The Organization and Management of Construction 2 728 PDF

The Organization and
Management of Construction
SHAPING THEORY AND PRACTICE
VOLUME TWO
Managing the Construction

Project and Managing Risk
CIB W65 (in conjunction with W92)
International Symposium for
The Organization and

Management of Construction
SHAPING THEORY AND PRACTICE
VOLUME TWO
Managing the Construction
Project and Managing Risk
Edited by
D.A. Langford and A. Retik
SPONSORED BY
E
glasgow
TheCHARTERED uk city of architecture
INSTITUTE OF + design
BUILDING 1999
GLASGOW
200 YEARS OF CALEDONIAN

USEFUL LEARNING
UNIVERSITY
@ Taylor & Francis

""e" Taylor & Francis Group
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First edition 1996

© 1996 Taylor & Francis
ISBN 0419222405 (Hbk) 041921030 X (Set)
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Publisher's Note
This book has been produced from camera ready copy provided by the
individual contributors in order to make the book available for the
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The publisher has gone to great lengths to ensure the quality of this reprint
but points out that some imperfections in the original may be apparent.
CONTENTS
Foreword xiii
Introduction to Volume Two xvii
PART I PRODUCTIVITY 1
1 Labour productivity 3
Precast concrete box units - a case study

Bengt Hansson 4
The use of conversion factors for the analysis of concrete

formwork labor productivity
U.E.L. de Souza and H.R. Thomas 14
Development of an explanatory model for concrete formwork

labour productivity
U.E.L. de Souza and H.R. Thomas 27
Overmanning and the effects on labor efficiency

H. Randolph Thomas and Todd M. Arnold 39
Steel framing crew performance and variation

Gary R. Smith and Yu-Bin Lin 49
Analysis of construction delays

T.M. Lewis and B.A. Atherley 60
Client benchmarking of contractor performance

D. Baldry 72
2 Productivity estimates 83
Operative fatigue on the construction site

S. Tennant 84
Determination of an efficient contractor by using the new

method of multicriteria assessment
E. Zavadskas and A. Kaklauskas 94
vi Contents
A new approach to productivity estimation

H. Y. Ersoz and D. W. Halpin 105
The application of value management to the development of

project concepts
R.T. Barton 115
Linear programming for time and cost optimisation

E. Laptali, S. Wild and N.M. Bouchlaghem 124
A financial planning model based on risks for contracting firms

operating in inflationary environments
Elt;in Tas 138
PART II PLANNING AND SCHEDULING 149
1 Project planning 151
Cash flow management and time/cost escalation

Helen Lowe and John Lowe 152
Effectiveness of short-term planning for interface management

of trade contractors
S.J. Allen and A.G.F. Gibb 162
Practical behaviour of managing time-overrun risks in

construction projects
L. Y. Shen and W. K. Cheung 172
Time planning using the Zagreb method

~Petro0c 182
A study on the control of the decision-making process

in building production
Y. Omi and S. Matsumura 198
State space representation of linear projects

v.K. Handa and P. w.M. Tam 212
Raising the efficiency of studies by using the multicriteria

decision-making system
E Zavadskas and A. Kaklauskas 222
Cost growth in public sector buildings

F.H. Giritli 232
Contents vii
2 Construction process planning 235
Just in time applied to repetitive renovation projects

S. To~kanen 236
Planning and progressing project variations - a building

case study
A. T. Baxendale and T.J. Schofield 243
Financial and organizational impacts of project management

Young Hoon Kwak and G. William Ibbs 252
The application of constructability principles in the

Australian construction industry
A.C. Sidwell and V.E. Francis 264
Operational problems facing a sample of construction firms

in Trinidad and Tobago
T. Michael Lewis and Deogratius D. Mugishagwe 273
Integrating site-related activities into the planning and

scheduling of construction projects
Theophilus Adjei-Kumi, Arkady Retik and A viad Shapira 283
Cash flow trends for infrastructural works in residential

developments
S. Singh 293
PART III PROCUREMENT 303
1 Project procurement 305
Level and determinants of imports in Australian high rise

construction
G. Runeson and T. Uher 306
Procurement of a motorway - a case study

Bengt Hansson 316
French building procurement approaches - input to theory

and practice
G.S. Birrell 326
Integrating complexity
I.G. Jennings and R. Kenley 339
vIII Contents
Total resource assessment based on extension of traditional

procurement systems
C. Elliot and A. Palmer 352
The relationship between construction procurement strategies

and construction contract disputes
J. T. Conlin, D.A. Langford and P. Kennedy 360
The provision of infrastructure services in developing countries

W.H.E. Suite 372
Alternative dispute resolution methods in construction -

a Trinidad and Tobago case
W.H.E. Suite 380
Capital works procurement: owner's obligations under the

'tendering contract'
R. W. Craig and P. Davenport 391
2 Partnerlng 403
Long term co-operation between main contractor and its

suppliers in construction
T. Sarkilahti 404
'Constructing the team': a US perspective

V. King 414
The pricing of contract preliminaries: quantity surveyors and

contractors compared
P.A. Bowen, K.A. Hall and P.J. Edwards 424
Client-professional communication during the early stages of

project development
R.N. Gameson 437
Construction dispute minimisation

M.M. Kumaraswamy 447
The case for the integration of the project participants'

activities within a construction project environment
R.A.C. Luck and R. Newcombe 458
Subcontracting - the subcontractor's view

J.D. Matthews, A. Tyler and T. Thorpe 471
Contents Ix
The world according to subcontractors

Z. Sozen and M.A Kayak 481
PART IV PROCUREMENT VALUE MANAGEMENT 489
Value management 491
Management of specialist contractor design for mechanical

and electrical works
G.M. Price and AG.F. Gibb 492
Design quality concept to improve building quality

S.B. Me/hado and V. Agopyan 502
A design tool for incorporating construction knowledge

during design
Bob G. McCullouch 509
The cost of defects in construction

P-E. Josephson and Y. Hammarlund 519
Group decision support for value management

S.D. Green and S.J. Simister 529
International comparison of value management practice

A/bert P.C. Chan, Betty P. V. Ho and C.M. Tam 541
Professional integration in the building design team

A Whyte and H.M. Edge 551
Client management of the design process for buildings

Graham Miller 562
The construction project as a process of innovation

M.F. Dulaimi, A T. Baxendale and D.A Langford 572
PART V HUMAN RESOURCES ISSUES 579
New leadership patterns in construction

J-M. Junnonen 581
The importance of leadership in change initiatives

S. McCabe, J.A Rooke and D. E. Seymour 589
x Contents
The use and abuse of humour in construction management

J.G. Gunning 599
Aspirations, commitment and careers in construction management

P.R. Lansley 609
Intrinsic job satisfaction in construction

R.J. Davies and A. R. Duff 619
Rapid team integration to overcome the construction industry's

fragmentation
C. Gray and M. V. Suchocki 629
Perceived relative importance of training in contractor

development in Nigeria
o.A. Adams 640
The potential for employee involvement in construction

M. W. Coffey 650
Tasks performed by the site manager - a review of the literature

P. Farrell and A. Gale 659
People and projects - building successful combinations

J.E. Rowings, Jr and M.O. Federle 669
The influence of project size on site managers' effectiveness

R. Djebarni 680
PART VI INTERNATIONAL CONSTRUCTION 693
International projects 695
Reactivation of construction projects in Kuwait after the

Gulf War
Sami M. Fereig, Abdul-Hameed Darwish and
Hashim AI-Tabtabai 696
The effect of Saudi national development plans on students'

enrolment in construction-oriented programs in Saudi Arabia
Adel S. Aldosary and Sadi Assaf 704
International consortia in the European construction industry

S. Bonke, E. Campagnac, S. Stanghellini, G. Syben and
G. Winch (Le Groupe Bagnolet) 712
Contents xi
Are there monitoring and controlling systems in infrastructure

projects in Gaza strip?
Adnan Enshassi 722
Comparison of construction safety and risk between USA

and Taiwan
E. Koehn and C-S. Pan 737
A current vision of construction management practices in Chile

A Serpell, J. Crovetto and D. Seymour 747
Establishing quantity surveying as an academic discipline

in China
Ng Wing Fai 757
New challenges from Hong Kong's new airport

J.D. Gilleard and WS. Chong 767
Croatian managers in a changing industry environment

B. Mraovic 778
A framework for evaluating operational effectiveness of design

institutes in China
AM.M. Liu, H.E. Bosen and R.F. Fellows 788
PART VII MANAGING RISK 799
How do government regulations impact residential

construction activity?
D. Corbett, G. Smith and P. Tikalsky 801
Risk management: maintaining programmed construction time

in economies in transition
Mladen Radujkovic 811
Building contractors' risk management of subcontractors

in refurbishment projects
M.I. Okoroh and V.B. Torrance 820
Design management through quality evaluation

Jorge Moriera da Costa and Vitor Abrantes 829
Risk in determining the duration of manually performed

construction activities
A Flasar and S. Vukovic 843
xII Contents
Innovation model in construction

A.I. Sukhorukov 851
Total quality management of construction work: from safety

exclusion to a comprehensive management strategy
J.J. Smallwood and P.O. Rwelamila 859
Addressing construction worker safety in the design phase

J. Gambatese and J. Hinze 871
Beyond ADR - dispute reduction in the construction industry

through realistic contract risk allocation
G.A. Smith 881
Risk management and major construction projects

John Lowe and Tim Whitworth 891
Managing human resource in the Indonesian construction

industry: case study on construction workers' accident
compensation policy
B. W. Soemardi and K.S. Pribadi 900
Index 907
FOREWORD
The Chartered Institute of Building is pleased to be associated once again with

CIB and with Working Commission 65, in supporting this conference and the
'Managing the Construction Project and Managing Risk' session in particular.
Construction is metaphorically and in reality the bedrock of ordered society,
not only in providing the necessary shelter in which to live, but also in
facilitating those elements of life which transcend the mundane. By this I mean
those extensions of life which allow the enjoyment and practice of the arts,
religion, sporting recreation etc.
Once there is a need for construction, irrespective of the level of technology
applied, it is implicit that someone will be required to manage it: to manage the
three key elements of the construction process - materials, labour and money.
Nowadays, there is a fourth element - time - of little or no account to the
cathedral builders of the twelfth and thirteenth centuries but a key issue in
today's dynamic and impatient society.
The Institute in all its various forms during its 160 plus years of existence has
been close to the management function. As the 'Builders Society' in the early
nineteenth century it acted in the interests of the owners of building firms,
mainly in London, to 'uphold and promote reputable standards of building
through friendly intercourse, the useful exchange of information and greater
uniformity and respectability in business'.
When in 1884 it changed its name to the Institute of Builders its principal
objective was 'to promote excellence in the construction of building and just
and honourable practice in the conduct of business'. It goes without saying that
in fulfilling these aims the requirement to manage the project effectively was
paramount.
As an employers' association the Institute's influence waned as the
twentieth century progressed and increaSingly it turned its attention to
developing an educational base for those who were responsible for managing
the project as part of the contractor's team. In 1924 examinations were
introduced for Licentiates comprising papers on Building Construction,
Quantities and Estimating, Book-keeping and Accountancy, and a choice of
subjects, some of a craft character. As yet there was no hint of management as
a separate topic; this was to come in 1927 with the Associate examination
where one subject had the all-embracing title 'Finance, Book-keeping,
Costing and Management'.
From its inception in 1929, until 1947, the Institute in conjunction with the
government's Board of Education administered the scheme for National
Certificates and Diplomas in Building. The Institute's transformation to a
professional institution in which membership was achieved primarily through
examination was now complete.
xlv Foreword
However, it was not until the late 1950s that the Institute, through the Board
of Building Education (BBE), established jointly with the NFBTE in September
1955, began to take action in recognition of the fact that 'in building as in other
industries, attention has hitherto been directed almost entirely towards
technology training and insufficient thought has been devoted to the problems
of recruiting, selecting and formally training individuals for supervisory,
managerial and executive responsibility. As a consequence there is an acute
shortage of men qualified to apply the principles of modern management
techniques to the conduct of building affairs'.
Management Studies for the Buildinq Industry, published by the Institute in
1959 is the seminal work laying the foundations for the modern Institute which
embraces management as its focus.
The syllabus, specified in this report and adopted by the Institute for its
examinations in the 1960s, was in three parts: Law, and Economics of the
Industry in the first year; Management in the second. 'Management' was
tackled both in principle and practice, with the latter having within the
'Production' segment the generic subjects of Construction; Purchasing; Plant
and Vehicles; Work Study; and Statistics and Sampling. It is interesting and
indicative to note that the supporting reading matter for the complete syllabus
was limited to about 30 titles, with only three of these being directed
specifically to construction.
It did not take long for the Institute to develop its own guidance for the
systematic teaching of building management subjects. In 1962, largely under
the direction of John Andrews, the Building Management Notebook saw the
light of day. For many it was the 'bible', with a new edition appearing in 1972 to
meet the demands of yet another change in the structure of examination
syllabuses.
The 1960s were a productive period for the Institute as its membership grew
and its influence extended. Recognition of the significance of management in
a modernizing industry had created a long lead over other qualifying bodies.
Having tackled management in generic terms it then, once again through the
BBE, looked at the needs of the construction site. The report Construction
Management in Building: Present and Future published in 1964 provided a
blueprint for the recruitment and training of site managers. Having identified
the increased demands placed on construction management the book
recommended 'a properly planned programme of education and training for
different levels of responsibility'. Ultimately, this objective was realised by the
creation of the Site Management Education and Training Scheme.
In 1970 a research project was initiated aimed at investigating the potential
for mid-career education and training of site managers. The study involved
widespread consultation and the subsequent development of pilot pro-
grammes, the first course of which was completed in 1972. This and
associated studies led to a proposal for a training scheme based on a series of
modules covering the skills needed in site management, leading successively
to a certificate and diploma. Implementation took place in 1976 with ten
colleges taking part. The scheme has continued to prosper and to fulfil its
Foreword xv
aspirations. Now managed by the Construction Industry Training Board, at 1

January 1996 over 9,000 site managers have participated since the scheme
started.
The Institute's general examinations were restructured in 1984. Although
incorporating some radical concepts the speed of change was such that in less
than a decade a further comprehensive re-evaluation was necessary.
In 1994 the Education Frameworkwas published providing 'the knowledge
and understanding requirements for CIOB membership', and 'defining mini-
mum competencies required of a chartered building professional and setting
standards of attainments to be achieved'.
Within the Framework, management studies commence at 'Formation
Studies' level with an overview of the business environment, including law and
also a study of information and decision making. In 'Core Studies' manage-
ment is further developed and integrated with the process of building
production. Aspects of management are studied within the 'Professional
Studies' level (initially facilities management; commercial management;
project management; and construction management). 'Project Evaluation and
Development' uses the vehicle of project· management for learning and
assessment.
Even now there are further developments in the pipeline.
The need for improved management standards is being addressed by
supplementing the strategic management skills for directors of building firms
and by preparing those who work in contracting for the challenge of single
point responsibility. For both cases a substantive training programme has
been developed.
Designed to establish the UK as a world class centre for the teaching of
construction management, the Discipline Network in Building Management
was launched in 1995 with the support of the Department for Education and
Employment. Its aim is to promote techniques and practices that will improve
the standard of building education and tailor it more closely to the needs of
industry. By sharing best practice, senior teaching staff in construction
management have created an environment which cannot but improve the
quality of teaching and thereby enhance the management capability of
construction students. This programme is ongoing.
What then of research and construction management?
Inevitably, the Institute's involvement with research pales in comparison
with its track record in educational terms. Research into construction
management issues is a relatively recent phenomena: W65's first international
conference was as recent as 1976. Sponsoring the fifth conference in 1987
was an act of faith by the Institute and one which committed it to an acceptance
of the essential nature of construction management research. This investment
is now beginning to pay dividends!
Over the past three years the Institute's Innovation and Research Commit-
tee has looked long and hard at how the Institute should interface with
research. The result has been remarkable in its prescience!
Many of the proposals contained within the innovation and research
xvi Foreword
strategy for the Institute have anticipated their adoption by the industry itself.
Perhaps the most important, all-embracing objective is the desire to change
the way in which the industry regards research and innovation, for by doing so
it is believed that competitiveness and business efficiency can be substantially
improved.
The other key tasks addressed in the strategy relate to education -
incidentally in the Building Management Notebook referred to earlier it is
suggested that a one hour lecture should be adequate to cover research and
development - communications, priorities and international. The latter antici-
pates to a large degree a closer relationship with CIB and its Working
Commissions.
Much of the credit for the Institute's strategy must go to Dr Peter Morris, the
Committee's Chair and the keynote speaker for the 'Managing the Construc-
tion Project and Managing Risk' session.
I have attempted in preparing this contribution to highlight the CIOB's
involvement with, and support of, construction management. It is fitting to
conclude with the Institute's vision contained in Meeting the Challenge - a ten
year strategy for growth which was published in February of last year.
'Our vision is that, by the year 2005, the CIOB will be fully recognised as the
leading professional body for management in construction, thereby serving
society, the industry and its clients world-wide; and our members will be the
established leaders of the construction team.'
Peter Harlow
Innovation and Research Manager
Chartered Institute of Building
Ascot, Berkshire
April 1996
INTRODUCTION TO VOLUME TWO
Managing the Construction Project and Managing Risk is produced in

conjunction with the Chartered Institute of Building and the CIB W92 on
Procurement. This volume is the largest of the three and is the most wide
ranging. It contains seven sub-themes and ten sets. These are:
Sub-themes Sets
• Productivity Labour productivity
Productivity estimates
• Planning and scheduling Project planning
Construction process planning
• Procurement Project procurement
Partnering
• Procurement value management Value management
• Human resources issues [Organizational behaviour]
• International construction International projects
• Managing risk [Risk management and allocation]
The productivity sub-theme brings together research into the effective ways
of estimating likely productivity in the pre-construction stage and then goes on
to evaluate how productivity may be best measured when work is taking place
on site. The planning and scheduling theme reports research findings in the
areas of short-term planning and decision making around construction plans.
The second set of papers integrates this planning with other elements of
project control such as materials or money.
The procurement and procurement-value managernent sUb-theme is in the
province of W92 and papers have been presented in the popular area of
procurement routes, partnering and the application of value management and
value engineering techniques to construction.
Research into human resource issues, fundamental to successful project
management, is represented and work on leadership, team building training
and worker participation is presented.
The growing globalization and internationalization of construction projects is
recognized in the sub-theme bringing together the international project
experience and case studics of major projects in regions as diverse as the Gulf
states, Europe, India, South America and China demonstrate the true
international character of research reported under CIB W6S.
Finally, the risks that firms take in undertaking research is presented.
Managing risks is an increasingly demanding part of managing the enterprise
and issues of safety, risk allocation in projects and risks arising from regula-
tions imposed by outside agencies have all come within the purview of senior
management. Research in this important area is presented in this volume.
xviii Introduction
The structure of the volumes
To organize the range of topics covered by the W65 Commission the papers
have been structured into three volumes. Each volume focuses upon a
particular theme. These themes are:
• Managing the Construction Enterprise
• Managing the Project
• Managing Information
Within each theme there are sub-themes which collect together papers around
a specialist area of interest and then within each sub-theme there is a further
selection to collect together papers on similar topics.
This approach is intended to assist the reader in identifying and consolidat-
ing areas of special interest and to link together subjects appearing in each
volume.
Maintaining standards
In line with the growing confidence and maturity of the discipline, the papers
contained within the volumes have been subjected to exacting standards of
refereeing. Of the 241 abstracts received, 183 were selected for development
into full papers. All of the full papers received were then refereed and authors
invited to incorporate the referees' comments into their papers. At the time of
sending the material to the publishers 161 papers had been accepted. The
standards achieved ensure that the papers presented in the volumes are of a
standard expected in refereed journal articles.
Acknowledgments
We would like to record our special thanks to members of the organizing

committee, the scientific committee and the conference organizers, Meeting
Makers, especially Susan Miller and Elaine Bone. Particular thanks are due to
Edith Henry of E & FN Spon for the painstaking attention to the detail
associated with presenting the papers for the 8th International Symposium of
the W65 Commission on Organization and Management of Construction.
Dave Langford
Arkady Retik
Glasgow, June 1996
Part I
Productivity
1 Labour productivity
PRECAST CONCRETE BOX UNITS - A
CASE STUDY
Bengt Hansson
Department of Construction Management, Lund University,
Lund, Sweden
Abstract
The cost of building new housing rose substantially during the eighties, which
resulted in high living costs despite substantial subsidies. A decision was taken to
reduce housing subsidies. This, together with a number of other factors has brought a
reduction in the demand for new dwellings. This has motivated substantial efforts to
develop building techniques so that the costs of housing can be reduced in newly
produced dwellings to a level which the consumer can accept. The reductions in costs
which are required are of such an extent that a completely new approach is required.
A company in Ljusdal, Sweden, has developed a form of construction using
factory-made precast concrete box units and carried out the first large project. The
aim of the chosen method is to reduce costs by improving quality, rationalizing
production, more efficient purchasing and shortening the construction time.
An evaluation and production economic analysis of the construction techniques
developed has been carried out. The evaluation shows good prospects for reducing
the costs of housing by means of precast box unit construction. Further development
work is required, particularly with respect to production techniques at the factory and
the design of construction parts which are to be connected to the precast box units.
Keywords: Precast concret, box units.
Sommaire
Les coats, pour la construction d'irnmeubles, ont augments sensiblement durant les
annees -80, ce qui a donne des coUts d'habitation plus important malgre des subven-
tions interessantes. Des decisions visant II baisser ces subventions, ont ete prises.
Ceci, ainsi que d'autres raisons ont conuit II une baisse de la demande d'habitation
nouvelle. Cela motive de grands efforts pour developper la construction et ainsi creer
des habitations nouvelles II des niveaux de coats acceptables pour les clients. Les
reductions necessaires sont II ce point etendues qu'iJ faudrait de nouvelles idees pour
attaquer Ie probleme sur tous les cotes techniques.
Un groupe d'entrprises II Ljusdal, Suede, a developpe un systeme d'element de
volume prefabrique en beton, et ainsi a deja realise un premier grand projet. Le but de
cette methode est de baisser les coilts, par une meillure qualite, une production ratio-
nalisee, des achat plus efficaces et une duree de travaux plus courte.
Une evaluation et une analyse d'economie de la production de cette technique a ete
realise. Cette evaluation demontre les bonnes possibiliees de baisser les coOts
d'habitations par une construction avec des elements prefabriques.Il est necessaire de
continuer II travailler sur Ie developpement, particulierement sur les techniques de
production dans les usines ainsi que sur la conception de pieces de la construction qui
vont relier les elements prefabriquees.
1 Introduction
1.1 Background and the project aim
The initiators of this development project, for which precast box units are used to
reduce construction costs, analysed 1990 costs for the project carried out and came to
the conclusion that there was a possibility of reducing construction costs by more
than 20%. They believed that this could be done by reducing the construction time on
The Organization and Management of Construction: Shaping theory and practice (Volume Two).
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Span. ISBN 0 419 22240 5.
Precast concrete box units 5
site and with a high degree of prefabrication. This opinion was supported by others
during the general debate.
In brief, the project concept was that by producing precast concrete box units in a
factory, it would be possible to reduce the building costs to a competitive level. Pro-
duction could be made more efficient as a result of factory production, which would
not be affected by weather conditions and would also facilitate a high level of quali-
ty.The precast box units will be heat insulated and finish constructed at the factory.
The foundations consist of spot footings and beams which require minimal ground
work at an early stage. The greater part of the ground work is intended to be done
after the building is complete. The precast box units are primarily intended for
offices, hotels, detached houses and multiple-unit dwellings.
The overall aim of the development project is to further develop the sketched
production method of factory manufactured precast box units and to test it in a larger
project.
The economic evaluation of production, which is briefly presented in this paper,
should, among other things, answer the question whether building costs can be re-
duced by 20% with this method of production and, if so, in which way thesereduc-
tions in costs are accomplished compaired to a traditional production.
1.2 Expected advanges and disadvanges with

The new production method is expected to provide the following advantages:
• Industrial production (higher efficiency and cheaper workforce). Since the precast
box units are manufactured with industrial methods, the production can, to a large
extent, be rationalized. Machinery can be used rationally when casting and working
on the concrete units.
• Independent of the weather
The production takes place in a factory, independent of climatic conditions outside.
As a result, the working environment is more favourable than when working out
doors.
• Shorter construction time.
Work on site is restricted to foundations, erection and groundwork.
• It is anticipated that costs will be approximately 20% lower totally than with
traditional construction.
• Quick building start since simplified design can be applied.
• High technical quality
A mixing plant is built adjacent to the unit production where production of concrete
can be checked and controlled to ensure a constant level of concrete quality is
obtained.
Among the expected disadvantages which the developers hoped to be able to
remove or reduce the significance of, were the following:
• Transport costs for precast box units are added
• Costs for the factory are added
• Modules restrict the freedom of the architect
• Normal resistance of interested parties in the construction process to new-fangled
ideas
• Larger volumes are required (in the long run, the production volume must exceed
the point for the critical volume). Precast box unit production is profitable with
large series and with few different types of unit, but this easily leads to choice
being limited for architects and proprietors.
1.3 Realization of the development project

The development work has been carried out in the following stages:
A. First the various production methods have been studied in order to be able to
undertake the production of the precast box units in the short and long term. It was
6 Hansson
then found that the most important operations are those of handling and transporting
the precast box units, since the loading during transport is probably dimensioned.
B. The precast box units are designed.
C. Some precast box units are produced and test handled.
D. The precast box units are re-designed.
E. The precast box units for a student accommodation are produced as a pilot
project under accurate evaluation and a well developed quality assurance system.
F. The student accommodation is erected under strict control and follow-up.
G. The experiences of those who took part and those who evaluated the project
have been compiled with the aim of providing basic data for future production.
2. The full-scale pilot project
2.1 General
In the early developed solution, the structure was to consist of concrete columns and
beams on which the precast boxes would be positioned. The load-bearing beams,
which were intended to be installed at each level in order to prevent underlying mod-
ules from being loaded, could be omitted. During the development work it was
shown that a system of columns and beams was not necessary since the units could
be stacked on one another. It should be possible to construct the foundations with a
simple system of spot footings on which a columnlbeam system would be laid as
support for the precast box units. With the aim of keeping the weight of the concrete
to a minimum, high performance concrete was to be used in the precast box units.
2.2 The precast box unit and other units

