Contractor Prebid Planning Principles

Planning is an essential function of project management. Yet, many small- and medium-sized contractors do a relatively poor job of operational planning. Better prebid plans will reduce costs, shorten schedules, and improve labor productivity. Unfortunately, the published literature offers little guidance for smaller contractors on what constitutes effective planning. Most papers describe planning as a macrolevel process for owners. Most emphasize scope definition for industrial projects. This paper describes a microlevel planning process for contractors. It consists of eight steps which are: (1) assess contract risks; (2) develop a preliminary execution plan; (3) develop site layout plans; (4) identify the sequences that are essential-to-success; (5) develop detailed operational plans; (6) develop proactive strategies to assure construction input into design; (7) revise the preliminary plan; and (8) communicate and enforce the plan. The entire process is illustrated with a case study project and is fully illustrated with figures which show how to integrate the work of multiple contractors, keep key resources (crews or equipment) fully engaged with no downtime, provide time buffers so the work of follow on crews can be efficiently done, expedite the schedule using multiple work stations and concurrent work, ways to communicate the work plan to the superintendent and foremen, and how to assess the feasibility of various work methods. The steps are easy to understand and implement. They will yield immediate positive results.     

Competitiveness of Inexperienced and Experienced Contractors in Bidding

This paper tests the assertion that experienced contractors are more competitive than inexperienced contractors by measuring the effect of experience on bidding competitiveness for building contracts procured by a regular client. Contractors are grouped into experienced and inexperienced contractors, and two levels of contractors’ experience are identified: (1) bidding experience only and (2) bidding plus construction experience. Results of two-sample t tests show that experienced contractors are more competitive than inexperienced contractors. Contractors’ competitiveness in respect of school contracts and other contracts are further compared in evaluating the relationship between the project type and experience effect. Experienced contractors are, on average, more competitive in competing for school contracts. It emerges that the factor of project type familiarity amplifies the experience effect. A comparison of experienced contractors’ competitiveness in bidding for (1) new building works and (2) alteration and extension works shows that the effect of experience would be more significant when contract works packages are highly standardized.     

Contractor-Performed Quality Control: Is the Fox Guarding the Henhouse?

At the same time that state departments of transportation are allowing contractor-performed quality control, they are also concerned about using the contractor-reported data for acceptance and payment purposes. The question is, are we putting the fox in charge of guarding the chickens? To address this concern, a large number of asphalt and concrete projects in Kentucky were examined. The statistical analyses showed that for the most part there is no significant difference between the contractor-performed acceptance data and concomitant highway agency-performed verification data. This is obviously a very encouraging finding that is expected to enhance the level of trust between the contractors and highway agencies.     

Quality, Environmental, and Health and Safety Management Systems for Construction Engineering

The philosophy behind quality, environmental, and safety (QES) management systems is a concept that has been accepted by various contractors. Furthermore, a process has been developed insuring that the output produced conforms to customer satisfaction without violating any environmental, health, and safety rules and regulations. An effective QES program not only assures a quality product but also reduces costs, and enhances productivity. It is a top down process, i.e., top management together with line management and other employees develop the program and motivate all personnel to accept the process. Important functions to take under consideration are (1) explain and clarify the quality, environmental, and safety performance expected; (2) involve employees in decision-making and problem solving; (3) describe the consequences of poor quality and unsafe/unhealthy work conditions; (4) establish QES goals and provide feedback on performance; (5) provide a self-monitoring system; and (6) recognize and reinforce good performance and develop a reward system. This paper presents a discussion of the development of a portion of a QES management system which has been employed by a medium to large size construction company. In particular, Items 1–4, listed above, are described in detail.     

Risk Allocation and Risk Handling of Highway Projects in Taiwan

Risks always exist in construction projects and often cause schedule delay or cost overrun. Risk management is a key issue in project management. The first step of risk management is risk identification. It includes the recognition of potential risk event conditions in the project and the clarification of risk responsibilities. We conducted multiple-case studies using a systematic analytical procedure to identify risks in highway projects in Taiwan, to recognize risk allocation by contract clauses, and to analyze the influence of risk allocation on the contractor’s risk handling strategies. The results show that the owner allocates risks by stipulating specific contract clauses into five kinds of risk allocation conditions. If a risk is more controllable by the contractor, the owner has a greater tendency to allocate the risk to the contractor. Risk allocation determines which kinds of risks the contractor would take and influences the contractor’s risk handling decisions. The analysis furthermore indicates that, if the probability of a certain risk event condition is uncontrollable, then with the increasing possibility of taking the risk, the contractor’s tendency of risk handling changes from actively transferring the risk to passively retaining the risk. In contrast, if a risk is controllable and certainly allocated to the contractor, the contractor tends to take the initiative to reduce the impact caused by the risk event rather than retain the risk.     

