Reliability and Stability Buffering Approach: Focusing on the Issues of Errors and Changes in Concurrent Design and Construction Projects

This paper proposes a new buffering approach, reliability and stability buffering, as a means to reduce uncertainty caused by errors and changes, in particular, when concurrent design and construction is applied to an infrastructure project. The proposed buffering provides a proactive mechanism to protect the planned performance of a project with a flexibly located and systemically sized buffer. For its implementation, the reliability and stability buffering is incorporated into a dynamic design and construction project model, which simulates the impacts of errors and changes on design and construction performance and evaluates the effectiveness of the proposed buffers. Applying this buffering approach into the infrastructure project in Massachusetts, this paper concludes that (1) the amount of hidden errors and latent changes was reduced; (2) the flexibly located and distributed buffers helped identify the predecessors’ errors and changes in concurrent design and construction; (3) the impacts of hidden errors and changes were minimized, preventing their ripple effect on the succeeding activities; and (4) the quality of the coordination process was increased. Thus it shows great potential to protect design and construction performance against uncertainty in concurrent design and construction delivery of civil infrastructure projects. Such benefit obtained from the proposed buffering should be relevant to researchers and practitioners because it provides the base for future investigation for the strategic utilization of schedule buffers in an uncertain environment as well as the guideline for their effective use in practice.     

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.     

Budgeting Owner’s Construction Contingency

This paper attempts to find ways to reduce an owner’s construction contingency budget such that just enough contingency is allocated that will allow the owner to deal with uncertainties but at the same time not tie up valuable funds that can be used for other activities. It is suggested that the common practice of allocating a fixed owner contingency (e.g., 10% of the contract value) to all projects contracted out by an owner is not appropriate. Instead, a methodology is proposed whereby the owner (1) analyzes historical project data; (2) identifies the line items that are problematic; (3) takes the necessary measures at the preconstruction stage to streamline these line items with respect to site conditions, time constraints, constructability issues, and project scope; and (4) finally budgets contingency funds based on this information. A case study was conducted to analyze the contingencies budgeted and actually spent by an owner in nine parking lot projects. The findings indicated that a systematic approach such as the methodology proposed in this paper is likely to minimize the owner’s contingency budget.     

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.     

Discriminant Analysis for Predicting Ranges of Cost Variance in International Construction Projects

Unanticipated market conditions as well as project-related risks can easily lead to cost overruns in international construction projects. For a contractor to be financially successful in international projects, a careful examination of the project is a prerequisite to understanding the cost variance characteristics. Based on the reasonably accurate characterization of the cost performance, the markup or contingency amount is determined to ensure both a decent level of profit and a good chance of winning the contract. This paper presents a classification model to categorize international construction projects, particularly faced by Korean contractors, into five cost-variation classes: extreme cost overrun, moderate cost overrun, neutral, moderate cost saving, and extreme cost saving. The model is able to characterize an international project for its cost performance prediction in comparison to the contractor’s initial cost estimate. A linear discriminant analysis is utilized to develop the predictive classification model with the support of the bootstrap method. Tests show that the proposed model is able to help cost estimators determine a proper level of cost contingency before bidding on an international project.     

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.     

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%.     

Web-Enabled System Dynamics Model for Error and Change Management on Concurrent Design and Construction Projects

Construction projects are uncertain and complex in nature often because of iterative cycles caused by errors and changes. These errors and changes impair project performance and, consequently, cause schedule and cost overruns to be prevalent. Iterative cycles are more detrimental when design and construction are concurrent and often force activities to proceed without complete information. In an effort to address this issue, this paper presents the information technology aspect of the dynamic planning and control methodology (DPM), which provides a mechanism that will analyze the impact of negative iterative cycles on construction performance. In order to guarantee a smooth application of this method to real-world projects, DPM has been developed by integrating several existing methods around a core system dynamic model for quality and change management and then implementing these methods into a web-based collaborative environment. A case project, applying the developed web-based DPM, shows great potential in facilitating on-site decision making by virtue of its support of data analysis as well as real-time information sharing.     

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.     

Criticism of CPM for Project Planning Analysis

Published criticism in recent years concerning the inadequacy of Critical Path Method (CPM) as a project planning tool is identified and grouped under six major headings with reference to the publications in which the criticism were contained. These are answered from the writer's field experience and from experiences published by other authors. The object of the analysis is to see whether or not CPM as a project planning tool can meet the required functions of planning in construction, including consideration of legal and contractual framework and the complex and interdisciplinary nature of the project environment. The analysis reveals that, despite numerous criticism, project and construction planning should be done using CPM scheduling. Main factors affecting successful planning are realistic estimation of the productivity of crews in the context of expected job‐management efficiency conditions, and inclusion of sufficient time buffers between dissimilar trades. CPM is found to be equally useful as a planning tool for linear or repetitive projects. The limitations of this technique are identified in terms of the defined planning functions in the engineering phase of capital projects. A broad model for management of the engineering phase in revenue‐generating projects is suggested.     

