What Is Preproject Planning, Anyway?

The importance of preproject planning in the capital facility delivery process and its potential impact on project success has long been recognized by industry practitioners. Nevertheless, the preproject planning process varies significantly throughout the construction industry from one organization to another, and from one business sector to another. This paper will summarize lessons learned from five research projects conducted during the past 14?years regarding the preproject planning process. These research projects were based on data from more than 200 capital projects, representing approximately 8.7 billion U.S. dollars; input from more than 500 industry practitioners; and reviews of the project planning processes used by more than 100 organizations. The positive relationship between thorough preproject planning and enhanced project performance is demonstrated. Findings are presented, including key requirements, processes, and scope definition elements that comprise thorough preproject planning. Similarities and differences in the scope definition of building and industrial projects are outlined. Conclusions of the research effort and recommendations to industry practitioners are provided.     

Quantifying Engineering Project Scope for Productivity Modeling

A poor scope definition in an engineering design project disrupts project rhythm, causes rework, increases project time and cost, and lowers the productivity and morale of the workforce. A quantitative measurement of the project scope is the basis for productivity modeling that involves the measurement, estimation, control, and evaluation of productivity. This paper proposes a conceptual model, the quantitative engineering project scope definition (QEPSD), to standardize the measurement of engineering project scope in construction projects, within a computer aided design environment. The QEPSD quantitatively measures engineering project scope, in terms of the complexity of design items by defining design categories and complexity functions appropriate to the particular discipline. The proposed method was originally verified and implemented specifically for steel drafting projects. Actual data was analyzed and used to demonstrate the benefits of historical data prepared using QEPSD for project scope definition. It was found that the new method led to increased utilization of previously untapped values in historical data, improving the accuracy of project scope definition, and productivity modeling. The paper concludes with a discussion of the potential benefits of adopting the QEPSD method, and its implications upon various project management functions.     

Evaluation of Risk Factors Leading to Cost Overrun in Delivery of Highway Construction Projects

Accurate owner budget estimates are critical to the initial decision-to-build process for highway construction projects. However, transportation projects have historically experienced significant construction cost overruns from the time the decision to build has been taken by the owner. This paper addresses the problem of why highway projects overrun their predicted costs. It identifies the owner risk variables that contribute to significant cost overrun and then uses factor analysis, expert elicitation, and the nominal group technique to establish groups of importance ranked owner risks. Stepwise multivariate regression analysis is also used to investigate any correlation of the percentage of cost overrun with risks, together with attributes such as highway project type, indexed cost, geographic location, and project delivery method. The research results indicate a correlation between the reciprocal of project budget size and percentage cost overrun. This can be useful for owners in determining more realistic decision-to-build highway budget estimates by taking into account the economies of scale associated with larger projects.     

Design and Build Project Success Factors: Multivariate Analysis

This study aimed to identify a set of project success factors for design and build (D&B) projects and examine the relative importance of these factors on project outcome. Six project success factors (project team commitment, contractor's competencies, risk and liability assessment, client's competencies, end-users' needs, and constraints imposed by end-users) were extracted from factor analysis of data provided by 53 participants of public-sector D&B projects through a questionnaire survey. Project team commitment, client's competencies, and contractor's competencies were found to be important to bring successful project outcome from the multiple regression findings. Contractor's competencies also contributed to project time performance. Project team members should also recognize that time and cost performance as well as quality of design and workmanship represent the key elements of overall success of D&B projects. Practitioners are advised to focus on teamwork and partnering for successful project completion. More research should be conducted to further explore the relationship between procurement method and project success factors.     

