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.     

Facility Management Value-Adding Functional Analysis Model

Project management functions in facility management groups include design, construction, and renovation of facilities. The organizational structure and processes of such project management group affect the cost, quality, and duration of any project. The group's functions directly add to the overhead of the parent organization and therefore only value-adding functions are needed. The focus of this paper is to describe a value-adding functional analysis model and its application to develop a strategic direction for a parent organization. The paper presents the foundation for the analysis model, describes its application process to define and support the value-adding functions, and concludes with recommendations for organizational improvement strategy. The paper shows that value-adding functions are usually related to working closely with customer needs while considering the parent organization's requirements in project planning and control. In addition, it was found that any form of closed-market reliance on the internal resources in design and construction constrained the various processes and induced a high level of process uncertainty, which reflected negatively on project delivery time and cost.     

Decision Support Tool for Life-Cycle-Based Solid Waste Management

Existing solid waste management (SWM) planning software provides only limited assistance to decision makers struggling to find strategies that address their multifarious concerns. The combinatorial nature (many waste items and many management options) and multiple objectives of the SWM problem severely constrain the effectiveness of a manual search process using these tools. Recognizing this, researchers have proposed several optimization-based search procedures. These methods, however, enjoy limited use due to the substantial expertise required for their application. This paper presents a new computer-based decision support framework that addresses these limitations. The new framework integrates process models that quantify the life-cycle inventory of a range of pollutants and costs for an extensive municipal solid waste system, an optimization search procedure that identifies strategies that meet cost and environmental objectives and site-specific restrictions, and a user-friendly interface that facilitates utilization of these components by practitioners. After describing the software design, the use and value of the tool in typical waste management scenarios is demonstrated through a hypothetical, but realistic, case study in which several alternative SWM strategies are generated and examined.     

Computer-Integrated System for Estimating the Costs of Building Projects

The cost estimate is considered one of the most important and critical phases of a construction project. Preparing reliable and accurate estimates to help decision makers is the most challenging assignment that cost engineers and estimators face. For decades, practitioners in the construction industry focused only on estimating the initial cost of a facility, neglecting costs associated with operating and maintaining it. Today, more interest lies in investigating the economics of facility management, which include the cost of owning and operating a building over its useful life. This paper presents a methodology that can be used for an integrated conceptual cost estimating and life-cycle cost analysis for construction projects during their initial phase. The methodology describes the development and implementation of a system that automates the preparation of parametric cost estimates and forecasts future running costs of building projects. The system integrates relational databases, a parametric cost estimate module, an AutoCAD module, a global module, a cost estimate forecasting and decision support system module, and a life cycle costing and sensitivity analysis module. The system will automatically generate a new parametric estimate upon any modification in building design. Once the capital costs are identified, the system forecasts the cost of running and maintaining the new building throughout its expected service life. After assigning the range of deviation, a sensitivity analysis is conducted, which identifies the most sensitive parameters for further consideration and analysis. Designing the system in a user-friendly environment allows owners and decision makers to envision the feasibility of new building projects within their anticipated life cycles. Moreover, it assists architects and cost engineers in generating parametric cost estimates in a dynamic environment. A numerical case example is presented to illustrate the usefulness and capabilities of the developed system.     

Building Integrated Architecture/Engineering/Construction Systems Using Smart Objects: Methodology and Implementation

Integrated project systems hold the promise for improving the quality while reducing the time and cost of architecture/engineering/construction (AEC) projects. A fundamental requirement of such systems is to support the modeling and management of the design and construction information and to allow the exchange of such information among different project disciplines in an effective and efficient manner. This paper presents a methodology to implement integrated project systems through the use of a model-based approach that involves developing integrated “smart AEC objects.” Smart AEC objects are an evolutionary step that builds upon past research and experience in AEC product modeling, geometric modeling, intelligent CAD systems, and knowledge-based design methods. Smart objects are 3D parametric entities that combine the capability to represent various aspects of project information required to support multidisciplinary views of the objects, and the capability to encapsulate “intelligence” by representing behavioral aspects, design constraints, and life-cycle data management features into the objects. An example implementation of smart objects to support integrated design of falsework systems is presented. The paper also discusses the requirements for extending existing standard data models, specifically the Industry Foundation Classes (IFC), to support the modeling of smart AEC objects.     