Site Management of Work-in-Process Buffers to Enhance Project Performance Using the Reliable Commitment Model: Case Study

Buffers have been commonly used as a production strategy to protect construction processes from the negative impact of variability. Construction practitioners and researchers have proposed several buffering approaches for different production situations and contexts. However, these solutions have been impractical for managing buffers. To overcome this, this study proposes a new site methodology for managing work-in-process (WIP) buffer in repetitive projects, on the basis of the reliable commitment model (RCM). RCM is a decision-making tool based on lean principles, which uses statistical models to develop more reliable work plans at the operational level. RCM helps to manage WIP buffer in work plans by using site information and planning reliability indicators that result in improved project performance, such as labor productivity and process progress. A repetitive building project was used as a case study. The main finding was that labor productivity, process progress, and waiting times improved when using larger WIP buffers than those typically used among crews. This shows the potential of RCM as a practical tool to manage WIP buffer sizes and to promote the use of lean production strategies at the operational level.     

Construction Planning Method Using Case-Based Reasoning (CONPLA-CBR)

During the construction process, there occur many unexpected events that hinder timely completion of a project. One plausible solution in formulating a robust plan against such uncertainties is to provide the proper construction duration by utilizing as-built schedules in which past events are stored for similar future projects. Many schedulers thus develop schedules based on similar past schedules, taking into consideration the dynamic construction environment. As a result, construction schedulers normally refer to similar past schedules for their current projects. Few studies on the reuse of past schedules using case-based reasoning (CBR) have been conducted, and those that are available are limited to specific areas of construction such as apartment-building construction and boiler manufacturing. This research has an emphasis on developing a CBR-based general planning tool with higher applicability, which consists of generic attributes with the capability to be customized to the given project. To address this issue, construction planning by CBR (CONPLA-CBR) is presented as a generic planning tool for various types of construction projects. CONPLA-CBR, with the dynamic case approach and construction schedule data mart, also developed in this research, helps schedulers to utilize past schedules. CONPLA-CBR was not only verified to be of practical utility by experts, but also, because it uses past cases to which the successor relationships pertain, it does not require users to input all relationships. Whereas the proposed CONPLA-CBR generates master schedules at the preconstruction stage, its concept can also be applied to the construction stages to generate more detailed, for example, weekly or monthly, schedules. Thereby, CONPLA-CBR would enhance construction performance through the increased application of CBR in construction.     

Simulation Model to Forecast Project Completion Time

Project cost is most sensitive to its schedule. The construction project environment comprising dynamic, uncertain, but predictable, variables such as weather, space congestion, workmen absenteeism, etc., is changing continuously, affecting activity durations. The reliability of project duration forecast can be enhanced by an explicit analysis to determine the variation in activity durations caused by the dynamic variables. A computer model is used to simulate the expected occurrence of the uncertainty variables. From the information that is collected normally for a progress update of the tactical plan and by simulating the project environment, the combined impact of the uncertainty variables is predicted for each progress period. By incorporating the combined impact in the duration estimates of each activity, the new activity duration distribution is generated. From these activity duration distributions, the probability of achieving the original project completion time and of completing the project at any other time is computed.     

Modeling Weather-Sensitive Construction Activity Using Simulation

This paper proposes a framework for simulating weather-sensitive construction projects that are executed under extreme weather conditions. It applies the framework steps to enable simulating and planning pipeline construction activities under severe cold weather conditions. The uncertainties caused by weather, such as extreme cold, heat, wind, or precipitation, can significantly affect a project’s schedule and produce significant deviations from the baseline schedule. The proposed framework structures a project in the way an engineer would approach it, setting out a breakdown of work activities to quantify weather effects and account for their impact on the project baseline. The proposed weather-sensitive construction simulation framework is employed to determine the effects of weather on the construction process of high-density polyethylene (HDPE) pipe installation. The relevant simulation findings are reported to clarify the impact of extreme weather events on construction projects and to assist in project planning and decision support.     

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.     

Time-Cost Optimization of Construction Projects with Generalized Activity Constraints

Time-cost analysis is an important element of project scheduling, especially for lengthy and costly construction projects, as it evaluates alternative schedules and establishes an optimum one considering any project completion deadline. Existing methods for time-cost analysis have not adequately considered typical activity and project characteristics, such as generalized precedence relationships between activities, external time constraints, activity planning constraints, and bonuses/penalties for early/delayed project completion that would provide a more realistic representation of actual construction projects. The present work aims to incorporate such characteristics in the analysis and has developed two solution methods, an exact and an approximate one. The exact method utilizes a linear/integer programming model to provide the optimal project time-cost curve and the minimum cost schedule considering all activity time-cost alternatives together. The approximate method performs a progressive project length reduction providing a near-optimal project time-cost curve but it is faster than the exact method as it examines only certain activities at each stage. In addition, it can be easily incorporated in project scheduling software. Evaluation results indicate that both methods can effectively simulate the structure of construction projects, and their application is expected to provide time and cost savings.     

