction projects. Doing so, it assesses the general usefulness of the model to explain the success of technology implementation dynamics in project teams. The paper also derives a number of management suggestions from the model: for example, project managers should focus squarely on the immediate benefits of the technology in improving work processes on the project instead of focusing on long-term strategic firm or industry benefits.     

Models for Predicting Project Performance in China Using Project Management Practices Adopted by Foreign AEC Firms

China is a new market to many international architectural, engineering, and construction (AEC) firms and it is not known what would be the likely project outcomes, based on different project management (PM) practices adopted. This research developed and tested five models to predict the likely project success levels, based on PM practices adopted by foreign AEC firms in China. Based on data obtained from 33 projects, multiple linear regression (MLR) models for predicting the performance of foreign managed projects in China were constructed. The models were tested against 13 new cases, and the results show that they are able to predict project outcomes with some level of accuracy. The models show that certain scope management practices can be used to predict owner satisfaction, profit margin, and cost and quality performance of the project. Construction industry practitioners who are managing projects in China may benefit from the findings by focusing more on upstream management, like managing project scope, in order to ensure project success. It is recommended that construction industry practitioners use the MLR models to make preliminary assessment of the possibility of project success based on the type of PM practices they intend to adopt in China. From the results, they can then decide if they should change their practices or abort the project.     

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.     

Achieving Multiple Project Objectives through Contingency Management

Project managers use budgets to satisfy multiple objectives such as cost control, short durations, and high quality. Contingency funds are included in project budgets to manage risk and achieve project goals. Understanding how managers use budget contingencies requires a dynamic information processing model of how managers bridge the gap between high project complexity and limited managerial capacity. The results of collecting contingency management practices of real estate development project managers is reported and a dynamic simulation model of contingency management described. The model is used to test hypotheses of the effectiveness of aggressive and passive management strategies on cost, timeliness, and facility value. Managers were found to pursue general project objectives in their management of contingency. An aggressive strategy was found to be more robust but performed poorer than a passive strategy. Conclusions include the prevalence of trade-offs between robust and high-performance contingency management policies in construction projects and the importance of incorporating uncertainty into project planning and management.     

Hybrid Model Incorporating Real Options with Process Centric and System Dynamics Modeling to Assess Value of Investments in Alternative Dispute Resolution Techniques

Project-specific dispute resolution ladders (DRLs) are typically implemented in construction projects to resolve issues arising between the project participants. The DRL typically consists of single or multiple alternative dispute resolution (ADR) techniques to address construction issues at the three levels of escalation: conflicts; disputes; and claims. However, a DRL requires significant investments to cover the direct costs incurred in-house by the project participants or, externally, if construction specialists and lawyers are recruited to assist in the resolution. Thus, the benefits of the DRL implementation in a construction project must outweigh its costs for the implementation to be worthwhile. This paper presents a methodology to study the effect of different resolution strategies on the value of the investment in a DRL using option/real option theories from financial engineering, process centric modeling, and system dynamics methodology. Of particular interest in this paper is the integration of these research methodologies into a computer model to support the evaluation of the DRL investment in a particular construction project by taking into account the characteristics of (1) the project and (2) the different ADR techniques chosen for the DRL implementation. Finally, an example is presented to illustrate the application of the computer model in a real construction project. The results of the simulation serve two main purposes. First, the results of the simulation are used to verify the intended model behavior in terms of proper integration of the three methodologies (i.e., real options, process centric, and system dynamics) in one computer system. Second, the model application to a real construction project using actual project data illustrates the potential of the model in providing the project participants with information related to the expected number of claims and change orders resolved at each level of the DRL, the change in the expected savings during the construction phase, and finally the value of the investment from the perspective of the project owner.