Contractor as Trust Initiator in Construction Partnering—Prisoner’s Dilemma Perspective

Partnering has been advocated for use in construction as a project-delivery approach to curb dispute and enable a cooperative contracting environment. Successful construction partnering is perceived to derive benefits to both developers and contractors. In view of significant implications to successful project delivery, there has been a surge of research and studies on construction partnering. These studies typically focus on the partnering process as well as the identification of critical success factors. Among the various success factors that underpin partnering success, establishing trust among partners is considered the most important. Moreover, skeptics have been swift to point out that establishing trust in construction is daunting. A better understanding of the role of trust and its manifestation in partnering efforts is therefore of both academic and practical value. In this study, motivating trust in construction partnering is described within the classic framework of “the prisoner’s dilemma,” which suggests the trust cycle can be kick-started if construction partners put cooperation before competition and self-interest. This paper reports a study that is designed to suggest a suitable candidate for the trust initiator. As such, the critical trust factors for two groups of construction partners in Hong Kong—developers/consultants and contractors—are first identified. It is found that “performance” and “permeability” of partners are the two most critical trust factors. “Performance” describes the partner’s competence and problem-solving ability as perceived by their counterpart. “Permeability” reflects the partner’s openness in sharing information. The result of a multiple-regression analysis further suggests that the contractor is in a position to initiate trust through competent performance and maintaining effective communication with the client. In this manner, the trust cycle can expand with reciprocal trustworthiness from the client.     

Factors influencing bid-winning performance in mixed crowdsourcing: The persuasive effect of credible information sources

Mixed crowdsourcing is increasingly becoming the main organizational model of domestic crowdsourcing platforms. However, research on the interpretation of winning performance fails to focus on the persuasive effect of the credibility of the contractor's information source on the contractee's decision making. Based on source credibility theory (SCT), this study constructs a model of the factors influencing the contractor's bid-winning performance based on three aspects—credibility, professionalism, and attractiveness—and examines the moderating effect of positive contractor evaluations from previous tasks on the bid decision. The results reveal that integrity guarantee and contact authentication (which belong to the credibility dimension), as well as ability level and professional identity (professionalism dimension) positively affect the contractor's bid-winning performance, and that an inverted-U-shaped relationship exists between the number of services displayed by the contractors (attractiveness dimension) and bid-winning performance.     

Survey of construction lawyers' attitudes and practice in the use of ADR in contractors' disputes

Continuing a survey of contractors' perceptions about alternative dispute resolution (ADR) this paper seeks to report an investigation of the level of involvement of legal advisors to the construction industry in the dispute resolution process and the perceptions that legal professionals have about the use of ADR in construction disputes. The research findings are that contractors are likely to involve lawyers in the dispute resolution procedure, particularly when disputes concern a legal issue, when the parties to the dispute are entrenched in their argument, or when the other party insists on using legal professional assistance. In these defined circumstances, legal advisors will be influential in determining the potential use of ADR. The paper concludes that lawyers are unlikely to recommend ADR for most disputes between contractors, particularly if the dispute resolution process is perceived to involve the use of delay by main contractors, if the parties are fixed in their arguments or if they are exhibiting adversarial behaviour in their approach to the dispute. In these circumstances lawyers and their clients prefer the force of the formal systems over conciliatory ADR procedures.     

Subcontracting in commercial and residential construction: an empirical investigation

Some twenty years ago Robert Eccles argued for the theoretical existence of the quasifirm, a semi-integrated form of production in the construction industry, following a field study of home building firms in the USA. The study was aimed at substantiating some aspects of Williamson's transaction cost theory. The present work has similar intents, and illustrates the results of two recent field studies of homebuilders and commercial contractors, and the specific features of their subcontracting practice. Given the difficulty of an effective measurement of transaction costs in construction, Williamson's concept of atmosphere is suggested to explain the different approaches observed in subcontracting.