Critical Activities in the Front-End Planning Process

Previous research conducted by the Construction Industry Institute (CII) and others has demonstrated the value of front-end planning as it impacts project success. A recently completed research project funded by CII, described in this paper, examines ways to improve information flow through the front-end planning process. This paper focuses on one specific objective of this research project, namely to isolate and closely examine the information critical activities within the front-end planning process. The front-end planning process was carefully diagrammed as consisting of 33 distinct activities, each with its own information flow entities and interactions. Fifty-one questionnaire survey forms were analyzed to obtain data for the 33 activities that included activity duration, resources expended, and the extent to which information was available to perform the activity. The 51 projects were then grouped according to survey respondents’ perceptions as to whether the front-end planning process was executed more or less effectively. An analysis of the data concluded with a degree of statistical significance that seven of the 33 activities have some impact on achieving project success. In addition, statistically significant differences were uncovered with respect to the extent that information was available for selected activities, and survey respondent perceptions with respect to how efficiently the activity was performed. These seven activities are involved in planning the following areas: Public relations, start up, quality and safety, the project execution plan, and project scope definition. Other activities for which information was frequently not available and/or for which considerable resources were expended relate to preliminary cost estimating and the development of a funding plan. A second survey form was forwarded to the original survey participants to obtain more specific information with respect to the information categories and interfaces associated with the critical activities that were identified in the original survey. This survey indicated problem areas including inadequate scope definition, risk identification and mitigation, minimal resource allocation for task execution, unclear definitions of roles and responsibilities, and ineffective external communication mechanisms.     

Predicting Accuracy of Early Cost Estimates Using Factor Analysis and Multivariate Regression

The importance of accurate estimates during the early stages of capital projects has been widely recognized for many years. Early project estimates represent a key ingredient in business unit decisions and often become the basis for a project’s ultimate funding. However, a stark contrast arises when comparing the importance of early estimates with the amount of information typically available during the preparation of an early estimate. Such limited scope definition often leads to questionable estimate accuracy. Even so, very few quantitative methods are available that enable estimators and business managers to objectively evaluate the accuracy of early estimates. The primary objective of this study was to establish such a model. To accomplish this objective, quantitative data were collected from completed construction projects in the process industry. Each of the respondents was asked to assign a one-to-five rating for each of 45 potential drivers of estimate accuracy for a given estimate. The data were analyzed using factor analysis and multivariate regression analysis. The factor analysis was used to group the 45 elements into 11 orthogonal factors. Multivariate regression analysis was performed on the 11 factors to determine a suitable model for predicting estimate accuracy. The resulting model, known as the estimate score procedure, allows the project team to score an estimate and then predict its accuracy based on the estimate score. In addition, a computer software tool, the Estimate Score Program, was developed to automate the estimate score procedure. The multivariate regression analysis identified 5 of the 11 factors that were significant at the α = 10% level. The five factors, in order of significance, were basic process design, team experience and cost information, time allowed to prepare the estimate, site requirements, and bidding and labor climate.     

Forecasting Construction Staffing for Transportation Agencies

When the volume of construction projects let to contract increases significantly, state departments of transportation must critically examine internal construction project management staffing capabilities and accurately forecast the manpower required to execute future projects. This paper describes the development of a model or process to forecast manpower requirements as a function of project type and cost for selected employee classifications. Using data from 130 recently completed highway construction projects and over 11,000 employee payroll entries, regression analysis plots were generated to predict overall manpower requirements for projects of a given type and cost. These overall requirements were then adjusted to predict manpower requirements for individual employee classifications using typical task allocation percentages obtained from questionnaire data. The output from the model serves as input into commercially available critical path method scheduling software to facilitate manpower planning and resource leveling.     

Downside Risks in Construction Projects Developed by the Civil Service: The Case of Spain

The purpose of the work summarized here was to improve the efficiency of the construction project management processes performed by the Spanish civil service, identifying and analyzing the main risks in these kinds of projects, and also establishing potential risk responses. The scope of this effort included a list of 96 risk events, categorized and prioritized first by impact, then by frequency. The most relevant ones are related to issues such as an inadequate prequalification system, insufficient training of public servants, or political considerations prevailing over real needs, among others. A total of 117 potential risk responses were identified, categorized, and prioritized by potential efficiency and difficulty of implementation. Each risk event was associated to a set of potential responses. The paper includes the top 15 risk events with its main potential responses, including qualitative assessments. A survey was carried out among Spanish public servants working in construction projects, to validate risk identification and to obtain a qualitative assessment. Moreover, a Delphi analysis was developed to validate the risk response identification and obtain a qualitative assessment. One of the conclusions is that small and medium-sized Spanish civil service agencies should work toward increasing their maturity in managing projects and, mainly, project risks.     

