Showing papers in "Journal of Management in Engineering in 2009"

Construction Project Cost Escalation Factors

Abstract: Construction projects, private and public alike, have a long history of cost escalation. Transportation projects, which typically have long lead times between planning and construction, are historically underestimated, as shown through a review of the cost growth experienced with the Holland Tunnel. Approximately 50% of the active large transportation projects in the United States have overrun their initial budgets. A large number of studies and research projects have identified individual factors that lead to increased project cost. Although the factors identified can influence privately funded projects the effects are particularly detrimental to publicly funded projects. The public funds available for a pool of projects are limited and there is a backlog of critical infrastructure needs. Therefore, if any project exceeds its budget other projects are dropped from the program or the scope is reduced to provide the funds necessary to cover the cost growth. Such actions exacerbate the deterioration of a state's transportation infrastructure. This study is an anthology and categorization of individual cost increase factors that were identified through an in-depth literature review. This categorization of 18 primary factors which impact the cost of all types of construction projects was verified by interviews with over 20 state highway agencies. These factors represent documented causes behind cost escalation problems. Engineers who address these escalation factors when assessing future project cost and who seek to mitigate the influence of these factors can improve the accuracy of their cost estimates and program budgets.

Early Contractor Involvement in Design and Its Impact on Construction Schedule Performance

Abstract: The importance of integrating construction knowledge into the design process has long been recognized by the construction industry. This paper studies early contractor involvement in design and its impact on construction schedule performance through a combined empirical case study and theoretical simulation analysis. Pipe and steel fabricators' inputs at different design stages of industrial construction projects are identified. The case study shows that these inputs lead to improved drawing quality, material supply, information flow, and consequently improved construction schedule performance. This impact on construction schedule is illustrated using actual project data and simulation techniques. Simulation models were developed to demonstrate intuitively the impact at the construction operation level and they allow people to gain management insights through simulation experiments. Better understanding of the early contractor involvement process and its benefit can improve buy-in and help industry practitioners to reach the full potential of this concept.

Paradigm Trajectories of Building Information Modeling Practice in Project Networks

Abstract: Researchers have examined building information modeling (BIM), or parametric three-dimensional computer-aided design, from a myriad of technological perspectives. Many of these studies focus on examining or enhancing the interoperability of building information modeling technologies across project networks. The interoperability of business practices that must complement technological interoperability has been largely ignored. In this paper we examine building information modeling practice paradigms in project networks. We combine qualitative and quantitative data and analytical approaches to investigate 26 specific cases of firms using BIM tools. We identify four distinct practice paradigms and then induce an evolutionary model for building information modeling practice paradigm trajectories in project networks. The findings highlight the importance of understanding and developing interorganizational work practices to reap the benefits of building information modeling.

Developing a Performance Index for Relationship-Based Construction Projects in Australia: Delphi Study

Abstract: Over the past decade, an increasing trend of client organizations has been observed to adopt relationship-based approaches to run their building and construction projects internationally. Since there are numerous benefits of adopting relationship-based projects in construction, it is important to conduct research in the area of key performance indicators (KPIs) because it can help set a benchmark for measuring the performance of relationship-based projects. Nevertheless, few, if any, comprehensive and systematic research studies in this area have been conducted. This paper reports an empirical study which applies the Delphi survey technique to formulate a model to assess the success of relationship-based construction projects in Australia. Four rounds of Delphi survey questionnaires were conducted with 22 construction experts in Australia. The Delphi survey selected eight KPIs to evaluate the success of relationship-based projects in Australia. These KPIs included: (1) client's satisfaction; (2) cost performance; (3) quality performance; (4) time performance; (5) effective communications; (6) safety performance; (7) trust and respect; and (8) innovation and improvement. A statistically significant consensus on the eight selected KPIs was also obtained from the Delphi experts. A formula for calculating a performance index for relationship-based projects in Australia has been finally derived. Construction senior executives and project managers can use the index to measure, monitor, and improve the performance of their individual relationship-based projects. It also broadens the existing body of knowledge of both academics and practitioners in the construction industry because the research method could be replicated in other geographical locations to create similar indices for international comparisons, thus assisting in the understanding of managing relationship-based projects across different countries.

