Comparative Analysis of Project Delivery Systems Cost Performance in Pacific Northwest Public Schools

Alternative project delivery systems such as construction management at risk (CMR) are increasingly used in public school construction in the United States. CMR is expected to benefit owners with a guaranteed maximum price (GMP), decreased change order cost, and increased cost “certainty.” This paper empirically compares cost growth performance of the CMR and design-bid-build (DBB) methods in Pacific Northwest public school projects. Data were collected from state records and previous studies on 297 completed schools in Oregon and Washington. The analysis of the data shows no statistically significant difference between CMR and DBB in construction change order costs, school project costs exceeding the GMP in 75% of the cases, and a statistically significant difference in cost growth between CMR and DBB projects during buy out, making CMR projects less efficient at controlling cost growth at buy out. These results counter some of the traditional expectations of the CMR delivery method.     

Lean Processes for Sustainable Project Delivery

Facility owners and project teams often struggle to engage “green” or “sustainable” requirements on building projects and can incur additional project costs as a result. Although “investments” in high performance building features can be paid back through operational savings, the project delivery methods currently adopted by most teams are laden with process waste. Lean production principles have been proven to reduce waste and improve process performance in highly complex development and production environments. Adopting these lean principles, this paper reports a study that identified the presence of value and waste in a sustainable building project. Through an empirical investigation of the Real Estate and Facilities Division of Toyota Motor Sales, Toyota’s capital facility delivery process was mapped to identify both the steps in project delivery critical for success (value) and those that are waste. The investigation focused on the South Campus Facility, which received U.S. Green Building Council’s Leadership in Energy and Environmental Design Gold certification at a project cost equivalent to a conventional facility. Through post hoc process-based analysis, insight about what added value and waste in sustainable project delivery at Toyota was obtained. The results also identify further improvement opportunities to Toyota’s delivery process. For corporate facility owners and the Architecture Engineering Construction industry, the results unearth insights about how to successfully and economically deliver sustainable facilities.     

Effect of Delivery Methods on Design Performance in Multifamily Housing Projects

Existing studies on the performance evaluation by the delivery method generally indicate that the design build (DB) method is superior to the design-bid-build (DBB) method in terms of construction duration, cost, and quality. As opposed to the performance of construction duration and cost, where quantitative evaluation is relatively possible, most performance evaluations of quality are based on interviews with the owners. Therefore, this paper aimed at evaluating the level of design performance to conduct a quantitative evaluation on the performance of quality. To achieve this goal, this paper analyzed the impact of delivery methods on design performance in terms of the quantitative evaluation based on the case studies analyzing construction drawings and specifications of public multifamily housing projects delivered through the DB and DBB methods since 2000. The Delphi and analytic hierarchy process methods were used to develop objective standards and contents for evaluating the design performance. An analysis of variance test was conducted to analyze which delivery methods would have an effect on the design performance. Construction industry practitioners can use the results of this study in selecting a delivery method appropriate to the project characteristics.     

Outside the Budget Box—Public/Private Partnership as a Creative Vehicle for Finance and Delivery of Public School Facilities

Our public schools face almost irresistible pressures to upgrade and expand facilities and deliver better, more advanced, and higher-quality education while tax revenues and therefore budgets are shrinking each year. Class sizes grow in old and outdated facilities, and municipalities and school districts have few resources to address the pressing space needs. There is little public support for increased funding. However, there is a way to deliver educational facilities that uses less public capital than traditional project finance. Public/Private Partnership (PPP) is a delivery method that has traditionally been used on large infrastructure projects in developing nations, in order to allow more development for less public capital investment while maintaining the overall quality of construction. In recent years, PPP has gained acceptance in Europe and now in the United States as a means of public school finance and construction. This paper discusses PPP, its fundamental principles, and the various ways it can be employed in the delivery of educational facilities, as well as its advantages and disadvantages.     

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.     