Engineering Information Classification System

A good information classification and coding system is of great advantage to management. However, until now there has been no such a system for engineering management. MasterFormat is widely accepted as a construction information system but is not applicable to engineering work. This paper presents an engineering information classification system for engineering management that has a faceted and hierarchical structure that can flexibly classify information from facility to resource levels, such as construction information classification systems. The six digit coding system for products and functional tasks assists in project cost data collection and schedule planning. A design project was used as an example; the application can be broadened to incorporate the profit center practice and align a consulting firm’s business strategy.     

Linking Programming and Design with Facilities Management

This paper focuses on the potential of programming as a link between design and facility management. Not well understood and usually avoided, the promise of programming as a key activity is presented as a dynamic and flexible tool for identifying client-user facility expectations and requirements in the entire project-delivery process. In this context, facility management is proposed as a strategic resource and partner together with all the parties involved. Hinging on the design perspective, an analysis of the current practice and a modified framework are introduced, which suggests relying on facility management data, feedback, and involvement throughout the project delivery process.     

QUALICON: Computer-Based System for Construction Quality Management

This paper describes a computer-based system for construction quality management. The system tasks are derived from the elements of ISO 9001 standard and designed to integrate with other computer-aided project management functions. They can assist management in (1) the definition of requirements/criteria for design, construction, and quality management; (2) the development of inspection and test plans; (3) the tracking of actual inspection/test results; (4) the verification of their conformance to defined criteria; (5) the documentation of past experience in the form of standard templates for assisting the tasks involved; and (6) the generation of reports. A model was defined for representing the information used in the system tasks. The central role of the inspection and test plan representation was exploited to associate to construction components and processes, relevant inspections/tests, requirements/criteria, actual results, and nonconformance analyses. Templates were devised to enable the reuse of predefined packages of information, which recur from project to project. The developed system will render the assisted quality management tasks more effective. Its use was tested on data from different construction domains.     

项目责任成本管理的几点认识与思考

工程项目责任成本管理在工程项目施工过程中,以各职能部门为责任中心,以项目成本为对象,通过各项管理对成本费用发生进行控制与考核,实现工程项目利润最大化。     

Development and Application of the Specialist Task Organization Procurement Approach

The study focuses on the development of an innovative procurement method in order to improve owners’ contracting strategies. The aim of this paper is to develop a procurement system that improves the overall project implementation process, in order to meet the project objectives of time, cost, and quality. The Specialist Task Organization (STO) approach is suggested based on a constructive research approach, where extensive theoretical development of the STO concept is developed. The analogical validation was carried out through the review of four case study examples in order to find the analogies between the positive outcomes of four case studies and the elements of the STO route. The proposed task-oriented approach utilizes integrated product (task) development, integrated management, and fragmented execution via task organizations. The merits of the STO approach include, the shifting of competition from only single design and cost based to multiple designs, life-cycle costs, alternative materials, and maintainability implications. The STO approach assumes a modular approach to design, and allows experts knowledge in design and construction through their involvement from preconstruction through project starts up. The suggested STO route is a potential tool in realizing complete sustainability in construction in terms of environmental and social sustainability, as well as economic sustainability.     