Understanding and Interpreting Baseline Perceptions of Sustainability in Construction among Civil Engineers in the United States

Abstract: The highly influential Brundtland report released in 1987 was the first document to define the three pillars of modern sustainable development as environmental, social, and economic. The Rio Summit in 1992, the Kyoto Protocol in 1997, and the Johannesburg Meeting in 2002 followed up with primary focus on the needs of society and the environment. Economic issues were secondary at these meetings. This movement was the beginning of what has been passed down to the construction industry as sustainable construction. Within the industry, however, confusion reigns, and attitudes toward sustainable construction vary wildly. Understanding perceptions of sustainability in the industry would help to navigate a path towards a common understanding of the issues, to reach a point from which a reasoned dialogue could ensue concerning the relative merits of different approaches to sustainability and to sustainable construction itself. To understand perceptions of sustainability in the construction industry, a survey of close to 200 practitioners was conducted between July and Sept. 2006. Its results are described and analyzed in this article. Some conclusions are made and recommendations are suggested based on this analysis. In particular, it is clear that a persistent and broad-based effort will be required to introduce sustainability effectively to the profession.

Strengths, Weaknesses, Opportunities, and Threats Analysis of Chinese Construction Companies in the Global Market

Abstract: Recent years have seen a growing trend of Chinese companies making significant inroads into the international construction market. However, comparing to their fast development, only few studies have been reported to introduce the Chinese international construction companies (CICCs) as an emerging competing force. This research, by conducting a strength, weakness, opportunity, and threat analysis, aims to help understand CICCs which have been stereotypically viewed as a somewhat heterogeneous group. Data supporting the analysis were derived from multiple sources including statistical reports, literature review, interviews, and in particular first-hand experience from those who are competing on the forefront. The research opens a window through which all players in the global construction market can perceive internal and external conditions of their Chinese counterpart.

Entry Mode Taxonomy for International Construction Markets

Abstract: The global construction market is large, expanding, fragmented, regionally fluctuating, heterogynous, risky, and highly competitive. To survive and grow in this arena full of opportunities as well as pitfalls, international contractors must use the most appropriate entry modes for targeted overseas markets. The globalization process in the construction industry has seen various entry modes adopted by international contractors to meet specific internal and external business and project environments, and new innovative entry modes continue to emerge. It is, therefore, important for contractors to understand a comprehensive set of entry mode options and their respective characteristics, structure, formulation process, advantages, and disadvantages. Through analysis of 94 market entry cases, this paper identifies and defines a taxonomy of 10 basic entry modes for international construction markets, including strategic alliance, build-operate-transfer equity project, joint venture project, representative office, licensing, local agent, joint venture company, sole venture company, branch office/company, and sole venture project.

Offshore outsourcing in global design networks

Abstract: Researchers have examined the benefits of outsourcing engineering design services from various perspectives. However, the process by which complex engineering design work is outsourced across international boundaries requires further investigation. In this paper we examine three offshore outsourcing design projects involving a design team in the United States outsourcing part of the project design to an offshore design vendor. We analyze empirical interview data and primary documentation to induce a set of eight key issues associated with outsourcing engineering services across national boundaries. We further analyze variances in the perspectives of the client and the vendor and identify important differences. The findings highlight the importance of addressing (1) vendor concerns over trust development and knowledge sharing; (2) client concerns over quality control, communication, and schedule control; and (3) shared concerns over cultural barriers, role redundancy, and design practice norms. Understandi...

