DELPHI TECHNIQUE

Example

Implementation of Delphi Technique in procurement systems of construction

projects

Introduction

Construction procurement system is the organizational framework adopted by the client for the
management of design and construction of a project. With the introduction of new and innovative
ways of construction, many new and alternative procurement systems have been developed over
the past decades. These systems could be used to meet contemporary requirements of the clients.
Different procurement systems are used for different projects and the correct choice may help to
avoid problems and be the key to the attainment of project specific goals.

From the clients’ point of view, there are probably only three basic criteria which include cost,
time and quality. Hence, traditional procurement selection processes result in clients prioritizing
the basic criteria of Time, Cost, and Quality.

The lack of structured procedures, based on good information, for the selection of construction
procurement system sometimes inhabit the opportunity for client to choose a procurement option in a
fully informed manner

Each project in the industry has its own characteristics and the project to be success the procurement
method must address the technical features of the project alongside the client’s and contractor’s
needs. The selection of suitable procurement method is critical to the success of any project.

Procurement selection
Several previous studies have identified number of factors influencing the selection of procurement
system in construction. They have focused on selection factors in terms of Client characteristics,
Project requirements and External environment

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From the synthesis of the outcome of past studies, overall factors affecting the procurement selection
can be grouped under three main criteria. The Figure portrays the conceptual framework developed
based on the project’s environments which determine the selection criteria

There have been several models developed with the intention of facilitating the selection of suitable
procurement system for a particular project. Among the various models, Multi Attribute Utility
Technique (MAUT) received the greatest attention.

One of strongest criticisms was the selection of procurement variables. The other is the utility value
developed through opinions of industry experts.

Methodology

The use of Multi Attribute Decision Analysis has been considered the foremost technique for
examining client needs and weighting of preferences from experts for each procurement, but the
major difficulty with these selection systems lies in the lack of consensus among the experts on the
utility factors.

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To overcome above deficiencies, the Delphi technique was adopted. Delphi method is a highly
formalized method of communication that is designed to extract the maximum amount of unbiased
information from a panel of experts.

The success of the Delphi method principally depends on the careful selection of the panel of experts.
In order to meet all stipulated requirements and to increase efficiency of the outcomes, the sample
size was selected to have upper limit of the reliable sample size (15- 35) of the Delphi technique.

Thirty five (35) members of panel represent wide distribution of professionals from several
disciplines including Project Management, Quantity Surveying, and Engineering from consultant &
contractor organizations both in public and private sectors.

The Purposive selective sampling has been used as the appropriate sampling method for this
research, because the information obtained from experts required in depth knowledge and sound
experience on various procurement options. A group of experts, who have relevant working
experience in the field of construction management and procurement selection, were selected to get
the opinion on selection criteria and their level of influence on various procurement systems in
construction.
The following Table gives the profile of the experts involved in the survey

The Table 2 presents the formats of Delphi survey carried out in four rounds and briefly introduces
the data evaluation techniques used to analyze the data collected from the survey

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Findings

• Review of literature in Delphi round one.

• In the second round level of importance of each factor was considered.

• Third round targeted to derive the utility values

• fourth round comprised with the average utility values

The questionnaire used in fourth round comprised with the average utility values derived from 25
experts for each factors against various procurement systems. The respondents were asked to
reconsider the results of round three in order to improve the consistency of the results. There were 23
out of 25 questionnaires received in the fourth round and they were considered for the analysis at the
end of fourth round.

Client’s requirements

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Utility values of all nine factors were sufficiently consistent at 0.05 level of significance or smaller.
Further, concordance coefficient (w) ranges between 0.08 - 0.46 for certain factors indicating less
strong agreement among experts during round three. The concordance coefficient ranges between
0.59 - 0.74 indicate the strong agreement among experts at the fourth round of Delphi. The
concordance analysis shows that the consistency of the experts’ ranking for procurement systems
against each factor has improved over the succeeding round.
Therefore, it can be concluded that all nine factors significantly influence the procurement selection
practices.

Project Characteristics

Utility values of all six factors were sufficiently consistent at 0.05 level of significance or smaller.
Further, concordance coefficient (w) ranges between 0.29 - 0.38 for all six factors indicate less strong
agreement among experts during Delphi round three. The concordance analysis shows that the
consistency of the experts’ ranking for procurement systems against each factor has improved over
the successive round.

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The coefficient of concordance for all six factors improved from 154.64% to 581.644%. In this
round, six factors were considered sufficiently consistent compared to previous round. The results
shows that the experts had overcome the difficulty in assessing the factor such as Project type, since
the significance improved lesser than 0.05 (α reduced from 0.2613 to 0.0000 in the successive
rounds).

External Environment

With respect to the external environment, utility values of all five factors were sufficiently consistent
at 0.05 level of significance or smaller. On the other hand, the correlation between the experts
regarding the external environmental factors has also been increased. These external environmental
factors have either direct or indirect influence on the selection and use of the procurement systems.
Therefore, in assessing the suitability of a procurement system, the underplaying relationships of
external environment need to be considered to avoid the consequences in decision making.

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Conclusion

An exclusive set of multiple decisive factors in terms of main three criteria: Clients’ requirements &
objectives, Project characteristics and External Environment, have been identified as being generally
adequate for the procurement selection and there is a reasonable consensus on utility values for each
procurement system.

This study has used Delphi technique to ensure that the consensus is reached for the utility values
provided by the panel of experts/practitioners from the industry. The synthesis of the outcome of the
survey demonstrates intensely that there is a significant improvement in the consistency of the utility
values over the successive Delphi rounds.

From this study it was found that all identified factors in terms of clients’ requirements and project
characteristics have greater level of influence on procurement selection. The importance and
interrelationships of identified significant factors and the utility values provide a good background
for the development of procurement selection criteria for any kind of project scenario. The selection
criteria should be logically derived from project’s internal and external environment.

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