Analysis of the Design-Build Delivery Method in Air Force Construction Projects

The design-build (DB) method for construction project delivery continues to grow in both the private and public sector; additionally, research has shown that the DB method outperforms the design-bid-build (DBB) method. The Air Force has applied the results of these previous research efforts to its military construction (MILCON) program without performing empirical studies to validate the approach. Therefore, the objective of this study was to compare the performance of the DB delivery method with the traditional DBB approach for the Air Force MILCON program. Data related to 835 (278 DB and 557 DBB) MILCON projects for fiscal years 1996–2006 were subsequently analyzed. The DB method had better performance in three of six metrics with the performance being significantly better for cost growth and the number of modifications per million dollars. The traditional DBB method performed significantly better in terms of total project time. Furthermore, the DB method was best suited for various facility types. This study provides empirical evidence of how the DB method provides an advantage over the traditional DBB method for Air Force MILCON projects.     

Strategic Group Analysis in the Construction Industry

The aim of strategic group analysis is to determine whether clusters of firms that have a similar strategic position exist within an industry or not. Findings of strategic group analysis may further be used to investigate the performance implications of strategic group membership. The objective of this paper is to identify the possible strategic groups that could exist within the Turkish construction industry by using a theoretical framework applicable for the construction industry and alternative statistical cluster analysis techniques. The achieved results pinpoint the existence of three clusters and significant differences between the performances of firms in each cluster. All of the firms in the strategic group that have the highest average performance utilize a quality differentiation strategy and have the necessary resources and capabilities that give them the opportunity to differentiate their services from others. Also, they use a systematic approach and have a collaborative environment for strategic decision making. Findings of strategic group analysis can be used by professionals to understand the current strategic position of a firm within the competitive environment and formulate strategies to shift to a better performing cluster.     

Avoiding Change Orders in Public School Construction

Increased student enrollment and the current poor state of the educational infrastructure require the construction of more school buildings and the renovation of many of the existing ones. The large number and magnitude of change orders in these projects constitute an impediment to the rapid and economic delivery of these projects. A total of 6,585 change orders filed in a school district’s projects in the 5 1/2 year period from 1999 to 2004 were analyzed in five categories including owner-directed changes, code compliance issues, errors/omissions in contract documents, discovered or changed conditions, and others. The results of the study indicate that the dollar value of change orders relative to the original contract can be reduced if preventive measures are taken. These measures include choosing the right construction management firm, emphasizing the definition of project scope early in the project, and effectively managing the precontract activities by conducting value engineering and constructability reviews. The results indicate that school projects can be completed with change orders not exceeding 5% of the contract value if these measures are taken. This study is of relevance to practitioners involved in school design and construction projects.     

Project Delivery Systems and Project Change: Quantitative Analysis

Design/build has become one of the favored project delivery methods in the engineering construction industry. Numerous studies have advocated the use of design/build over the traditional design/bid/build delivery approach. A comprehensive analysis of 67 global projects from the Construction Industry Institute's database shows that design/build projects may not provide all the benefits to project performance. The study found timesaving was a definitive advantage of design/build project delivery, but, the positive effects of cost and productivity changes were not convincing. Based on the results of the study, the project management expertise and experience of the contractor may have a greater impact on project performance outcomes than focusing on project delivery strategy only.     

Alternative Project Delivery Systems: Applications and Legal Limits in Transportation Projects

This paper presents the results of a comprehensive survey of the legal codes of all the 50 states in the United States regarding alternative project delivery systems in transportation projects. In the past decade there has been a surge of legislation allowing state transportation officials much more flexibility regarding the choice of project delivery systems. These delivery systems are usually selected based on a combination of price and quality. Specific delivery systems studied in this paper are Design-Build, Construction Management at Risk, and Public-Private-Partnership. The background and history of the emergence of these new delivery systems are studied in this paper. The research showed that in many states, alternative delivery systems may be allowed but with specific restrictions. For each state, all of these delivery systems have been researched and placed into one of the following distinguishable categories: (1) fully authorized; (2) authorized but needs extra approvals; (3) authorized for a pilot program and/or with some limitations; (4) not authorized. The output of the survey gives valuable snapshots over the status of each delivery system in regards to its legality in different parts of the country as of December 2006. Comparing the results of this survey with the surveys done previously shows that the trend is to allow states more flexibility in the choice of project delivery systems.     