The project concept of the development group was that everything which was built
would, as far as possible, consist of units, normally concrete units. In addition to the
precast concrete box units which formed the most important component in thebuild-
ing system, many other concrete units were to be found in the pilot project.
The foundation was formed with prefabricated spot footings. Edge beams were
placed around the bottom floor structure. These consisted of a skirting, support for a
steel floor and shoulders of laminated wood which was to transfer the loads down-
ward through the insulated layer. Inside the edge beams under the house, concrete
flange beams were positioned which formed the support for the steel floor. For the
lift pit a completely finished lift pit was supplied.
The rectangular floor structure units are used as floor structures outside the precast
box units at corridors, public areas and stair enclosures. At the ends of the building
the precast box units must have a facade and heat insulation added which is also done
with the aid of traditional concrete units. Outer walls for the areas which are not built
with precast box units are formed from traditional prefabricated sandwich units.
The shape of the precast box units chosen by the development group can be varied
within certain limits. By setting in an intermediate floor structure, installations could
be located there and easily drawn to the ceiling over an access balcony or corridor. In
Fig. 1. is the plan for the module and the precast box for the student accommodation
projec and i Fig. 2. one plan of of the student accommodation for which the produc-
tion method was utilized commercially for the first time.
The precast box size is determined mainly by the precast boxes having to be
transported by trailer on public highways. In practice this sets the maximum
permitted width, without an escort car, at 3.1 m. With an escort car a dispensation can
be obtained for up to 4.2 m. For the loading and moving of the precast box unit
modules a truck which can take a load of 30 tons is required.
4.4 m (5.4 m resp.)
~~~====~====~==~==~==~x
STUDENT ROOM
I
Figure 1. Plan of a student room, the student accommodation, Ljusdal. Drawing
made by Ljustech AB, Ljusd.~..
Figure 2. Ground floor plan, The student accommodation, Ljusdal. Drawing by

Ljustech AB, Ljusdal.
8 Hansson
2.51 Design of student accommodation
In Fig. 3. is a picture of the entrance-facade and Fig. 4. a section of the same build-
ing. The student accommodation contains 78 student rooms and approximately 90
room modules. In the student accommodation there are leisure, laundry, storage and
service areas for the property.
Figure 3. Facade, Hammaren student accommodation, Ljusdal.
Eaves structure formed from

prefabricated concrete units
Precast box units formed as comp-

letely ready-to-use prefabricated
modules for student rooms and
kitchens.
Rectangular floor structure units

used as a floor structure outside of
the precast boxes at corridors,
communal areas and stair
enclosures.
Foundations were formed with prefabricated spot footings. Edge beams

were positioned around the bottom floor structure. These consisted of a
skirting, support for a steel floor and shoulders of laminated wood which
were to transfer the loads downward through the insulated layer. Concrete
flange beams were positioned inside the edge beams under the building to
form the support for the steel floor.
Figure 4. Section with comments regarding the formation of the Hammaren student
accommodation, Ljusdal,
The student module is normally 4.4 m long and 5.4 m for the handicapped adapted
module. Each student module contains a toilet and shower, plus a refri- gerator. The
student modules are grouped around a corridor with a communal kitchen and
assembly areas.
3. Factory production
The precast box unit system transfers the traditional construction from the site's
craftsmanship-oriented production to an industrial operation. The way to solve tasks
and problems that arise is more in line with that applied in engineering industry.
From a material flow point of view the production of precast box units can be
adapted to the modern just-in-time philosophy.
To begin with, it should be pointed out that the forming of the factory and the
production system should be seen as a small part of the overall concept to be tested.
There was not enough capital available within the framework of this project to
completely develop and analyze the production apparatus.
The flow contains the following production operations or production stations, see
Fig. 5. In the same figure the time required to carry out each respective operation has
been given for a precast box with fittings the equivatent of those in the student
module. Precast box units with many installations can take longer time. The total
throughput time is, with dif-ferent installations and taking into account the drying
time before and after painting, 12-14 working days.
This method of production, with casting of the walls and roof simultaneously,
proved to form a restriction on versatility. Variations in size namely meant an
expensive rebuilding of the tunnel form. In future production a casting method will
probably be chosen which will involve the casting of the flat concrete units with cast-
in steel plates which are welded together.
The material flow of concrete has been adapted to the just-in-time philosophy by
the concrete being produced in line with the demand. Consequently instead of
reducing transport costs for the concrete trucks by linking several smaller concrete
castings together, as soon as a form and the reinforcement were ready on each little
stage they were cast and this was also done even if the batch cast was relatively
small. The quantities in each individual batch could be adapted exactly to the amount
required when casting. If the concrete was transported by truck it would have been
necessary to have a little extra in the truck.
Production stations Time consumed

Concrete unit 3 days
Installation+floor+bathroom I day
Painting I day
Electrical installation 0,5 day
Fittings I day
Incasing in plastic+ transport to store 0,5 day
Total 7 days
Figure 5. Appropriate production stations and approximate time consumed when

producing precast concrete box units.
10 Hansson
4. Transport and building site erection
The cost of the precast boxes forms the dominant cost in the procuction with box
units. Two operations in the precast box unit concept are most important:
• The precast box units must, for economic reasons, be able to be mounted in position
immediately after factory production.
• The connection work following precast box unit erection must be carried out
quickly for both technical and financial reasons.
The prefabricated concrete units place special demands on the transport system
because of their size (for example with a maximum width of 3.8 m here compared
with a normally permitted 2.6 m on Swedish roads) The precast boxes coped with the
static and dynamic stresses during transporting without any mentionable problems.
The weight is 10-30 tons depending upon size.
During the concrete casting work the precast box is transported on its form and
supports which are used for casting concrete, and after that on a carriage equipped
with jacks with the help of which the precast box unit can be placed on trestles.,
The units are transported to the building site on a trailer. The carriage could take
two precast box units per trailer, Fig 6.
Figure 6. The units were transported between the factory and the building site on a
trailer drawn by a lorry.
5. Analysis of the consequences with respect of time
5.1 Evaluation method and analysis prerequisites

A comparative analysis method was chosen for the evaluation. This compares
construction with the precast box unit technique with traditional construction. By
traditional construction is meant here the anticipated production which a local builder
would have carried out for the building project in 1993. Based on conversations with
a local builder and a study made by The Swedish Precast Concrete Society of 12 resi-
dential blocks produced with the site casting technique, the hypothetical traditional
production of the student accommodation can briefly be described as:
• A concrete structure cast on site using a tunnel or angle form .
• The construction time was estimated as being one year .
• The facades would be made of precast concrete units.
Based on this brief description and one application, the student accommodation, an
evaluation of the precast box unit concept was made.
5.2 Precast box unit versus traditional construction

For the student accommodation which was constructed, it was decided to mix precast
box units and traditional concrete units which meant that the project was not a pure
precast box unit project. Corridors and common areas were constructed using
traditional concrete units but, since this production operation involved considerable
disruption, the student accommodation did not sufficiently reflect the characteristic
differences between traditional production and precast box unit production. The
differences between traditional production and construction using precast box units is
in principal illustrated in Fig. 7. This figure clearly show that a delay in the following
work has substantial financial consequences since a large part of the resources have
been consumed.
100%
Precast concrete
box units
On site construction
Designing
Time
Figure 7. Principal figur showing use of resources during the time for production
with precast concrete box units and on traditional site construction respectively (here
showing a production of an hotel consisting of 40 room with a total time of 33 weeks
if on site production is chosen and 16 weeks for the alternative box units.
6 Quality assurance
A fundamental concept in the development project was that the production was
mainly to be carried out at a factory. As a result the quality required would be
ensured and the number of faults minimized. Factory production is also an important
prerequisite for being able, for example, to cast with high performance concrete.
For the production a quality plan was drawn up for production at a factory and
building site which was adapted to ISO 9001. The quality work at the factory and
building site was coordinated. Consultation meetings and self-inspection led to
continual improvement of the production.
An important hypothesis for the development group was, against the background of
the production method chosen, that the occurrence of faults on the work site should
be fewer than for traditional production. A survey of the examination report after the
final examination shows few faults internally in the room modules but a lot of dam-
age to the door frames and similar. Furthermore the survey shows that the total num-
ber of faults was no less than for a randomly chosen examination of a housing pro-
ject, which the same inspector carried out at approximately the same time as the
examination of this student accommodation. Types of fault noted in the report from
12 Hansson
the final examination are different for precast box unit production and traditional
production. Few faults occurred on the building site in the room modules. Those
which occurred were mainly due to faults in sealing in plastic during the construction
period. Quality assurance within the manufacturing had functioned well and the room
modules had left the production with few faults.
7. Economic consequences conclusions

A financial comparison of the project realized, the Hammaren student accommoda-
tion, has been carried out relative to traditional production. The result of the compari-
son is presented in Fig. 8. The distribution of costs of various elements of cost for
precast box unit production and the necessary revision to the traditional option (also
given in SEK per m2) were made at 1994 cost levels.
The value added tax, 25%, has been calculated on all costs except for the ground
and other proprietor's costs.
From the previous section the following summary can be made:
• Working time consumption increases by more than 34% with traditional produc-
tion instead of precast box unit production. Other work is not affected measurably by
the change of production techniques.
• Capital costs are halved and a reduction in the order of just over 3% of the
production costs is obtained.
• A delay after the precast box units are produced involves large capital costs since a
large part of the resources have then been invested in the project.
• The prerequisites for the right quality increase when there is precast box unit
production but the financial differences could not be shown in the project.
• Site costs increase by approximately 19% with traditional production.
Against the background of this summary and previously accounted experience, an
Nature of expenses IPrecast box unit ISite built I
production SEK SEK
ISEK 11m2 SEK 11m2 %
Materials
In precast box units 3098506 1299 3315401 1390
Other materials 2661726 1116 2661726 1116
Building workers' wages
In precast boxes 829188 348 1111112 466
Other wages 1 941 600 814 1 941 600 814
Sub-contractors
In precast boxes 2812980 1 179 3 198358 1341
Other sub-contractors 2291000 961 2291000 961
Site costs 1570000 658 1870000 784
Design and plannin& 1280000 537 1280000 537
ConstrutlOn and desIgn 15205000 6375 16389 198 6872 7,8
Municipal fees 1000 1000
Land & other proprietor costs 800 800
Value Added Tax 1844 1968
Credit costs 283 678
Total production cost 10 302 11 318 9,9
Interest rate 12,0%

Dwelling area 2385 m2
Figure 8. The cost for production using precast box unit and traditional on site built
respectively.
assessment and calculation can be made of the total effects in the case of traditional
construction being carried out. The actual results of the municipal fees have not been
studied here.
8 Conclusions and experiences .

Even if only one project is realized, certain generalizable conclusions can be drawn.
-The total working time will be shorter
During the undertaking of the project the time taken to cast the precast concrete box
units was followed-up. This follow-up suggested that the time taken by the workers
would have been substantially longer with traditional construction.
-Shorter construction time than for traditionel building
Building with the precast box unit technique in the case gave a shortening of the
construction time of 56 % compaired with traditional construction. A shortening of
the building time can of course be achieved in another way but this was not studied
here. A generalizable experience of the project is that with the precast box unit
technique the construction time can be halved in relation to traditional production.
- Site costs reduced
The time-dependent site costs reduce when the construction time reduces. Conse-
quences of production disruptions at a late stage are significant. With this project it
was established that disruptions at the final stage of precast box unit production can
have significant financial and technical consequences. It is particularly important to
ensure that the operations following the precast box unit erection function as planned.
-Building costs are reduced
Building costs can be reduced and cost reductions as a percentage are largest for
site costs, credit costs and wage costs.
-Precast box unit construction relative to the rationalization measures
From this project no conclusions can be drawn as to whether precast box unit con-
struction is better or worse than other measures which can be taken to reduce con-
struction costs. Shorter construction time in itself gives the same cost reducing effects
as the precast box unit technique. However, studying other measures lies outside the
confines of this work. This first trial, with precast concrete box units, has shown that
technically the production is achievable and that the method has large potential possi-
bilities for cost-reduction relative to traditional production methods.
The biggest problem with this building concept is that there must be continual
production for a project, i.e. there must be a demand which keeps the factory going.
With reference to the rate of erection of approximately 10 precast boxes/day, the
factory should achieve approximately the same production so that it is not forced to
build up a stock before the start of each erection of units. This gives a need in the
order of 1000-2000 units. This means that the manufacturer must take a substantial
share of the construction market.
-Develop the production technique at the factory
The production technique can, and needs to be, developed at the factory. Manufac-
turing concrete slabs which are assembled together (welded) to form precast boxes
can make it possible to produce the approximately 10 precast boxes/day which is nec-
essary to keep the rate of work at the factory in line with the erection. Essential if
stocks are to be avoided.
8 References
Hansson B (1995) Precast concrete box units -production analysis, Department of
construction management, Lund University, Lund, Sweden.
THE USE OF CONVERSION FACTORS
FOR THE ANALYSIS OF CONCRETE
FORMWORK LABOR PRODUCTIVITY
U.E.L. de Souza
Department of Civil Construction, University of Sao Paulo,
Sao Paulo, Brazil
H.R. Thomas
Deparment of Civil Engineering, Pennsylvania State University,
University Park, Pennsylvania, USA
Abstract
Labor productivity management is important to the success of a project. The
concrete formwork operation is a labor intensive task ([1], [2], [3]) which influences
substantially the total cost of construction ([1], [2], [4], [5]).
Traditional cost systems follow a time consuming routine that includes: the break
of the work in pieces (items); the measurement of the amount done and the
workhours spent for every item. In doing so, several times one commits mistakes in
assigning workhours to each item. The "conversion factors" (CF) are used to avoid
this problem and to create an easier way to measure productivity. They estimate how
much easier (or more difficult) different formwork situations may be, identifying the
relation between the effort (expressed as workhours) necessary to accomplish one unit
of a certain item and the effort necessary to accomplish one unit of a standard item.
This paper presents the calculation of CF related to form work for walls and
columns. The following steps were followed: collection of productivity rates for
cases presenting different factors affecting the performance, from American
estimating manuals; choice of the most important factors in explaining productivity
variation; definition of a standard item for formwork (steel framed plywood panels
for walls until 8 feet height); definition of equations to estimate the CF for any non-
standard item of form work.
Since the CF has been calculated, one may transform quantities of any item in
equivalent quantities of the standard item. And then, measuring only the hours spent
on the work as a whole (the formwork in this case), its productivity can be
evaluated.
Keywords: construction management, conversion factors, labor productivity, work
measurement.
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Spon. ISBN 0419222405.
Conversion factors for analysis 15
Sommaire
La gestion de la productivite est cruciale dans Ie succes d'un projet La
realisation de coffrages est tres couteuse en temps et en hommes ([1], [2], [3]),
et pese en consequence sur la globalite des couts des travaux ([1], [2], [4], [5]).
Traditionnellement, les systemes de couts observent des procedures
particulierement chronophages dont Ie detail du travail en items et Ie calcul
du travail et du temps fournis par item. TI n'est pas rare, au cours de ces
operations, de faire des erreurs d'attribution des heures/hommes par item.
Pour circonvenir ce probleme et creer un instrument de mesure de la
productivite plus facile a manier, on a recours aux "facteurs de conversion"
(CF). TIs evaluent Ie degre de difficuIte de la realisation du coffrage en
etablissant Ie lien entre l'effort necessaire (en heures/hommes) a la realisation
d'une unite d'un item particulier et l'effort necessaire a la realisation d'une
unite d'un item standard.
Ce papier presente les calculs de CF propres au coffrage des murs et
des colonnes. Les etapes en ont ete : recueil, dans des manuels d'evaluation
americains, des taux de productivite pour des cas presentant des facteurs de
natures diverses influenc;ant les performances, definition d'un item standard
pour Ie coffrage (panneaux de contreplaque a cadre acier pour des murs
allant jusqu'a 2m de hauteur), definition d'equations permettant d'estimer les
CF pour tout item non-standard.
Sur la base des CF calcules, on peut alors se permettre de convertir les
quantites propres a n'importe quel item en quantites equivalentes de l'item
standard. Et ainsi, par Ie calcul des heures fournies pour la realisation
globale du coffrage (pour Ie cas qui nous interesse ici), sa productivite peut
etre estimee.
16 de Souza and Thomas
1 Introduction
For the purposes of this paper, productivity is measured by means of the unit rate,
that is defined [6] as the relation between the inputs (workhours) and the outputs
(amount of work done) of ajob. The inputs are measured in workhours (wh) and the
outputs in square feet (st).
The effort to complete 1 sf of form work may vary according to several features
like: the system used; type of element (column or wall, in this case); height of the
element; etc. To take these features into account, one has to defme a standard
condition and calculate correction factors to transform quantities of any other
condition into equivalent "units" of the standard one.
The conversion factor (CF) allows this transformation [6]. It is expressed as:
CFO) = unit rate(j) / unit rate(std)
where:
CF(j) = conversion factor for condition "j",
unit rate(j) = unit rate for the condition "j",
unit rate(std) = unit rate for the standard condition.
Then, the equivalent quantity may be estimated by:
output(std) = output(j) * CF(j)

where:
output(std) = equivalent quantities in the standard condition,
output(j) = quantities in the condition "j".
The use of CF, as described on Figure 1, allows the estimation of an equivalent

amount of work: first it is necessary to measure the amount of units for each type of
work done; then, to transform these amounts into standard units; and, fmally, the
summation represents the total work done.
The conversion factors, for wall and column formwork, were developed following
the steps: formwork classification and choice of the standard; collection of
productivity rates, for cases presenting different factors affecting the performance,
from American estimating manuals; choice of the most important factors in explaining
productivity variation; defmition of equations to estimate the CF for any non-standard
item of formwork.
2 Formwork classification
To allow the deftnition of conversion factors, one ftrst needs to defme a framework
at the same time comprehensive (to include as many types of formwork as possible),
simple (avoiding excessive slightly different classiftcations), and easy to understand
(avoiding misuses and inducing its use).
conversion equivalent
quanti1les factors quantities
~ w.l
comparison
to
SUM
the equivalent
quantities
~t8nd8rd Co
c.;
Figure 1- The conversion factor's role in measuring the amount of work.
Figure 2 shows the framework used to classify wall and column formwork and to
calculate the CF. The ftrst division is related to the element being formed (wall or
column). The second division defmes the following broad categories:
- for walls:
* stick (#) = built-in-place formwork;
* non-stick (N#) = prefabricated (both in-site or out-site);
- for columns:
* stick (#) = built-in-place;
* non-stick rectangular (N#rec) = prefabricated (both in-site or out-site) with
rectangular section;
* non-stick round (N#rou) = prefabricated (both in-site or out-site) with round
section.
These terms, that represent a compromise between the simplicity and accuracy, ftts
the methods and the language used in construction. More than it, this division is
necessary to create groups of forms whose productivity is expected to be influenced
by the same factors (for example, "#" must be isolated from "N#" to study the
influence of "ganging panels").
The several levels below the two divisions represent factors (for example "height")
that have influence on the classes defmed by each vertical line (for example, "C#").
As a consequence of such a division, there are factors that have influence on one
category of fonn but not (or have a different influence) on another (for example,
"height" may have influence on the productivity of "C#" but not of "CN#rec").
other
factors
I--+----+----+---+_ t.i
conversion factors equations
Figure 2- Framework to defme the conversion factors for fonnwork.
3 Choice of the standard
The fonnwork job may be done under different kind of "factors" (as previously
shown on Figure 2); to describe a case, one must detect and quantify the existing
factors. The standard case is the one chosen as the gauge for comparisons. The
chosen case should be the most often used in practice in order to: improve the
accuracy of the comparisons; simplify the understanding of equivalent quantities
estimated using this standard.
The features of the standard condition for fonnwork were chosen as: fonn for wall
non-stick, with height not exceeding 8', and using plywood as surface material.
4 Measuring factors' effects
Although the procedures to get the data are sometimes not well understood, and may
vary from one manual to another, the estimating manuals represent an accumulated
experience extremely significant. Mainly because to collect data in construction is
neither an easy nor a cheap task.
Each case presented by a manual, expressed in tenns of accumulated unit rate at
the completion of the project, represents an average of the results obtained for similar
conditions in several sites.
The following criteria were used in order to choose the manuals to serve as source
of data: to be recognized by the technicians as a good manual; to describe in detail
the cases analyzed; to avoid the use of manuals with the same origin.
The five chosen manuals were: "Structural Concrete Cost Estimation" [7]; "The
1984 Berger Building & Design Cost File" [8]; "1988 Dodge Unit Cost Data" [9];
"Means Man-hours Standards" [10]; "General Construction Estimating
Standards"[ll].
Table 1 shows how many cases were collected from each manual, while Table 2
shows the kind of information provided by the manuals.
Table 1- Number of cases collected in the manuals, for walls and columns.
Manual Element
wall column
Clark: 2 1
Berger 48 32
Dodge 12 43
Means 21 52
Richardson 104 24
TOTAL 187 152
Table 2- Information provided by the manuals.
Information Walls Columns

cumulative unit rate X X
perimeter X
section format X
section area X
curvature X X
tickness X
height X X
material/system X X
number of uses X X
gang size X X
use of crane X X
maximum dimension X
5 Transforming unit rates into conversion factors
The data collected from the Manuals expressed productivity in terms of unit rates for
each case. The transformation of this information into conversion factors followed the
steps: the cases were classified according to the "categories of fonnwork" previously
defmed: column stick, column non-stick round, column non-stick rectangular, wall
stick, and wall non-stick (generating five subset of data); for each subset it is
necessary to detect which Manuals have the standard as a case; when the Manual has
the standard, CF=1 is assigned to this case and the CF's for the remaining cases of
this Manual are calculated according to the defmition previously explained (ratio of
unit rates); when the Manual doesn't have the standard as a case, it is necessary to
calculate the unit rate for a "estimated" standard (the unit rate for the standard if it
was present in the subset), and then the CFs for all the cases are calculated in the
same way just described. In order to estimate the standard unit rate it is necessary
to make comparisons among comparable situations relating the manuals.
The unit rates for the standard, expressed in wh/sf, are: 0.236 for "Clark"; 0.131
for "Berger"; 0.073 for "Dodge"; 0.075 for "Means"; and 0.067 for "Richardson".
Notice that, although each data point in a Manual may represent an average of
several collections, there are no established standard procedures, common to all the
Manuals, to calculate the productivity rates. Then, it is very common to fmd different
unit rates related to the same case, as it happened with the unit rates for the standard.
Some explanations are: certain Manuals are more conservative than others; some may
consider the management hours as part of the input, while others only take into
account the direct labor; etc. But, many times, the comparable values in two distinct
Manuals differ roughly by a constant. This is the typical situation in that the use of
conversion factors will improve the fit of data, as illustrated in Figure 3: the unit
rates and the conversion factors for walls non-stick coming from two distinct Manuals
(Berger and Means) are plotted; although there is a significant difference between the
unit rates proposed by them, there is a close agreement in relation to the conversion
factors.
6 Calculation of the conversion factors for non-standard conditions
The process of defming equations to estimate the conversion factors for each category
of fonns, as illustrated by Figure 4, follows the steps: for each "category of
fonnwork" one must list all the variables that potentially can affect the conversion
factors (CF); during a "preliminary individual evaluation" , each variable, one by one,
will be checked by means of "graphical analysis" (for example plotting the CF in
relation to the variable), "statistical analysis" (for example using individual ANOYA
and individual regression analysis), "personal evaluation" (taking into account past
experience and common sense), and "confidence on the data" (involving both the
number of available data points and the clearness of Manual's infonnation); the
remaining variables (named "potential variables") are now evaluated together, by
means of "graphs" and "statistical analysis", to take into account the eventually
present interactions effects; the variables in the fmal equation will be the ones with
good statistics, with significant impact over the CF being calculated, and the ones
that are considered causal variables.
0.20 0
0 0
0 0
0 0
0 0
2 0.15 0 0 aJ
E 0
0
0
::i 0
''"
0.05
}+
+
+
+
10 15 20 0 Berger
height + Means
2.1 -
0
1.6 -
0
LL. 0 + 0
0 0 0 bJ
+ 0 0
0 0
1.1 - + 0 0
0 0
+ 0
0
+
0.6
10 15 20
height
Figure 3- Comparison between the infonnation from two Estimating Manuals (Berger
and Means) for walls non-stick: a)unit rates; b)conversion factors.
IIvlliiable vllriables
preliminary individual
evaluation
potencial variables
group evaluation
final equation
Figure 4- The process of defIning a conversion factor's equation.
The fmal equations can be seen on Figures 5, 6, 7, 8 e 9, respectively for columns

N, columns NNrec, columns NNrou, walls N and walls NN, as part of the regression
analysis that generate them.
Regression Analysis
CF = 1.95 - 0.00158*perimeter+ 0.109*(12'<h<=15')
predictor std dey. t-ratio p-value

constant 0.01742 111.99 0.000
perimeter 0.00019 -8.2 0.000
12'<h<=15' 0.01332 8.15 0.000
Figure 5- Regression analysis to estimate the CF equation for columns N.

Regression Analysis
CF = 1.58 - 0.00407"petimeter - 0.0101*(pref.plywood syst.)*(petimeter - avg. perimeter) +

+ 0.000084*(pref.plywood syst.)*(petimeter - avg.perimeter)**2
predictor std dey. t-ratio p-yalue

constant 0.07942 19.95 0.000
perimeter 0.001142 -3.56 0.007
(pref.plywood syst.)*(petimeter - avg.perimeter) 0.001382 -7.3 0.000
(pref.plywood sysL)*(perimeter - avg.perimeter)"2 0.000011 -7.67 0.000
Figure 6- Regression analysis to estimate the CF equation for columns N#rec.
Regression Analysis
CF =0.966 - 0.006*(max.dim.) - 0.0115*(tiber surface)*(max.dim.) +

-0.341*(tiber surface) + 5.57"(tearable syst.)/(max.dim.)
predictor std dey. i-ratio p-yalue

constant 0.0612 15.79 0.000
max.dim. 0.001952 -3.1 0.003
(tiber surface)*(max.dim.) 0.002213 -5.21 0.000
tearable sysL 0.06958 -4.9 0.000
(tearable syst.)/(max.dim.) 1.193 4.67 0.000
Figure 7- Regression analysis to estimate the CF equation for columns N#rou.
Regression Analysis
CF = 1.19 + 0.397"(9'<h<=16') + 0.756*(h>=17') + 0.57"curved
predictor std dey. t-ratio p-yalue

constant 0.06562 18.14 0.000
9'<h<=16' 0.09659 4.11 0.001
h>=17' 0.1392 5.43 0.000
curved 0.1856 3.07 0.010
Figure 8- Regression analysis to estimate the CF equation for walls #.

Regression AnalYSis
=
CF 1 + 0.15*gang - 0.16*(steel surface) + 0.106*(9'<h<=16') +
+ 0.187*(h>=17') +0.321*curved
predictor std dey. t-ratio p-value

constant 0.04793 21.57 0.000
gang 0.05198 2.89 0.007
steel surface 0.05437 -2.95 0.006
9'<h<=16' 0.0632 1.67 0.105
h>=17' 0.04483 4.16 0.000
curved 0.05437 5.9 0.000
Figure 9- Regression analysis to estimate the CF equation for walls NU.
7 Using the conversion factors to estimate daily productivity
The following example uses data collected in Central Pennsylvania (United States of
America) in 1995 from the construction of a big gymnasium (seating capacity:
16,500). Table 3 illustrates the necessary steps to transform the quantities, measured
for each item, into equivalent quantities of the standard condition. Notice that, to take
into account the different efforts involved in assemble and strip the forms, these parts
of the item being done are tracked separetedely and receive weights respectively of
0.85 and 0.15 (for example: 100 sf of assembled form represent 85 sf of the item's
job, while the same amount of stripped forms mean only 15 sf). Finally, Table 4
shows the calculation of the daily unit rates: the total equivalent quantities represent
the summation of the several items performed that day; the workhours are the total
hours related to the formwork as a whole (and not for each item); the daily unit rate,
then, being connected to the standard condition, represents a standard measurement
of productivity.
8 Conclusion
Traditional cost systems break the work in pieces (items) and require the
measurement of both the amount of work done and the workhours spent for each
piece. This report showed that conversion factors can be used in order to simplify the
labor measurement and to create a gauge for productivity calculation.
Based on data collected from estimating manuals five equations (one for each
category of form: CU, CNURec, CNURou, WU, WN#) were developed to allow the
transformation of amounts of any type of formwork into standard equivalent
quantities. Using these equations, it is only necessary to track the total workhours
spent with forms instead of observing the labor consumption for each item. The use
of standard quantities turns the unit rate into a standard productivity measurement,
what makes the comparison between measurements in different days and/or sites
possible.
Table 3- Transfonnation of item quantities into standard quantities.
item item assembled stripped item equivalent

wday number description quantities quantities quantities CF quantities