Skunkworks Approach to Project Management

Three new product development programs attempting to meet challenging targets for time-to-market, quality, and cost were in urgent need of space and facilities. A decision was made to reengineer a light commercial building 50 miles from the main research and development and manufacturing facility. This satellite facility that housed a supplier of electroformed parts to another original equipment manufacturer would need to be entirely retrofitted to accommodate the research and development and manufacturing requirements of the four groups. The existing corporate facilities engineering group was unable to deliver the array of requests generated by the product development programs. This included 31 different projects, ranging from clean rooms and labs to air handling systems and offices. A project management team was spun off with the directive to meet customer requirements on time and within budget—even if it meant breaking rules. The project had many of the earmarks of a “skunkworks,” the concept originally developed by Lockheed Martin, as a way to quickly develop solutions by bypassing some of the time-consuming bureaucracy and allowing the team to make ad hoc decisions. The skunkworks project management team was able to deliver the projects on time and within budget by: (1) adhering to a clear focus on their mission; (2) including extensive up-front planning efforts; (3) critically analyzing customer needs; (4) leveraging project overlaps; (5) involving suppliers early; (6) empowering the team; and (7) breaking rules. Many of the lessons learned from this project are being treated as organizational learning and are currently being incorporated into other facilities engineering groups to improve their operations.     

Project Management and Good Technical and Business Practices

Good Technical Practices or Good Business Practices by themselves are not sufficient to produce and deliver “good” products∕services quickly and at a low cost. They must be integrated. Various researchers have addressed this need, but these efforts have been inconsistent and incongruent, and, the supporting information technology elements were incompatible. This paper discusses ingredients of Good Technical Practices and Good Business Practices and presents a framework for integrating them through good project management to achieve better product/service delivery. The principles of quality, and reengineering, and information technology are important ingredients of this framework. The paper explains the components of the framework and the linkages between them, and discusses the potential opportunities offered by the framework to effect the simultaneous improvement of the three main objectives of a project, i.e., time, quality, and cost.     

Benchmarking of Project Management Office Establishment: Extracting Best Practices

This paper deals with best practices in establishing, developing, and implementing project management offices (PMOs). First, a brief overview of the theoretical background for PMOs is presented. The research approach is described, along with an overview of the benchmarking partners used. In the main part of this paper, various aspects of a PMO’s life cycle are discussed based on observations from the benchmarking partners. Through the benchmarking study, we have discovered that although the PMO design differs greatly, certain key characteristics, responsibilities, and tasks are very similar. Successful PMOs take on responsibility for different project-related functions and core tasks related to development of shared methodology and processes for handling of projects, training and competence development within project management, proposing of new projects, and quality assurance of projects. The success of the PMO is related to ensuring the necessary authority of the PMO, real organizational authority as well as academic and social credibility, top management support, and that the PMO covers true needs in the organization.     

Cost and Schedule Impacts of Information Management on EPC Process

As with most industries operating in a worldwide business environment, engineering and construction companies have a need to quantify the business impact of information management strategies and the associated investment in information technology. The prevailing assumption that corporate investment in information technology will immediately result in more efficient business operations and inevitably improve the standard measures of business performance is now highly suspect in many U.S. industries. It is not uncommon for companies to be dissatisfied with their information technology investments, and to be frustrated over their inability to objectively quantify the anticipated process benefits. These issues raise two important questions: (1) how can companies objectively measure the potential benefit of information management investments?; and (2) what information management strategies can be successful in construction engineering? This paper summarizes a research project designed to specifically answer these two questions. A methodology is provided to objectively predict the project schedule and cost impacts of process changes that may result from strategic investment. The methodology is then used to identify the potential impact of three proposed information management strategies on the construction engineering process should the strategies by implemented successfully. The research concluded that substantial cost and schedule reductions result from improving internal information exchange and integrating project-based information across organizational boundaries.     