Performance Assessment of Construction Companies Integrating Key Performance Indicators and Data Envelopment Analysis

The web benchmarking systems broadly used in the construction industry (CI) are designed to provide results based on key performance indicators (KPIs). No insights concerning organization overall performance and improvements targets are available. This research aims to fulfill this gap using data envelopment analysis (DEA) as a method to complement the information provided by a set of KPIs. The methodology proposed is useful to all organizations involved in benchmarking routines. To enable a more realistic assessment of CI companies, two types of DEA models were used, one allows factor weights to vary freely and the other includes weight restrictions. These models assign an efficiency score to each organization, identifying efficient organizations and providing performance improvements targets for the others. To enable suggesting targets for all organizations, expert opinion was used to specify virtual units which were included in the efficiency assessment to define a practical frontier located beyond the productivity levels of the original DEA frontier. Based on a sample of 20 Portuguese leading contractors, the Portuguese web benchmarking system for CI, icBench, was used to demonstrate the advantages of integrating the DEA method with KPIs benchmark scores.     

Relative Effectiveness of Project Delivery and Contract Strategies

Project delivery systems define the roles and responsibilities of the parties involved in a project. They also establish an execution framework in terms of sequencing of design, procurement, and construction. The decision made in the selection of a project delivery system for a project impacts all phases of execution of the project and greatly impacts the efficiency of project execution. Such decisions should be facilitated by thorough analysis. Structured, quantitative decision analysis processes have been shown to have several benefits over the simplistic, holistic, and informal processes that typically characterize subjective evaluations. However, a dearth of quantitative values of project delivery systems established and validated through research has invariably left project managers with no alternative than to make project delivery selection decisions on the basis of subjective evaluations. Development of the needed quantitative values for application in a decision analysis process would greatly enhance the quality of the decision-making process and provide a defensible rationale for selection of project delivery systems for capital projects. This paper presents research findings that provide the needed quantitative values in this area. Based on the quantitative values defined here, interested parties can develop and implement quantitative evaluation of project delivery alternatives to identify the optimal solution for a given project. Multicriteria decision analysis was found to be the suitable approach for a quantitative, analytical evaluation of project delivery systems. Consequently, the quantitative values presented in this paper were developed in accordance with the requirements of the multicriteria decision analysis technique known as simple multiattribute rating technique with swing weights (SMARTS). Utilizing the quantitative values presented here and applying the analysis technique of SMARTS, a decision support tool has been developed and validated for the Construction Industry Institute. The decision support tool is presently being utilized by member companies of the Construction Industry Institute that were privy to its development. With the presentation of the quantitative values in this paper, other parties interested in developing similar tools would benefit from the research results presented here.     

Effects of Delivery Systems on Change Order Size and Frequency in Mechanical Construction

Change orders represent one of the largest sources of cost growth on building construction projects. Field generated, or “unforeseen” change orders can also be highly disruptive to field productivity. Design-build delivery methods can potentially help minimize change orders on construction projects. This study was performed to closely examine the effects of delivery methods on the frequency and magnitude of change orders in mechanical construction, and how design-build business practices can be used to minimize the frequency of field generated chance orders. In a study of 598 change orders occurring on 120 construction projects performed by the same contractor, the total number of change orders was found to be close to the same on design-build and design-bid-build projects, however an 87% decrease in the average number of unforeseen change orders was observed on design-build projects versus design-bid-build projects. In addition, the average size of unforeseen change orders was 86% smaller on design-build projects. A detailed and qualified presentation of the research methodology and resulting data is provided. Key attributes and business practices leading to the results are discussed and practical applications of this research for owners and contractors are provided.     

Concurrent Engineering Approach to Reducing Design Delivery Time

A common method used to reduce project delivery time is to overlap sequential activities. Evolution and sensitivity characterizations of design activities provide a practical tool for identifying overlapping opportunities. The faster the evolution of information in an activity, the less risky it is to begin a downstream activity before the upstream activity is finalized. Also, the lower the sensitivity to changes in upstream information, the less risky it is to overlap activities. A methodology for determining the evolution and sensitivity of design activities has been developed through a series of expert interviews. The evolution of an activity can be determined by evaluating the levels of design optimization, constraint satisfaction, external information exchange, and standardization. The sensitivity of an activity can be determined by evaluating activity constraints, input variables, and the level of design integration. This framework for characterizing design activities in terms of evolution and sensitivity will lead to significant reductions in project delivery times.     