!~ !~ (sf) !~
1 1 WN#; h>=17'; straight; gang; surface=ply 0 330 50 1.37 68
1 2 CN#Rec; perimeter=8'; steel framed ply 0 32 5 1.15 6
1 4 W#; 9'<=h<=16'; straight 236 0 201 1.59 319
1 10 WN#; h>=17'; straight; handset; surface=ply 250 0 213 1.22 260
2 4 W#; 9'<=h<=16'; strai9ht 0 472 71 1.59 113
3 8 WN#; h<=8'; straight; gang; surface=ply 161 0 137 1.18 162
3 9 WN#;9'<= h<=16'; straight; gang; surface=ply 181 0 154 1.29 198
3 10 WN#; h>=17'; straight;handset; surface=ply 328 0 278 1.22 340
4 10 WN#; h>=17'; straight;handset; surface=ply 77 0 66 1.22 80
5 8 WN#; h<=8'; straight; gang; surface=ply 157 0 134 1.18 158
5 9 WN#;9'<= h<=16'; straight; gang; surface=ply 181 0 154 1.29 198
Table 4- Daily unit rate calculation.
workday total equivalent workhours daily unit rate

quantities (sf) (wh) (whist)
1 1181 124 0.10
2 1502 96 0.06
3 714 96 0.13
4 665 88 0.13
5 717 84 0.12
9 Table of conversions
1 foot (t) = 0.3048 meter (m);

1 square foot (st) = 0.0929 square meter (m2);
1 inch (in) = 0.0254 meter (m);
1 workhourper square foot (whist) = 10.7639 workhourper square meter (whlm2).
10 References
1 Bukhart, A.F. (1994) Selecting a wall fonning system for your next job, in
Selecting and Using Wall Forms. Aberdeen, Louisiana, pp.18-53.
2 Qabbani, Z.S. (1987) Formwork: economy and productivity analysis. University

of Colorado. 113p.
3 Adrian, J.J. (1975) Realistic calculations of costs for wall fonning systems.
Concrete Construction, June.
4 Aldana, L. (1991) Measurement and analysis of concrete formwork and steel

reinforcement productivity. University of Dundee, 163p.
5 Backe, C. (1994) Wall fonns: selecting the best ganged system, in Selecting and
Using Wall Forms. Aberdeen, Louisiana, pp.54-58.
6 Thomas, H.R. and Kramer, D.F. (1987) The manual of construction productivity
measurement and performance evaluation. crr, Austin, 168p.
7 Clark, J.E. (1983) Structural concrete cost estimating. McGraw-Hill, 298p.
8 Hlibok, A.J. (1984) The 1984 Berger building & design cost file. Hicksville,
Building Cost File Inc., VoU, 479p.
9 Iavarone, R.C. (1987) 1988 Dodge unit cost data. New Jersey, McGraw-Hill,
338p.
10 Cleveland, A.B. (1983) Means man-hours standards. Means, 576p.
11 Richardson Engineering Services (1987) General construction estimating

standards. Richardson, Vol.l.
DEVELOPMENT OF AN EXPLANATORY
MODEL FOR CONCRETE FORMWORK
LABOUR PRODUCTIVITY
U.E.L. de Souza
Sao Paulo, Brazil
H.R. Thomas
Deparment of Civil Engineering, Pennsylvania State University,
Abstract
Labor costs are very significant in construction. To manage this resource it is

important to know the factors that influence labor productivity variations, and by how
much.
Researchers have been trying to develop models to explain productivity variability
([1], [2], [3], [4], [5]), but this is not an easy task. Many activities in construction
(as formwork) are labor intensive and there are both operational and environmental
factor influences on the productivity.
The "Factor Model" approach, developed at Pennsylvania State University (PSU),
identifies these factors by means of statistical modeling. This paper presents the
development of a Factor Model for Concrete Formwork (it is restricted to concrete
walls and columns).
Some of the steps followed to complete this research were: a procedures manual
for formwork, developed at PSU, furnished a standard way to collect data; the author
collected daily information in the site construction of a gymnasium (capacity: 16,5
thousands seats) located in State College (pennsylvania - USA), for more than 250
workdays; data from 5 other projects [6], tracked with similar procedures, were also
used in this study.
After the reconciliation of all the information received from the sources above
discussed, a statistical analysis generated a mathematical expression that identifies the
factors and their influence on the labor productivity.
Keywords: construction management, construction model, formwork, labor

productivity.
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Spon. ISBN 041922240 5.
Sommaire
Les couts de main d'oeuvre sont loin d'etre negligeables dans Ie
batiment. n est indispensable, pour gerer au mieux les ressources humaines,
de connnaitre les facteurs qui influencent les variations de productivire, et
dans quelle mesure.
De nombreux chercheurs ont tenre de developper des modeles de
variabilire de la productivire ([1], [2], [3], [4], [5]); cette tache s'avere
cependant ardue. Nombre d'activires du bil.timent - tel Ie coffrage - sont!res
couteuses en temps et en hommes, et on observe que les facteurs agissant sur
la productivire sont de nature operationnelle autant qu'environnementale.
La modelisation des facteurs ("Factor Model") developpee a la
Pennsylvania State University (PSU), aux Etats-Unis, circoncit ces facteurs
statistiquement. Ce papier a pour objectif de presenter Ie developpement
d'une modelisation applicable au coffrage en beton, uniquement ici pour Ie
coffrage des murs et des colonnes.
Cette recherche s'est ainsi deroulee: un manuel des procedures pour Ie
coffrage, moyen standard de recolte des donnees, a ere developpe a la PSU;
l'auteur a recueilli des donnees quotidiennement, sur Ie chantier d'un
gymnase d'une capacire de 16 500 places et situe dans l'enceinte du State
College Pensylvania, Etats-Unis, pendant une periode de 250 jours travailles;
les donnees de 5 autres projets [6] observant les memes procedures ont par
ailleurs ere utilisees dans la presente etude.
Apres la reunion de toutes les informations recueillies aupres des
sources citees precedemment, l'analyse statistique a fait apparaitre une
equation mathematique qui identifie les facteurs et leur influence sur la
productivire humaine.
Explanatory model for labour productivity 29
1 Introduction
The observation of a real process for a certain period of time allows the construction
of models that provide understanding: the explanation of what has happened and the
forecast of future events. Figure 1, based on Casti [7], illustrates this mechanism.
r-----, r----,
I
I I
I
I
I inputs
I
I
Inputs
-.! encoding
(explanation)
observed
laws procr.ss sample model
01 a
I
process
I
outputsi'
I
decoding
forecactin 9)
i'OlltplllS
I
I
I
L-~ '--~
Figure 1- The modeling relations.
The Factor Model [8], based on the crew level productivity, was developed in the
Pennsylvania State University (PSU). Graphically shown in Figure 2, the
development of the model assumes the existence of an "standard condition of work";
under this condition, the daily productivity will be the "ideal" (here one may assume
the existence of learning or not); variances in the work scope and/or in the work
environment make the productivity vary in relation to the ideal. The model relates
the actual daily productivity to the daily work features.
~
.£
o
t:
S WORICTYPE
a:I7~~
..
w
PHYSICAL ELf:MEHt'
g~ CONSTRUCTION METHOD
~ DESIGN REQUIREMEIiTS
UNrrSOFWORK
Figure 2- The Factor Model.

In this report the Factor Model approach is used in order to "explain" daily
productivity variability: detecting the factors that generate variation and their degree
of influence, based on nonnaI workdays (Figure 3).
disruptions/outliers
Figure 3- Explanatory model development.
To reach these goals the report discusses the following issues: standardization of
productivity measurement; collection of daily infonnation; preliminary evaluation of
the factors; modelling; and final checks.
2 Standardization of productivity measurement
This paper adopts, as a tool to measure daily productivity, the daily unit rate [9],
defmed as the ratio between the inputs (labor workhours) and the output (work
quantities). In order to establish a standard measurement, it is necessary to have
standard measurements of both the inputs and the outputs.
The measurement of labor consumption (input) was done as prescribed by a PSU's
manual for data collection [10]. The main recommendations are: to track the
workhours spent by one crew, that "consists of the foreman and the gang members";
"hours of absenteeism are not counted"; support personnel are only take into account
when their work is devoted exclusively to the crew; the recorded workhours are the
paid hours . (excluding eventual "premium"). The quantities measurement
standardization relies on the following ideas (Figure 4): to recognize the parts
(subtasks) that constitute a task and to record quantities individually allocated; to add
these quantities accordingly to the relative demanded efforts (rules of credit); to
transfonn the quantities for each different task into equivalent amounts of the
standard task (conversion factors) and to add them to fmd the daily quantities of
standard work. The units of measurement are: workhours (wh) for the inputs, and
square feet (st) of fonnwork for the outputs; then, the unit rate will be expressed in
workhours per square foot (whist).
quantities
r c
u 0
I n
e
s
of
c a
r c
e t
d 0
r
s
Figure 4- Measuring quantities of work.
An extensive discussion about the output measurement process is provided elsewhere

[9]. But some aspects are worth to be presented here: some factors that have
influence on formwork labor productivity have ever been considered in the
development of the conversion factors (type of element, height, section size,
formwork system, format, handling system, surface material); the equivalent
quantities are expressed in terms of the following standard task: forms for walls not
higher than 8 feet, using handset panels with plywood surface.
3 Daily information
The description of daily performance includes both the calculation of the unit rate
(expressed in terms of standardized inputs and outputs) and the description of present
factors that may influence productivity. The standard measurements of amounts of
labor (input) and work (outputs) were previously discussed in this report. In relation
to the "productivity influencing factors", some additional comments are: some of
them were included in the conversion factors' equations; the remaining ones may be
divided into quantitative and qualitative variables; for the qualitative ones it is
necessary only to detect its presence or absence; the quantitative ones demand a
quantification task; the number of factors to be tracked should be as big as possible,
under the researcher's point of view, but as low as necessary to diminish the
spending time for future practical use of the fmal model by contractors; previous
experience helps in defming what factors must be tracked; try to avoid factors that
present difficulties in being measured; as far as possible, use factors common to
former data collections; because this report deals with an explanatory (and not a
forecasting) model, it is possible to use daily features as factors, instead of
information necessarily extracted from plans (for example, one can use the number
of the floor in execution in a certain day instead of the building'S height).
This report uses databases collected accordingly to the procedures developed at the
PSU. Table 1 summarizes the main features of the available databases.
Table 1- Databases' infonnation summary.
project cumulative u.r. at total total equiv. % of disr. or

name completion (whIst) worKdays area (1000 sf) outlier days
Bryce Jordan 0.12 256 208.9 34
Tertiary Filter -level 1 0.17 25 6.6 16
Tertiary Filter - level 2 0.12 39 16.7 21
Composting Facility 0.05 23 46.1 9
Art Museum Wing 0.05 43 15.6 21
ParKing Deck Garage 0.14 40 13.8 28
As it can be seen on Figure 5, the chosen factors to be analyzed ("available

variables"), grouped under the classes "design features/work content", "environment
conditions", and "construction methods", were: "boxout or pipesleeves" (Figures
6.a.l and 6.a.2), a qUalitative variable that states if the workday was significantly
affected by the execution of boxouts or the positioning of pipesleeves by the fonn
crew; "comers" (Figure 6.b), that can be treated either as a quantitative (counting the
number of fonn comers perfonned) or a qualitative variable (stating if there was
significant effort spent in fonning comers); "elevation changes" (Figure 6.c), with
approach similar to comers in relation to the existence of "steps" along the height of
the element being fonned; air "temperature" (represented by the temperature at
1:OOPM) and "relative humidity" (represented by the temperature of dew point at
1:00PM), whose summation is representative of weather comfort; "length of
workday", measured in hours; "bulkheads" (Figure 6.d), with approach similar to
comers in relation to the presence of this kind of fonnwork; "accessibility", a
qualitative variable that implies in classify an element as easily approachable (Figure
6.e.l) for workers and materials or as of not easy access (Figure 6.e.2); "pour
coordination", a qualitative variable that states if the fonn crew was involved with
concrete pouring in a certain day; "crew size", measuring the number of workers of
the crew in a certain day, from the foreman (included) down (hierarchically
speaking), independently of their skills.
4 Preliminary evaluation of available variables
Once the infonnation about the available variables has been collected in the fonner
step, it is time now to check which ones are really important for the model's
development: different approaches were used for quantitative and qualitative
variables; the checks include the use of graphical and statistical tools (analysis of
variance, regression analysis, confidence intervals, scatter plots); as a result of this

evaluation, each available variable is "accepted" for further analysis or "excluded".
AVAILABLE VARIABLES
Figure 5- Available variables classification.

3.1) 8.21 bl
Iii! il II
v-l Ir;:1====+
~ -//-
e.1)
c)
e.2)
o dJ
Figure 6- Variables description: a)boxouts and pipesleeves; b)comers; c) elevation

changes; d)bulkbeads; e)accessibility.
Table 2 summarizes the results for the qualitative variables. Some additional
comments are: in relation to the 95% confidence intervals, a "good" plot is that one
with no superposition between the ranges of variation for the conditions being
checked; "difficult access" is considered to happen whenever there is not only
elements easily approachable being formed; although the results for "elevation
change" and "bulkheads" are not so bad, there is an inconsistency between the data
and the expected performance: days with these factors present have a smaller unit
rate than days without.
Table 2- Qualitative variables evaluation.
# of Anova ind.regr. 95%

variable cateQory obs. mean p r2-adj C.1. classification
boxout or 0 238 0.113 0.004 2.3% good accepted
pipesleeve 1 67 0.144
corners 0 150 0.122 0.771 0.0% bad excluded
1 155 0.119
elevation 0 280 0.123 0.033 1.2% good excluded
chanQes 1 25 0.088
bulkheads 0 195 0.127 0.051 0.9% bad excluded
1 110 0.109
difficult 0 125 0.097 0.000 5.8% good accepted
access 1 180 0.136
pour 0 203 0.105 0.000 6.8% gOOd accepted
coordination 1 102 0.150
Table 3 summarizes the results for the quantitative variables. Some additional
comments are: plotting the unit rate against the variables allows the visual detection
of the existence of a "trend" (possible flag for a relationship); in order to fit the
reality, the "density" of comers, elevation changes and bulkheads, separately, are
studied; "density" is defmed as the number of units of the factor (for example the
number of comers formed in that day) multiplied by 1000 and divided by the total
equivalent amount of form work job for the same day; "T1 +Tdp", the summation of
air temperature and temperature of the dew point at 1:00PM, is used to analyze the
effect of weather over the labor productivity.
5 Modelling
The fmal expression of the explanatory model is an equation generated by regression

analysis having the standard daily unit rates as dependent and the "accepted" factors
as independent variables:
unit rate = 0.080 + 0.030*(difficult) + 0.028*(pour coord) + 0.034*(boxipipe)

On a day with standard condition of work (difficult = pour coord = box/pipe = 0)

the ideal daily unit rate, expressed in equivalent quantities of fonnwork, is 0.080
whlsf. Because all the factors in this final expression are qualitative, the presence of
anyone modifies the daily unit rate by the value of its coefficient (for example: in
a day with concrete pour, "pour coord" = 1, and the unit rate becomes 0.108 whist).
Table 3- Quantitative variables evaluation.
individual regression plot

variable J2-adj p - value trend? classification
comers density 0.0% 0.301 no excluded
elevation change density 0.6% 0.159 no excluded
bulk density 0.0% 0.922 no excluded
T1 + Tdp 2.1% 0.037 no excluded
length of wor1<day 0.0% 0.768 no excluded
crew size 0.2% 0.247 no excluded
6 Final checks
Four different approaches are showed to check the model's equation: coefficient's
statistics; infonnal evaluation; effect on the standard deviation; omitting databases.
Coefficient's statistics
Table 4 presents the main statistics related to the coefficients of the model's factors;
they are significant.
Table 4- Coefficient's statistics from the regression analysis.
factor t-ratio p-value

difficuH 4.45 0.000
poor coord 4.06 0.000
box/pipe 4.30 0.000
Informal evaluation of the coefficients

The coefficients are: 0.030 for "difficult" , what means an increase of 38 % in the unit
rate in relation to standard days; 0.028 for "pour coord", representing an increase of
35 %; 0.034 for "box/pipe", meaning a 43 % increase.
The literature review didn't provide a baseline to compare these values; but they
seem to be consistent with the reality, based on the researcher's personal experience.
Effect on the standard deviation

To verify the model's explanatory capability, one may compare the standard deviation
of the database "before" the standardization and modelling and "after" that. The
values are, respectively, 0.3077 and 0.0559. This means a very significant 82 %
reduction.
Omitting databases
When developing a forecasting model, the last stage of the process is to confront its
predictions with new data coming from a database not used in the model's
development. Although this is not the case (this report is concerned with an
explanatory model), a similar approach will be used in order to check the confidence
one can credit on the model: "new" equations were developed accordingly to the
same process used to create the "model's" equation, but making use of all databases
except one; because there were six databases, it is possible to develop six new
equations based on the five remaining databases; the intercept and coefficients values
for the "model's" and the six "new" equations can be seen on Table 5.
Table 5- Intercept and coefficients values for the "model's" and the six "new"
equations.
constants
intercept difficult pour coord. box or pipe
model 0.0797 0.0299 0.0282 0.0342
new 1 0.0716 0.0341 0.0299 0.0387
new 2 0.0905 0.0192 0.0279 0.0346
new 3 0.0854 0.0256 0.0254 0.0325
new 4 0.0810 0.0303 0.0239 0.0347
new 5 0.0761 0.0346 0.0264 0.0272
new 6 0.D705 0.0430 0.0520 0.0405
In order to check the agreement among all the generated models, all the equations are
plotted together, as can be seen on Figure 7, for different working conditions. The
visual evaluation shows a good harmony among them: the points are close to each
other.
7 Conclusion
Several factors may have influence on formwork labor productivity. In order to

standardize the measurement of outputs some of them were already considered: type
of element; height; section size; formwork system; format; handling system; and
surface material. The importance of several other factors were checked in this paper:
boxouts; pipesleeves; comers; elevation changes; air temperature; relative humidity;
length of workday; bulkheads; accessibility; pour coordination; and crew size. The
Factor Model approach helped in create an equation that shows the factors to be
considered and quantifies their influence on the daily unit rate value: the ideal
productivity (standard condition of work) is 0.080 whlsf; "difficult" access represents
an increase of 0.030 whlsf; days with concrete "pour coordination" mean an
additional 0.028 whlsf; and extra 0.034 whlsf can be credit to days impacted by box
out or pipesleeve work. This kind of information can help the site management in
different ways: as baseline for performance evaluation; as source of information to
defme production goals; in defming strategies to make easy the "access" to the
elements (for example, to defme an advantageous forming sequence); in taking
decisions about having an special crew only for concrete pour; etc.
0.25
.. model ur
0.2
-+ new 1
.....
Q)
*new2
co
.... 0.15
:!:::! -B new 3
c:
:J ~new4
0.1 -fr new 5

.new6
0.05
different conditions
Figure 7- Plot of the "model's" and the six "new" equations for different working
conditions.
8 Table of conversions
1 foot (t) = 0.3048 meter (m);

1 square foot (st) = 0.0929 square meter (m2);
1 workhour per square feet (whist) = 10.7639 workhours per square meter
(wh/m2).
9 References
1 Thomas, H.R. and Yakoumis, I. (1987) Factor model of construction

productivity. ASCE Constr. Engrg. and Management, Vol. 113, No.4. pp.623-
639.
2 Thomas, H.R. and Sakarkan, A.S. (1994) Forecasting labor productivity using
the factor model. ASCE Constr. Engrg. and Management, Vol. 120, No. 1.
3 Sanders, S.R. and Thomas, H.R. (1991) Factors affecting masonry labor
productivity. ASCE Constr. Engrg. and Management, Vol. 117, No.4. pp.626-
644.
4 Qabbani, Z.S. (1987) Formwork: economy and productivity analysis.

University of Colorado. 113p.
5 Bennett, P.O. (1990) A case study of the validity of daily crew-based

productivity measurements. Pennsylvania State University. 87p.
6 Shumway, J.D. (1992) A comparative analysis of concrete form work

productivity influence factors. Pennsylvania State University. 103p.
7 Casti, J.L. (1990) Searching for certainty: what scientists can know about the
future? W. Morrow, New York, 496p.
8 Thomas, H.R. et alii (1990) Modelling construction labor productivity. ASCE

Constr. Engrg. and Management, Vol. 116, No.4. pp.705-726.
9 Thomas, H.R. and Kramer, D.F. (1987) The manual of construction

productivity measurement and peljormance evaluation. crr, Austin, 168p.
10 Thomas, H.R., Homer, R.M.W. and Smith, G.R. (1991) Procedures manual
for collecting productivity and related data of labor-intensive activities on
commercial construction projects: concrete formwork. PTI, State College, 63p.
OVERMANNING AND THE EFFECTS ON
LABOR EFFICIENCY
H. Randolph Thomas
Professor of Civil and Environmental Engineering,
Pennsylvania State University, University Park, Pennsylvania, USA
Todd M. Arnold
Graduate Assistant, Pennsylvania State University,
SUMMARY
Schedule acceleration is a very troublesome problem for contractors because of the

potentially devastating effect on labor productivity. While much has been written
about scheduled overtime, little has been published about the effects of overmanning,
that is, managing a larger workforce than planned. This paper reports the results of
a survey of electrical contractors asking about the magnitude of inefficiencies due to
overmanning and the causes. The results show significant degradation in efficiency
as more craftsmen are hired and are reported by project type, however, the differences
are not significant.
SOl\1MAIRE
L'acceleration de l'horaire du travail pose des problemes pour les entrepreneurs a

cause de l'eventual effect detrimental sur la productivite de la main-d'oeuvre. Tandis
que beaucoup a ete ecrit au sujet des heures supplementaires, il y a tres peu d'etudes
sur l'effect et les problemes de gestion d'une main-d'oeuvre surchargee. Cette etude-
ci presente les resultats d'un sondage d'entrepreneurs d'electricite sur la manque de
l'efficacite cause par une main-d'oeuvre surchargee et ses causes. Les resultats
demontrent une manque d'efficacite lorsque plus d'employes sont engages, et ces
resultats sont decrits par project; neanmoins, les differences ne sont pas importantes.
INTRODUCTION
A survey was distributed to the membership of the National Electrical Contractors

Association (NECA) requesting pertinent information on projects that were accelerated
or compressed causing overmanned. These surveys provide two relevant pieces of
information: assessment of contractor perceptions of the extent of efficiency loss
caused by overmanning, and relative differences in loss of efficiency for different type
projects.
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Spon. ISBN 0419222405.
40 Thomas and Arnold
SURVEY INQUIRIES
The survey instrument requested the following infonnation about a specific project that
was accelerated or compressed:
• Project type
• Planned and actual number of electricians
• Estimated loss of efficiency caused by ovennanning
• Planned (budgeted) and actual workhours
• Estimated and actual schedule duration
In total, infonnation was provided on 129 projects. There were complete responses
for 110 projects. Table 1 summarizes the surveys according to the project type and
average planned maximum number of electricians. As can be seen, most projects
were industrial, commercial, or institutional. The average planned maximum number
of electricians ranges from 4 to 50. Comparatively few line projects were contributed.
Table 1. Summary statistics of survey responses.

Project Type Number of Average Planned
Projects Maximum
Number of
Electricians
Inside Projects:
Industrial 45 50
Commercial 26 40
Institutional 29 28
Communications I 4
Line Projects;
Transmission 1 9
Distribution 2 6
Substation I 10
Underground 0
Communications 5 43
TOTAL WSS OF EFFICIENCY
For the data analyses, several parameters were calculated. The first is the percent
ovennanned which was calculated as follows:
Overmanning and the effects on labour efficiency 41
Percent Overmanned (%) = ( Actual Max. No. of Elec. -1.0) x 100 (1)
Planned Max. No. of Elec.
The total loss of labor efficiency relies on the actual workhours and the budgeted
or planned workhours. These values are used in equation 2.
Total Loss of Efficiency (%) = (1.0 - Budgeted Workhours) x 100 (2)

Actual Workhours
Figure 1 shows the distribution of the total efficiency loss for all projects as a function
of the percent ovennanned. Using equation 2, an efficiency loss of 25 % means that
33 % more workhours were required than budgeted. As can be seen, the number of
workhours required can exceed the budgeted or planned workhours by a considerable
margin.
The relationship between the total loss of efficiency and the ratio of the actual
divided by the planned schedule duration was also investigated. From figure 2, this
relationship is unclear. However, it is obvious that few projects finish early or on
time. In the survey, 68 percent of all projects took more workdays than planned.
LOSS OF EFFICIENCY CAUSED BY OVERMANNING
The survey requested the estimated percentage of the total labor overrun attributed to
providing additional manpower resources, i.e., ovennanning. The distribution of
percentage estimates is shown in figure 3. It is obvious that the consensus of opinion
of electrical contractors is that ovennanning causes considerable loss of efficiency.
The average estimate is 29 percent, but in many instances, the estimated percentage
is much higher.
The net loss of efficiency caused by ovennanning was calculated by mUltiplying
the total loss of efficiency from equation 2 times the estimated percentage of the total
labor overrun attributed to ovennanning. The net efficiency loss is shown in equation
3.
Total Elf. Loss x Est. % From Overmanning (3)
Net Elf. Loss (%)
100
Figure 4 shows the relationship between the net loss of efficiency and the percent
ovennanned. The general trend is that as the percent ovennanned increases, the net
loss of efficiency also increases.
The net loss of efficiency from ovennanning was also investigated for other
relationships. No correlation was evident between the net loss of efficiency and the
planned size of the work force or the planned duration. Thus, from the survey, it
cannot be said that larger or longer duration projects have greater efficiency losses.
This observation may be different if there were more larger projects in the database.
Figure 5 shows that half of the database is from projects where the planned maximum
number of electricians was 20 or less.
The net loss of efficiency by project type was also investigated for indoor
projects. A linear regression equation was calculated for all indoor projects and
industrial, commercial, and institutional projects. These equations are shown in figure
6. As can be seen, when the percent overmanned is 25 percent or less, there is
minimal difference between the net loss of efficiency as a function of project type.
Because there were insufficient line projects to examine by type, a linear
regression equation was calculated for all line projects. Figure 7 compares the indoor
and line projects. There appears to be minimal difference between these two groups.
To validate the results of the survey, losses of efficiency were calculated for each
project type at 50 percent overmanned (see figures 6 and 7), and the results were
compared to the summary curves from the literature review. From the literature
review, the range of efficiency loss at 50 percent overmanned for small and large
projects is between 8 and 15 percent. As shown in figure 8, the results of the survey
are within this range.
SYNOPSIS
The results of the survey are generally consistent with the published literature on net
loss of efficiency caused by overmanning (homas et al. 1994). The data also show
that efficiency losses as a function of project type can vary. Table 2 summarizes the
difference between project types by showing relative increases and decreases in
efficiency loss. The category representing the analysis of all indoor projects is used
as the base for the indoor projects. The relative differences in table 2, called
efficiency loss multipliers, show that institutional projects are affected least and
industrial projects are affected the most. Further, the efficiency losses reported from
the survey showed no correlation to the planned size of the work force or planned
schedule duration.
CAUSES
The survey asked the respondents to indicate the principle cause of the acceleration.
The responses to this open-ended question are summarized in table 3. As can be seen,
the highest frequency of causes are related to design changes, change orders, and
scope alterations. Another category offrequent responses covers scheduling, planning,
and coordination. These factors may be as a result of problems with the design or the
inability of the prime contractor to adequately manage the project.
CONCLUSIONS
The survey confmns in numerical tenns what has been generally known in the
construction industry, that is, staffmg a project with more craftsmen than was planned
leads to losses in labor productivity. This infonnation should be of value to both
contractor and owner in negotiating an equitable adjustment to the contract sum when
schedule acceleration requires the contractor to hire more craftsmen than planned.
REFERENCES
Thomas, H. R., A. A. Oloufa, and A. S. Hanna. Construction Productivity Losses

From Ovennanning: A Literature Review and Analysis. Report to the Electrical
Contracting Foundation, Inc., Bethesda, MD, 29 pp. (1994).
Table 2. Efficiency loss multipliers.

Project Type Loss of Efficiency Loss
Efficiency Multiplier
Indoor:
All 11.70 1.00
Industrial 12.25 1.05
Commercial 10.08 0.92
Institutional 9.65 0.82
Line:
All 10.80
All Indoor and Line 10.20

Projects
Table 3. Principle cause of the acceleration.

Cause of the Acceleration No. of Responses
Management (Scheduling, Planning, 54

Coordination)
Labor 9
Weather 1
Design 10
Change Orders/ Scope Alteration 50
Crowding 5
Materials and Equipment 8
Other 4
>-
u
.~ 80
.~ 70
°° °
c......
~ 60
° °° ° °
50
c......
0 ° °° °
en 40 ~
00<ID
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°8 00
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en o 008 &C§ &0

030
--.l ~, ~ 0t C9 <ID0
- 20 0<6 8~ 0
CD 00 o ° 6b 0
~ 10 ° 0
o 0<6
0
I--
0 ° 00 Q)
0
0 @
0 10 20 30 40 50 60 70 80 90
Percent Overmann~d (%l
Figure 1. Total loss 0' erriciency vs. ~ercent overmanned.
~
- 80 o
>- o o
g 70 o
.~ 60 o 0 o
::: 50
w 40
c......
0 30
en
en 20
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--.l 10
~ 0
o I
I-- 0 3 4 2
Actual Duration / Planned Duration
Figure 2. Total loss 0' erriciency vs. actual dur'ation I planned duration,
30
(!l
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(J)
c
o
0.20
(J)
Q)
a::::
'"-
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E
::J
20
0.0 0.1 0.2 0.3 0.4 0.5 0.6 OJ
Estimated Loss from o'Lermanning
Figure 3. Distribution or estimated proportion or total erriciency 105S attributed to overmanning.
o
>-40
() o o
C
Q)
o
·u 30
'"- o
'"- o
W
20 o o
'"- o
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a 10 20 30 40 50 60 70 80 90
Percent Overman ned (%)
Figure 4. Net loss or err;ciency vs. percent overmanned.
>-
()
c
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0-
(l)
'-
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>
...... 0.50
co
(l)
a::
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o 20 406080100120140160180200
Planned Maximum Manning Level. Mp
Figure 5. Distribution of planned maximum manning level. Mp.
~25
>-
()
c(l) 20
.-
()
c.-
c.-
IS
w
' - 10
0
.(f)
(f)
0
5
---l
...... 0
(l)
z: 100
0 50
Percent Overmanned (%1
Figure 6. Net loss of efficiency vs. percent overmanned.
s.Q
>-20
u
c /
/ Indoor
Q) /
/
u /
/
/
/
'--
'--
w
'--
lO /
/
0 /
/
/
/
(J)
(J)
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z: 50 laO
a
Percent Overmann~d (%1
Figure T. Net loss of efficiency vS. percent overmanned.
s.Q r-
l5 -
>-
u .---
c
Q) r-
r- .---
u lO - .---
.---
'--
'-- ,.--
w
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(J)
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(J)
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---l
...... --l L-J - '--
Q) 0 - . '-- l-
I I
z: ["du~trial In't1t~lional Small large
Commercial All Indoor
Indoor Line All Proj. Literature
Work Type-
Figure 8. Net loss of efficiency @ 50:: overmanned.
STEEL FRAMING CREW
PERFORMANCE AND VARIATION
Gary R. Smith and Yu-Bin Lin
Department of Civil and Environmental Engineering,
Pennsylvania State University, University Park, Pennsylvania, USA
Abstract
Traditional forecasting models, reported for labor-intensive productivity, have not
provided much insight into structural steel productivity and the factors affecting steel
construction crews. The factor model has introduced many new facets into evaluating
crew level performance in addition to providing a reasonably accurate model. Accurate
forecasts for crew-level performance can also be an important element of project control.
This paper examines those factors, which were identified through project based research,
that contribute to steel crew productivity variation. Understanding this variation is the key
to understanding process control and development of productivity improvement
procedures.
Data was compiled from nine steel frame construction projects. Each work day was
classified according to those factors and disruptions that had an impact on the crew that
day. When combined, 235 days of data were available for analysis. This data was