Job burnout among construction engineers working within consulting and contracting organizations

Abstract: This research investigated and compared the experience of job burnout among 249 construction engineers working within consulting and contracting organizations in Hong Kong. The most widely recognized model of burnout, comprising emotional exhaustion, cynicism, and diminished professional efficacy was found to be valid. The sample in this study scored highest in all three dimensions of burnout among nine other occupations in national samples, with engineers working within contracting organizations reporting higher levels of burnout than their fellow engineers working within consulting organizations. The results of the study also showed that burnout attributed largely to stressors associated with job conditions and working environments. In particular, qualitative overload and lack of promotion prospects were found to be the major predictors of job burnout among engineers working within consulting organizations; whereas long working hours, role conflict, role ambiguity, and lack of job security accounted mostly for the burnout among engineers within contracting organizations. This suggested that intervention strategies targeting minimizing burnout, such as job redesign, should be devised with reference to the type of the engineering organizations.

Strategic Management Practices in Turkish Construction Firms

Abstract: This paper presents a study that aims to define the present position of Turkish construction companies in terms of strategic management. It is based on a survey measuring strengths and weaknesses in the “strategic management” practices of Turkish construction companies, and thus reveals potential opportunities and threats in a generalized manner. The results highlight the current strategic management practice of construction firms for designing their own future. Toward this aim, a detailed questionnaire was administered to 52 construction companies. The culture of companies and their perceptions of strategic management were shown to have serious shortcomings. However, specialization on different project types through joint venture companies established by their partners was found to be a major strength of many companies. These companies also pointed out the developing and unstable nature of both the political and economic structure of Turkey as their most significant threat. This disadvantage has inclined...

Using Public-Private Partnerships to Expand Subways: Madrid-Barajas International Airport Case Study

Abstract: In the beginning of 2006, the regional government of Madrid decided to expand the subway network to the new Terminal T-4 in Madrid-Barajas International Airport using a public-private partnership PPP approach. Owing to the peculiar characteristics of this new access as the enlargement of an existing subway line, the PPP approach was based on separating infrastructure management from transportation service operation. The PPP contractor was entrusted with the infrastructure construction and maintenance while Madrid's public subway company remained in charge of operating the trains. This paper examines the theoretical foundation that justifies the implementation of different PPP approaches to deal with urban rail projects. The paper then explains the reasons why a nonintegrated PPP approach was ultimately adopted for the expansion of Madrid's subway network to the airport. From the outcome of the tender and the present operation performance, we find that nonintegrated PPP contracts have important advantages for urban rail PPPs, particularly for conventional subway networks. These advantages are notable in terms of encouraging economies of scale and density, boosting compe- tition, and reducing the financial costs.

Procurement of Design-Build Services: Two-Phase Selection for Highway Projects

Abstract: In the United States, public agencies are adopting the design-build (DB) delivery method for delivering highway projects after having used the traditional design-bid-build method for generations. In the 2002 design-build contracting final rule, the Federal Highway Administration (FHWA) strongly encourages the use of two-phase selection procedures for DB procurement. This paper takes a case study approach to investigating the use of a two-phase process for selecting providers of highway design-build services. Using two DB projects in central Texas as case studies, the writers have analyzed project documentation and performed interviews with 37 project participants involved in procurement, including owner representatives and legal consultants. For the first case, the writers selected the $1.3 billion SH-130 tolled expressway project in central Texas. Procurement of the SH-130 DB contract was performed before the FHWA rule on DB contracting was released. In addition, the writers examined procurement activities for the $154 million DB contract for the SH-45 SE tolled expressway, which was procured by the same owner in 2004 following procedures identified in the FHWA rule. As a result, a process was developed that included activities to be performed between the delivery method decision and the contract execution. This process model tracks the differences between the SH-130 and the SH-45 SE processes that are attributable to the latter's adoption of the FHWA Rule.

Unethical Practices in Nigerian Engineering Industries: Complications for Project Management

Abstract: The purpose of the paper is to establish the unethical practices in engineering industries and identify the various factors that could encourage unethical practices in the nation’s life with a view to highlighting the findings for corruption-free management of projects. A sample of 226 was randomly selected for the study from a population of 12,230 workers from selected companies in the manufacturing and construction industries in Lagos state. The data were analyzed using simple percentages and the chi-square statistics. The results revealed that organizations have a code of conduct that should generate in the workforce values such as accountability and integrity and that there are disciplinary and control measures to check malpractices, yet individuals still engage in unethical practices. Of all the 34 unethical practices studied, “people want to acquire wealth by all means to enhance public status” ranked highest, followed by “people are driven by their inherent greed for money.” The factor that contrib...