Developing ERP Systems Success Model for the Construction Industry

Recently, a significant number of major construction companies embarked on the implementation of integrated information technology solutions such as enterprise resource planning (ERP) systems to better integrate various business functions. However, these integrated systems in the construction sector present a set of unique challenges, different from those in the manufacturing or other service sectors. There have been many cases of failure in implementing ERP systems in the past, so it is critical to identify and understand the factors that largely determine the success or failure of ERP implementation in the construction industry. This paper presents the process of developing an ERP systems success model to guide a successful ERP implementation project and to identify success factors for ERP systems implementation. The paper identifies factors associated with the success and failure of ERP systems, and develops a success model to analyze the relationships between key factors and the success of such systems. The proposed ERP systems success model adapts the technology acceptance model and DeLone and McLean’s information systems success model and integrates those with key project management principles. The goal of the ERP systems success model is to better evaluate, plan, and implement ERP projects and help senior managers make better decisions when considering ERP systems in their organization.     

Role of Inventory Buffers in Construction Labor Performance

Buffers of material stockpile (inventory) are formed at the work level in construction to help manage production. The size of material stockpiles often has an important bearing on construction project performance. In construction projects, where conditions are often uncertain and variable, some have suggested that buffers be sized and located according to the conditions. New management thinking like lean construction and theory of constraints suggests that the size of buffers needs to be managed carefully, because when oversized, buffers are wasteful, impede workflow, and hinder performance. Research has shown that project variability can be affected with the careful deployment of buffers but has not really evaluated the impact on construction labor performance. This paper reports an exploratory analysis of the relationship between inventory (buffers) and construction labor performance with data collected from three commercial projects in Brazil. In this study, the size of the buffer between rebar fabrication and installation in the construction of a structural system is compared to the labor performance of the fabrication and installation crews. The results show that some buffer helps achieve the best labor performance in the construction operations studied.     

Comparable Performance Measurement System for Construction Companies

The construction industry has mainly relied on financially focused performance measurements, and studies on performance measurement systems (PMSs) have been carried out at the project level. However, recently, the demand for performance evaluation and management at the company level has increased. A few previous efforts have aimed to develop a conceptual framework for company performance, but there have been few follow-up studies. From this perspective, we have developed an implementation model and practical methodology to measure and compare the performance of construction companies. First, our thorough qualitative and quantitative analysis was used to develop a set of indicators for performance measurement, and an analysis of the relative weightings of the indicators was carried out. Second, we calculated the performance score of construction companies using a study of 34 Korean construction companies. Finally, we carried out a performance evaluation and system analysis using the calculated performance scores and identified practical issues for the implementation of our PMS. Using the results of our analytical processes identified in this work, further research is suggested.     

Industrialized Building Systems Construction in Malaysia

Available literature indicates that considerable research efforts have been directed toward the “hardware elements” of the industrialized building systems technology. However, the hardware elements are only concerned with the structure itself. Nonetheless, to date, the “software elements” of the industrialized building systems, which are concerned with the data and information available on the system, users, clients, establishment of manufacturing and assembly layout and process, as well as allocation or resources and material, have received little attention. There is therefore a dire need to overcome the shortage in the software elements of the building system research. This paper reports a survey conducted on industrialized building system construction companies. The main objective is to present the building system technologies existing in Malaysia and to examine problems and constraints associated with these technologies.     

Measuring the Impact of Rework on Construction Cost Performance

Rework continues to affect both cost and schedule performance throughout the construction industry. The direct costs alone often tally to 5% of the total construction costs. Using the data obtained from 359 construction projects in the Construction Industry Institute database, this paper assesses the impacts of rework on construction cost performance for projects in various categories. In addition, it identifies the sources of this rework, permitting further analyses and the development of rework reduction initiatives. The results of this study establish that the impacts of rework differ according to project characteristics and that the sources of rework having the greatest impact are not significantly different among project categories. By recognizing the impacts of rework and its sources, the construction industry can reduce rework and ultimately improve project cost performance.