evaluated for the purpose of determining the most significant factors and their overall
influence on performance. A model of the crew performance was developed from the
significant factors. Process control chart concepts were reviewed to identify whether the
variability in the crew performance could have been identified in a manner that would
have permitted corrective action in a timely fashion. Although interpretation of the results
are somewhat limited, the combination of process control charts with forecasts may
provide a method to better understand project performance variation causes and provide
an opportunity to better control the field process.
Key Words: Productivity, Process Control, Steel Construction
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Span. ISBN 0419222405.
50 Smith and Yu-Bin Lin
Sommaire
Les modeles traditionnels de prevision des productivires couteuses en
heures de travail n'ont guere apporre jusqu'ici d'eclairage sur la productivite
structurelle de l'acier ni sur les facteurs affectant les equipes de la
construction acier. La modelisation des facteurs, qui s'avere etre relativement
precise, a mis en lumiere nombre de nouvelles facettes de l'evaluation du
niveau des performances des equipes. Des previsions precises du niveau de
performances des equipes peuvent etre un element important du controle de
projet. Le present papier examine les facteurs, identifies au cours d'un projet
de recherche, qui affectent les variations de la productivite des equipes acier.
Com prendre ces variations revient a com prendre Ie controle des processus et
les procedures d'amelioration du developpement de la productivite.
Les donnees ont He recueillies sur 9 chantiers de construction de
charpentes acier. Chaque journee de travail a ere classee selon ces facteurs et
selon les evenements qui sont venus deranger l'equipe ce jour-lao Une fois
compilees, ces donnees representaient 235 jours de donnees a analyser. Elles
l'ont ete dans Ie but de determiner les facteurs les plus importants et leur
influence sur les performances des equipes. Le concept des graphiques de
controle des processus a ere revu pour tenter d'identifier si la variabilite des
performances des equipes aurait pu etre identifiee d'une maniere qui aurait
permis une action correctrice a temps. Bien que l'interpretation des resultats
soit quelque peu limitee, la combinaison des graphiques de controle des
processus et des previsions pourrait s'averer un bon outil pour un meilleur
controle des processus sur Ie terrain.
Steel framing crew performance 51
1 Introduction
Developing accurate estimates is important during the planning and execution phases of
all construction projects. The purpose of this paper is to introduce quantified factors that
significantly affect steel erection productivity on the basis of field data. The factor
analysis is viewed as the first step toward developing accurate estimates. Process control
charts are employed to demonstrate the variability inherent in the process.
A key to effective forecasting is the development of an accurate model. Multivariate
factor models have been designed to respond to a range of factors [1]. Many factors have
been observed which influence productivity like temperature and humidity [2] and crew
size [3]. Sanders quantified significant factors for masonry construction [4]. Pace
demonstrated the model was a plausible alternative to conventional forecasting techniques
[5]. Sakarcan tested the model on international projects and found it to be reliable [6].
Detailed development of the model has been limited to masonry productivity.
1.1 Data Collection

The measure chosen for structural steel productivity was selected as the workhours per
piece (wh/pc). "While the material cost for structural steelwork is likely most dependent
on the weight of steel members, the labor installation cost may be more dependent on the
number of members to be placed. [7]"
An important element in model development is a source of consistent data whose
characteristics are known. Structural steel data was collected on nine low to mid-rise
projects. Table 1 lists the attributes of the projects included in the study. Daily data
collection and measurements were performed at the end of the work shift. Intermittent
visits to the site during the workday were performed to observe the crew and general site
conditions to supplement the data collection procedures. Production data and other
information were collected using physical measurements of completed work and from
observations. Brief discussions with crew supervisors identified or verified significant
problems, delays, interruptions, or disruptions that occurred during the day.
1.2 Data Characterization

Data are classified for further analysis according to the factors identified in the
"Procedures Manual [8]." Interruptions and disruption events were noted during data
collection. Interruptions are unplanned events or conditions that cause work to stop.
Examples of interruptions are strikes, accidents, and equipment breakdown. Disruptions
are unplanned events that impair crew productivity for a significant period of time. Work
does not come to a complete stop during a disruption, rather it proceeds at reduced
efficiency. Rainfall, rework, and poor material handling are examples of disruptions.
Disrupted and interrupted days are set aside from the model analysis data set to remove
the influence of large disruptions and interruptions in the model development. The
database contains 235 days of structural steel production recorded. Eighty (80) days have
been classified from the notes as disrupted workdays, leaving 155 workdays eligible for
factor model analysis.
Table 1. Project Characteristics

Project Floor Area Steel Quantity Total
Number Project Type (sf) (pieces) Workhours
1 Classroom 10,816 642 1109
2 Condominium 13,000 496 902
3 Office 23,920 414 1256
4 Apartment 17,640 399 526
5 Apartment 10,926 86 152
6 Office 14,500 671 894
7 Commercial 45,000 408 891
8 Commercial 32,000 290 889
9 Medical Center 47,092 885 3020
1.3 Modeling
Project-related factors, weather zones, and crew sizes were evaluated using analysis of
variance techniques to determine the statistical significance of these factors prior to
including them in the model. After deciding which factors could be included in the
regression, the coefficients for the variables can be obtained though the regression
process. The effects of disruptions are addressed through an impact comparison to the
average non-disrupted productivity.
2 PROJECT FACTORS
Project factors are specific construction requirements, dictated by the design of the
project or construction methods, which can be identified from the plans and
specifications. In this study, project-related factors were classified as: Work Types,
Physical Elements, Design Details, and Construction Methods. Workdays are
classified according to the work performed that day.
2.1 Work Types

The Work Type category focuses on the structural system. Projects often progress
through more than one work type. This is associated with the work phase and work
type. Five classes of work types were included initially. Due to insufficient data in
some categories, only three Work Type factors were evident in the structures studied
are explained below. Table 2 lists the mean productivity for work types .
• Beam & Girder, Multistory - The structure has multiple floors with nearly identical
layouts. Floor loads are transmitted directly from the floor slabs to the steel beams
and girders.
• Beam & Joist, Multistory - The structure has multiple floors with nearly identical
layouts and floor loads are transmitted through web steel joists to beams and girders .
• Truss or Sloped Roof - Roof structure is not flat but is sloped. The roof system
wi11likely consist of roof purlins and metal deck rather than a concrete deck.
Table 2. Work Type Average Productivity

Work Type Number of Average
Observations (wh/pc)
Beam & Girder, Multistory 129 2.457
Beam & Joist, Multistory 22 3.437
Truss or Sloped Roof 4 6.285
Overall 155 2.695
An analysis of variance, with the data grouped by Work Type, indicates that there is a
statistically significant difference between the Work Types (F-ratio 12.527 and
Significance Level of 0.000). Two of the three work classes have relatively small
samples which were obtained from a single project and bias the response.
2.2 Physical Elements

Physical elements are structural components that can be identified from the
construction drawings. Each work day is classified based on the predominant physical
element used that day. Two physical elements classifications were used. Table 3
provides the mean values for these classifications. The classifications are:
• Beams, Columns, Girts, Bracing, etc. - Consists of regular shapes used in a

conventional manner .
• Trusses and Irregular Shaped Members - Work involving roof trusses, composite,
and irregular shaped members.
Table 3. Physical Element Classification Means

Physical Element Number of Average
Beams, Columns, Girders 151 2.600
Truss/Irregular Shapes 4 6.285
Overall 155 2.695
The analysis of variance indicates a significant difference between these two factors (F-
ratio 18.053, Significance Level 0.000). This result is highly correlated to Work
Type.
2.3 Design Details

Design details are specific features of the work that are more detailed than the physical
elements. Design Detail for this set of data pertains to different building heights
classified as the number of Tiers. Other than the mean productivity showing
improvement up to the 4th-7th Tier classification, little can be gained from detailed
analysis of the Tiers for this data. Analysis of variance indicated that some difference
can be identified between these groups (F-ratio 2.76 and Significance Level of 0.03).
2.4 Construction Methods

The Construction Methods classification indicates if any of the following circumstances
dominate the work on a particular day.
• Normal - No unusual methods or practices observed.

• Material Handling- Most of the day is spent performing material shakeout, stocking,
or resupply.
• Steel, Joists and/or Decking Together - Structural steel, joist and/or decking are
erected simultaneously by the same crew and the workhours cannot be separated.
The mean values obtained from this data classification are provided in Table 5.
Analysis of variance indicates there is a statistical difference between these group
means (F-ratio 12.968 and Significance Level 0.000).
Table 5. Construction Method Classification Means

Method Influence Number of Average
Normal 129 2.391
Material Handling 4 3.530
Steel, Joist and Decking 22 4.323
Combined
Overall 155 2.695
3 OTHER FACTORS
3.1 Weather Zones

Weather information recorded with daily production included the temperature in
degrees Fahrenheit and the relative humidity. Precipitation events were also recorded.
The weather data was classified into three temperature ranges and three humidity
ranges. Those ranges create a matrix of nine weather zones. Analysis of variance was
performed for Temperature, Humidity, and Zones. While many other studies have
indicated weather has a direct influence, none of the analyses indicated a significant
effect by the weather. This may be due to the workers adjusting to the conditions or
other variability in performance is large enough to mask the effect of weather.
3.2 Crew Size

The distribution of crew sizes ranged from one to twelve workers. Analysis of variance
shows significant differences among the crew sizes, but with a great deal of inconsistency
in the responses. When considering the optimal structural steel crew size range, the job
site area and crane size should also be taken into consideration. This data was not
available for analysis. Therefore, crew size, until more variables affecting it are defined
and understood, should not be included in the model.
4 MODEL DEVELOPMENT
A stepwise regression analysis was used to determine the order of selection and which
variables would be selected for inclusion in the model. The stepwise model uses a
minimum F-value of 1.5 as the criteria to include or remove a factor from the model.
Table 7 summarizes the factor coefficients for the six variables included in the model.
The number in parentheses for the stepwise model indicates the order in which the
variables entered the model. The standard conditions of the model are:
• Work Type - Beam & Girder, Multistory

• Physical Elements - Beams, Columns, Girders, Bracing
• Design Detail - None
• Construction Method - Normal
• Weather-Zone 5 (Medium Temperatures 40°F-80°F and Medium Humidity 45 %-80%)
Table 7. Regression Model Coefficients and t-values

Factor Factor Coefficient t-value
(Selection Order)
Constant 3.45
Trusses or Sloped Roof 2.94 (2) 3.51
1st Tier -1.29 (5) 3.15
2nd-3rd Tier -1.77 (3) 4.58
4th-7th Tier -1.51 (4) 3.85
Steel, Joist and Decking
Together 1.90 (1) 4.49
Medium Temperature,
High Humidity 0.66 (6) 1.68
R-Square 30.85
4.1 Model Evaluation

Qualitatively the results are consistent with the analysis of variance findings. The first
variable selected by a stepwise regression was the Steel, Joists and Decking placed
concurrently. The second variable included was the sloped roof and truss elements. This
factor will only be used in the event this particular type of work is encountered. Each of
the first two factors included in the regression represent fairly small data sets. Perhaps
the most significant factor group was the tier designations. The coefficients indicate that
productivity improves with increased floors. This is felt to be an influence of repetition
in the connections and consistency of the work activity. The final variable selected for
inclusion was the High Humidity, Medium Temperature zone. This shows a slightly
reduced productivity. High temperature and high humidity was not included due to a lack
of data.
An R-square of 30.85 shows that the model is a fairly weak predictor of the data set
from which it was derived. Since major disruptions have been set aside, the factor model
clearly indicates that there remains a significant amount of internal variability that is
unexplained.
5 DISRUPTION ANALYSIS
Table 8 summarizes the classifications of disruptions and the mean productivity value
determined for each set of data. Due to the small data sets for each noted disruption, the
results appear to be somewhat erratic. It would be expected that a disruption in
production would result in worsening productivity. In some cases the index shown here
would suggest improved productivity. The disruption index is the mean undisrupted
productivity divided by the mean disrupted productivity.
Table 8. Disruption Mean Values and Index

Type of Disruption Mean Value Disruption
(observations included) (wh/pc) Index
None (141) 3.20 1.00
Size/Layout of Material Storage Area (3) 6.57 0.49
Site Cleanliness (3) 2.53 1.26
Material Handling (4) 3.67 0.87
Material Availability (4) 5.12 0.62
Tool Availability (2) 4.89 0.65
Out of Sequence Work (8) 2.89 1.11
Rework/Fabrication Errors (8) 3.61 0.89
Equipment Availability (2) 0.55 5.85
Staffing (2) 2.33 1.37
Weather (8) 3.33 0.96
6 CONTROL CHART EVALUATION
While control charts are quite common in practice for quality control applications, it
was felt that they may provide a more relative measure for understanding project
productivity and variation. For this evaluation, the project with the most consistent
daily work output was selected as the basis for the mean and standard deviation. This
procedure provided more restrictive upper and lower control limits.
Figure 1 is representative of many projects that have only a few incidents that
significantly disrupt production. The average productivity for this project was lower
than the control chart mean, including the disrupted days. A large proportion of the
project data is noted as disrupted. The field notes indicate that this crew had many
tool and material problems, but the data plot would suggest that the crew compensated
for these problems and maintained a degree of control. Figure 2 illustrates a project
that was overwhelmed by disruptions. However, the project did have a series of days,
late in the project, that fall within the control region, which suggests that the project
had the potential to work within the control limits.
Superficially, the control charts can make average projects look fairly good.
Current upper and lower control limits range from 0.62 mh/pc to 3.19 mh/pc. This
wide range of "normal production" may cover a range that is too large for control
purposes. At this time much of the variability within this region is felt to be related to
the process itself and not necessarily to external factors considered by the models.
Whether the control charts can be useful for project control purposes is still
questionable because of the large variations permitted within the upper action limits.
DAIL Y PRODUCTIVITY
PROJECT 6
9 o Disruption Noted
~
.l 8 Within Limits
c:= ,
~
if) Disruption Noted

'" Outside Limits
>- 6
0-
> 5
u
~ 4
·0
UCL~3.190
- 3
0
CL
2 MU~1.904
LCL~0.6176
iJ
n 10 15 20 25 ItJorkday
Figure 1 Control Chart of A Typical Project

DAIL Y PRODUCTIVITY
PROJECT 3
10
u
c-- 9
8
7
> 6
U 5
::J
-0
o 4
ct . 3 UCL=3.190
2 MU=1.904
LCL=0.6176
o
o 10 20 30 40
Workday
Figure 2 Control Chart for a Severely Disrupted Project
6 SUMMARY
The control charts show there is a great amount of fluctuation within "normal data"
which is not measured by the factors currently evaluated in the factor model. The
factor model and control charts demonstrate the difficulty of modeling performance
from field data. Large amounts of variation remain to be explained by either model.
However, the combination of techniques provides useful insight into improvements
needed in recording and measuring productivity at the project level for developing
forecasting tools.
7 REFERENCES
1 Thomas, H. R. and I. Yiakoumis, "Factor Model of Construction Productivity",

Journal of Construction Engineering and Management, ASCE, Vol. 113, No.4,
December 1987, pp 623-639.
2 Smith, G.R. and S. Kilroy, Operations Impact From Temperature and Humidity,
Proceedings of the Canadian Society for Civil Engineers 1994 Annual Meeting,
Winnipeg, Manitoba, Canada
3 Swank, Joseph. An Exploratory Study of the Effects of Crew Size on Productivity

in Masonry Construction. Master's Thesis, The Pennsylvania State University,
1989.
4 Sanders, S.R., An Analysis of Factors Affecting Labor Productivity in Masonry

Construction, Doctoral Thesis, The Pennsylvania State University, August 1989.
5 Pace, J.M., A Comparative Analysis of Work-Hour Forecastin2 Techniques at the

Crew level, Master of Science Thesis, The Pennsylvania State University,
December 1989.
6 Sakarcan, A. S., An Evaluation of Forecasting Capability of the Factor Model for

Masonry Projects, Master of Science Thesis, The Pennsylvania State University,
May 1992.
7 Adrian, J. J., Construction Estimating. Reston Publishing Co. Inc., Reston,

Virginia, 1982.
8 Thomas, H. R., M. W. Homer and, G. R. Smith. Procedures Manual for

Collecting Productivity and Related Data of Labor-Intensive Activities on
Commercial Construction Project: Structural Steel. December 1990.
ANALYSIS OF CONSTRUCTION DELAYS
T.M. Lewis
Department of Civil Engineering, University of the West Indies,
St Augustine, Trinidad
B.A. Atherley
Project Manager, W.W. Micron Ltd, Port of Spain, Trinidad
Abstract
This report presents the results of an investigation into the nature, length and cost of
delays, that occurred on thirty (30) building projects in Trinidad and Tobago.
This paper first discusses the circumstances that give rise to delays, the
classification of these according to responsibility and the effects they have on the
project cost and schedule. The data are presented, analysed, and conclusions drawn.
Sommaire
Ce travail present les resultats d'une recherche sur la nature duree et coilt des delais qui
se sont arrivee en trent (30) projets de construction a Trinite et Tobago. Ce travail
debatte premierement les circumstances qui donnent naissance aces delais, classifie
ceux-ci, selon la responsabilite et analyse les effets de ceux-ci sur Ie coilt et Ie progres
de chaque projet. Les donnees sont presentees, analysees et conclusions sont obtenues
Keywords: Delays, classification of delays, excusability, compensability,

responsibility, cost implications, survey, West Indies.
1. Introduction
When a piece of work is scheduled to be carried out on a particular day and for some
reason cannot be completed, a delay is said to have occurred. This may be of little
consequence, unless it affects subsequent work when it may become significant in
terms of both its planning and its financial implications. Significant delays that occur
during a construction project will either extend its duration or increase its cost or both.
In addition, if completion is delayed the client may also lose out financially by not
having the facility (and its potential income) available when wanted, and the contractor
may lose out by not having his resources released to take on other work.
Unfortunately, there are all too many factors that can cause delays to construction
work, from those inherent in the technology and its management, to those resulting
from the physical, social and financial environment. Because there are often financial
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Spon. ISBN 0 419 22240 5.
Analysis of construction delays 61
implications to delays, the parties involved are normally interested in determining their
causes and allocating responsibility. However, it is rarely easy to determine a unique
cause, or to allocate responsibility and this, naturally, leads to disputes between the
parties involved.
An assessment of delays should try to determine as many of the following factors
as possible, as these are inevitably the focus of disputes:
(a) what factor or factors caused the delay,
(b) who was responsible,
(c) how long was the delay attributable to anyone factor
(d) what extra costs were incurred as a result of a delay.
These are the factors that have been concentrated on here.
The standard forms of building contracts do not seem to be particularly well
designed for dealing with delays. As a result delays often lead to disputes, which can
easily lead to litigation aimed at trying to establish legal responsibility and allocate
additional costs. Because litigation is itself such an expensive and long winded
process, it is best avoided. If it is possible to identify the main causes of significant
delays then it may be possible to introduce contractual or policy measures which could
help them be avoided in future.
In order to investigate the structure of delays, their causes and the costs
associated with them, a survey was undertaken into experiences on a number of
construction projects (30) in Trinidad & Tobago over the period from 1979 - 1992. In
all cases, the projects were let by a client, used a design consultant, employed some
form of site supervision and were built by general and specialist contractors selected by
conventional tender methods. Taking a year that had statistics fairly typical of the
period, construction in Trinidad and Tobago for the year 1990 accounted for 8.8% of
the Gross Domestic Product (current prices) and for approximately 11% of the
employed labour force [6][7].
2. Definition and Classification of Delays

2.1 What is a Delay?
The traditional, and still the most common procedure for letting a contract is on the
basis of the lowest bidder. This contract document normally stipulates, amongst other
things, the starting date and a completion date for the project Problems which occur
during construction may cause a delay which results in the project duration being
extended beyond the scheduled completion date. On contracts which have interim
partial completion targets, a significant delay may occur when anyone of the target
dates is not met. There is also the disruptive element to consider, as delay in one
aspect may set back another aspect in a more than proportional amount, and this can
have a 'knock-on' effect
Most organisations are concerned with 'the bottom line', and the bottom line is
that a delay can increase costs and reduce profits. A delay may have direct cost
implications in terms of an extended construction period, which will mean extra
expense for the contractor in terms of salaries, plant and equipment expenses and
additional overheads. Depending on the cause, these additional costs mayor may not
be recoverable from the client, but this is only one part of the cost equation.
A delay may have implications which go far beyond the cost of the construction
phase of the project, because commercial or environmental 'windows' may not be
achieved. Such failures can have serious consequences in terms of the cash flow from
the project, because of additional financial charges to be met and lack of use of the
facilities being constructed. In the case of an offshore oil platform, for example, this
may mean loss of revenues in the hundreds of millions of dollars per week, and even
for a more normal commercial investment, the failure to meet a window of opportunity
like a peak seasonal deadline (e.g. Christmas) may change the project's whole
62 Lewis and Atherley
financial complexion. Because every project will have a different set of financial
implications associated with late delivery, little could be learned from attempting to
generalise from a few specifics. As a result, this investigation focuses on the
implications of delays on direct costs during the construction phase of projects.
As a result, because delays are both disruptive and expensive, they merit close
scrutiny.
2.2 Types of Delays

The general principle underlying a contract is that "a party under contract has an
absolute obligation to perform, barring breach or unfulfilled conditions by the other
side" [3]. Where one of the contract clauses stipulates a completion date, this becomes
one of the conditions of the contract that must be met, and, clearly, a delay may imply a
breach of that condition.
However, there are obviously circumstances when the cause of a delay is a factor
that is beyond the control of any party to the contract and it would be unfair to blame
one party for a breach. Thus, when examining delays, it is necessary to try to
establish where responsibility lies, and it is convenient to classify delays under three
main headings:
(i) Excusable delays,
(ii) Non-excusable delays,
(iii) Concurrent delays.
Taken from the viewpoint of the contractor, these classifications would be

expanded as,
(i) Excusable delays are those caused by unforeseeable factors outside the control
of the contractor. They may be either (a) Compensable excusable delays, i.e.
those for which the contractor is entitled to claim damages from the owner, or (b)
Non-compensable excusable delays, i.e. those for which no one can be held
responsible.
(ii) Non-excusable delays are those that are deemed to be the fault of the
contractor, because they were within his control and should have been
foreseeable.
(iii) Concurrent delays occur when two or more delays occur at the same time.
Any analysis is complicated by details, and when people are involved, details
proliferate. As an example of the sort of complications that can arise, the following
quotation is apposite: " ... suppose the owner failed to supply certain materials on time.
At the same time, the workers who would have installed the materials were on strike.
The contractor cannot claim damages for work that would not have been accomplished
had the owner-caused delay not occurred. He would, however, be entitled to a time
extension for the period of the strike unless it can be proved that the strike was due to
his own actions. This is an example of concurrent compensable and non-compensable
delays. The result is a time extension, but no damages for the contractor". [4]
3.Causes of Delays
3.1 Excusable Non-Compensable Delays

In the case of excusable non-compensable delays the following have been reported [3]
as being the most frequently given for excusing timely performance:
(i) Act of God - natural disasters such as earthquakes, tornadoes, hurricanes,
volcanic eruptions, floods and fire,
(ji) 'Force Majeure' (excepted or accepted risks) - all acts of God, war,
insurrection, riots, major labour strikes, Acts of the State,
(iii) Weather - when weather becomes unusually severe and surpasses the normal
(i.e. average conditions for an area over the previous ten years based on
meteorological data) for that particular locality during a specific season of the
year, it becomes a factor excusing delay.
3.2 Excusable Compensable Delays

Excusable compensable delays, which are attributable to the client, entitle the contractor
to an extension of time and a claim for damages. "The basis of recovery of damages for
delays is the implied obligation that the owner will co-operate with the contractor and
not impede the performance of the work of the contractor" [4]. Delays which are both
compensable and excusable are most frequently caused [3] by the following:
(i) failure to hand over the total site on time,
(ii) slow payments to the contractors,
(iii) errors in drawings and specifications,
(iv) late detailing of work,
(v) slow approval of fabrication drawings.
3.3 Non-Excusable Delays

Non-excusable delays are those deemed to be the responsibility of the contractor.
Thus, a contractor who extends his work beyond the original completion date for
causes which could be shown to be foreseeable and avoidable, is liable to the client for
monetary damages for the delay, in the form of actual or liquidated damages [4]. The
more common causes are reported [3] to be:
(i) failure to properly co-ordinate men, materials and equipment,
(ii) failure to properly finance the project,
(iii) failure to submit shop drawings promptly,
(iv) failure to employ competent personnel.
4. Effects of Delays
A delay tends to act like a virus - very slowly, but with far reaching effects. Like the
symptoms of a virus, there are symptoms which are indicative of a situation developing
which may lead to a delay, they are:
(a) a general slowing down of the job,
(b) inefficient use of the weather, i.e. not using dry weather effectively,
(c) improper sequencing of activities, leading to work stoppages on some tasks
In an attempt to solve these problems there is a tendency to want to accelerate the

work. However, acceleration is no guarantee that the job is going to be finished on
time, and it is almost certain to increased costs because it usually involves on of the
following:
(i) increase of the labour crew,
(ii) increase in the working hours of the present crew,
(iii) sub-contracting out sections of the work to specialists,
(iv) hiring more equipment or more up-to-date equipment,
(v) any combination of items (i) to (iv).
The increased cost of accelerating a job must be carefully considered by both the
client and contractor before the decision is taken. The contractor may favour
acceleration of the job at his own expense if he feels that he may be held responsible
for the delay and:
(i) the liquidated damages are more costly than acceleration,
(ii) certain operations are heading for an unfavourable time of year,
(iii) the same men and equipment are needed on another job,
64 Lewis and Ather/ey
(iv) specialist trades/services may be delayed and higher costs incurred.
The client may favour acceleration of the job at his own expense if he feels that he
is responsible for the delays and:
(i) he will have to pay penalty costs to the contractor for extending the period,
(ii) the original completion date has special significance,
(iii) the project will suffer a loss of profits greater than the cost of acceleration
In some cases, in the interests of goodwill, and where both parties perceive it to
be to their benefit, the costs of acceleration may be shared between owner and
contractor. It is also possible for delays to have a positive side effect, as when delays
are apparently inescapable, and the effects are sufficiently costly, the parties to the
contract may be inspired to seek new and innovative means of avoiding them. The
solutions that evolve may enable future problems to be avoided.
The worst effect of delays to a construction project is the termination of the
contract by either party. It is normally a last resort action taken by an owner, who
terminates the contract for excessive non-excusable delays. Any such termination must
take place within the legal framework of the contract.
5 Standard Contract Provisions For Delays

Claims can arise for many different reasons and between any of the parties involved in
or affected by a contract, however, this paper seeks only to examine the claims
between client and contractor resulting from delays on contracts using the most
common locally employed contract documents, i.e. the Trinidad and Tobago Institute
of Architects (TTIA) [8], standard form of building contract (with quantities-I974
edition) and the ICE (Institution of Civil Engineers) conditions of contract [2].
6 Analysis Of Delays From 30 Projects

The data collected are all from professionally designed and supervised projects, which
used the more common standard forms of building contracts. While the thirty (30)
projects studied were not sufficient for a statistically significant analysis, the sample
size was large enough to suggest trends in the data, and those trends are compatible
with results obtained from a study of the nature and extent of variations to building
contracts in Australia [1].
6.1 Accuracy and Consistency of Data

The data collected were for projects done between the years 1978 to 1992 inclusive.
There is no significance to be attached to these years, other than that more up-to-date
data were not available.
The details of the actual delays were reasonably well recorded because the
projects had used bar charts which had been regularly updated. The contract documents
required that scheduling techniques should be used and bar charts were all that were
used on all except two jobs. Hence, whether the information came from the contractor
or the consultant the point of reference was always the contractor's bar chart.
As far as the costing of the delays was concerned big differences were observed
between the contractors' records and those of the consultants. Where quantity
surveyor's letters were available, they were the points of reference for both parties,
since in most cases they detailed the sums in question. In their valuations, however,
the contractors tended to lump the cost of supervision, extra work, additions and
variations together, and to cost delays on the basis of what they spent directly to get the
job done rather than to try to break-down the cost of the work into elements and
associated overheads. By comparison, the consultants tended to try to identify items of

work associated specifically with the delays, broken-down into their elements and
valued at rates given in the bills of quantities, and these valuations were used to review
the contractors' claims with a view to their acceptance, rejection or reduction to
'acceptable' levels. Consultants did not normally increase bill rates or overhead