Optimizing Implementation of Value Management Processes for Capital Projects

A variety of innovative management processes are increasingly being introduced into the capital facility projects, thereby causing a great concern about which to implement on a particular project among project stakeholders. It is essential to identify the most effective process because varying circumstances on each project determine the level of suitability. This paper details a new systematic approach to determining the best process from among the 44 value management processes (VMPs) that can proactively achieve the articulated 12 project value objectives (PVOs). Throughout this paper, identifying and quantifying the selection principles (e.g., targeted PVOs, timing of initiation, project characteristics, and relative impact), the detailed research methodology and the findings from industry survey and VMP expert input are also illustrated. A computerized tool, programmed by Visual Basic Application on MS Excel, is described, and its ongoing validation process is also discussed. As a first-ever research, this paper contributes to a growing area of research, not only by providing a comprehensive and structured knowledge on the subject of VMPs, but also by developing a new method to effectively select the most beneficial VMPs. From the industry perspective, the results of this study, specifically the computerized selection tool, facilitate the implementation of the VMPs on the construction industry and maximize the potential benefits to a particular project.     

Project Management Functions in Facility Owners' Environment: Organizational Diagnostics

This paper describes the early organizational diagnostic stage that a facility owner may perform as part of the quality improvement decision. The diagnostics stage represents one step of a pilot research effort performed in a collaborative consortium of industry and academic organizations. The paper starts by describing the research goals and methodology. It then describes the typical customers for project management functions. The paper then illustrates an example organization to describe the basic conflicts of authority and responsibility that was found as an important factor behind ineffectiveness. Example processes are illustrated as a vehicle to describe facets of process uncertainty. The paper ends with an analysis of the interplay between organization and processes.     

Alternative Delivery Approaches for Military Medical Construction Projects

Military medical construction projects take more than 10 years to complete, from the time the need for a new facility is identified until the building actually opens for occupancy. This time is often extended even further due to complications during the design and construction process. Furthermore, these projects often are completed well over their original budget. Although there are many reasons for this exorbitant amount of time and many causes for the budgetary problems, one of the major factors is the reliance on the traditional methods of a lump-sum contract and the design∕bid∕build project delivery approach. The writers illustrate how the use of alternative project delivery methods (specifically construction management and design∕build) can reduce the amount of time it takes to design and build a new military medical facility, as well as reduce the overall cost of the project. The advantages offered by these alternative delivery methods are set forth, and their applicability within the federal procurement process is discussed. Several recommendations are then given for using these methods for the design and construction of military medical facilities.     

Cost-Estimating Tools for Low-Impact Development Best Management Practices: Challenges, Limitations, and Implications

Tools were developed for estimating costs of vegetative roofs, rainwater catchment systems, and bioretention facilities. These tools provide a detailed framework to facilitate cost estimation for capital costs, operation and maintenance costs, and life-cycle net present value. The tools can provide users with planning-level cost estimates and serve as a format for cost-reporting for past, current, and future projects. Very little cost data was available in the public forum, and prolific inconsistencies of supporting details were found in the available cost data. To address this, design assumptions were established for each facility type and professionally prepared cost estimates based on these design assumptions were used. Electives in design, such as plant selection and media depth, also greatly affected costs. To make the user aware of these effects, the model separates each option into line items that can be elected or excluded as appropriate. To facilitate collecting future cost data, best management practice (BMP) designers and builders should use these tools to record actual costs and report them to a clearinghouse such as the BMP Database.     

Implementation of Project Management in Public Engineering Organization

The Bureau of Engineering is a part of the City of Los Angeles' Department of Public Works and is responsible for the planning, design, and construction management of capital improvement projects for the city. In February 1997, the Bureau of Engineering executive staff and the Board of Public Works mandated a dramatic shift to improve project delivery. All of the non-wastewater elements of the Bureau were organized into a program-based matrix organization with a Project Manager as the focus for project delivery with project conception-to-conclusion responsibility. This paper describes the project management method of project delivery being implemented at the City of Los Angeles Bureau of Engineering and explains the implementation elements and their status. The paper reviews the new project management organizational structure and the organizational options considered by the Bureau. The work details the roles and responsibilities for the project delivery team members. The new tools used to manage projects are described, and the problems and solutions encountered are documented for use on future engineering management efforts.     

EPC总承包模式下的项目设计管理

阐述EPC总承包项目设计管理应注意的问题,分析项目设计对成本、工期和质量的影响,提出对设计过程和实施管理的整体解决策略和方法。