Encouraging Research and Development in Construction Companies

Governments around the world are seeking to transfer their traditional responsibility for research and development to the private sector. This paper investigates the factors that will impede the effectiveness of privately funded research and development in the construction industry. It concludes that the construction industry is skeptical of the process and ill-equipped to undertake it. Recommendations are made to help private firms adapt to their new role and benefit from it. These relate to issues of strategy, organizational culture, procurement, contractual practices, and interorganizational alliances.     

Educating the 21st Century Construction Professionals

Traditionally recognized construction professionals such as architects, engineers, and surveyors occupy segregated roles in the construction industry. With the rapidly growing complexity and ever increasing sophistication in project procurement and construction, new disciplines have been added to the traditional construction professions. The characteristics and the roles of the different disciplines in the construction industry are becoming less clear-cut. Specialism within the different disciplines and the working relationship among them are also not easily defined. Transprofessional practice among the several disciplines of construction professionals is commonplace. The skills needed by each discipline and the education structure required to develop those skills cannot be usefully examined on a discipline-by-discipline basis. This paper, based on a research study carried out with a questionnaire survey, aims to investigate these phenomena in professional practices within the construction industry and to develop cogent and sustainable directions for the education of construction professionals in the new millennium. Results from the study suggest that the demands of a transprofessional discipline practice call for construction professionals to critically reexamine their professional skills and realistically evaluate the professional demands made on them by the ever-increasing complexity and technological sophistication in construction and project procurement. The work concludes that the curricula for educating aspiring construction professionals should embrace a multidisciplinary and an integrative-professional approach. Such an approach should be implemented in curricula designed for undergraduates and for the continuing professional education of practitioners.     

由工程建设项目招投标审计引起的思考

招投标是在市场经济条件下进行工程建设、货物买卖、财产出租、中介服务等经济活动的一种竞争形式和交易方式,是引入竞争机制订立合同(契约)的一种法律形式;是依据技术经济的评价方法和市场经济的竞争机制,实施规范化的程序以择优选择的市场行为。审计署在"十二五"审计工作发展规划固定资产审计中指出,进一步加大对工程招投标、设备材料采购、资金管理使用和工程质量管理等重点环节的审计力度。工程施工招投标审计,就是对建设工程施工招投标活动全过程的真实性、合规性和有效性进行的审查、监督、评价。     

Contractor Selection for Design∕Build Projects

As traditional construction procurement approaches are found to be inadequate in meeting the demands and challenges of recent times, alternative procurement routes such as through management contracting or build-operate-transfer are increasingly being adopted. Although design∕build is one of the more popular alternative procurement methods that also has a long history, it does not appear to have well-established contractor selection procedures. This paper focuses on developing a model for contractor prequalification and bid evaluation in design∕build projects. For this purpose, it presents a comparative overview of some international practices in the design∕build contractor selection process. The overall objective is to identify the core aspects of selecting a suitable bidder in order to achieve the best “value for money.” The strengths and weaknesses of current practices of contractor selection are highlighted while identifying some of the best practices followed in design∕build projects by various clients.     

Best Practices for Procuring Commissioning Services

Owners are increasingly recognizing building commissioning as an effective means of ensuring quality and maximizing energy performance. The demand for commissioning new construction projects has increased substantially over a short period of time with the growing demand for leadership in energy and environmental design certified buildings. However, the pool of experienced commissioning providers hasn’t increased at the same rate. Many owners are procuring commissioning services for the first time and don’t know how to best procure these services. The objective of the research described in this paper was to identify best practices for procuring commissioning services for new construction projects and to compare them with current practices. Issues that were evaluated include the timing of the commissioning provider involvement, the independence of the commissioning provider, certification of the commissioning provider, selection criteria, and the importance of a clear definition of the scope of work. Research results indicate that there is variation between current practices and recommended best practices. It is important for building owners and industry professionals to understand and implement the best practices recommended in this paper to maximize the benefits of the commissioning process.     