allowances to account for extra time required on the project.
It was rarely possible to check data on a specific delay with both consultants and
contractors involved because a questionnaire approach was used to collect data and it
was not possible to get responses on the same project from both. Personal interviews
were conducted with all but one respondent in order to discuss the details of the
projects and the delays involved, and a telephone interview was conducted with the
other respondent.
6.2 The Basic Data

The data was obtained from seven organisations representing a spread of interests in
the construction field. Their distribution and the number of projects analysed from
each were as follows:
lI-roup Type Projects

Consultants - Engineering firms (2) 8
Architectural firm 2
Contractors (2 independent firms) 12
Project Manager 7
Government - Ministry of Drainage 1
:ill
Table 1 lists the clients, the total cost of the contract, the total number, the total
cost and the total length of delays on each contract. All costs and values, are quoted in
Trinidad and Tobago dollars (approximately TT$6 =US$I).
The figures show that on contracts worth $56,626,485, 95 significant delays
occurred, the delays cost $4,561,963 and involved 424 lost weeks of work. The cost
of delays represents approximately 8% of the overall cost of the contracts. The total
cost shown is the cost of the particular contract involved, not of the entire project, for
example, the Hall of Justice (project #21) had an overall cost of over TT$400 million,
while the painting contract reported here was worth TT$1.4 million. All these projects
were professionally designed and supervised.
Table 2 gives a more detailed breakdown of the 95 specific delays that were
reported on the 30 projects. Briefly summarising the data in Table 2, 57 of the delays
were deemed excusable and compensable, and these delays accounted for $4,333,972
of extra cost and 290 extra weeks of work. The delays which were deemed to be non-
compensable numbered 38, and these accounted for $227,991 of extra cost and 132
weeks of extra work.
Included amongst the excusable/compensable figures are two items recorded as
"Claims for loss and expense". These account for $580,000 of extra cost and no extra
time. These were claims put in by the contractors for extra payments against increased
overheads and loss of other work, which were caused by their being delayed on a job
(for reasons deemed excusable/compensable), but not having claimed this
compensation against any other specific delay.
A degree of consistency was achieved in the analysis because in most cases the
description of the details and the nature of the delay were agreed between the
respondentsand the conductor of the survey.
Project/Client
-
TABLE 1 A n allysIS
. 0 f P roJects
Total Cost Total Total Cost Total
($) No. of of Delays Length
Delays ($) of Delay
(wks)
1. Housin1! Development 8,600,000 2 250,000 48
2. Housing Development 8,400,000 2 210,000 36
3. Bus Terminal 7,000,000 5 210,000 48
4. *M.o.W. Drainage Division 35,000 1 2
5. *U.W.I. Inflammable Stores 263,647 3 3
6. *U.w.I. Environmental Lab. 488,782 3 15,836 13
7. *U.W.I. Fluids Lab. 412,734 4 12,000 12
8. *D.W.I. Offices and Classrooms 1,330,716 4 259,724 4
9. *D.W.I. Electrical and Electronic Lab 948,133 5 82,767 13
10. Ghany Site 21,000 2 12,700 4
11. Ishmael Khan 63,000 2 16,000 8
12. Trinidad Cement Limited 63,000 3 8,000 4
13. National Petroleum Ltd. 5,800 1 2.5
14. Print Masters 29,440 1 4
15. Associated Bnmds 12,000 1 3
16. *T.S.T.T. 29,000 1 5
17. *NIHERST 46,000 1 1,285 2
18. Government Health Center 23,530 1 4.5
19. *U.W.I. Offices and Classrooms 2 12,628,046 5 278,591 16
20. Colsort Mall 450,000 6 190,000 14
21. Hall of Justice 1,400,000 5 1,060,000 29
22. Farrell House 150,000 7 75,000 28
23. *U.w.I. Hi1!h Volta1!e Lab. 878,810 8 465,000 43
24. *D.W.I. Food Technolo~ Lab. 3,909,682 7 845,012 36
25. Scotia Bank Not available 4 8
26. Free Zone 1,600,000 2 4
27. Bank of Commerce 2,300,000 2 4
28. *TELCO Head Office 4,800,000 3 500,000 16
29. Hand Arnold 580,000 2 50,000 6
30. *D.W.I. FoodProcessin~Lab. 158,165 2 20,048 4
Totals 56,626,485 95 4,561,963 424
.. ..
*M.o. W. - Ministry of Works, Government of Tnmdad & Tobago
* U. W.1. - University of the west Indies, St. Augustine Campus
*T.S.T.T.- Telecommunications Services of Trinidad and Tobago Limited
*NIHERST - National Institute of Higher Education (Research Science & Technology)
'TELCO - Telephone Company
TABLE 2 - NATURE, TYPE, COST AND LENGTH OF DELAYS

Project Nature of Delay Type Cost Length
No. * ($) (wks)
1. Payment delays by client E/C 150,000 24
Part of si te not available E/C 100,000 24
2. Part of site not available E/C 100,000 12
Payment delay by client E/C 110,000 24
3. Poor work sequencing by contractor NE
Procurement failures by contractor NE 24
Lack of manpower by contractor NE 16
Payment delay by client E/C 60,000 8
Extra works E/C 150,000
4. Heavy rains/floodin2 of iob site E/C 2
5. Subsurface different than expected E/C 0.5
Heavy rains ElNC 1
Procurin2 failures by subcontractor NE 1.5
6. Additional work demanded by client:
Furniture changes E/C 8,000 8
Equipment changes E/C 2,375 3
Structural work E/C 5,461 2
7. Additional work demanded by client:
Plumbing changes E/C 3,000 3
Structural Work E/C 4,229 3
Electrical Work E/C 3,000 4
Cupboards chan2ed E/C 1,771 2
8. Errors in plans & specs. E/C 22,784
Ambiguities in plans and specs. E/C 35,896
Change sequence by contractor NE 20,000
Additional work by owner E/C 181,044 4
9. Ambiguities in plans & specs. E/C 3,250 1
Oruissions in plans & specs. E/C 19,637 4
Errors in interpretation (floor finishes) ElNC 4,200 2
Additional work (client brief) EIC 22,142 2
Chan2e order by new client EIC 33,538 4
10. Change sequence by contractor NE 1
Utility not available by owner E/C 12,700 3
11. Change method by contractor NE
Poor scheduliDR of work bv contractor NE 16,000 8
12. Change method by contractor NE
Utility not available by owner E/C
Redo work by contractor NE 8,000 4
13. Change sequence by contractor NE 2.5
14. Procurement failures by contractor NE 4
15. Lack of productivity by contractor NE 3
16. Lack of productivity by contractor NE 5
17. Additional work b~_dient E/C 1,285 2
18. Chan2e sequence by contractor NE 4.5
19. Heavy rains ElNC 18,591 1.5
Oruissions in plans & specs. E/C 160,000 2.5
Procurement failures by contractor NE 36,000 4
Consultants change scope of work E/C 60,000 4
Late power supply connections E/C 4,000 4
TABLE 2 (Continued)
Project Nature of Delay Type Cost Length
No. * ($) (wks)
20 Errors in plans & specs. E/C 12,400 1
Ambiguities in plans and specs. E/C 14,600 1
Omissions in plans & specs. E/C 23,700 2
Strike by General Contractor E/C 10,000 4
Additional work E/C 102,300 4
Redo ftnished work NE 27,000 2
21. Ambiguities in plans & specs. E/C 106,000 2
Omissions in plans & specs. E/C 170,000 3.5
Day works E/C 200,000 4.5
Extra painting/variations E/C 500,000 17
Redo ftnished work NE 84,000 2
22. Heavy rains EtNC 1,000 3
Change in sequence by contractor NE 4,000 2
Procurement failures by contractor NE 3,000 2
Strike by main contractor E/C 2,600 8
Redo work damaged by strike E/C 10,000 4
Additional work by client E/C 50,400 7
23. Errors in plans & specs. E/C 20,000 4
Ambiguities in plans & specs E/C 5,000 3
Procurement failures by contractor NE ** 4
Late shop drawing approval by consultant EtC ** 1
aaim for loss & expense E/C 80,000
24. Errors in plans & specs. E/C 17,750 4
Ambiguities in plans & specs. EtC 15,000 4
Omissions in plans & specs. EtC 31,948 2
Heavy rains no work EtNC ** 4
aairns for loss & expense EtC 500,000
25. Poor means of sequencing by contractor NE 2
Procurement failures by contractor NE 2
Procurement failure by subcontractor NE 3
Poor scheduling of work by contractor NE 1
26. Procurement failures by contractor NE
Lack of manDOwer NE 4
27. Poor work sequencing by contractor NE 2
Lack of space at site meetings ? 2
28. Slow change in project brief requirements E/C 4
Poor work sequencing by contractor NE ** 6
29. Poor work sequencing by Contractor NE 6,200 3
30. Errors in plans & specs. EtC 2,200 2
Additional work bv client E/C 17,848 2
• EtC =Excusable Compensable; EINC =Excusable Non-Compensable; NE =Non-Excusable
** Difficult to quantify
6.3 The Data Collected

Given that some computation was necessary on the part of the respondents to separate
information related to the delay from the rest of the stored information, it was
gratifying to receive data on thirty (30) projects. The data covered some ninety five
(95) recorded delays caused by a fairly wide range of factors. Seven (7) individual
organisations were involved, and they provided information on projects as shown in
Table 2.
7. Discussion of Results
During the interviews with those involved, it was felt that the projects analysed here
were not untypical of the projects being constructed in Trinidad and Tobago at that
time, in other words, they were neither worse nor better than average in the number of
delays that they suffered.
Although each case study represented a 'project' to the company concerned, they
did not all represent complete projects to the clients involved, e.g. the painting contract
for the Halls of Justice was a project to the contractor, but only a very small element of
the total project to the client. This was not expected to make any difference to the
conduct of the work either by the contractor or by the client or his representative, or to
affect the results of this survey.
It is clear that the majority of the delays which were detailed fell into the category
'compensable excusable'. This bias almost certainly resulted from the fact that the
contractors would have been much more aware of the need to fully document delays
which they felt they could claim compensation for. Equally, the consultants would
have been aware of the contractor's intention to claim and would also have recorded
relevant details.
The non-compensable delays are made up of the portion of the delays that were
claimed for but rejected, as well as the delays that were recorded in diaries and minutes
of meetings but not claimed for. In no cases did the client enforce the 'liquidated
damages' or penalty clauses which were in the contract documents, even though very
significant delays (over 40 weeks) were experienced on some of the contracts.
Where values have been given for non-excusable or non-compensable delays
these figures were either on record as claims or were derived from the actual costs
involved in redoing work, or in accelerating the work to get it back on schedule.
One overall pattern that did emerge was that main contractors suffer more delays,
and more costly delays than subcontractors. This may have simply been a scale related
fact i.e. the more work you do the more likely you are to experience problems (which
seems to be substantiated in the related finding that larger jobs tended to have more
delays than smaller ones), or it may have been to do with the timing of their
participation in the works. The main contractor is likely to be involved earlier in the life
of a project, and hence at a time when it is likely to be least fully finalised, and when
the site is least prepared - subcontractors tend to get involved later on when things have
settled down, and problems causing delays are less likely to arise.
The general economic climate during the period under study was one of recession
and high levels of unemployment, and this generally tended to keep industrial action to
a minimum. Only two projects were affected by strike action, and in both cases it was
the work of the subcontractor being delayed by a strike affecting the main contractor
that was recorded. As a result, in those two instances, what would otherwise have
been an excusable but non-compensable delay became compensable as the
subcontractor claimed against the main contractor.
By far the largest factor leading to delays was the client requiring changes or
additions to be made to the project. If the 'top ten' causes for delays (by additional cost
incurred) are listed (see tabulation below) it will be seen that the quality of the drawings
and specifications that the contractors' had to work with appeared to leave much to be
desired. When the omissions, ambiguities and errors (items 4,7 & 9) in these
documents are added to variations required by the consultants, they accounted for
claims amounting to $1,528,365 and for delays totaling 72.5 weeks.
The consultants who were interviewed indicated that this was not a fair reflection
of their performance or competence as most of the variations and the problems with
drawings and specifications arose because of late design changes that emanated from
the clients. They, the consultants, had to respond and make the desired changes, and it
was this which caused the delays and cost increases.
# Nature Cost (:Ii) Length

1 Additional work by client 1,636,970 99 weeks
2 Variations by consultants 760,000 25.5 weeks
3 Claims for loss and expense 580,000
4 Omissions in drawings & specs. 509,285 23 weeks
5 Late payment by client 320,000 56 weeks
6 Unavailability of whole or part of site 212,700 39 weeks
7 Ambiguities in drawings & specs. 179,746 11 weeks
8 Redo work damaged by other trades 129,000 12 weeks
9 Errors in drawings and specs. 79,334 13 weeks
10 Poor scheduling or change of sequence 46,200 32 weeks
It should also be added that during recessionary times the process of decision
making on capital investments tends to slow down, as a result of this the period over
which the design process takes place tends to expand. In the projects examined, for
example, the design of project 19 (University buildings) took 5 years from conception
to tender. Given the rate of technological change, it is hardly surprising that the client
required changes to be made to the project definition between the time of the brief and
the tender and before the completion of the building when such time scales are
involved.
In addition to this, as Bromilow has noted "... Variations are needed to help the cost
steering process and to cope with new ideas, changes in technology and mistakes; they
are, contrary to the view of many, an inevitable part of the building process. "[I] We
are dealing with delays rather than variations, but in practice, they tend to be
interdependent. Delays are often a consequence of variations;
During recessionary times the pressure to meet cost targets increases, and this leads
clients to 'tinker' with their projects in order to try to effect savings. For example, on
this particular project, in the original design (carried out during the boom years) all
services were centrally controlled, there were not even light switches in the individual
rooms. With the onset of the recession before building got under way, increasing
awareness of the need to control energy costs led the client to demand a revision of the
design to allow lights to be switched off in each room. Such 'cost steering' variations
led to design changes, which led to delays. Although the effect of such tinkering may
be delays and extra costs in the short term, in the longer term they may well be cost
saving, and hence very cost effective.
8. References
1. Bromilow, F. J. (1969). Measurements and Scheduling of Construction Time
and Cost Performance in the Building Industry. Report of the Division of
Building Research Division. CIRlA: Melbourne.
2. ICE Conditions of Contract. (1979). Conditions of Contract and Forms of

Tender, Agreement and Bond for use in Connection with Works of Civil
Engineering Construction. 5th ed., London: The Institute of Civil Engineers.
3. Richter, I. E. (1983). International Construction Claims: Avoiding and Resolving
Disputes. New York: McGraw-Hill.
4. Rubin, R. A., Guy, S. A. and Maevis, A. C. (1983). Construction Claims
Analysis, Presentation. Defence New York: VanNostrand Reinhold.
S. Stokes, M. (1977). Construction Law in Contractors' Language. New York:
McGraw-Hill.
6. Trinidad and Tobago. Central Statistical Office. (1992). Review at the Economy
l!l!lL Port of Spain: Government Printery.
7. Trinidad and Tobago, Central Statistical Office. (1992). Annual Statistical Digest
1990' No. 37 Port of Spain: Government Printery.
8. Trinidad and Tobago Institute of Architects. (1974) Standard Form of Building
Contract with Quantities. Port of Spain: Trinidad and Tobago Institute of
Architects.
CLIENT BENCHMARKING OF
CONTRACTOR PERFORMANCE
D.8aldry
Department of Surveying, University of Salford, Salford, UK
Abstract
Substantial clients of construction with extensive development programmes invariably
employ a range of contracting organisations. Some clients, notably in the public sector,
may employ widely from an extensive panel of contractors, whereas others may adopt
an approach in which a single or limited number of contractors are engaged for the
completion of a programme, in a manner which has become known as partnering.
Notwithstanding the procurement approach adopted there is an ongoing necessity for
clients to have some means of objectively assessing the performance and reputation of
these contractors as a way of evaluating current activities and also influencing future
procurement directions.
Benchmarking has emerged as a means by which participants in an industrial or

commercial process may monitor performance by reference to verifiable evidence from
comparable activities, posSloly derived from some mutual information sharing
agreement. This paper examines ways in which significant construction industry
employers may adopt this process as an integral part of their procurement decision
making and action as a means of enhancing project performance and predictability.
Keywords: Benchmarking, contractors, performance, procurement
Sommaire
Des clients importants de l'industrie de la Construction, ayant de vastes programmes de
developpement, emploient en general une gamme d'enterprises de sous-traitants.
Certains clients, du secteur public notamnent, peuvent employer a grande echelle a
partir d'un large panneau de sous-traitants, alors que d'autres, peuvent adopter une
approche dans laquelle un seul sous-traitant est engage, ou bien il est fait appel a un
Edited by D.A. Langford and A. Retik. Published in 1996 by E & FN Span. ISBN 0 419 22240 5.
Client benchmarking of contractor performance 73
nombre limite de sous-traitants pour terminer un programme, ce qui s'est fait connaitre
sous l'appellation de partenariat. Bien qu'il s'agisse d'approvisionnement, ou demande
d'achat, les clients doivent, en permanence, etre en mesure d'6valuer objectivement
l'execution et 1a reputation de ces sous-traitants, de maniere Ii 6valuer les activites
courantes et aussi Ii influer sur les orientations de l'approvisionnement futuro
L'evaluation des performances a fait son apparition comme moyen par lequel des
participants Ii un processus industriel ou commerciel peuvent piloter les performances,
en se referant a une evidence verifiable Ii partir d'activites comparables, peut-etre
derivee d'un certain accord sur Ie partage mutuel de l'information. La presente
communication examine les fayons dont les employeurs importants de l'industrie de 1a
construction peuvent adopter ce processus en tant que partie integrante de leur prise de
decision d'approvisionnement et d'action, et comme moyen de rehausser les
performances du projet et sa fiabilite.
Mots cles: Evaluation des performances, sous-traitants, performances,
approvisionnement
1 Introduction
Benchmarking as a term has a long history of application in the construction process,

being derived as it is from the technique used by map makers and surveyors to measure
a current position against an identified landmark or reference point known as the
"benchmark". In more recent times the term has become analogous to the business
process of establishing best practices, improving management systems, and providing
an aid to strategic procurement activities. For supply side organisations the process has
provided the means for observing in a disciplined manner the methods and practices of
others, both within a particular industry or area of commercial activity and also beyond
to other areas which offer methods and techniques which would be capable of beneficial
transfer, the intention being to adopt and adapt the most successful modes of operation
in order to pursue competitive advantage. For demand side organisations the approach
offers a way of developing a rigorous approach to supplier evaluation, applicable at pre-
contract, current, and post-contract stages, and as a means of assisting in critical
decision-making to optimise the procurement outcomes in terms of value for money,
certainty of performance, and operational reliability.
Benchmarking is characterised by a variety of definitions; Cousins [1] identifies a

number such as that of the Xerox Corporation which is one of the organisations
credited with the founding application of the approach:
"the continuous process of measuring products, services, and practices against the
toughest competitors or those companies recognised as industry leaders"
Ajoint definition from Coopers and Lybrand and the CBI states:
"the process for comparing business practices and performance levels against other
companies"
74 8a/dry
Cousins goes on to paraphrase the latter definition as:
"the process for comparing business and performance levels against others and
providing reassurance as to the validity of existing methods and costs or suggestions
for improvements as appropriate"
The tone and content of these definitions lean heavily towards supply side issues in
terms of references to competition, relative performance, and costs of production, with
an emphasis upon the ongoing continuity of the process. The operational relevance of
so much benchmarking activity may explain the alacrity with which the facilities
management industry has adopted this approach as a means of comparing and
evaluating a plethora of measurable performance indices (Varcoe [2]). However the
respective performance of organisations must extend beyond readily measurable
indicators of performance and present a profile of the totality of an organisation. France
[3] offers a quotation from Manton, an acknowledged expert in the benchmarking field,
who states "A company or industry .......... must focus not just on numerical
comparisons but on business vision, business strategy, management processes and
current best practice".
For a commercial client the process of benchmarking offers the opportunity for a
structured means of comparing and evaluating supplier characteristics as an aid to
developing a procurement strategy capable of delivering reliable and superior
performance. A well considered benchmarking process should allow a client to focus
upon those issues of supplier performance which are critical to the successful
accomplishment of client organisational objectives. For regular or prospective clients of
the construction industry a benchmarking mechanism allows for appropriate weightings
to be applied to contractor performance in terms of price competitiveness, programme
reliability, technical expertise, experience of building type, product quality, claims
awareness, etc., to reflect the significance of these issues for the project sponsors
primary business.
2 Expectations of Construction Clients
Sponsors and clients of construction services vary in their level of experience,

sophistication, and degree of awareness of the construction process and marketplace.
All however are seeking some degree of reassurance that the procurement decisions
that are made, and in particular the selection of contractual supply partners, are those
which are most likely to result in a high level of customer satisfaction. Chicken [4]
suggests that major decisions are not the product of a single event or action but arise
from protracted discussion, investigation, and consideration. The final decision is often
the product of a whole series of subsidiary decisions and the interaction of several
interested parties. The making of critical project decisions is a fundamental element of
the project sponsor's duties. Gorog [5] describes the strategic decision points in the
project process which largely determine the degree to which organisational objectives
are realised, the selection of supply contractors having a profound influence upon
project performance and outcomes.
The factors which can be identified which will influence the process of contractor
selection by the project sponsor may be stated as:
• General level of sponsor expertise and experience of the construction process

• Specific expertise in innovative or unorthodox procurement methods
• Awareness of supply organisations and their apparent capabilities
• Access to professional advice either in-house or externally commissioned
• Statutory controls over contractor qualification notably as set by European Union
codes
• Organisational policy over contractor qualification particularly in the public sector
• Organisational requirements for project performance priorities
When proposing to sponsor construction activity the client organisation enters a

process of selectivity to determine the supply organisation which will be finally
appointed as contractor to the project . This selection may take one of a number of
forms as determined by the procurement process of the sponsoring organisation:
• identification of a single contractor organisation with whom the sponsor intends to

enter into a negotiated contractual relationship
• formation of a restricted panel of selective contractors required to compete for the
project on a number of criteria, commonly price, but also possibly including
resource capacity, design skills, management expertise, or funding capability
• facilitation of an open tendering process in which a large number of responding
contractors compete for the project having normally first satisfied some
prequalification criteria
Whichever procurement approach is adopted there is an overriding requirement for

the project sponsor to be in possession of expert intelligence as to the characteristics,
merits, drawbacks, and performance record of potential contractors. An active and
effective process of benchmarking can provide the mechanism for determining criteria
against which past performance and current capability may be measured, for
establishing a set of minimum standards as a means of testing for prequalification, and
for forming the basis for negotiation in respect of risk allocation, range of services to be
provided, and the terms of the contractual relationship to be formed.
3 The Benchmarking Process
Benchmarking is commonly applied to key operational processes within a business to

determine those critical factors which create organisational success. The majority of
benchmarking activity has been in the form of peer assessment in which a supply side
organisation measures its capabilities, competencies, and ultimately its performance
outturns, against relevant and appropriate companies often from within the same
76 Ba/dry
industry. Codling [6] has identified how three distinct types of benchmarking have
evolved from mutual information sharing relationships:
• Internal - intra-company comparisons of practices and procedures to promote

harmonisation of perceived best practice.
• External - information exchange for mutual advantage occurring amongst

organisations within the same industry or on occasions across a range of industries.
This process often utilises the services of a third party organisation to moderate
information and, if required, to maintain confidentiality of participants.
• Best practice - the seeking out of the undisputed leader in a specific business
process which is critical to organisational success. Competitive forces may mean
that this approach often requires a partnership relationship to be developed with a
leading organisation in an alternative relevant industry to that occupied by the
benchmarking organisation.
It may be recognised from the above that the intensity of benchmarking activity
occurs within organisations which are part of a product or service supply chain, being
both providers and procurers of resources and key components. For an organisation
which is dominantly the end consumer of goods or services, such as the sponsor of
construction project services, the process requires adjustment and refinement to reflect
the external location of the client organisation, its limited direct access to market
intelligence, and its often infrequent and occasional participation in the procurement
process.
As has been noted the application of benchmarking techniques has been widely
adopted in process industries and., in particular, taken up with enthusiastic vigour by the
rapidly expanding facilities management industry which is largely building related in its
activities. Some particular difficulties do emerge however when applying the process to
a project based industry such as construction which do need to be overcome if optimal
benefits are to be derived. An opposing view to this is held by Karlof and Ostblom [7]
who propose that the project form of organisational activity is highly suited to the
application of benchmarking techniques as the formation of an optimal ad hoc team
with specialised qualifications offers flexibility and the ability to operate outside regular
channels without being hampered by organisational formalities. Nevertheless difficulties
do exist which to some degree distinguish construction from other industries and
include:
• very few projects are alike given the variety of locations, participants, and product
content
• projects are invariably conducted by teams of participants assembled for the
duration of the project only and which are broken up on completion
• the supply side of the industry is highly fragmented both in the number and diversity
of available organisations
• some project sponsors are regular and frequent commissioners of construction
services whilst others take part once-in-a-corporate-lifetime
• the highly competitive and commercial nature of construction activity does not
encourage either supply or purchasing organisations to be forthcoming with
information
• the data generated from construction activity may be complex and variable and
subject to differing interpretation
• the application of benchmarking in construction has only minority penetration to
date resulting in a lack of knowledge and enthusiasm for its potential and often
being limited to cost comparisons only
If these obstacles to effective benchmarking are to be overcome a prerequisite is an

improved industry wide culture of confidence and mutual trust, a condition which the
industry has largely avoided during its modem history. Hawke [8] highlights a quotation
from the Editor of Building magazine on the occasion of that journal's 150th
anniversary: ".... one theme comes twinkling through, the unchanging nature of human
behaviour. Professional jealousy, competitive friction, and contractual wrangles
preoccupied the Victorian building industry." Similarly Powell [9] identified how the
cultural image of the contemporary construction industry was working against the
formation of values of trustworthiness and integrity. The development and growth of
benchmarking is dependent on the existence of an atmosphere of co-operation, which
does not necessarily lead to a diminution in competitiveness, but may prove to be a
mechanism which is instrumental in assisting the creation of such a culture.
4 A Benchmarking Process for Construction Clients
Construction clients are commonly obliged to enter into demanding contractual

relationships with organisations with whom they have had limited contact and of whom
they have incomplete and inadequate knowledge. Construction projects contain a high
level of risk for both primary contracting parties, at a level which in some extreme
circumstances could threaten the survival of the organisation if a major risk impact was
to occur. Sponsorship of a major construction project requires the client organisation to
make significant decisions, notable of which is the selection of the contracting supply
partner (Chicken [4]).
For major projects a process of prequalification is often implemented which is

designed as the first part of a two stage process which requires putative tenderers to
satisfy some basic criteria to test suitability and capability to tender and to execute the
contract. Alternatively clients who are regular participants in the construction
marketplace may retain a continuing "approved" list of vetted contractors from which
an appropriately sized panel oftenderers may be drawn for a specific project. This latter
approach is a common occurrence in the public sector as described by Latham [10] who
particularly notes the CMIS list held by the Department of Environment to which
private clients may have access to determine whether a specific contractor is held on
that list. Latham goes on to comment how the preparation and maintenance of a
multitude of lists represents a wasteful duplication of effort which significantly adds to
client costs. To mitigate these costs some client organisations have attempted to levy
charges on contractors for admission to an approved list, an approach which has raised
78 8a/dry
the ire and contempt of contractors and their trade associations. The conclusion of
Latham is that it would be appropriate for the DOE to develop the CMIS scheme as a
centralised national resource to assist clients and their advisers to determine contractor
competence against a range of performance criteria.
From a client's perspective this paper suggests the following essential elements of an
effective scheme for benchmarking contractor capability:
• Comprehensive - containing an adequate range of contracting organisations to meet

the clients requirements in terms of frequency of contracting intentions,
geographical spread, and typical characteristics of contracts
• Interactive - capable of presenting the client with choices and alternatives with
which the client may engage to customise a search process
• Regularly updated - able to illustrate the most current and meaningful information
of contractor performance and capability
• Targeted - capable of allowing the client to select appropriate specialist contracting

organisations to serve expressed needs and requirements
• Economic - demonstrate ease of access and a reasonable cost profile so as to

promote regular and widespread utilisation
• Reciprocal - encourage participative feedback from client participants on contractor

performance and capability in a form which is defenSlole, appropriately confidential,
and which indemnifies contn"butors against actions in tort
The establishment of a national database of contracting organisations offers the

possibility for the assembly of factual and measurable information together with
verifiable value judgements to assist prospective clients to identifY those companies
which would prequalify for consideration for bid or negotiation opportunities by
satisfying whichever set of performance criteria the client wishes to impose, in addition
to those imposed by some other agency such as the European Union Works and
Services Directives. In this way a client may impose as it's benchmark standard the