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.     

Developing a Traffic Closure Integrated Linear Schedule for Highway Rehabilitation Projects

In recent years, the state departments of transportation have implemented a number of highway rehabilitation projects across the country. These projects differ fundamentally from new highway projects in that they require an uninterrupted flow of traffic throughout both the duration and geometric length of the project. Synchronization of traffic closure with the construction activities is crucial in such projects to avoid the traffic conflicts and prevent idle time for equipment and labor. Although most highway rehabilitation projects involve predominantly linear activities, the techniques of linear scheduling are not readily applicable to highway rehabilitation projects due to the conflict between the workzone and traffic flow. This paper documents the development of a traffic closure integrated linear schedule (TCILS) that addresses both traffic closure and work progress issues. The TCILS generates a single schedule for both the construction activities and the associated traffic closures. Visual and graphical features are also applied in the system, which makes it particularly applicable for highway rehabilitation projects. An actual concrete pavement rehabilitation project using the TCILS is presented as a sample of application. The findings from the sample project, although they are limited, show that the TCILS can be applied to an actual project. With recommended future development, the system is believed to be beneficial for both construction practitioners and academics.     

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.     

Portfolio Cash Assessment Using Fuzzy Systems Theory

Gaps between cash outflows and inflows throughout the life cycle of construction projects can create extended periods of low cash availability for a construction contractor, jeopardizing the financial stability of the business. A number of researchers have therefore attempted to model cash availability at a project level. However, at a firm level, financial stability is more thoroughly examined as a function of the cash flows related to multiple projects. This paper proposes a methodology on the basis of fuzzy systems theory to forecast cash requirements of a portfolio of projects for a construction firm, taking into account the effect of changing portfolio composition on portfolio cash-flow risk. Portfolio cash-flow risk is calculated from a variance matrix created by using covariance among cash flows of pairs of projects. Expert opinions of a group of highway construction contractors regarding project selection, project risk assessment and cash control were collected to create a fuzzy proportional derivative (PD) model that predicts portfolio risk for a construction firm. The model was assessed by the same group of contractors for overall logic (if/then rule base), appropriateness of cash-flow calculations (moving weights of cost categories), and practicality through application on a hypothetical test case. The paper concludes that a fuzzy proportional derivative model can be an effective tool to establish trends in cash-flow availability and risk across a portfolio of construction projects.     

Integrated Methodology for Project Risk Management

This article presents a generic project risk management process that has been particularized for construction projects from the point of view of the owner and the consultant who may be assisting the owner. The process could also be adapted to the needs of other project participants, and many points referred to in the article can be directly applied to them. Any project risk management process must be tailored to the particular circumstances of the project and of the organization undertaking it. First, the article explains a complete or generic project risk management process to be undertaken by organizations with the highest level of risk management maturity in the largest and most complex construction projects. After that, factors influencing possible simplifications of the generic process are identified, and simplifications are proposed for some cases. Then the application to a real project is summarized. As a final validation, a Delphi analysis has been developed to assess the project risk management methodology explained here, and the results are presented.     

Ontology for Relating Risk and Vulnerability to Cost Overrun in International Projects

Risk management is about identifying risks, assessing their impacts, and developing mitigation strategies to ensure project success. The difference between the expected and actual project outcomes is usually attributed to risk events and how they are managed throughout the project. Although there are several reference frameworks that explain how risks can be managed in construction projects, a major bottleneck is the lack of a common vocabulary for risk-related concepts. Poor definition of risk and patterns of risk propagation in a project decrease the reliability of risk models that are constructed to simulate project outcomes under different risk occurrence scenarios. This study aims to extend previous studies in risk management by presenting an ontology for relating risk-related concepts to cost overrun. The major idea is that cost overrun depends on causal relations between various risk sources (namely, risk paths) and sources of vulnerability that interfere with these paths. Ontology is used to develop a database system that represents risk event histories of international construction projects and to construct a model for estimation of cost overrun. It will form the basis of a multiagent system that can be used to simulate the negotiation process among project participants about sharing of costs considering the risk allocation clauses in the contract, sources of vulnerability, and causal relations between risk events and their impacts. The ontology is constructed by interaction with Turkish contractors working in international markets and extensive literature review on risk-related concepts. The validation test results provide evidence that the ontology is fairly effective to help Turkish contractors to assess cost overrun by considering sources of vulnerability and risk in international construction projects.     