Concessionaire Selection for Build-Operate-Transfer Tunnel Projects in Hong Kong

A significant realignment of risks between project participants is a fundamental facet of the new procurement paradigm of BOT (build-operate-transfer). A BOT concessionaire assumes far more and deeper risks than a contractor. One critical contributor to the success of a BOT project is the selection of an appropriate concessionaire who has the necessary capacity to provide the best overall deal throughout the build-operate-transfer process. However, various BOT-type procurement protocols are not yet proven and are still being tried and tested. Many countries are at the lower ends of their learning curves. Therefore, there is a need to benchmark the best practices that have been emerging. The Hong Kong government has developed a well-structured concessionaire selection framework supported by the Kepner-Tregoe decision analysis technique. This paper analyzes and draws experiences and lessons from this concessionaire selection practice. Current concessionaire selection practices worldwide are also discussed with a view to improve the procurement process of regions lacking in such experiences or expertise.     

Procurement Effects on Coopetition in Client-Contractor Relationships

Client-contractor relationships are often criticized for being competitive and adversarial, rather than cooperative. The main purpose of this paper is to examine how construction clients’ procurement procedures affect the balance between cooperation and competition (i.e., coopetition) in client-contractor relationships. The empirical results, based on a survey to 87 Swedish construction clients, show that clients’ procurement procedures facilitate a focus on competition. It was also found that clients’ earlier experience of a certain procedure heavily affects their procurement choices, thereby preserving old behaviors. Although two-thirds of the clients wish to increase cooperation with contractors, this does not affect their procurement decisions. This study therefore concludes that the theoretical framework, based on transaction cost economics, is correct in prescribing more cooperation than is empirically observed in the construction sector. The theoretical framework can increase clients’ awareness of how procurement affects cooperation and competition, thereby serving as a basis for more unbiased and systematic procurement decisions, facilitating cooperation-based coopetition.     

Communication Patterns in Construction at Construction Manager Level

The procurement process of construction projects has been affected by developments in the field of Information Technology, as well as by the need to cope with growing technological challenges stemming from the integration of multiple building systems into tall and complex buildings. Furthermore, since the procurement phases are undertaken simultaneously, project complexity is increased, and increased integration among them is therefore required. These constraints have made the management of complex construction projects less of an architectural and engineering issue and more of a managerial one. In turn, this has led to an increasing use of the “construction management” concept in the procurement process. This study focused on communications in construction management procurement of building and residential projects in Israel. Communications between the construction manager and the design team were found to be vital in ensuring adherence to project objectives. Communication means were classified as “formal”—written technical information, and as “informal”—verbal communications. Construction managers in Israel still use informal communications in 50% of their interactions with their project counterparts. The study concludes that design capabilities should be one of the essential qualifications required of a construction management firm. In addition to the more traditional responsibilities, such as planning, scheduling, and coordination, the scope of the construction manager’s professional duties should emphasize the aspect of quality management.     

浅谈加强建设工程招投标管理工作的重要性

对于建设工程的招标人来说,重要的是如何找到理想的、有能力承担建设工程任务的合格单位,用经济合理的价格,获得满意的服务和产品。根据建设工程的通常做法,建设工程的招标人均是严格按照法律法规的规定,通过招投标形式选择建设工程任务的实施单位,包括设计、监理、施工承包和供货等单位。可见利用招投标形式选择合格的实施单位,一方面从法律上保证了项目和项目法人的合法性,另一方面,也从技术上和经济上为项目的顺利实施提供了支持和保障。     

Design/Build for Water/Wastewater Facilities: State of the Industry Survey and Three Case Studies

Documented successes of innovative delivery methods and recent changes in procurement laws are enabling water and wastewater utility owners to use alternative delivery methods for the construction of new facilities and the expansion of existing facilities. This shift toward alternative project delivery systems, such as design/build, has resulted in demand for additional guidance for owners and practitioners. This paper provides the results of an industrywide survey and three in-depth case studies. The survey results indicate large-scale growth in the use of design/build project delivery for water and wastewater facilities throughout the United States. The findings from the case studies indicate that common practices exist with regard to selecting a delivery system, contracting, allocating risk, evaluating proposals, determining the level of design in the request for proposals, using consultants, establishing trust, identifying key players, and permitting. These results serve as best practices for owners and practitioners using design/build delivery for the first time.     

