Achieving Partnering Success through an Incentive Agreement: Lessons Learned from an Underground Railway Extension Project in Hong Kong

Over the years, it has been observed that partnering has been ineffectively implemented in the public sector of Hong Kong. Contributing factors to this lack of success are nature and the large size of bureaucratic organizations and commercial pressure compromising the partnering attitude. The Mass Transit Railway Corporation Limited (MTRCL), one of the prominent pioneers in adopting project partnering in the infrastructure sector of Hong Kong since 1999, however, implemented the partnering principle with significant success. This paper, based on a recently completed research project funded by the Construction Industry Institute?Hong Kong in late 2004 and a followup in-depth interview meeting with senior executives of MTRCL in early June 2005, analyzes the rationale behind the successful development of partnering culture in the infrastructure sector of Hong Kong through a case study—the Tseung Kwan O Railway Extension (TKE) Contract 654—platform screen doors. The project comprises the supply and installation of platform screen doors along the whole MTRCL’s TKE with five stations. This project was analyzed by means of the project documentation and face-to-face interviews with the project representatives, comparisons with another five partnering case studies, and a followup in-depth interview meeting with another two senior executives of MTRCL. After the analysis, it was found that the implementation of partnering together with an incentive agreement (IA), a kind of target cost (TC) contract, underpinned the partnering success of this project. Therefore, it is recommended that partnering together with TC contracts, such as IA, greatly assists in the achievement of construction excellence, and can provide a workable model for enhancing overall project performance in electrical and mechanical projects.     

Choices,values and time

Researcher Philip Mitusch in the Building Process Group at the Norwegian Building Research Institute (Byggforsk) shows how the use of Hyper card, a graphics database and software development tool, and the Macintosh II personal computer, enabled the Institute to develop an expert system using a spreadsheet approach to information for fire requirements in the new Norwegian building regulations.     

Application of Delphi method in selection of procurement systems for construction projects

A number of procurement selection systems have been developed over the last decade. The use of multi-attribute decision analysis has been considered the foremost technique for examining client needs and the weightings of preferences from experts for each procurement system in the most objective way available. However, the major difficulty of these selection models lies in the lack of consensus among the experts on the utility factor of the selection criteria. To overcome these deficiencies, a Delphi technique was adopted to develop a multi-attribute model. Four rounds of Delphi surveys were conducted. A statistically significant consensus on the weighting of the utility factors for each procurement system was obtained from eight experts. The results vividly reveal that the Delphi method is a powerful and appropriate technique for deriving objective opinions in a rather subjective area such as the multi-attribute model for the selection of procurement system.     

Effects of the law reforming public works contracts on the Italian building process

The Italian construction industry was rocked by the scandals regarding procurement by the public sector during the early 1990s. Although not confined to construction, the role of the state in construction demand meant that it was one of the most heavily implicated sectors. Known as 'tangentopoli', the scandals have prompted a major reform of public sector procurement in the Italian industry which, combined with changes required to conform with EU directives, is leading to a profound cultural change in the industry. This paper provides an authoritative review of the changes in the procurement codes and the roles and relationships within the construction industry. It shows how the project management of public sector programmes is being strengthened, and how the procurement of the design and construction processes is being separated to provide greater transparency in the process. Although it is too soon to tell what the actual impact of these changes will be upon construction industry practice, some suggestions are made in the concluding comments. En Italie, le secteur de la construction a ete secoue par les scandales concernant les approvisionnements par le secteur public au debut des annees 1990. Bien que n'etant pas limitee a la construction, la part de l'Etat dans la demande pour les travaux de construction temoignait que c'etait bien l'un des secteurs les plus impliques. Connus sous l'appellation de 'tangentopoli', ces scandales ont declenche une vague de reformes qui a touche les approvisionnements par le secteur public qui, combines aux changements necessaires pour se conformer aux directives de l'UE, conduisent a un profond changement culturel de cette industrie. La presente communication constitue une etude documentee des changements qui affectent les codes d'approvisionnement ainsi que les roles et les relations qui s'etablissent au sein de l'industrie de la construction. Elle montre comment la gestion de projets, lorsqu'il s'agit de programmes du secteur public, se trouve renforcee et comment la fourniture de prestations d'etudes et de travaux de construction joue en faveur d'une plus grande transparence du procede. Bien qu'il soit trop tot pour dire quel impact auront ces changements sur les pratiques dans le secteur de la construction, l'auteur conclut en faisant certaines recommandations.     