Risk Allocation by Law—Cumulative Impact of Change Orders

Change, defined as any event that results in a modification of the original scope, execution time, or cost of work, is inevitable on most construction projects due to the uniqueness of each project and the limited resources of time and money available for planning. There are many factors that may cause a change such as design errors, design changes, additions to the scope, or unknown conditions in the field. For each change, contractors are entitled to an equitable adjustment to the base contract price and schedule for all productivity impacts associated with the change. The focus of this paper is to outline the types of changes that can occur on a construction project and also to spell out the financial recovery possibilities that exist for the contractor for each type of change. There are many historical and current court decisions that shape the outcomes of such claims and determine who holds the risks associated with various project changes. Also, an effective cumulative impact claim contains certain vital elements upon which the final outcome will be determined by the legal system. Last, there are certain actions that a contractor and owner can do to either enhance or mitigate the effectiveness of a potential cumulative impact claim.     

Dynamic Site Layout Planning Using Approximate Dynamic Programming

Dynamic site layout planning requires identifying and updating the positions of all temporary construction facilities such as offices, storage areas, and workshops over the entire project duration. Existing models do not guarantee global optimal solutions because they focus on optimizing the planning and layout of successive construction stages in a chronological order, without considering the future implications of layout decisions made in early stages. This paper presents the development of an approximate dynamic programming model that is capable of searching for and identifying global optimal dynamic site layout plans. The model applies the concepts of approximate dynamic programming to estimate the future effects of layout decisions in early stages on future decisions in later stages. The model is developed in three main phases: (1) formulating the decision variables, geometric constraints, and objective function of the dynamic site layout planning problem; (2) modeling the problem using approximate dynamic programming; and (3) implementing and evaluating the performance of the model. An evaluation example is analyzed to illustrate the use of the model and demonstrate its capabilities in generating global optimal solution for dynamic site layout planning of construction projects.     

Effect of Preconstruction Planning Effort on Sheet Metal Project Performance

The complexity of construction industry requires the identification of work tasks and the coordination of interactions among them. As a result, construction planning is considered to be one of the most critical steps toward success and is the main focus of past research. Consequently, little research has been performed regarding the preconstruction planning, which is the planning completed by the contractor in the period between project award and project execution. This paper focuses on sheet metal preconstruction planning, primarily that of mechanical and heating ventilations and air conditioning contractors. The research was completed in three phases: phase one gathered data on the current state of preconstruction planning, phase two developed a model sheet metal preconstruction planning process to be used by sheet metal contractors, and phase three validated the model preconstruction planning process. Based on project data collected for this research, projects that used a planning process similar to the model process performed more successfully—they achieved an average profit margin of 23% while projects that were poorly planned experienced an average profit margin of ?3%.     

Probabilistic Duration Estimation Model for High-Rise Structural Work

The duration of a construction project is a key factor to consider before starting a new project, as it can determine project success or failure. Despite the high level of uncertainty and risk involved in construction, current construction planning relies on traditional deterministic scheduling methods that cannot clearly ascertain the level of uncertainty involved in a project. This, subsequently, can prolong a project’s duration, particularly when that project is high-rise structural work, which is not yet a common project type in Korea. Indeed, among construction processes, structural work is notable, as it is basically performed outdoors. Thus, no matter how precisely a schedule is developed, such projects can easily fail due to unexpected events that are beyond the planner’s control, such as changes in weather conditions. Therefore, in this study, to cope with the uncertainties involved in high-rise building projects, a probabilistic duration estimation model is developed in which both weather conditions and work cycle time for unit work are considered to predict structural work duration. According to the proposed estimation model, weather variables are divided into two types: weather conditions that result in nonworking days and weather conditions that result in work productivity rate (WPR) change. Obtained from actual previous data, the WPR is used with relevant nonworking day weather conditions to modify the actual number of working days per calendar days. Furthermore, on the basis of previous research results, the cycle time of the unit work area is assumed to follow the β probability distribution function. Thus, the probabilistic duration model is valid for 95% probability. Finally, a case study is conducted that confirms the model can be practically used to estimate more reliable and applicable probabilistic durations of structural work. Indeed, this model can assist schedulers and site workers by alerting them, at the beginning of a project, to project uncertainties that specifically pertain to structural work and the weather. Thus, the proposed model can enable personnel to easily amend, and increase the reliability of, the construction schedule at hand.