System Dynamic Approach for Simulation of Experience Transfer in the AEC Industry

Abstract: This paper describes the possibilities of using a system dynamic model to simulate experience transfer scenarios in a construction and property management organization. This experience transfer simulation model can be used to evaluate potential benefits and establish the processes that improve transferring of knowledge and learning in an architecture, engineering and construction (AEC) organization. The methodology is based on causal loops and trends of the AEC industry to illustrate the relationships between selected features of the complexity of experience transfer. The aim is to apply methodologies of system thinking and system dynamics to depict the issues and needs involved in an experience transfer process faced by a fragmented and multifaceted AEC industry, and then decompose the complex process into manageable pieces. Based on prior surveys, the known experiences and costs at the project stage and at the operative and management stage, features are defined and assumptions made. Then relationships ...

Best Practices for Procuring Commissioning Services

Abstract: Owners are increasingly recognizing building commissioning as an effective means of ensuring quality and maximizing energy performance. The demand for commissioning new construction projects has increased substantially over a short period of time with the growing demand for leadership in energy and environmental design certified buildings. However, the pool of experienced commissioning providers hasn’t increased at the same rate. Many owners are procuring commissioning services for the first time and don’t know how to best procure these services. The objective of the research described in this paper was to identify best practices for procuring commissioning services for new construction projects and to compare them with current practices. Issues that were evaluated include the timing of the commissioning provider involvement, the independence of the commissioning provider, certification of the commissioning provider, selection criteria, and the importance of a clear definition of the scope of work. Resear...

Owner's Risks versus Control in Transit Projects

Abstract: This paper studies the characteristics of different project delivery methods in public transit projects with respect to the owner’s project control and its share in project risks. The most appropriate project delivery method is selected early in the project life cycle based on a number of objectives and criteria set forth by the owner. The ability to manage risk effectively and owner’s control over the project are among the most important factors for selecting the delivery method. These two factors are highly interrelated. This paper discusses the interaction of risk and control in the context of the project delivery method. Results of several interviews with transit authorities are used to ensure the validity of findings. This paper shows that higher control over the project is achieved only if the owner is willing to accept more risks. In other words, there is no delivery method that allows the owner to enjoy high levels of control and minimum risk simultaneously.

Quality Culture Auditing for Engineering Consultants

Abstract: Design is one of the most important aspects in the engineering project cycle. To improve the quality of engineering consulting firms, various quality techniques and practices have been proposed by researchers. Most researchers agree that the successful implementation of such quality practices depends on the quality culture of the consultant organization. Therefore, a thorough understanding of the overall quality culture that exists in a consultant organization is essential. The purpose of this paper is to develop a pragmatic tool, a quality culture auditing (QCA) questionnaire, which enables engineering consulting firms to measure the quality culture quantitatively through a scoring system. The responses obtained from 30 engineering consulting firms that participated in the QCA show that the scores obtained can be a good indicator of a consultant organization’s current quality culture. Using these results as the basis, benchmarking exercises and parametric studies can also be conducted. Through the use of...

Development and Application of the Specialist Task Organization Procurement Approach

Abstract: 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.

Impact of Using an E-Marketplace in the Construction Supply Process: Lessons from a Case Study

Abstract: The procurement process is critical for construction companies. To improve it, many are resorting to e-marketplaces although they usually do not know exactly how much they can gain by doing so. This paper describes a study that measured the benefits of using an e-marketplace to support the procurement process of a construction company. The study included three marketplaces currently operating in Chile. However, in this paper, we focus on Iconstruye, the most important one. 70 executives and professionals from 25 construction companies randomly selected from the 89 that used this marketplace, were interviewed and asked to fill out a questionnaire. This data was validated using data from Iconstruye and from 33 suppliers. The results show that the adoption of an e-marketplace reduces turnaround time, errors, urgent orders, and irregular purchases. A more reliable procurement process directly contributes to a leaner construction process by reducing upstream variability, procurement cycle times, and the need f...