Public-Sector Design∕Build Evolution and Performance

Design∕build project delivery is experiencing expansive growth in both the private and the public sectors. Owners are driving the change away from the traditional design∕bid∕build method. This change and changes in federal procurement laws necessitate investigation, formalization, and development of new design∕build guidelines and practices. Public-sector use of design∕build represents a fundamental departure from traditional competitive, low-bid procurement procedures. Understanding the evolution and current trends in public-sector design∕build provides a foundation for developing uniform guidelines and practices. This paper describes the rapid evolution of public-sector design∕build and analyzes results from 104 completed public-sector design∕build projects. The results provide insights for owners, designers, and builders into the changing public-sector procurement system. Items analyzed include owner experience, level of design completion, design∕builder selection, contract type, method of award, and design∕build process variations. The research conclusions provide a design∕build benchmark for public-sector agencies.     

Project Procurement Competence and Knowledge Base of Civil Engineering Consultants: An Empirical Study

This paper reports the findings of a survey designed to capture information on the construction project procurement systems (CPPSs) knowledge base of civil engineering consultants, specifically on their level of competence in terms of advising clients to make appropriate choices of CPPSs. The study included an examination of whether the civil engineering consultants’ advice on CPPSs and CPPSs services fulfilled the client’s needs and also the degree to which the client’s project requirements were being met. The selection criteria used by civil engineering consultants when choosing an appropriate procurement system was investigated. Also included in the study was an investigation into the degree to which civil engineering consultants communicate and inform clients of the range of CPPSs available to them. A postal questionnaire survey was administered to the clients (property developers) and civil engineering consultants in South Africa’s Western Cape Province. The results show that civil engineering consultants are unaware of or underinformed about the various construction project procurement systems available. Their selection criteria for procurement systems is based on biased past experience and conservative choices, with the result that incorrect decisions with unfortunate consequences are made.     

Optimizing Material Procurement and Storage on Construction Sites

Efficient planning of materials procurement and storage on construction sites can lead to significant improvements in construction productivity and project profitability. Existing research studies focus on material procurement and storage layout as two separate planning tasks without considering their critical and mutual interdependencies. This paper presents the development of a new optimization model for construction logistics planning that is capable of simultaneously integrating and optimizing the critical planning decisions of material procurement and material storage on construction sites. The model utilizes genetic algorithms to minimize construction logistics costs that cover material ordering, financing, stock-out, and layout costs. The model incorporates newly developed algorithms to estimate the impact of potential material shortages on-site because of late delivery on project delays and stock-out costs. An application example is analyzed to demonstrate the capabilities of the construction logistics planning model in simultaneously optimizing material procurement decisions and storage layout plans.     

Gates’ Bidding Model

In evaluating closed-bid competitive procurement auctions, the most crucial issue is to determine the probability of placing a winning bid for a given markup level. There has long been disagreement on how this should be done due to the absence of a mathematical derivation of one of the main evaluation techniques—Gates’ method. Gates’ method is shown in this paper to be valid if, and only if, bids can be described using the proportional hazards family of statistical distributions. When markup values are included in Gates’ method, it is seen that the underlying statistical distribution required for the method to work is closely related to the Weibull distribution. Likelihood based methods are suggested for parameter estimation and an illustrative example is provided by analysis of Shaffer and Micheau's 1971 construction contract bidding data.     

When will it be coming to the large discount chain stores? Psychotherapy as commodity.