Risk-Informed Transit Project Oversight

This paper presents an evolutionary process of integrating risk management into the Federal Transit Administration’s (FTAs) new-start transit project program. New-start transit projects generally request federal funding assistance through the FTA. FTA funding commitments occur early in the project’s development, and as such the project is subject to significant risk, which has historically caused early estimates to be unreliable. To provide more reliable funding commitments and to better inform decision-makers, the FTA introduced risk-assessment requirements in 2002. Results from the earliest efforts indicated two areas for improvement: a more holistic method for risk assessment, and a better integration of risk management into standard project management practices. Although there are insufficient results, to date, to fully validate this new process, the purpose of this paper is to provide information on background and methodology to industry risk practitioners and researchers.     

Probabilistic Approach for Budgeting in Portfolio of Projects

This paper presents a mathematical model for calculating the budgetary impact of increasing the required confidence level in a probabilistic risk assessment for a portfolio of projects. The model provides a rational approach for establishing a probabilistic budget for an individual project in such a way that the budget for a portfolio of projects will meet a required confidence level. The use of probabilistic risk assessment in major infrastructure projects is increasing to cope with major cost overruns and schedule delays. The outcome of the probabilistic risk assessment is often a distribution for project costs. The question is at what level of confidence (i.e., the probability that budget would be sufficient given the cost distribution) should be used for establishing the budget. The proposed method looks at a portfolio of such projects being funded by the same owner. The owner can establish a target probability with respect to its annual budget. The model can help the owner establish confidence level for individual projects and also examine the effect of changing the confidence level of the portfolio budget on the budget and the confidence level of individual projects. The paper is relevant to practitioners because it provides a methodology for establishing confidence levels by the owner agencies in the emerging field of cost risk assessment for infrastructure projects. A numerical example is provided using actual transit project data to demonstrate the model application.     

Feasibility Study of an Automated Tool for Identifying the Implications of Changes in Construction Projects

Because of the fragmented nature of project information, decisions on changes in construction projects are usually based on project design instead of project requirements. This research proposes a new approach for coping with changes in construction projects: A change control tool (CCT) that will identify implications of a change as soon as it is proposed. The tool will ensure that the stakeholders involved in the decision process in which change proposals are evaluated will know in advance if a change could cause the project to stray from its original goals, as expressed in the requirements. The proposed CCT uses the building program as a link between client requirements and the building design and traces the different relationships that exist between the requirements in the project. The relationships are traced using requirement traceability capabilities on the level of a specific space in the project and on the level of the entire project. A preliminary CCT model was developed and pilot studies implementing the model have been conducted. The pilot studies have given positive results, indicating that the CCT could identify the scope of the proposed changes’ implications.     

Optimal Project Organizational Structure for Construction Management

This study relies on the trend model to investigate various modes of coordination among team members of construction projects. According to the project network developed based on the characteristics of a project, the trend model establishes an activity relationship matrix (ARM) to identify the activity relationships within the construction process. ARM is used to construct an organizational structure for project management and a communication resistance matrix that shows the efficiency of communication and coordination among the members of the project team. To evaluate various organizational structures and their coordination efficiencies, this study utilizes the analytical hierarchy process to quantify the strength of an organizational structure and identify the optimal structure for project management. Through quantitative modeling of communication efficiency among organizational team members, an objective function for calculating the total resistance index is used to determine the optimal organizational structure available to execute the project. This study demonstrates how the trend model may be applied in the future for evaluating the coordination efficiencies of various organizational structures.     

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.