Closure to "Developing a Model of Construction Safety Culture” by Rafiq M. Choudhry, Dongping Fang, and Sherif Mohamed

Abstract: The concept of safety culture is relatively new in the construction industry; however, it is gaining popularity due to its ability to embrace all perceptional, psychological, behavioral, and managerial factors. To address the lack of a verifiable process to analyze construction safety culture, this technical note presents a robust conceptual model that has its roots firmly entrenched in pertinent academic and applied literature. It provides a critical review of the term "safety culture"; along with distinct yet related concepts (i.e., safety climate, behavior-based safety, and safety system). It also compares the proposed model with available safety culture models in order to demonstrate its applicability in construction site environments.

Legal Environment for Warranty Contracting

Abstract: Due to the public expectation of better road performance accompanied by economic development and population growth over the past decades, state highway agencies have been under intense pressure for continuous improvement in the quality and cost efficiency of transportation projects. To meet these challenges, state highway agencies must seek innovative approaches to deliver highway projects, including outsourcing some of the agency’s functions and shifting maintenance responsibilities to contractors. Many states have implemented alternative contracting methods in project programming and execution to provide lasting and functional roadways at the optimum life-cycle cost to the public. The performance warranty is one of the innovative practices that has been declared operational by the Federal Highway Administration since 1996. Use of warranties in some states has required changes to state legislation and agency regulations. This paper discusses the laws and regulations needed to successfully incorporate per...

Exploratory Study on Value of Information Systems to Electrical Construction Companies: Resource-Based View

Abstract: Many practitioners and researchers believe that the application of information systems in the construction industry lags behind that of other industries such as the manufacturing industry, because the construction industry is mainly composed of small to medium size companies. Besides, to many people, the value of information systems to their business is vague and elusive. Existing studies on the value of information systems are not specifically focused on small to medium size specialty contractors such as electrical contractors. In addition, with an intention to demonstrate the value of information systems to the improvement of operations or business of all relevant companies, those studies typically do not look into the impact of information systems on the competitive advantage of individual companies. This paper argues that such a generalization of the value of information systems, although valuable to both practitioners and researchers, may have overlooked the fact that the value of information systems...

Design Futures: Pop-I Method for Long-Range Planning of Design Organizations

Abstract: The writers present the results from a research project that explored the factors which design organizations and individual designers take into consideration when they address the management of change to the design function over the long-term future. First a brief description of the telegenesis project which formed a background to the research project is provided to help place in context the solutions that emerged from the investigation and development. The principal development from the research project was a transitional framework of how design will evolve into the future based on a pop-i configuration. The concept of pop-i is outlined. The transitional framework projects the future state of design, defined by the time horizon projected to 2020, and based on information from the sectors of aerospace, construction, and product design. The rationale and use of the transitional map is explained. The transitional map is recommended as an audit system for managing the long-term future of design organization.

Improving Labor-Based Road Rehabilitation in Ghana

Abstract: In an attempt to create more employment and reduce poverty, a labor-based road rehabilitation program was introduced in Ghana in 1986 with the assistance of international organizations. Although this program has the potential to create more employment than equipment-intensive methods, it is considered less attractive than equipment-intensive methods. It is considered to be too slow, encumbered with labor organization and management problems, and reliant upon casual (nonpermanent) workers. This paper describes the family-based labor management (FBLM) concept intended to make the labor-based road program more attractive to contractors and laborers, and thereby help address the unemployment and poverty problems. It is anticipated that if at least 10% of the $174 million currently used to import construction and earthmoving equipment annually is invested in labor-based road rehabilitation program, about 23,000 jobs could be created. If 50% of the equipment expenses are invested in the program, almost 117,000 jobs could be created annually. The proposed FBLM concept is flexible enough to serve as a model to other African countries encountering similar problems.

Risk-Informed Transit Project Oversight

Abstract: 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.