highest degree of satisfaction level which may be achieved in those success criteria
which are most critical to itself and against which it would be posSlole to identifY those
companies whose performance record and verified capability came closest to matching.
The outcome of this approach would be to add an additional option to the range of
benchmarking approaches, as noted earlier in this paper by reference to Codling [6],
that of most desirable practice which would be an abstract achievement which mayor
may not be attained by any participating supply organisation but which exists as a pure
benchmark of performance.
Any database formed would be a combination of factual and evaluated information

derived from both the participating contracting organisations themselves and former
clients. Herein lies a particular dilemma as to the degree of access which should be
made available to contractors to verify the factual data on record and update if
necessary, and, if deemed appropriate, to examine the performance values placed
against them by contnbuting clients. It is proposed that it would be fair and reasonable,
and probably necessary to promote contractor confidence, to allow contractors full
access to the data file held against them in order to secure feedback on past client views
on their performance, the specific identities of these clients being necessarily concealed.
If such a benchmarking scheme is to maximise the potential benefits available the

body charged with the responSIbility for management would need to display the
following characteristics:
• be independent of contracting and client organisations or confederations

• be equally accessible to public sector and private sector client organisations
• be capable of providing a timely and efficient response to client enquiries
• have sufficient and appropriate marketing and information dissemination skills as to
be able to promote the uptake and utilisation of the scheme as widely as posSlble
without reliance upon powers of compulsory registration
• have the resources to process, manage, and intexpret data in a consistent and
reliable way to promote meaningful comparability
Latham is of the view that the DOE CMIS scheme could provide the framework for a
central United Kingdom resource for public sector contracts based upon an official
registration of contractors. It is suggested in this paper that such a system would have
limited acceptance into the private sector as the DOE would be too strongly identified
with the government in its role as a major client of the industry. Furthermore the
reluctance of government to directly intervene in commercial relationships in the
construction industry, and the limited capability of the utilisation of such a scheme
without legislative authority, would effectively hamper its widespread acceptance and
participation.
A preferred solution would be the formation of a benchmarking service which was

under the management of an organisation which was seen as neutral by all participants
in the construction process and could be relied upon to be effective custodians of the
client information service. The Building Research Establishment and the Construction
Industry Research and Information Association are two organisations whose function is
the conduct of research into building and associated matters and yet display the
desirable characteristics noted above, in particular the absence of any allegiance to any
sector of the construction market, demonstrable expertise in the gathering and
management of information which would be a perquisite of the service, and would be
likely to enjoy the support of contracting organisations, consultancy practices and
professional institutions, and the collective body of construction sponsors. In addition
the neutrality of such organisations should attract the support and recognition of a
secondary layer of organisations who have an interest in the success and efficiency of
the construction process, including material and component suppliers, insurers, unions,
and consumer associations.
80 Ba/dry
The identifiable success factors of such an arrangement would be the delivery of a

service which came to be relied upon as the authoritative source of support to the
client procurement decision making process. Watson [11] descnbes how these critical
success factors need to be measured in basic business terms and become the basic
process measures of a TQM approach. For a sponsor of construction activity the
selection of a supply partner which comes closest to that sponsor's specific model of
supply excellence will enhance the likelihood of the success of a contractual
relationship. Furthermore the spur of achieving and maintaining a presence on a widely
regarded and valued database of suppliers of construction services may result in an
elevation of the standards of petformance of contracting organisations to new levels of
excellence and customer satisfaction.
5 Conclusion
Construction clients are seeking to improve their procurement and supplier selection
process to reduce project risk and create conditions for a greater certainty and quality
of contractor performance. This paper has descnbed how the disciplined process of
benchmarking may be adapted from the conventional inter-company supply side
comparator of process activity into a means for the reliable and objective assessment of
contractor competence. Notwithstanding the obstacles presented by the peculiarities of
the construction process, when compared to the manufacturing or service industries,
and the particular necessity of the development of a culture of co-operation, it is
proposed that an effective and workable system meeting certain delivery criteria is
desirable and achievable. The types of organisation which would be suitable to accept
the responsibility for managing such a service have been reviewed and appropriate
bodies proposed. The outcome of the establishment and successful operation of a
contractor petformance benchmarking system is predicted to be a direct positive aid to
client procurement experiences, and it is also speculated that improved contractor
performance may result from the competitive forces arising from participation in a
formalised comparative process.
6 References
1. Cousins, R (1995) Guide to Benchmarking in Premises Management, in Premises

and Facilities Management, February, pp. 45-48.
2. Varcoe, B. (1993) Benchmarking for Competitive Advantage, in Premises and

Facilities Management, February, pp. 11-12.
3. France, G. (1994) On your Benchmarks, in Building, 2 December, p. 42.
4. Chicken, IC. (1994) Managing Risks and Decisions in Major Projects, Chapman
Hall, UK.
5. Gorog, M. (1995) Client Orientated Strategic Project Management, in Proceedings

of SOVNET Project Management Symposium, St. Petersburg, Russia.
6. Codling, S. (1992) Best Practice Benchmarking, Gower Publishing, UK
7. Karlo£: B. and Ostblom, S. (1993) Benchmarking: a Signpost to Excellence in

Quality and Productivity, John Wiley, UK
8. Hawke, M. (1994) Mythology and Reality: the perpetuation of mistrust in the

building industry, Construction Papers No. 41, Chartered Institute of Building, UK.
9. Powell, M. (1994) Building Trust, in Proceedings of Sixth Annual Conference of

ARCOM, UK.
10. Latham, M. (1994) Constructing the Team, Final Report of the

GovemmentlIndustry Review of Procurement and Contractual Arrangements in the
UK Construction Industry, HMSO, UK.
11. Watson, G. H (1992) The Benchmarking Workbook, Productivity Press, USA.

References
1 Labour productivity
Hansson B (1995) Precast concrete box units -production

analysis, Department of

THE USE OF CONVERSION FACTORS FOR THE ANALYSIS OF
CONCRETE FORMWORK LABOR PRODUCTIVITY U.E.L. de Souza
Sao Paulo, Brazil H.R. Thomas Deparment of Civil
Engineering, Pennsylvania State University, University
Park, Pennsylvania, USA Abstract Labor productivity
management is important to the success of a project. The
concrete formwork operation is a labor intensive task ([1],
[2], [3]) which influences substantially the total cost
of construction ([1], [2], [4], [5]). Traditional cost
systems follow a time consuming routine that includes: the
break of the work in pieces (items); the measurement of
the amount done and the workhours spent for every item. In
doing so, several times one commits mistakes in assigning
workhours to each item. The "conversion factors" (CF) are
used to avoid this problem and to create an easier way to
measure productivity. They estimate how much easier (or
more difficult) different formwork situations may be,
identifying the relation between the effort (expressed as
workhours) necessary to accomplish one unit of a certain
item and the effort necessary to accomplish one unit of a
standard item. This paper presents the calculation of CF
related to form work for walls and columns. The following
steps were followed: collection of productivity rates for
cases presenting different factors affecting the
performance, from American estimating manuals; choice of
the most important factors in explaining productivity
variation; definition of a standard item for formwork
(steel framed plywood panels for walls until 8 feet
height); definition of equations to estimate the CF for
any nonstandard item of form work. Since the CF has been
calculated, one may transform quantities of any item in
equivalent quantities of the standard item. And then,
measuring only the hours spent on the work as a whole
(the formwork in this case), its productivity can be
evaluated. Keywords: construction management, conversion
factors, labor productivity, work measurement.
The Organization and Management of Construction: Shaping

theory and practice (Volume Two).
Edited by D.A. Langford and A. Retik. Published in 1996 by

E & FN Spon. ISBN 0419222405. Conversion factors for
analysis 15
Sommaire La gestion de la productivite est cruciale dans

Ie succes d'un projet La
realisation de coffrages est tres couteuse en temps et en

hommes ([1], [2], [3]),
et pese en consequence sur la globalite des couts des

travaux ([1], [2], [4], [5]). Traditionnellement, les
systemes de couts observent des procedures
particulierement chronophages dont Ie detail du travail en

items et Ie calcul
du travail et du temps fournis par item. TI n'est pas rare,

au cours de ces
operations, de faire des erreurs d'attribution des

heures/hommes par item.
Pour circonvenir ce probleme et creer un instrument de

mesure de la
productivite plus facile a manier, on a recours aux

"facteurs de conversion"
(CF). TIs evaluent Ie degre de difficuIte de la realisation

du coffrage en
etablissant Ie lien entre l'effort necessaire (en

heures/hommes) a la realisation
d'une unite d'un item particulier et l'effort necessaire a

la realisation d'une
unite d'un item standard. Ce papier presente les calculs

de CF propres au coffrage des murs et
des colonnes. Les etapes en ont ete : recueil, dans des

manuels d'evaluation
americains, des taux de productivite pour des cas

presentant des facteurs de
natures diverses influenc;ant les performances, definition

d'un item standard
pour Ie coffrage (panneaux de contreplaque a cadre acier

pour des murs
allant jusqu'a 2m de hauteur), definition d'equations

permettant d'estimer les
CF pour tout item non-standard. Sur la base des CF

calcules, on peut alors se permettre de convertir les
quantites propres a n'importe quel item en quantites

equivalentes de l'item
standard. Et ainsi, par Ie calcul des heures fournies pour

la realisation
globale du coffrage (pour Ie cas qui nous interesse ici),

sa productivite peut
etre estimee. 16 de Souza and Thomas 1 Introduction For

the purposes of this paper, productivity is measured by
means of the unit rate, that is defined [6] as the
relation between the inputs (workhours) and the outputs
(amount of work done) of ajob. The inputs are measured in
workhours (wh) and the outputs in square feet (st). The
effort to complete 1 sf of form work may vary according to
several features like: the system used; type of element
(column or wall, in this case); height of the
element; etc. To take these features into account, one has

to defme a standard
condition and calculate correction factors to transform

quantities of any other
condition into equivalent "units" of the standard one.

The conversion factor (CF) allows this transformation [6].
It is expressed as:
CFO) = unit rate(j) / unit rate(std) where: CF(j) =

conversion factor for condition "j", unit rate(j) = unit
rate for the condition "j", unit rate(std) = unit rate
for the standard condition.
Then, the equivalent quantity may be estimated by:
output(std) = output(j) * CF(j) where: output(std) =

equivalent quantities in the standard condition, output(j)
= quantities in the condition "j". The use of CF, as
described on Figure 1, allows the estimation of an
equivalent
amount of work: first it is necessary to measure the
amount of units for each type of
work done; then, to transform these amounts into standard

units; and, fmally, the
summation represents the total work done. The conversion

factors, for wall and column formwork, were developed
following
the steps: formwork classification and choice of the

standard; collection of
productivity rates, for cases presenting different factors

affecting the performance,
from American estimating manuals; choice of the most

important factors in explaining
productivity variation; defmition of equations to estimate

the CF for any non-standard
item of formwork. Conversion factors for analysis 17
2 Formwork classification To allow the deftnition of

conversion factors, one ftrst needs to defme a framework
at the same time comprehensive (to include as many types

of formwork as possible), simple (avoiding excessive
slightly different classiftcations), and easy to understand
(avoiding misuses and inducing its use). quanti1les

conversion equivalent factors quantities ~ w.l
comparison to SUM the equivalent ~t8nd8rd Co
quantities c.;
Figure 1The conversion factor's role in measuring the

amount of work.
Figure 2 shows the framework used to classify wall and

column formwork and to
calculate the CF. The ftrst division is related to the

element being formed (wall or
column). The second division defmes the following broad

categories:
for walls: * stick (#) = built-in-place formwork; *

non-stick (N#) = prefabricated (both in-site or out-site);
for columns: * stick (#) = built-in-place; * non-stick
rectangular (N#rec) = prefabricated (both in-site or
out-site) with rectangular section; * non-stick round
(N#rou) = prefabricated (both in-site or out-site) with
round section. These terms, that represent a compromise
between the simplicity and accuracy, ftts
the methods and the language used in construction. More

than it, this division is
necessary to create groups of forms whose productivity is

expected to be influenced
by the same factors (for example, "#" must be isolated

from "N#" to study the
influence of "ganging panels").
18 de Souza and Thomas The several levels below the two

divisions represent factors (for example "height")
that have influence on the classes defmed by each vertical

line (for example, "C#").
As a consequence of such a division, there are factors

that have influence on one
category of fonn but not (or have a different influence) on

another (for example,
"height" may have influence on the productivity of "C#"

but not of "CN#rec"). I--+----+----+---+_ t.i conversion
factors equations other factors
Figure 2Framework to defme the conversion factors for

fonnwork.
3 Choice of the standard
The fonnwork job may be done under different kind of

"factors" (as previously
shown on Figure 2); to describe a case, one must detect and

quantify the existing
factors. The standard case is the one chosen as the gauge

for comparisons. The
chosen case should be the most often used in practice in

order to: improve the
accuracy of the comparisons; simplify the understanding of

equivalent quantities
estimated using this standard. The features of the

standard condition for fonnwork were chosen as: fonn for
wall
non-stick, with height not exceeding 8', and using plywood

as surface material.
4 Measuring factors' effects
Although the procedures to get the data are sometimes not

well understood, and may
vary from one manual to another, the estimating manuals

represent an accumulated
experience extremely significant. Mainly because to collect

data in construction is
neither an easy nor a cheap task. Each case presented by a

manual, expressed in tenns of accumulated unit rate at
the completion of the project, represents an average of the

results obtained for similar
conditions in several sites. Conversion factors for

analysis 19 The following criteria were used in order to
choose the manuals to serve as source
of data: to be recognized by the technicians as a good

manual; to describe in detail
the cases analyzed; to avoid the use of manuals with the

same origin. The five chosen manuals were: "Structural
Concrete Cost Estimation" [7]; "The
1984 Berger Building & Design Cost File" [8]; "1988 Dodge
Unit Cost Data" [9];
"Means Man-hours Standards" [10]; "General Construction

Estimating
Standards"[ll].
Table 1 shows how many cases were collected from each

manual, while Table 2
shows the kind of information provided by the manuals.
Table 1Number of cases collected in the manuals, for walls

and columns. Manual Element wall column Clark: 2 1
Berger 48 32 Dodge 12 43 Means 21 52 Richardson
104 24 TOTAL 187 152
Table 2Information provided by the manuals. Information

Walls Columns cumulative unit rate X X perimeter X
section format X section area X curvature X X
tickness X height X X material/system X X number of
uses X X gang size X X use of crane X X maximum
dimension X
5 Transforming unit rates into conversion factors
The data collected from the Manuals expressed productivity

in terms of unit rates for
each case. The transformation of this information into

conversion factors followed the 20 de Souza and Thomas
steps: the cases were classified according to the
"categories of fonnwork" previously defmed: column stick,
column non-stick round, column non-stick rectangular, wall
stick, and wall non-stick (generating five subset of
data); for each subset it is necessary to detect which
Manuals have the standard as a case; when the Manual has
the standard, CF=1 is assigned to this case and the CF's
for the remaining cases of this Manual are calculated
according to the defmition previously explained (ratio of
unit rates); when the Manual doesn't have the standard as a
case, it is necessary to calculate the unit rate for a
"estimated" standard (the unit rate for the standard if it
was present in the subset), and then the CFs for all the
cases are calculated in the same way just described. In
order to estimate the standard unit rate it is necessary
to make comparisons among comparable situations relating
the manuals. The unit rates for the standard, expressed in
wh/sf, are: 0.236 for "Clark"; 0.131 for "Berger"; 0.073
for "Dodge"; 0.075 for "Means"; and 0.067 for "Richardson".
Notice that, although each data point in a Manual may
represent an average of several collections, there are no
established standard procedures, common to all the
Manuals, to calculate the productivity rates. Then, it is
very common to fmd different unit rates related to the
same case, as it happened with the unit rates for the
standard. Some explanations are: certain Manuals are more
conservative than others; some may consider the management
hours as part of the input, while others only take into
account the direct labor; etc. But, many times, the
comparable values in two distinct Manuals differ roughly
by a constant. This is the typical situation in that the
use of conversion factors will improve the fit of data,
as illustrated in Figure 3: the unit rates and the
conversion factors for walls non-stick coming from two
distinct Manuals (Berger and Means) are plotted; although
there is a significant difference between the unit rates
proposed by them, there is a close agreement in relation to
the conversion factors. 6 Calculation of the conversion
factors for non-standard conditions The process of defming
equations to estimate the conversion factors for each
category of fonns, as illustrated by Figure 4, follows the
steps: for each "category of fonnwork" one must list all
the variables that potentially can affect the conversion
factors (CF); during a "preliminary individual evaluation"
, each variable, one by one, will be checked by means of
"graphical analysis" (for example plotting the CF in
relation to the variable), "statistical analysis" (for
example using individual ANOYA
and individual regression analysis), "personal evaluation"

(taking into account past
experience and common sense), and "confidence on the data"

(involving both the
number of available data points and the clearness of

Manual's infonnation); the
remaining variables (named "potential variables") are now

evaluated together, by
means of "graphs" and "statistical analysis", to take into

account the eventually
present interactions effects; the variables in the fmal

equation will be the ones with
good statistics, with significant impact over the CF being

calculated, and the ones
that are considered causal variables. Conversion factors

for analysis 21 0 0.20 0 0 0 0 0 0 0 2 0.15 0
0 0 0 aJ E 0 0 ::i 0 0 + ''" } + + 0.05 + 10
15 20 0 Berger height + Means 2.1 0 1.6 0 LL. 0 +
0 0 0 0 0 bJ + 0 0 0 1.1 + 0 0 + 0 0 0 0
+ 0.6 10 15 20 height
Figure 3Comparison between the infonnation from two

Estimating Manuals (Berger
and Means) for walls non-stick: a)unit rates; b)conversion

factors.
22 de Souza and Thomas final equation IIvlliiable

vllriables preliminary individual evaluation potencial
variables group evaluation
Figure 4The process of defIning a conversion factor's

equation.
The fmal equations can be seen on Figures 5, 6, 7, 8 e 9,

respectively for columns
N, columns NNrec, columns NNrou, walls N and walls NN, as

part of the regression
analysis that generate them. Regression Analysis CF =

1.95 0.00158*perimeter+ 0.109*(12'<h<=15') predictor
constant perimeter 12'<h<=15' std dey. 0.01742 0.00019
0.01332 t-ratio 111.99 -8.2 8.15 p-value 0.000 0.000
0.000
Figure 5Regression analysis to estimate the CF equation for

columns N. Conversion factors for analysis 23 Regression
Analysis CF = 1.58 0.00407"petimeter 0.0101*(pref.plywood
syst.)*(petimeter avg. perimeter) + +
0.000084*(pref.plywood syst.)*(petimeter avg.perimeter)**2
predictor constant perimeter (pref.plywood
syst.)*(petimeter avg.perimeter) (pref.plywood
sysL)*(perimeter avg.perimeter)"2 std dey. 0.07942
0.001142 0.001382 0.000011 t-ratio 19.95 -3.56 -7.3
-7.67 p-yalue 0.000 0.007 0.000 0.000

columns N#rec. Regression Analysis CF =0.966
0.006*(max.dim.) 0.0115*(tiber surface)*(max.dim.) +
-0.341*(tiber surface) + 5.57"(tearable syst.)/(max.dim.)
predictor std dey. constant 0.0612 max.dim. 0.001952
(tiber surface)*(max.dim.) 0.002213 tearable sysL 0.06958
(tearable syst.)/(max.dim.) 1.193 i-ratio 15.79 -3.1
-5.21 -4.9 4.67 p-yalue 0.000 0.003 0.000 0.000
0.000

columns N#rou. Regression Analysis CF = 1.19 +
0.397"(9'<h<=16') + 0.756*(h>=17') + 0.57"curved predictor
std dey. t-ratio p-yalue constant 0.06562 18.14 0.000
9'<h<=16' 0.09659 4.11 0.001 h>=17' 0.1392 5.43 0.000
curved 0.1856 3.07 0.010

walls #.
24 de Souza and Thomas Regression AnalYSis CF = 1 +

0.15*gang 0.16*(steel surface) + 0.106*(9'<h<=16') + +
0.187*(h>=17') +0.321*curved predictor std dey. t-ratio
p-value constant 0.04793 21.57 0.000 gang 0.05198
2.89 0.007 steel surface 0.05437 -2.95 0.006
9'<h<=16' 0.0632 1.67 0.105 h>=17' 0.04483 4.16
0.000 curved 0.05437 5.9 0.000

walls NU.
7 Using the conversion factors to estimate daily

productivity
The following example uses data collected in Central

Pennsylvania (United States of
America) in 1995 from the construction of a big gymnasium

(seating capacity:
16,500). Table 3 illustrates the necessary steps to

transform the quantities, measured
for each item, into equivalent quantities of the standard

condition. Notice that, to take
into account the different efforts involved in assemble and

strip the forms, these parts
of the item being done are tracked separetedely and receive

weights respectively of
0.85 and 0.15 (for example: 100 sf of assembled form

represent 85 sf of the item's
job, while the same amount of stripped forms mean only 15

sf). Finally, Table 4
shows the calculation of the daily unit rates: the total

equivalent quantities represent
the summation of the several items performed that day; the

workhours are the total
hours related to the formwork as a whole (and not for each

item); the daily unit rate,
then, being connected to the standard condition, represents

a standard measurement
of productivity.
8 Conclusion
Traditional cost systems break the work in pieces (items)

and require the
measurement of both the amount of work done and the

workhours spent for each
piece. This report showed that conversion factors can be

used in order to simplify the
labor measurement and to create a gauge for productivity

calculation. Based on data collected from estimating
manuals five equations (one for each
category of form: CU, CNURec, CNURou, WU, WN#) were

developed to allow the
transformation of amounts of any type of formwork into

standard equivalent
quantities. Using these equations, it is only necessary to

track the total workhours
spent with forms instead of observing the labor

consumption for each item. The use
of standard quantities turns the unit rate into a standard

productivity measurement,
what makes the comparison between measurements in different

days and/or sites
Selecting and Using Wall Forms. Aberdeen, Louisiana,

pp.18-53. 2 Qabbani, Z.S. (1987) Formwork: economy and
productivity analysis. University
of Colorado. 113p. 3 Adrian, J.J. (1975) Realistic

calculations of costs for wall fonning systems.
Concrete Construction, June. 4 Aldana, L. (1991)

Measurement and analysis of concrete formwork and steel
reinforcement productivity. University of Dundee, 163p. 5
Backe, C. (1994) Wall fonns: selecting the best ganged
system, in Selecting and
Using Wall Forms. Aberdeen, Louisiana, pp.54-58. 6

Thomas, H.R. and Kramer, D.F. (1987) The manual of
construction productivity
measurement and performance evaluation. crr, Austin, 168p.

7 Clark, J.E. (1983) Structural concrete cost estimating.
McGraw-Hill, 298p. 8 Hlibok, A.J. (1984) The 1984 Berger
building & design cost file. Hicksville,
Building Cost File Inc., VoU, 479p. 9 Iavarone, R.C.

(1987) 1988 Dodge unit cost data. New Jersey, McGraw-Hill,
338p.
10 Cleveland, A.B. (1983) Means man-hours standards. Means,

576p.
11 Richardson Engineering Services (1987) General

construction estimating
standards. Richardson, Vol.l. DEVELOPMENT OF AN

EXPLANATORY MODEL FOR CONCRETE FORMWORK LABOUR
PRODUCTIVITY U.E.L. de Souza Department of Civil
Construction, University of Sao Paulo, Sao Paulo, Brazil
H.R. Thomas Deparment of Civil Engineering, Pennsylvania
State University, University Park, Pennsylvania, USA
Abstract Labor costs are very significant in construction.
To manage this resource it is important to know the
factors that influence labor productivity variations, and
by how much. Researchers have been trying to develop
models to explain productivity variability ([1], [2], [3],
[4], [5]), but this is not an easy task. Many activities in
construction (as formwork) are labor intensive and there
are both operational and environmental factor influences
on the productivity. The "Factor Model" approach,
developed at Pennsylvania State University (PSU),
identifies these factors by means of statistical modeling.
This paper presents the development of a Factor Model for
Concrete Formwork (it is restricted to concrete walls and
columns). Some of the steps followed to complete this
research were: a procedures manual for formwork, developed
at PSU, furnished a standard way to collect data; the
author collected daily information in the site
construction of a gymnasium (capacity: 16,5 thousands
seats) located in State College (pennsylvania USA), for
more than 250 workdays; data from 5 other projects [6],
tracked with similar procedures, were also used in this
study. After the reconciliation of all the information
received from the sources above discussed, a statistical
analysis generated a mathematical expression that
identifies the factors and their influence on the labor
productivity. Keywords: construction management,
construction model, formwork, labor productivity.


E & FN Spon. ISBN 041922240 5.
Sommaire Les couts de main d'oeuvre sont loin d'etre

negligeables dans Ie
batiment. n est indispensable, pour gerer au mieux les

ressources humaines,
de connnaitre les facteurs qui influencent les variations

de productivire, et
dans quelle mesure. De nombreux chercheurs ont tenre de

developper des modeles de
variabilire de la productivire ([1], [2], [3], [4], [5]);

cette tache s'avere
cependant ardue. Nombre d'activires du bil.timent tel Ie

coffrage sont!res
couteuses en temps et en hommes, et on observe que les

facteurs agissant sur
la productivire sont de nature operationnelle autant

qu'environnementale. La modelisation des facteurs
("Factor Model") developpee a la
Pennsylvania State University (PSU), aux Etats-Unis,

circoncit ces facteurs
statistiquement. Ce papier a pour objectif de presenter Ie

developpement
d'une modelisation applicable au coffrage en beton,

uniquement ici pour Ie
coffrage des murs et des colonnes. Cette recherche s'est
ainsi deroulee: un manuel des procedures pour Ie
coffrage, moyen standard de recolte des donnees, a ere

developpe a la PSU;
l'auteur a recueilli des donnees quotidiennement, sur Ie

chantier d'un
gymnase d'une capacire de 16 500 places et situe dans

l'enceinte du State
College Pensylvania, Etats-Unis, pendant une periode de 250

jours travailles;
les donnees de 5 autres projets [6] observant les memes

procedures ont par
ailleurs ere utilisees dans la presente etude. Apres la

reunion de toutes les informations recueillies aupres des
sources citees precedemment, l'analyse statistique a fait

apparaitre une
equation mathematique qui identifie les facteurs et leur

influence sur la
productivire humaine. Explanatory model for labour

productivity 29 1 Introduction The observation of a real
process for a certain period of time allows the
construction
of models that provide understanding: the explanation of

what has happened and the
forecast of future events. Figure 1, based on Casti [7],

illustrates this mechanism. r-----, I I -.! I Inputs I
encoding (explanation) laws procr.ss I outputsi' I I
decoding forecactin 9) L-~
Figure 1The modeling relations. r----, I I I inputs

observed I sample 01 a model process i'OlltplllS I
I I '--~
The Factor Model [8], based on the crew level productivity,

was developed in the
Pennsylvania State University (PSU). Graphically shown in

Figure 2, the
development of the model assumes the existence of an
"standard condition of work";
under this condition, the daily productivity will be the

"ideal" (here one may assume
the existence of learning or not); variances in the work

scope and/or in the work
environment make the productivity vary in relation to the

ideal. The model relates
the actual daily productivity to the daily work features.

~ £ .. o t: S WORICTYPE w ..a:I7~~ PHYSICAL
ELf:MEHt' ~ CONSTRUCTION METHOD g ~ DESIGN REQUIREMEIiTS
~ UNrrSOFWORK
Figure 2The Factor Model.
In this report the Factor Model approach is used in order

to "explain" daily
productivity variability: detecting the factors that

generate variation and their degree of influence, based on
nonnaI workdays (Figure 3). disruptions/outliers
Figure 3Explanatory model development.
To reach these goals the report discusses the following

issues: standardization of
productivity measurement; collection of daily infonnation;

preliminary evaluation of
the factors; modelling; and final checks.
2 Standardization of productivity measurement
This paper adopts, as a tool to measure daily

productivity, the daily unit rate [9],
defmed as the ratio between the inputs (labor workhours)

and the output (work
quantities). In order to establish a standard measurement,

it is necessary to have
standard measurements of both the inputs and the outputs.

The measurement of labor consumption (input) was done as
prescribed by a PSU's
manual for data collection [10]. The main recommendations

are: to track the
workhours spent by one crew, that "consists of the foreman

and the gang members";
"hours of absenteeism are not counted"; support personnel

are only take into account
when their work is devoted exclusively to the crew; the

recorded workhours are the
paid hours . (excluding eventual "premium"). The

quantities measurement
standardization relies on the following ideas (Figure 4):

to recognize the parts
(subtasks) that constitute a task and to record quantities

individually allocated; to add
these quantities accordingly to the relative demanded

efforts (rules of credit); to
transfonn the quantities for each different task into

equivalent amounts of the
standard task (conversion factors) and to add them to fmd

the daily quantities of
standard work. The units of measurement are: workhours (wh)

for the inputs, and
square feet (st) of fonnwork for the outputs; then, the

unit rate will be expressed in
workhours per square foot (whist). Explanatory model for

labour productivity 31 quantities r c u 0 I n e s
of c a r c e t d 0 r s
Figure 4Measuring quantities of work.
An extensive discussion about the output measurement

process is provided elsewhere
[9]. But some aspects are worth to be presented here: some

factors that have
influence on formwork labor productivity have ever been
considered in the
development of the conversion factors (type of element,

height, section size,
formwork system, format, handling system, surface

material); the equivalent
quantities are expressed in terms of the following

standard task: forms for walls not
higher than 8 feet, using handset panels with plywood

surface.
3 Daily information
The description of daily performance includes both the

calculation of the unit rate
(expressed in terms of standardized inputs and outputs)

and the description of present
factors that may influence productivity. The standard

measurements of amounts of
labor (input) and work (outputs) were previously discussed

in this report. In relation
to the "productivity influencing factors", some additional

comments are: some of
them were included in the conversion factors' equations;

the remaining ones may be
divided into quantitative and qualitative variables; for

the qualitative ones it is
necessary only to detect its presence or absence; the

quantitative ones demand a
quantification task; the number of factors to be tracked

should be as big as possible,
under the researcher's point of view, but as low as

necessary to diminish the
spending time for future practical use of the fmal model

by contractors; previous
experience helps in defming what factors must be tracked;
try to avoid factors that
present difficulties in being measured; as far as

possible, use factors common to