Like other products introduced to American consumers, psychotherapy follows the 4 typical phases of the market cycle: emergence, rapid growth, product maturity, and decline. Economic forces have pushed this product's life into the third phase, where managed care companies act to handle psychotherapy like a commodity. The present major purchasers, American businesses, are seeking bargain prices for basic services. Psychologists should stop chasing this market, which is driven primarily by cost, and use its resources toward innovation of new and effective services for narrower niche markets. Practitioners should refocus their practices away from the medical paradigm and toward the creation of effective total solutions for newly defined market segments. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Qualifications-Based Selection of Professional A/E Services

Recognizing the need for improvements in the way professional architectural and design services are procured, the U.S. Congress in 1972 established as federal law the requirement that architects and engineers be selected on the basis of their professional qualifications, subject to negotiation of a fair and reasonable compensation for such services. The law (commonly referred to as the Brooks Act) was adopted by many states (a total of 41 as of the end of 2001) and local jurisdictions. One of the states that adopted qualifications-based selection (QBS) of architectural/engineering (A/E) services is New York state. The New York state law, however, does not cover local jurisdictions, and New York City continues to use competitive pricing as its primary method of selecting A/E consultants. This report outlines the findings of a recent study performed on QBS in an attempt to evaluate some of the claims put forward by proponents and opponents of QBS. The study was based on past literature as well as recently procured projects in New York City and relevant project data from these projects. The study is based primarily on information provided by the New York City mayor’s Office of Contracts during a public hearing on QBS (December 1999) and additional information on A/E firms from a representative data sample from the original data. Among the findings of the study was that presumed cost savings in design services for existing price-dominant practices were actually insignificant and most definitely offset by escalating costs in the construction phase.     

Abolition of Standard of Care in Residential Design? Study of SB 800’s Impacts on Design Professionals

California Civil Code §§895 through 945.5, also known as “SB 800,” has dramatically changed the legal landscape for residential construction projects in California. The law sets forth new, legislatively defined, actionable defects; a detailed prelitigation repair process; and available damages and defenses. This paper examines the impacts of the law on design professionals and concludes that the law appears to have supplanted the standard of care for design professionals in connection with residential construction—meaning that their services may now be measured against codified standards instead of against the performance of their peers. Alternatively, rather than supplanting the standard of care, the law may have the practical effect of shifting the burden of proof from homeowner claimants to the allegedly negligent design professionals, thereby requiring the defendant design professional to show that their services comply with the standard of care in order to escape liability. In either event, the playing field has changed dramatically for design professionals. This paper suggests ways in which design professionals might tailor their practices to best position themselves for claims which are sure to arise out of SB 800.     

Managed competition in practice: 'value purchasing' by fourteen employers

Many large U.S. companies have transformed their procurement of health benefits in the 1990s by combining the principles of managed competition with other business tactics to create a business-savvy hybrid of the private sector's own design, often referred to as "value purchasing." Until recently, few policymakers or health care observers believed that large firms would be a force in health system reform. Yet to implement value purchasing, the large companies in this study created new organizational forms, provided employees with financial incentives to select low-cost health plans, and used business tactics such as competitive bidding to negotiate more favorable rates and to improve quality among health plans. The financial results were impressive for the companies studied. In addition, the companies' demands on the health care delivery system are multiplying as the interface between business firms and health care organizations changes. These demands will only increase as the practices we found become more widespread.     

Project Procurement System Selection Model

In the last two decades, there have been significant changes in the technical and economic conditions prevailing in the construction industry. To overcome the shortcomings of the traditional procurement methods, the construction industry has developed a large number of different procurement systems. A systematic approach for selection of the most appropriate system is now needed. This paper presents the development of the project procurement system selection model (PPSSM), which integrates the techniques of the analytic hierarchy process and Parker's judging alternative technique of value engineering into a multicriteria multiscreening system. A survey was conducted in Saudi Arabia with the aim of testing the PPSSM for effectiveness and efficiency and assisting the governmental agencies to select the most appropriate procurement system for implementation of their projects. For this purpose, a questionnaire was developed. On the basis of the synthesis process of the PPSSM, Saudi public clients selected design and build as the most appropriate procurement system for their projects, with an overall priority of 0.496. The outcome of the study demonstrates the effectiveness of PPSSM in helping the client in the construction industry to choose the procurement system that fulfills the needs of the client and the project requirements.