Reconstructing Cultures for Relational Contracting

Although previous research has pointed to potential performance gains through relational contracting (RC), reservations remain as to its value and viability. Even those who wish to use RC need guidelines for introducing it, especially where it clashes with prevalent project cultures. A study was launched from Hong Kong to identify the critical factors which promote RC and team building in the context of specific cultures. This paper consolidates the perceptions of 60 respondents to a questionnaire survey in Singapore, in relation to the hypothesized 24 factors facilitating RC, and 28 factors impeding/deterring RC. It indicates the evident readiness of the Singaporean contracting industry to embrace collaborative working practices. On the whole: (1) all the 24 factors facilitating RC, and 23 of the 28 factors deterring RC, are significant; (2) these two sets of factors could be represented by six and seven “broad factors,” respectively; and (3) except in a few cases, respondents from large and medium companies, as well as with and without experience in RC, have similar perceptions of the importance of different factors. It was perceived that trust should be at the core of RC approaches to construction procurement, but also seen that the current level of trust is low. Identifying the principal “facilitators” and “impediments”/ deterrents to RC, provides pointers to building relationally integrated teams to boost performance to much higher levels, as are now expected from the industry. The literature indicates that the outcome of the survey in Singapore reflects the trends in many countries that are moving toward RC. This research model and approach may be conveniently replicated in other contractual regimes, in order to reinforce these observations.     

Introduction of a new form of quote evaluation: a case study in southern Sweden

The effects of changing from traditional tendering methods to an alternative form of quote evaluation were tested in a case study within the southern Swedish construction market. The project studied replacing the outer surface of the roof of a multiple‐dwelling building 2000m² in area. Procurement was carried out in two steps. The first step consisted of traditional tendering methods in which quotations were obtained by asking different contractors to bid. In the second step, formal tender documents were sent by mail to the same contractors. These documents included an alternative form of quote evaluation requiring that references to be provided for similar work, as well as for issues of environmental control, working environment, quality control and the material's life cycle. This second step was found to create additional value for the client and to improve competition. It was also observed that although there was a communication threshold to overcome, this segment of the construction market appeared ready to accept alternative methods for evaluating quotes. It was regarded as important to make the criteria readily understandable and measurable and strive towards a standardized template form of quote evaluation to reflect the goals of both the project and the clients.     

The practical application of delivery methods to project portfolios

The rebirth of design-build, design-build-operate, and build-operate-transfer as viable alternatives for the delivery of major capital projects is symptomatic of dynamic changes in the relationship between producers and clients throughout the construction industry. In the private sector, these delivery methods offer clients the chance to shift emphasis towards core functions and away from real estate development and operations. In the public sector, where capital budgets are constrained, delivery alternatives offer clients the chance to combine construction skills and technology to meet infrastructure needs in innovative ways. However, for those clients with numerous facilities and a steady flow of projects over long periods of time, a critical problem is emerging: how to effectively match each project in the portfolio to a preferred delivery method. This paper presents a tool called CHOICES©?, which permits convenient comparisons of alternative delivery scenarios for a portfolio of capital projects and services. CHOICES©? is designed to help formulate a portfolio infrastructure strategy, test that strategy, and adjust it to meet strategic goals within capital constraints.     

The factors influencing bid mark-up decisions of large- and medium-size contractors in Singapore

The construction industry in Singapore is dominated by a competitive business environment that is being driven by a lowest cost mentality. The pressure on contractors' profit margins has further increased after a prolonged recession in this sector, which has seen construction demand and output shrinking significantly. This paper examines the factors that contractors perceive to be important when they are considering the size of their bid mark-up. The research hypothesis is that contractor size would have a significant bearing on the factors that would influence the bid mark-up decision. Forty factors were identified and a survey was conducted. The results showed that contractor size has a significant impact on their attitude towards bid mark-up decision-making. The analysis also showed that when deciding the size of a bid mark-up large contractors tend to be more concerned with the nature of the construction work while medium-size contractors are more concerned about the state of their own companies finance.     

世界银行贷款项目国际竞争性招标采购程序

本文介绍了世界银行贷款项目国际竞争性招标采购中所遵循的一般程序，便于从事这类项目的人员理解和运作。     

Impact of the Capital Market Collapse on Public-Private Partnership Infrastructure Projects

The collapse of capital markets is having an impact of the funding arrangements for economic and social infrastructure projects in Australia. Bearing this in mind, this paper seeks to examine whether the current volatility and uncertainty in capital markets in Australia affects the feasibility of privately financed infrastructure and specifically the public-private partnership (PPP) method of procurement. This paper examines the role and dependency that capital markets play in funding PPPs, current market conditions, and how they will affect PPP viability. In addition, alternative funding and procurement mechanisms that can be used for short- and medium-term infrastructure deliveries are presented.