former data collections; because this report deals with an

explanatory (and not a
forecasting) model, it is possible to use daily features

as factors, instead of
information necessarily extracted from plans (for example,

one can use the number
of the floor in execution in a certain day instead of the

building'S height).
32 de Souza and Thomas This report uses databases

collected accordingly to the procedures developed at the
PSU. Table 1 summarizes the main features of the available

databases.
Table 1Databases' infonnation summary. project name

Bryce Jordan Tertiary Filter -level 1 Tertiary Filter
level 2 Composting Facility Art Museum Wing ParKing Deck
Garage cumulative u.r. at completion (whIst) 0.12 0.17
0.12 0.05 0.05 0.14 total worKdays 256 25 39 23
43 40 total equiv. % of disr. or area (1000 sf) outlier
days 208.9 34 6.6 16 16.7 21 46.1 9 15.6 21 13.8 28
As it can be seen on Figure 5, the chosen factors to be

analyzed ("available
variables"), grouped under the classes "design

features/work content", "environment
conditions", and "construction methods", were: "boxout or

pipesleeves" (Figures
6.a.l and 6.a.2), a qUalitative variable that states if the

workday was significantly
affected by the execution of boxouts or the positioning of

pipesleeves by the fonn
crew; "comers" (Figure 6.b), that can be treated either as

a quantitative (counting the
number of fonn comers perfonned) or a qualitative variable
(stating if there was
significant effort spent in fonning comers); "elevation

changes" (Figure 6.c), with
approach similar to comers in relation to the existence of

"steps" along the height of
the element being fonned; air "temperature" (represented by

the temperature at
1 :OOPM) and "relative humidity" (represented by the

temperature of dew point at
1:00PM), whose summation is representative of weather

comfort; "length of
workday", measured in hours; "bulkheads" (Figure 6.d), with

approach similar to
comers in relation to the presence of this kind of

fonnwork; "accessibility", a
qualitative variable that implies in classify an element as

easily approachable (Figure
6.e.l) for workers and materials or as of not easy access

(Figure 6.e.2); "pour
coordination", a qualitative variable that states if the

fonn crew was involved with
concrete pouring in a certain day; "crew size", measuring

the number of workers of
the crew in a certain day, from the foreman (included) down

(hierarchically
speaking), independently of their skills.
4 Preliminary evaluation of available variables
Once the infonnation about the available variables has been

collected in the fonner
step, it is time now to check which ones are really

important for the model's
development: different approaches were used for
quantitative and qualitative
variables; the checks include the use of graphical and

statistical tools (analysis of Explanatory model for
labour productivity 33
variance, regression analysis, confidence intervals,

scatter plots); as a result of this
evaluation, each available variable is "accepted" for

further analysis or "excluded". AVAILABLE VARIABLES
Figure 5Available variables classification. 3.1) Iii!

v-l ~ o c) dJ 8.21 il II e.1) e.2) bl I r;: 1====+
-//
Figure 6Variables description: a)boxouts and pipesleeves;

b)comers; c) elevation
changes; d)bulkbeads; e)accessibility.
34 de Souza and Thomas Table 2 summarizes the results for

the qualitative variables. Some additional
comments are: in relation to the 95% confidence intervals,

a "good" plot is that one with no superposition between
the ranges of variation for the conditions being
checked; "difficult access" is considered to happen

whenever there is not only
elements easily approachable being formed; although the

results for "elevation
change" and "bulkheads" are not so bad, there is an

inconsistency between the data
and the expected performance: days with these factors

present have a smaller unit
rate than days without.
Table 2Qualitative variables evaluation. # of Anova

ind.regr. 95% variable cateQory obs. mean p r2-adj C.1.
classification boxout or 0 238 0.113 0.004 2.3% good
accepted pipesleeve 1 67 0.144 corners 0 150 0.122
0.771 0.0% bad excluded 1 155 0.119 elevation 0 280
0.123 0.033 1.2% good excluded chanQes 1 25 0.088
bulkheads 0 195 0.127 0.051 0.9% bad excluded 1 110
0.109 difficult 0 125 0.097 0.000 5.8% good accepted
access 1 180 0.136 pour 0 203 0.105 0.000 6.8% gOOd
accepted coordination 1 102 0.150
Table 3 summarizes the results for the quantitative

variables. Some additional
comments are: plotting the unit rate against the variables

allows the visual detection
of the existence of a "trend" (possible flag for a

relationship); in order to fit the
reality, the "density" of comers, elevation changes and

bulkheads, separately, are
studied; "density" is defmed as the number of units of the

factor (for example the
number of comers formed in that day) multiplied by 1000

and divided by the total
equivalent amount of form work job for the same day; "T1 +
Tdp", the summation of
air temperature and temperature of the dew point at

1:00PM, is used to analyze the
effect of weather over the labor productivity.
5 Modelling
The fmal expression of the explanatory model is an

equation generated by regression
analysis having the standard daily unit rates as dependent

and the "accepted" factors
as independent variables:
unit rate = 0.080 + 0.030*(difficult) + 0.028*(pour coord)

+ 0.034*(boxipipe) Explanatory model for labour
productivity 35 On a day with standard condition of work
(difficult = pour coord = box/pipe = 0) the ideal daily
unit rate, expressed in equivalent quantities of fonnwork,
is 0.080 whlsf. Because all the factors in this final
expression are qualitative, the presence of
anyone modifies the daily unit rate by the value of its

coefficient (for example: in
a day with concrete pour, "pour coord" = 1, and the unit
rate becomes 0.108 whist).
Table 3Quantitative variables evaluation. individual

regression variable J2-adj p value comers density 0.0%
0.301 elevation change density 0.6% 0.159 bulk density
0.0% 0.922 T1 + Tdp 2.1% 0.037 length of wor1<day
0.0% 0.768 crew size 0.2% 0.247
6 Final checks plot trend? no no no no no no

classification excluded excluded excluded excluded
excluded excluded
Four different approaches are showed to check the model's

equation: coefficient's
statistics; infonnal evaluation; effect on the standard

deviation; omitting databases.
Coefficient's statistics
Table 4 presents the main statistics related to the

coefficients of the model's factors;
they are significant.
Table 4Coefficient's statistics from the regression

analysis. factor difficuH poor coord box/pipe t-ratio
4.45 4.06 4.30 p-value 0.000 0.000 0.000
Informal evaluation of the coefficients
The coefficients are: 0.030 for "difficult" , what means an

increase of 38 % in the unit
rate in relation to standard days; 0.028 for "pour coord",

representing an increase of
35 %; 0.034 for "box/pipe", meaning a 43 % increase. The

literature review didn't provide a baseline to compare
these values; but they
seem to be consistent with the reality, based on the

researcher's personal experience. 36 de Souza and Thomas
Effect on the standard deviation To verify the model's
explanatory capability, one may compare the standard
deviation of the database "before" the standardization and
modelling and "after" that. The values are, respectively,
0.3077 and 0.0559. This means a very significant 82 %
reduction.
Omitting databases
When developing a forecasting model, the last stage of the

process is to confront its
predictions with new data coming from a database not used

in the model's
development. Although this is not the case (this report is

concerned with an
explanatory model), a similar approach will be used in

order to check the confidence
one can credit on the model: "new" equations were

developed accordingly to the
same process used to create the "model's" equation, but

making use of all databases
except one; because there were six databases, it is

possible to develop six new
equations based on the five remaining databases; the

intercept and coefficients values
for the "model's" and the six "new" equations can be seen
on Table 5.
Table 5Intercept and coefficients values for the "model's"

and the six "new"
equations. constants intercept difficult pour coord.

box or pipe model 0.0797 0.0299 0.0282 0.0342 new 1
0.0716 0.0341 0.0299 0.0387 new 2 0.0905 0.0192
0.0279 0.0346 new 3 0.0854 0.0256 0.0254 0.0325 new
4 0.0810 0.0303 0.0239 0.0347 new 5 0.0761 0.0346
0.0264 0.0272 new 6 0.D705 0.0430 0.0520 0.0405
In order to check the agreement among all the generated

models, all the equations are
plotted together, as can be seen on Figure 7, for different

working conditions. The
visual evaluation shows a good harmony among them: the

points are close to each
other.
7 Conclusion
Several factors may have influence on formwork labor

productivity. In order to
standardize the measurement of outputs some of them were

already considered: type
of element; height; section size; formwork system; format;

handling system; and
surface material. The importance of several other factors

were checked in this paper:
boxouts; pipesleeves; comers; elevation changes; air

temperature; relative humidity; Explanatory model for
labour productivity 37
length of workday; bulkheads; accessibility; pour

coordination; and crew size. The
Factor Model approach helped in create an equation that

shows the factors to be
considered and quantifies their influence on the daily unit

rate value: the ideal
productivity (standard condition of work) is 0.080 whlsf;

"difficult" access represents
an increase of 0.030 whlsf; days with concrete "pour

coordination" mean an
additional 0.028 whlsf; and extra 0.034 whlsf can be credit

to days impacted by box
out or pipesleeve work. This kind of information can help

the site management in
different ways: as baseline for performance evaluation; as

source of information to
defme production goals; in defming strategies to make easy

the "access" to the
elements (for example, to defme an advantageous forming

sequence); in taking
decisions about having an special crew only for concrete
pour; etc. 0.25 .. model ur 0.2 -+ new 1 Q) *new2
..... co .... 0.15 -B new 3 :!:::! c: ~new4 :J 0.1
-fr new 5 .new6 0.05 different conditions
Figure 7Plot of the "model's" and the six "new" equations

for different working
productivity measurements. Pennsylvania State University.

87p. 6 Shumway, J.D. (1992) A comparative analysis of
concrete form work
productivity influence factors. Pennsylvania State

University. 103p. 7 Casti, J.L. (1990) Searching for
certainty: what scientists can know about the
future? W. Morrow, New York, 496p. 8 Thomas, H.R. et alii

(1990) Modelling construction labor productivity. ASCE
Constr. Engrg. and Management, Vol. 116, No.4. pp.705-726.
9 Thomas, H.R. and Kramer, D.F. (1987) The manual of
construction
productivity measurement and peljormance evaluation. crr,

Austin, 168p. 10 Thomas, H.R., Homer, R.M.W. and Smith,
G.R. (1991) Procedures manual
for collecting productivity and related data of

labor-intensive activities on commercial construction
projects: concrete formwork. PTI, State College, 63p.
OVERMANNING AND THE EFFECTS ON LABOR EFFICIENCY H.
Randolph Thomas Professor of Civil and Environmental
Engineering, Pennsylvania State University, University
Park, Pennsylvania, USA Todd M. Arnold Graduate
Assistant, Pennsylvania State University, University Park,
Pennsylvania, USA SUMMARY Schedule acceleration is a very
troublesome problem for contractors because of the
potentially devastating effect on labor productivity. While
much has been written about scheduled overtime, little has
been published about the effects of overmanning, that is,
managing a larger workforce than planned. This paper
reports the results of a survey of electrical contractors
asking about the magnitude of inefficiencies due to
overmanning and the causes. The results show significant
degradation in efficiency as more craftsmen are hired and
are reported by project type, however, the differences are
not significant.
SOl\1MAIRE
L'acceleration de l'horaire du travail pose des problemes

pour les entrepreneurs a
cause de l'eventual effect detrimental sur la productivite

de la main-d'oeuvre. Tandis
que beaucoup a ete ecrit au sujet des heures

supplementaires, il y a tres peu d'etudes
sur l'effect et les problemes de gestion d'une

main-d'oeuvre surchargee. Cette etude
ci presente les resultats d'un sondage d'entrepreneurs

d'electricite sur la manque de
l'efficacite cause par une main-d'oeuvre surchargee et ses

causes. Les resultats
demontrent une manque d'efficacite lorsque plus d'employes

sont engages, et ces
resultats sont decrits par project; neanmoins, les

differences ne sont pas importantes. INTRODUCTION A
survey was distributed to the membership of the National
Electrical Contractors Association (NECA) requesting
pertinent information on projects that were accelerated or
compressed causing overmanned. These surveys provide two
relevant pieces of information: assessment of contractor
perceptions of the extent of efficiency loss caused by
overmanning, and relative differences in loss of efficiency
for different type projects.


E & FN Spon. ISBN 0419222405. 40 Thomas and Arnold SURVEY
INQUIRIES The survey instrument requested the following
infonnation about a specific project that was accelerated
or compressed: • Project type • Planned and actual number
of electricians • Estimated loss of efficiency caused by
ovennanning • Planned (budgeted) and actual workhours •
Estimated and actual schedule duration
In total, infonnation was provided on 129 projects. There

were complete responses
for 110 projects. Table 1 summarizes the surveys according

to the project type and
average planned maximum number of electricians. As can be

seen, most projects
were industrial, commercial, or institutional. The average

planned maximum number
of electricians ranges from 4 to 50. Comparatively few line

projects were contributed.
Table 1. Summary statistics of survey responses. Project

Type Number of Average Planned Projects Maximum Number
of Electricians Inside Projects: Industrial 45 50
Commercial 26 40 Institutional 29 28 Communications I 4
Line Projects; Transmission 1 9 Distribution 2 6
Substation I 10 Underground 0 Communications 5 43
TOTAL WSS OF EFFICIENCY
For the data analyses, several parameters were calculated.

The first is the percent
ovennanned which was calculated as follows: Overmanning

and the effects on labour efficiency 41 Percent Overmanned
(%) = ( Actual Max. No. of Elec. -1.0) x 100 (1) Planned
Max. No. of Elec. The total loss of labor efficiency
relies on the actual workhours and the budgeted
or planned workhours. These values are used in equation 2.

Total Loss of Efficiency (%) = (1.0 Budgeted Workhours) x
100 (2) Actual Workhours
Figure 1 shows the distribution of the total efficiency

loss for all projects as a function
of the percent ovennanned. Using equation 2, an efficiency

loss of 25 % means that
33 % more workhours were required than budgeted. As can be

seen, the number of
workhours required can exceed the budgeted or planned

workhours by a considerable
margin. The relationship between the total loss of

efficiency and the ratio of the actual
divided by the planned schedule duration was also

investigated. From figure 2, this
relationship is unclear. However, it is obvious that few

projects finish early or on
time. In the survey, 68 percent of all projects took more
workdays than planned.
LOSS OF EFFICIENCY CAUSED BY OVERMANNING
The survey requested the estimated percentage of the total

labor overrun attributed to
providing additional manpower resources, i.e., ovennanning.

The distribution of
percentage estimates is shown in figure 3. It is obvious

that the consensus of opinion
of electrical contractors is that ovennanning causes

considerable loss of efficiency.
The average estimate is 29 percent, but in many instances,

the estimated percentage
is much higher. The net loss of efficiency caused by

ovennanning was calculated by mUltiplying
the total loss of efficiency from equation 2 times the

estimated percentage of the total
labor overrun attributed to ovennanning. The net efficiency

loss is shown in equation
3. Net Elf. Loss (%) Total Elf. Loss x Est. % From

Overmanning (3) 100
Figure 4 shows the relationship between the net loss of

efficiency and the percent
ovennanned. The general trend is that as the percent

ovennanned increases, the net
loss of efficiency also increases. The net loss of

efficiency from ovennanning was also investigated for other
relationships. No correlation was evident between the net

loss of efficiency and the 42 Thomas and Arnold planned
size of the work force or the planned duration. Thus, from
the survey, it cannot be said that larger or longer
duration projects have greater efficiency losses. This
observation may be different if there were more larger
projects in the database. Figure 5 shows that half of the
database is from projects where the planned maximum number
of electricians was 20 or less. The net loss of efficiency
by project type was also investigated for indoor
projects. A linear regression equation was calculated for

all indoor projects and
industrial, commercial, and institutional projects. These

equations are shown in figure
6. As can be seen, when the percent overmanned is 25

percent or less, there is
minimal difference between the net loss of efficiency as a

function of project type. Because there were insufficient
line projects to examine by type, a linear
regression equation was calculated for all line projects.

Figure 7 compares the indoor
and line projects. There appears to be minimal difference

between these two groups. To validate the results of the
survey, losses of efficiency were calculated for each
project type at 50 percent overmanned (see figures 6 and

7), and the results were
compared to the summary curves from the literature review.

From the literature
review, the range of efficiency loss at 50 percent

overmanned for small and large
projects is between 8 and 15 percent. As shown in figure

8, the results of the survey
are within this range.
SYNOPSIS
The results of the survey are generally consistent with the

published literature on net
loss of efficiency caused by overmanning (homas et al.

1994). The data also show
that efficiency losses as a function of project type can

vary. Table 2 summarizes the
difference between project types by showing relative

increases and decreases in
efficiency loss. The category representing the analysis of
all indoor projects is used
as the base for the indoor projects. The relative

differences in table 2, called
efficiency loss multipliers, show that institutional

projects are affected least and
industrial projects are affected the most. Further, the

efficiency losses reported from
the survey showed no correlation to the planned size of

the work force or planned
schedule duration.
CAUSES
The survey asked the respondents to indicate the principle

cause of the acceleration.
The responses to this open-ended question are summarized

in table 3. As can be seen,
the highest frequency of causes are related to design

changes, change orders, and
scope alterations. Another category offrequent responses

covers scheduling, planning,
and coordination. These factors may be as a result of

problems with the design or the
inability of the prime contractor to adequately manage the

project. Overmanning and the effects on labour efficiency
43
CONCLUSIONS The survey confmns in numerical tenns what has

been generally known in the
construction industry, that is, staffmg a project with more

craftsmen than was planned
leads to losses in labor productivity. This infonnation

should be of value to both
contractor and owner in negotiating an equitable adjustment

to the contract sum when
schedule acceleration requires the contractor to hire more
craftsmen than planned.
Thomas, H. R., A. A. Oloufa, and A. S. Hanna. Construction

Productivity Losses
From Ovennanning: A Literature Review and Analysis. Report

to the Electrical
Contracting Foundation, Inc., Bethesda, MD, 29 pp. (1994).
44 Thomas and Arnold Table 2. Efficiency loss multipliers.

Project Type Indoor: All Industrial Commercial
Institutional Line: Loss of Efficiency 11.70 12.25
10.08 9.65 All 10.80 All Indoor and Line 10.20 Projects
Efficiency Loss Multiplier 1.00 1.05 0.92 0.82 Table
3. Principle cause of the acceleration. Cause of the
Acceleration Management (Scheduling, Planning,
Coordination) Labor Weather Design Change Orders/
Scope Alteration Crowding Materials and Equipment Other
No. of Responses 54 9 1 10 50 5 8 4 ~ >u .~ 80
.~ 70 c...... ~ 60 c...... 50 0 en 4 0 en 030 --.l
20 CD ~ 10 I-0 ~ 80 >g 70 .~ 60 ::: 50 w 40
c...... 0 30 en en 20 o --.l 1 0 ~ 0 o I-0
Overmanning and the effects on labour efficiency 45 ° °
° ° ° ° ° ° ° ° ° ° ° 00<ID 00 0 ~ § 8 0 o
008 &C§ &0 ~, ~ 0t C9 <ID0 0<6 8 ~ 0 00 o ° 6b 0 ° 0
o 0<6 0 ° 00 Q) 0 @ 0 0 10 20 30 40 50 60 70 80
90 Percent Overmann~d (%l Figure 1. Total loss 0'
erriciency vs. ~ercent overmanned. o o o o 0 o 2 3
I 4 o Actual Duration / Planned Duration Figure 2.
Total loss 0' erriciency vs. actual dur'ation I planned
duration,
46 Thomas and Arnold 30 (!l Q) (J) c o 0.20 (J) Q)

a:::: '"o '10 Q) ..0 E ::J 20 0.0 0.1 0.2 0.3 0.4
0.5 0.6 OJ Estimated Loss from o'Lermanning Figure 3.
Distribution or estimated proportion or total erriciency
105S attributed to overmanning. >-40 () C Q) ·u 30
'"'"W 20 '"o ~ 10 o ---.J a; a 2 o o o o o o o
o o o o a 10 20 30 40 50 60 70 80 90 Percent Overman
ned (%) Figure 4. Net loss or err;ciency vs. percent
overmanned. Overmanning and the effects on labour
efficiency 47 >() c ~ 1.00 0(l) 'l.J.... (l) >
...... 0.50 co (l) a:: (l) > ...... co :J 0.00 E
:J o 20 406080100120140160180200 U Planned Maximum
Manning Level. Mp Figure 5. Distribution of planned
maximum manning level. Mp. ~25 >() c 20 (l) .() c.IS
c.w '10 0 .(f) (f) 5 0 ---l ...... 0 (l) z: 0
50 100 Percent Overmanned (%1 Figure 6. Net loss of
efficiency vs. percent overmanned.
48 Thomas and Arnold s.Q >-20 u c Q) u '-'-w lO

'-0 (J) (J) 0 ---l ...... 0 Q) z: s.Q l5 >u c
Q) u lO '-'-w '-0 5 (J) (J) 0 ---l ...... Q) 0
z: a / / / / / / 50 / / / / / / / / Indoor
Percent Overmann~d (%1 laO Figure T. Net loss of
efficiency vS. percent overmanned. .--r.--.--. '-l--l
["du~trial In't1t~lional Commercial All Indoor Indoor
r.--L-J ,.-I Small r'-I large Line All Proj.
Literature Work TypeFigure 8. Net loss of efficiency @
50:: overmanned. STEEL FRAMING CREW PERFORMANCE AND
VARIATION Gary R. Smith and Yu-Bin Lin Department of
Civil and Environmental Engineering, Pennsylvania State
University, University Park, Pennsylvania, USA Abstract
Traditional forecasting models, reported for
labor-intensive productivity, have not provided much
insight into structural steel productivity and the factors
affecting steel construction crews. The factor model has
introduced many new facets into evaluating crew level
performance in addition to providing a reasonably accurate
model. Accurate forecasts for crew-level performance can
also be an important element of project control. This
paper examines those factors, which were identified through
project based research, that contribute to steel crew
productivity variation. Understanding this variation is the
key to understanding process control and development of
productivity improvement procedures. Data was compiled
from nine steel frame construction projects. Each work day
was classified according to those factors and disruptions
that had an impact on the crew that day. When combined,
235 days of data were available for analysis. This data
was evaluated for the purpose of determining the most
significant factors and their overall influence on
performance. A model of the crew performance was developed
from the significant factors. Process control chart
concepts were reviewed to identify whether the
variability in the crew performance could have been
identified in a manner that would have permitted
corrective action in a timely fashion. Although
interpretation of the results are somewhat limited, the
combination of process control charts with forecasts may
provide a method to better understand project performance

variation causes and provide an opportunity to better
control the field process.
Key Words: Productivity, Process Control, Steel Construction


E & FN Span. ISBN 0419222405. 50 Smith and Yu-Bin Lin
Sommaire Les modeles traditionnels de prevision des

productivires couteuses en
heures de travail n'ont guere apporre jusqu'ici d'eclairage

sur la productivite
structurelle de l'acier ni sur les facteurs affectant les

equipes de la
construction acier. La modelisation des facteurs, qui

s'avere etre relativement
precise, a mis en lumiere nombre de nouvelles facettes de

l'evaluation du
niveau des performances des equipes. Des previsions

precises du niveau de
performances des equipes peuvent etre un element important

du controle de
projet. Le present papier examine les facteurs, identifies

au cours d'un projet
de recherche, qui affectent les variations de la

productivite des equipes acier.
Com prendre ces variations revient a com prendre Ie

controle des processus et
les procedures d'amelioration du developpement de la

productivite. Les donnees ont He recueillies sur 9
chantiers de construction de
charpentes acier. Chaque journee de travail a ere classee

selon ces facteurs et
selon les evenements qui sont venus deranger l'equipe ce

jour-lao Une fois
compilees, ces donnees representaient 235 jours de donnees

a analyser. Elles
l'ont ete dans Ie but de determiner les facteurs les plus

importants et leur
influence sur les performances des equipes. Le concept des

graphiques de
controle des processus a ere revu pour tenter d'identifier

si la variabilite des
performances des equipes aurait pu etre identifiee d'une

maniere qui aurait
permis une action correctrice a temps. Bien que

l'interpretation des resultats
soit quelque peu limitee, la combinaison des graphiques de

controle des
processus et des previsions pourrait s'averer un bon outil

pour un meilleur
controle des processus sur Ie terrain. Steel framing crew

performance 51
1 Introduction
Developing accurate estimates is important during the

planning and execution phases of
all construction projects. The purpose of this paper is to

introduce quantified factors that
significantly affect steel erection productivity on the

basis of field data. The factor
analysis is viewed as the first step toward developing

accurate estimates. Process control
charts are employed to demonstrate the variability inherent

in the process.
A key to effective forecasting is the development of an

accurate model. Multivariate
factor models have been designed to respond to a range of

factors [1]. Many factors have
been observed which influence productivity like temperature

and humidity [2] and crew
size [3]. Sanders quantified significant factors for

masonry construction [4]. Pace
demonstrated the model was a plausible alternative to

conventional forecasting techniques
[5]. Sakarcan tested the model on international projects

and found it to be reliable [6].
Detailed development of the model has been limited to

masonry productivity.
1.1 Data Collection
The measure chosen for structural steel productivity was

selected as the workhours per
piece (wh/pc). "While the material cost for structural

steelwork is likely most dependent
on the weight of steel members, the labor installation

cost may be more dependent on the
number of members to be placed. [7]"
An important element in model development is a source of

consistent data whose
characteristics are known. Structural steel data was

collected on nine low to mid-rise
projects. Table 1 lists the attributes of the projects

included in the study. Daily data
collection and measurements were performed at the end of

the work shift. Intermittent
visits to the site during the workday were performed to

observe the crew and general site
conditions to supplement the data collection procedures.

Production data and other
information were collected using physical measurements of

completed work and from
observations. Brief discussions with crew supervisors

identified or verified significant
problems, delays, interruptions, or disruptions that

occurred during the day.
1.2 Data Characterization
Data are classified for further analysis according to the

factors identified in the
"Procedures Manual [8]." Interruptions and disruption

events were noted during data
collection. Interruptions are unplanned events or

conditions that cause work to stop.
Examples of interruptions are strikes, accidents, and

equipment breakdown. Disruptions
are unplanned events that impair crew productivity for a

significant period of time. Work
does not come to a complete stop during a disruption,

rather it proceeds at reduced
efficiency. Rainfall, rework, and poor material handling

are examples of disruptions.
Disrupted and interrupted days are set aside from the model
analysis data set to remove
the influence of large disruptions and interruptions in

the model development. The
database contains 235 days of structural steel production

recorded. Eighty (80) days have
been classified from the notes as disrupted workdays,

leaving 155 workdays eligible for
factor model analysis. 52 Smith and Yu-Bin Lin Table 1.

Project Characteristics Project Floor Area Steel
Quantity Total Number Project Type (sf) (pieces)
Workhours 1 Classroom 10,816 642 1109 2 Condominium
13,000 496 902 3 Office 23,920 414 1256 4 Apartment
17,640 399 526 5 Apartment 10,926 86 152 6 Office
14,500 671 894 7 Commercial 45,000 408 891 8
Commercial 32,000 290 889 9 Medical Center 47,092 885
3020 1.3 Modeling Project-related factors, weather zones,
and crew sizes were evaluated using analysis of variance
techniques to determine the statistical significance of
these factors prior to including them in the model. After
deciding which factors could be included in the
regression, the coefficients for the variables can be
obtained though the regression
process. The effects of disruptions are addressed through

an impact comparison to the
average non-disrupted productivity.
2 PROJECT FACTORS
Project factors are specific construction requirements,

dictated by the design of the
project or construction methods, which can be identified

from the plans and
specifications. In this study, project-related factors were

classified as: Work Types,
Physical Elements, Design Details, and Construction

Methods. Workdays are
classified according to the work performed that day.
2.1 Work Types
The Work Type category focuses on the structural system.

Projects often progress
through more than one work type. This is associated with

the work phase and work
type. Five classes of work types were included initially.

Due to insufficient data in
some categories, only three Work Type factors were evident

in the structures studied
are explained below. Table 2 lists the mean productivity

for work types .
• Beam & Girder, Multistory The structure has multiple

floors with nearly identical layouts. Floor loads are
transmitted directly from the floor slabs to the steel
beams and girders. Steel framing crew performance 53
• Beam & Joist, Multistory The structure has multiple

floors with nearly identical
layouts and floor loads are transmitted through web steel

joists to beams and girders .
• Truss or Sloped Roof Roof structure is not flat but is

sloped. The roof system
wi11likely consist of roof purlins and metal deck rather

than a concrete deck.
Table 2. Work Type Average Productivity
Work Type Number of Observations
Beam & Girder, Multistory 129
Beam & Joist, Multistory 22
Truss or Sloped Roof 4
Overall 155 Average (wh/pc) 2.457 3.437 6.285 2.695
An analysis of variance, with the data grouped by Work

Type, indicates that there is a
statistically significant difference between the Work Types

(F-ratio 12.527 and
Significance Level of 0.000). Two of the three work

classes have relatively small
samples which were obtained from a single project and bias

the response.
2.2 Physical Elements
Physical elements are structural components that can be

identified from the
construction drawings. Each work day is classified based

on the predominant physical
element used that day. Two physical elements

classifications were used. Table 3
provides the mean values for these classifications. The

classifications are:
• Beams, Columns, Girts, Bracing, etc. Consists of regular

shapes used in a
conventional manner .
• Trusses and Irregular Shaped Members Work involving roof
trusses, composite,
and irregular shaped members.
Table 3. Physical Element Classification Means
Physical Element
Beams, Columns, Girders
Truss/Irregular Shapes
Overall Number of Observations 151 4 155 Average

(wh/pc) 2.600 6.285 2.695
The analysis of variance indicates a significant

difference between these two factors (F
ratio 18.053, Significance Level 0.000). This result is

highly correlated to Work
Type. 54 Smith and Yu-Bin Lin 2.3 Design Details Design

details are specific features of the work that are more
detailed than the physical elements. Design Detail for
this set of data pertains to different building heights
classified as the number of Tiers. Other than the mean
productivity showing improvement up to the 4th-7th Tier
classification, little can be gained from detailed
analysis of the Tiers for this data. Analysis of variance
indicated that some difference can be identified between
these groups (F-ratio 2.76 and Significance Level of 0.03).
2.4 Construction Methods The Construction Methods

classification indicates if any of the following
circumstances
dominate the work on a particular day. • Normal No unusual

methods or practices observed. • Material HandlingMost of
the day is spent performing material shakeout, stocking,
or resupply. • Steel, Joists and/or Decking Together
Structural steel, joist and/or decking are erected
simultaneously by the same crew and the workhours cannot be
separated.
The mean values obtained from this data classification are

provided in Table 5.
Analysis of variance indicates there is a statistical

difference between these group
means (F-ratio 12.968 and Significance Level 0.000).
Table 5. Construction Method Classification Means Method

Influence Normal Material Handling Steel, Joist and
Decking Combined Overall
3 OTHER FACTORS
3.1 Weather Zones Number of Observations 129 4 22 155

Average (wh/pc) 2.391 3.530 4.323 2.695
Weather information recorded with daily production included

the temperature in
degrees Fahrenheit and the relative humidity. Precipitation

events were also recorded.
The weather data was classified into three temperature

ranges and three humidity
ranges. Those ranges create a matrix of nine weather

zones. Analysis of variance was
performed for Temperature, Humidity, and Zones. While many

other studies have
indicated weather has a direct influence, none of the

analyses indicated a significant
effect by the weather. This may be due to the workers

adjusting to the conditions or Steel framing crew
performance 55
other variability in performance is large enough to mask

the effect of weather.
3.2 Crew Size
The distribution of crew sizes ranged from one to twelve

workers. Analysis of variance
shows significant differences among the crew sizes, but

with a great deal of inconsistency
in the responses. When considering the optimal structural

steel crew size range, the job
site area and crane size should also be taken into

consideration. This data was not
available for analysis. Therefore, crew size, until more

variables affecting it are defined
and understood, should not be included in the model.
4 MODEL DEVELOPMENT
A stepwise regression analysis was used to determine the

order of selection and which
variables would be selected for inclusion in the model. The

stepwise model uses a
minimum F-value of 1.5 as the criteria to include or remove

a factor from the model.
Table 7 summarizes the factor coefficients for the six

variables included in the model.
The number in parentheses for the stepwise model indicates

the order in which the
variables entered the model. The standard conditions of

the model are:
• Work Type Beam & Girder, Multistory
• Physical Elements Beams, Columns, Girders, Bracing
• Design Detail None
• Construction Method Normal
• Weather-Zone 5 (Medium Temperatures 40°F-80°F and Medium

Humidity 45 %-80%)
Table 7. Regression Model Coefficients and t-values
Factor Factor Coefficient t-value (Selection Order)
Constant 3.45
Trusses or Sloped Roof 2.94 (2) 3.51
1st Tier -1.29 (5) 3.15
2nd-3rd Tier -1.77 (3) 4.58

4th-7th Tier -1.51 (4) 3.85
Steel, Joist and Decking
Together 1.90 (1) 4.49
Medium Temperature,
High Humidity 0.66 (6) 1.68
R-Square 30.85 56 Smith and Yu-Bin Lin 4.1 Model

Evaluation Qualitatively the results are consistent with
the analysis of variance findings. The first variable
selected by a stepwise regression was the Steel, Joists and
Decking placed concurrently. The second variable included
was the sloped roof and truss elements. This factor will
only be used in the event this particular type of work is
encountered. Each of the first two factors included in the
regression represent fairly small data sets. Perhaps the
most significant factor group was the tier designations.
The coefficients indicate that productivity improves with
increased floors. This is felt to be an influence of
repetition in the connections and consistency of the work
activity. The final variable selected for inclusion was
the High Humidity, Medium Temperature zone. This shows a
slightly reduced productivity. High temperature and high
humidity was not included due to a lack of data. An
R-square of 30.85 shows that the model is a fairly weak
predictor of the data set from which it was derived. Since
major disruptions have been set aside, the factor model
clearly indicates that there remains a significant amount
of internal variability that is unexplained. 5 DISRUPTION
ANALYSIS Table 8 summarizes the classifications of
disruptions and the mean productivity value determined for
each set of data. Due to the small data sets for each noted
disruption, the results appear to be somewhat erratic. It
would be expected that a disruption in production would
result in worsening productivity. In some cases the index
shown here would suggest improved productivity. The
disruption index is the mean undisrupted
productivity divided by the mean disrupted productivity.

Table 8. Disruption Mean Values and Index Type of
Disruption (observations included) None (141)
Size/Layout of Material Storage Area (3) Site Cleanliness
(3) Material Handling (4) Material Availability (4) Tool
Availability (2) Out of Sequence Work (8)
Rework/Fabrication Errors (8) Equipment Availability (2)
Staffing (2) Weather (8) Mean Value (wh/pc) 3.20 6.57
2.53 3.67 5.12 4.89 2.89 3.61 0.55 2.33 3.33
Disruption Index 1.00 0.49 1.26 0.87 0.62 0.65 1.11
0.89 5.85 1.37 0.96 Steel framing crew performance 57
6 CONTROL CHART EVALUATION
While control charts are quite common in practice for

quality control applications, it
was felt that they may provide a more relative measure for
understanding project
productivity and variation. For this evaluation, the

project with the most consistent
daily work output was selected as the basis for the mean
and standard deviation. This
procedure provided more restrictive upper and lower control

limits.
Figure 1 is representative of many projects that have only

a few incidents that
significantly disrupt production. The average productivity

for this project was lower
than the control chart mean, including the disrupted days.

A large proportion of the
project data is noted as disrupted. The field notes

indicate that this crew had many
tool and material problems, but the data plot would

suggest that the crew compensated
for these problems and maintained a degree of control.

Figure 2 illustrates a project
that was overwhelmed by disruptions. However, the project

did have a series of days,
late in the project, that fall within the control region,

which suggests that the project
had the potential to work within the control limits.
Superficially, the control charts can make average projects

look fairly good.
Current upper and lower control limits range from 0.62

mh/pc to 3.19 mh/pc. This
wide range of "normal production" may cover a range that

is too large for control
purposes. At this time much of the variability within this

region is felt to be related to
the process itself and not necessarily to external factors

considered by the models.
Whether the control charts can be useful for project

control purposes is still
questionable because of the large variations permitted

within the upper action limits. 9
~ 8
.l
c:= ~
'" ,
>6
> 5
u 4 ~
·0
0 3
CL 2 iJ n DAIL Y PRODUCTIVITY PROJECT 6 o Disruption

Noted Within Limits if) Disruption Noted Outside Limits
UCL~3.190 MU~1.904 LCL~0.6176 1 0 15 20 25 ItJorkday
Figure 1 Control Chart of A Typical Project 58 Smith and

Yu-Bin Lin 10 u c-9 > U ::J -0 o 8 7 6 5 4 ct
. 3 2 o o DAIL Y PRODUCTIVITY PROJECT 3 1 0 20 30
Workday
Figure 2 Control Chart for a Severely Disrupted Project
6 SUMMARY 40 UCL=3.190 MU=1.904 LCL=0.6176

The control charts show there is a great amount of
fluctuation within "normal data"
which is not measured by the factors currently evaluated in

the factor model. The
factor model and control charts demonstrate the difficulty

of modeling performance
from field data. Large amounts of variation remain to be

explained by either model.
However, the combination of techniques provides useful

insight into improvements
needed in recording and measuring productivity at the

project level for developing
forecasting tools.
1 Thomas, H. R. and I. Yiakoumis, "Factor Model of

Construction Productivity", Journal of Construction
Engineering and Management, ASCE, Vol. 113, No.4, December
1987, pp 623-639.
2 Smith, G.R. and S. Kilroy, Operations Impact From

Temperature and Humidity, Proceedings of the Canadian
Society for Civil Engineers 1994 Annual Meeting, Winnipeg,
Manitoba, Canada Steel framing crew performance 59
3 Swank, Joseph. An Exploratory Study of the Effects of

Crew Size on Productivity in Masonry Construction.
Master's Thesis, The Pennsylvania State University, 1989.
4 Sanders, S.R., An Analysis of Factors Affecting Labor

Productivity in Masonry Construction, Doctoral Thesis, The
Pennsylvania State University, August 1989.
5 Pace, J.M., A Comparative Analysis of Work-Hour

Forecastin2 Techniques at the Crew level, Master of
Science Thesis, The Pennsylvania State University,
December 1989.
6 Sakarcan, A. S., An Evaluation of Forecasting Capability

of the Factor Model for Masonry Projects, Master of
Science Thesis, The Pennsylvania State University, May
1992.
7 Adrian, J. J., Construction Estimating. Reston

Publishing Co. Inc., Reston, Virginia, 1982.
8 Thomas, H. R., M. W. Homer and, G. R. Smith. Procedures
Manual for Collecting Productivity and Related Data of
Labor-Intensive Activities on Commercial Construction
Project: Structural Steel. December 1990. ANALYSIS OF
CONSTRUCTION DELAYS T.M. Lewis Department of Civil
Engineering, University of the West Indies, St Augustine,
Trinidad B.A. Atherley Project Manager, W.W. Micron Ltd,
Port of Spain, Trinidad Abstract This report presents the
results of an investigation into the nature, length and
cost of delays, that occurred on thirty (30) building
projects in Trinidad and Tobago. This paper first
discusses the circumstances that give rise to delays, the
classification of these according to responsibility and
the effects they have on the project cost and schedule.
The data are presented, analysed, and conclusions drawn.
Sommaire Ce travail present les resultats d'une recherche
sur la nature duree et coilt des delais qui se sont
arrivee en trent (30) projets de construction a Trinite et
Tobago. Ce travail debatte premierement les circumstances
qui donnent naissance aces delais, classifie ceux-ci,
selon la responsabilite et analyse les effets de ceux-ci
sur Ie coilt et Ie progres de chaque projet. Les donnees
sont presentees, analysees et conclusions sont obtenues
Keywords: Delays, classification of delays, excusability,
compensability, responsibility, cost implications, survey,
West Indies. 1. Introduction When a piece of work is
scheduled to be carried out on a particular day and for
some reason cannot be completed, a delay is said to have
occurred. This may be of little consequence, unless it
affects subsequent work when it may become significant in
terms of both its planning and its financial implications.
Significant delays that occur during a construction
project will either extend its duration or increase its
cost or both. In addition, if completion is delayed the
client may also lose out financially by not having the
facility (and its potential income) available when wanted,
and the contractor may lose out by not having his
resources released to take on other work. Unfortunately,
there are all too many factors that can cause delays to
construction work, from those inherent in the technology
and its management, to those resulting from the physical,
social and financial environment. Because there are often
financial The Organization and Management of Construction:
Shaping theory and practice (Volume Two).

E & FN Spon. ISBN 0 419 22240 5. Analysis of construction
delays 61 implications to delays, the parties involved are
normally interested in determining their causes and
allocating responsibility. However, it is rarely easy to
determine a unique
cause, or to allocate responsibility and this, naturally,

leads to disputes between the
parties involved. An assessment of delays should try to

determine as many of the following factors
as possible, as these are inevitably the focus of

disputes: (a) what factor or factors caused the delay,
(b) who was responsible, (c) how long was the delay
attributable to anyone factor (d) what extra costs were
incurred as a result of a delay.
These are the factors that have been concentrated on here.

The standard forms of building contracts do not seem to be
particularly well
designed for dealing with delays. As a result delays often

lead to disputes, which can
easily lead to litigation aimed at trying to establish

legal responsibility and allocate
additional costs. Because litigation is itself such an

expensive and long winded
process, it is best avoided. If it is possible to identify

the main causes of significant
delays then it may be possible to introduce contractual or

policy measures which could
help them be avoided in future. In order to investigate

the structure of delays, their causes and the costs
associated with them, a survey was undertaken into

experiences on a number of
construction projects (30) in Trinidad & Tobago over the

period from 1979 1992. In
all cases, the projects were let by a client, used a design

consultant, employed some
form of site supervision and were built by general and

specialist contractors selected by
conventional tender methods. Taking a year that had

statistics fairly typical of the
period, construction in Trinidad and Tobago for the year

1990 accounted for 8.8% of
the Gross Domestic Product (current prices) and for

approximately 11% of the
employed labour force [6][7].
2. Definition and Classification of Delays
2.1 What is a Delay?
The traditional, and still the most common procedure for

letting a contract is on the
basis of the lowest bidder. This contract document

normally stipulates, amongst other
things, the starting date and a completion date for the

project Problems which occur
during construction may cause a delay which results in the

project duration being
extended beyond the scheduled completion date. On

contracts which have interim
partial completion targets, a significant delay may occur

when anyone of the target
dates is not met. There is also the disruptive element to

consider, as delay in one
aspect may set back another aspect in a more than

proportional amount, and this can
have a 'knock-on' effect Most organisations are concerned

with 'the bottom line', and the bottom line is that a
delay can increase costs and reduce profits. A delay may
have direct cost implications in terms of an extended
construction period, which will mean extra
expense for the contractor in terms of salaries, plant and

equipment expenses and
additional overheads. Depending on the cause, these

additional costs mayor may not
be recoverable from the client, but this is only one part
of the cost equation. A delay may have implications which
go far beyond the cost of the construction
phase of the project, because commercial or environmental

'windows' may not be
achieved. Such failures can have serious consequences in

terms of the cash flow from
the project, because of additional financial charges to be

met and lack of use of the
facilities being constructed. In the case of an offshore

oil platform, for example, this
may mean loss of revenues in the hundreds of millions of

dollars per week, and even
for a more normal commercial investment, the failure to

meet a window of opportunity
like a peak seasonal deadline (e.g. Christmas) may change

the project's whole 62 Lewis and Atherley financial
complexion. Because every project will have a different set
of financial implications associated with late delivery,
little could be learned from attempting to generalise from
a few specifics. As a result, this investigation focuses on
the implications of delays on direct costs during the
construction phase of projects. As a result, because
delays are both disruptive and expensive, they merit close
scrutiny.
2.2 Types of Delays The general principle underlying a

contract is that "a party under contract has an
absolute obligation to perform, barring breach or

unfulfilled conditions by the other
side" [3]. Where one of the contract clauses stipulates a

completion date, this becomes
one of the conditions of the contract that must be met,

and, clearly, a delay may imply a
breach of that condition. However, there are obviously

circumstances when the cause of a delay is a factor that
is beyond the control of any party to the contract and it
would be unfair to blame one party for a breach. Thus,
when examining delays, it is necessary to try to
establish where responsibility lies, and it is convenient
to classify delays under three main headings: (i)
Excusable delays, (ii) Non-excusable delays, (iii)
Concurrent delays. Taken from the viewpoint of the
contractor, these classifications would be
expanded as, (i) Excusable delays are those caused by

unforeseeable factors outside the control of the
contractor. They may be either (a) Compensable excusable
delays, i.e. those for which the contractor is entitled to
claim damages from the owner, or (b) Non-compensable
excusable delays, i.e. those for which no one can be held
responsible. (ii) Non-excusable delays are those that are
deemed to be the fault of the contractor, because they
were within his control and should have been foreseeable.
(iii) Concurrent delays occur when two or more delays occur
at the same time. Any analysis is complicated by details,
and when people are involved, details
proliferate. As an example of the sort of complications

that can arise, the following
quotation is apposite: " ... suppose the owner failed to

supply certain materials on time.
At the same time, the workers who would have installed the
materials were on strike.
The contractor cannot claim damages for work that would

not have been accomplished
had the owner-caused delay not occurred. He would, however,

be entitled to a time
extension for the period of the strike unless it can be

proved that the strike was due to
his own actions. This is an example of concurrent

compensable and non-compensable
delays. The result is a time extension, but no damages for

the contractor". [4]
3.Causes of Delays
3.1 Excusable Non-Compensable Delays
In the case of excusable non-compensable delays the

following have been reported [3]
as being the most frequently given for excusing timely
performance: (i) Act of God natural disasters such as
earthquakes, tornadoes, hurricanes, volcanic eruptions,
floods and fire, (ji) 'Force Majeure' (excepted or
accepted risks) all acts of God, war, insurrection, riots,
major labour strikes, Acts of the State, Analysis of
construction delays 63 (iii) Weather when weather becomes
unusually severe and surpasses the normal (i.e. average
conditions for an area over the previous ten years based on
meteorological data) for that particular locality during a
specific season of the year, it becomes a factor excusing
delay.
3.2 Excusable Compensable Delays
Excusable compensable delays, which are attributable to the

client, entitle the contractor
to an extension of time and a claim for damages. "The

basis of recovery of damages for
delays is the implied obligation that the owner will

co-operate with the contractor and
not impede the performance of the work of the contractor"

[4]. Delays which are both
compensable and excusable are most frequently caused [3]

by the following: (i) failure to hand over the total site
on time, (ii) slow payments to the contractors, (iii)
errors in drawings and specifications, (iv) late detailing
of work, (v) slow approval of fabrication drawings.
3.3 Non-Excusable Delays
Non-excusable delays are those deemed to be the

responsibility of the contractor.
Thus, a contractor who extends his work beyond the original

completion date for
causes which could be shown to be foreseeable and

avoidable, is liable to the client for
monetary damages for the delay, in the form of actual or

liquidated damages [4]. The
more common causes are reported [3] to be: (i) failure to

properly co-ordinate men, materials and equipment, (ii)
failure to properly finance the project, (iii) failure
to submit shop drawings promptly, (iv) failure to employ
competent personnel.
4. Effects of Delays
A delay tends to act like a virus very slowly, but with far
reaching effects. Like the
symptoms of a virus, there are symptoms which are

indicative of a situation developing
which may lead to a delay, they are: (a) a general slowing

down of the job, (b) inefficient use of the weather,
i.e. not using dry weather effectively, (c) improper
sequencing of activities, leading to work stoppages on
some tasks In an attempt to solve these problems there is
a tendency to want to accelerate the
work. However, acceleration is no guarantee that the job

is going to be finished on
time, and it is almost certain to increased costs because

it usually involves on of the
following: (i) increase of the labour crew, (ii) increase

in the working hours of the present crew, (iii)
sub-contracting out sections of the work to specialists,
(iv) hiring more equipment or more up-to-date equipment,
(v) any combination of items (i) to (iv). The increased
cost of accelerating a job must be carefully considered by
both the
client and contractor before the decision is taken. The

contractor may favour
acceleration of the job at his own expense if he feels

that he may be held responsible
for the delay and: (i) the liquidated damages are more
costly than acceleration, (ii) certain operations are
heading for an unfavourable time of year, (iii) the same
men and equipment are needed on another job, 64 Lewis and
Ather/ey (iv) specialist trades/services may be delayed
and higher costs incurred. The client may favour
acceleration of the job at his own expense if he feels
that he is responsible for the delays and: (i) he will
have to pay penalty costs to the contractor for extending
the period, (ii) the original completion date has special
significance, (iii) the project will suffer a loss of
profits greater than the cost of acceleration In some
cases, in the interests of goodwill, and where both
parties perceive it to be to their benefit, the costs of
acceleration may be shared between owner and contractor.
It is also possible for delays to have a positive side
effect, as when delays are apparently inescapable, and the
effects are sufficiently costly, the parties to the
contract may be inspired to seek new and innovative means
of avoiding them. The solutions that evolve may enable
future problems to be avoided. The worst effect of delays
to a construction project is the termination of the
contract by either party. It is normally a last resort

action taken by an owner, who terminates the contract for
excessive non-excusable delays. Any such termination must
take place within the legal framework of the contract.
5 Standard Contract Provisions For Delays
Claims can arise for many different reasons and between any
of the parties involved in
or affected by a contract, however, this paper seeks only

to examine the claims
between client and contractor resulting from delays on

contracts using the most
common locally employed contract documents, i.e. the

Trinidad and Tobago Institute
of Architects (TTIA) [8], standard form of building

contract (with quantities-I974
edition) and the ICE (Institution of Civil Engineers)

conditions of contract [2].
6 Analysis Of Delays From 30 Projects
The data collected are all from professionally designed and

supervised projects, which
used the more common standard forms of building contracts.

While the thirty (30)
projects studied were not sufficient for a statistically

significant analysis, the sample
size was large enough to suggest trends in the data, and

those trends are compatible
with results obtained from a study of the nature and
extent of variations to building
contracts in Australia [1].
6.1 Accuracy and Consistency of Data
The data collected were for projects done between the years
1978 to 1992 inclusive.
There is no significance to be attached to these years,

other than that more up-to-date
data were not available. The details of the actual delays

were reasonably well recorded because the
projects had used bar charts which had been regularly

updated. The contract documents
required that scheduling techniques should be used and bar

charts were all that were
used on all except two jobs. Hence, whether the information

came from the contractor
or the consultant the point of reference was always the

contractor's bar chart. As far as the costing of the
delays was concerned big differences were observed
between the contractors' records and those of the

consultants. Where quantity
surveyor's letters were available, they were the points of

reference for both parties,
since in most cases they detailed the sums in question. In

their valuations, however,
the contractors tended to lump the cost of supervision,

extra work, additions and
variations together, and to cost delays on the basis of

what they spent directly to get the
job done rather than to try to break-down the cost of the

work into elements and Analysis of construction delays 65
associated overheads. By comparison, the consultants tended
to try to identify items of work associated specifically
with the delays, broken-down into their elements and
valued at rates given in the bills of quantities, and these
valuations were used to review the contractors' claims
with a view to their acceptance, rejection or reduction to
'acceptable' levels. Consultants did not normally increase
bill rates or overhead allowances to account for extra
time required on the project. It was rarely possible to
check data on a specific delay with both consultants and
contractors involved because a questionnaire approach was
used to collect data and it was not possible to get
responses on the same project from both. Personal
interviews were conducted with all but one respondent in
order to discuss the details of the
projects and the delays involved, and a telephone interview

was conducted with the
other respondent.
6.2 The Basic Data
The data was obtained from seven organisations representing

a spread of interests in
the construction field. Their distribution and the number

of projects analysed from
each were as follows: lI-roup Type Projects Consultants

Engineering firms (2) 8 Architectural firm 2 Contractors
(2 independent firms) 12 Project Manager 7 Government
Ministry of Drainage 1 :ill Table 1 lists the clients,
the total cost of the contract, the total number, the total
cost and the total length of delays on each contract. All

costs and values, are quoted in
Trinidad and Tobago dollars (approximately TT$6 = US$I).

The figures show that on contracts worth $56,626,485, 95
significant delays
occurred, the delays cost $4,561,963 and involved 424 lost

weeks of work. The cost
of delays represents approximately 8% of the overall cost

of the contracts. The total
cost shown is the cost of the particular contract

involved, not of the entire project, for
example, the Hall of Justice (project #21) had an overall

cost of over TT$400 million,
while the painting contract reported here was worth TT$1.4
million. All these projects
were professionally designed and supervised. Table 2 gives

a more detailed breakdown of the 95 specific delays that
were
reported on the 30 projects. Briefly summarising the data

in Table 2, 57 of the delays
were deemed excusable and compensable, and these delays

accounted for $4,333,972
of extra cost and 290 extra weeks of work. The delays which
were deemed to be non
compensable numbered 38, and these accounted for $227,991

of extra cost and 132
weeks of extra work. Included amongst the

excusable/compensable figures are two items recorded as
"Claims for loss and expense". These account for $580,000

of extra cost and no extra
time. These were claims put in by the contractors for extra

payments against increased
overheads and loss of other work, which were caused by

their being delayed on a job
(for reasons deemed excusable/compensable), but not having

claimed this
compensation against any other specific delay. A degree of

consistency was achieved in the analysis because in most
cases the
description of the details and the nature of the delay were

agreed between the
respondentsand the conductor of the survey. 66 Lewis and

Atherley TABLE 1 A al . f P n lysIS 0 roJects
Project/Client Total Cost Total ($) No. of Delays 1.
Housin1! Development 8,600,000 2 2. Housing Development
8,400,000 2 3. Bus Terminal 7,000,000 5 4. *M.o.W.
Drainage Division 35,000 1 5. *U.W.I. Inflammable
Stores 263,647 3 6. *U.w.I. Environmental Lab. 488,782
3 7. *U.W.I. Fluids Lab. 412,734 4 8. *D.W.I. Offices
and Classrooms 1,330,716 4 9. *D.W.I. Electrical and
Electronic Lab 948,133 5 10. Ghany Site 21,000 2 11.
Ishmael Khan 63,000 2 12. Trinidad Cement Limited
63,000 3 13. National Petroleum Ltd. 5,800 1 14.
Print Masters 29,440 1 15. Associated Bnmds 12,000 1
16. *T.S.T.T. 29,000 1 17. *NIHERST 46,000 1 18.
Government Health Center 23,530 1 19. *U.W.I. Offices
and Classrooms 2 12,628,046 5 20. Colsort Mall 450,000
6 21. Hall of Justice 1,400,000 5 22. Farrell House
150,000 7 23. *U.w.I. Hi1!h Volta1!e Lab. 878,810 8
24. *D.W.I. Food Technolo~ Lab. 3,909,682 7 25. Scotia
Bank Not available 4 26. Free Zone 1,600,000 2 27.
Bank of Commerce 2,300,000 2 28. *TELCO Head Office
4,800,000 3 29. Hand Arnold 580,000 2 30. *D.W.I.
FoodProcessin~Lab. 158,165 2 Totals 56,626,485 95 . .
.. *M.o. W. Ministry of Works, Government of Tnmdad &
Tobago * U. W.1. University of the west Indies, St.
Augustine Campus *T.S.T.T.Telecommunications Services of
Trinidad and Tobago Limited Total Cost of Delays ($)
250,000 210,000 210,000 15,836 12,000 259,724 82,767
12,700 16,000 8,000 1,285 278,591 190,000 1,060,000
75,000 465,000 845,012 500,000 50,000 20,048
4,561,963 *NIHERST National Institute of Higher Education
(Research Science & Technology) 'TELCO Telephone Company
Total Length of Delay (wks) 48 36 48 2 3 13 12 4
13 4 8 4 2.5 4 3 5 2 4.5 16 14 29 28 43 36
8 4 4 16 6 4 424 Analysis of construction delays 67
TABLE 2 NATURE, TYPE, COST AND LENGTH OF DELAYS Project
Nature of Delay Type Cost Length No. * ($) (wks) 1.
Payment delays by client E/C 150,000 24 Part of si te
not available E/C 100,000 24 2. Part of site not
available E/C 100,000 12 Payment delay by client E/C
110,000 24 3. Poor work sequencing by contractor NE
Procurement failures by contractor NE 24 Lack of manpower
by contractor NE 16 Payment delay by client E/C 60,000
8 Extra works E/C 150,000 4. Heavy rains/floodin2 of
iob site E/C 2 5. Subsurface different than expected
E/C 0.5 Heavy rains ElNC 1 Procurin2 failures by
subcontractor NE 1.5 6. Additional work demanded by
client: Furniture changes E/C 8,000 8 Equipment
changes E/C 2,375 3 Structural work E/C 5,461 2 7.
Additional work demanded by client: Plumbing changes E/C
3,000 3 Structural Work E/C 4,229 3 Electrical Work
E/C 3,000 4 Cupboards chan2ed E/C 1,771 2 8. Errors
in plans & specs. E/C 22,784 Ambiguities in plans and
specs. E/C 35,896 Change sequence by contractor NE
20,000 Additional work by owner E/C 181,044 4 9.
Ambiguities in plans & specs. E/C 3,250 1 Oruissions in
plans & specs. E/C 19,637 4 Errors in interpretation
(floor finishes) ElNC 4,200 2 Additional work (client
brief) EIC 22,142 2 Chan2e order by new client EIC
33,538 4 10. Change sequence by contractor NE 1
Utility not available by owner E/C 12,700 3 11. Change
method by contractor NE Poor scheduliDR of work bv
contractor NE 16,000 8 12. Change method by contractor
NE Utility not available by owner E/C Redo work by
contractor NE 8,000 4 13. Change sequence by contractor
NE 2.5 14. Procurement failures by contractor NE 4
15. Lack of productivity by contractor NE 3 16. Lack
of productivity by contractor NE 5 17. Additional work
b~_dient E/C 1,285 2 18. Chan2e sequence by contractor
NE 4.5 19. Heavy rains ElNC 18,591 1.5 Oruissions in
plans & specs. E/C 160,000 2.5 Procurement failures by
contractor NE 36,000 4 Consultants change scope of work
E/C 60,000 4 Late power supply connections E/C 4,000 4
68 Lewis and Atherley TABLE 2 (Continued) Project Nature

of Delay Type Cost No. * ($) 20 Errors in plans &
specs. E/C 12,400 Ambiguities in plans and specs. E/C
14,600 Omissions in plans & specs. E/C 23,700 Strike by
General Contractor E/C 10,000 Additional work E/C
102,300 Redo ftnished work NE 27,000 21. Ambiguities
in plans & specs. E/C 106,000 Omissions in plans &
specs. E/C 170,000 Day works E/C 200,000 Extra
painting/variations E/C 500,000 Redo ftnished work NE
84,000 22. Heavy rains EtNC 1,000 Omissions in plans &
specs. E/C 4,000 Change in sequence by contractor NE
4,000 Procurement failures by contractor NE 3,000 Strike
by main contractor E/C 2,600 Redo work damaged by strike
E/C 10,000 Additional work by client E/C 50,400 23.
Errors in plans & specs. E/C 20,000 Ambiguities in plans
& specs E/C 5,000 Omissions in plans & specs. E/C
100,000 Procurement failures by contractor NE **
Procurement failures by contractor NE ** Additional work
by client E/C 260,000 Late shop drawing approval by
consultant EtC ** aaim for loss & expense E/C 80,000 24.
Errors in plans & specs. E/C 17,750 Ambiguities in plans
& specs. EtC 15,000 Omissions in plans & specs. EtC
31,948 Heavy rains no work EtNC ** Procurement failures
by contractor NE ** Additional work E/C 280,314
aairns for loss & expense EtC 500,000 25. Poor means of
sequencing by contractor NE Procurement failures by
contractor NE Procurement failure by subcontractor NE
Poor scheduling of work by contractor NE 26. Procurement
failures by contractor NE Lack of manDOwer NE 27. Poor
work sequencing by contractor NE Lack of space at site
meetings ? 28. Slow change in project brief requirements
E/C Poor work sequencing by contractor NE ** Additional
work by client E/C 500,000 29. Poor work sequencing by
Contractor NE 6,200 Additional work E/C 43,800 30.
Errors in plans & specs. EtC 2,200 Additional work bv
client E/C 17,848 • EtC = Excusable Compensable; EINC =
Excusable Non-Compensable; NE = Non-Excusable ** Difficult
to quantify Length (wks) 1 1 2 4 4 2 2 3.5 4.5
17 2 3 2 2 2 8 4 7 4 3 7 4 4 20 1 4 4 2
4 4 18 2 2 3 1 4 2 2 4 6 6 3 3 2 2
Analysis of construction delays 69 6.3 The Data Collected
Given that some computation was necessary on the part of
the respondents to separate information related to the
delay from the rest of the stored information, it was
gratifying to receive data on thirty (30) projects. The
data covered some ninety five (95) recorded delays caused
by a fairly wide range of factors. Seven (7) individual
organisations were involved, and they provided information
on projects as shown in Table 2. 7. Discussion of Results
During the interviews with those involved, it was felt that
the projects analysed here were not untypical of the
projects being constructed in Trinidad and Tobago at that
time, in other words, they were neither worse nor better
than average in the number of delays that they suffered.
Although each case study represented a 'project' to the
company concerned, they did not all represent complete
projects to the clients involved, e.g. the painting
contract for the Halls of Justice was a project to the
contractor, but only a very small element of the total
project to the client. This was not expected to make any
difference to the conduct of the work either by the
contractor or by the client or his representative, or to
affect the results of this survey. It is clear that the
majority of the delays which were detailed fell into the
category 'compensable excusable'. This bias almost
certainly resulted from the fact that the contractors
would have been much more aware of the need to fully
document delays which they felt they could claim
compensation for. Equally, the consultants would have been
aware of the contractor's intention to claim and would
also have recorded
relevant details. The non-compensable delays are made up

of the portion of the delays that were
claimed for but rejected, as well as the delays that were

recorded in diaries and minutes
of meetings but not claimed for. In no cases did the client

enforce the 'liquidated
damages' or penalty clauses which were in the contract

documents, even though very
significant delays (over 40 weeks) were experienced on
some of the contracts. Where values have been given for
non-excusable or non-compensable delays
these figures were either on record as claims or were

derived from the actual costs
involved in redoing work, or in accelerating the work to

get it back on schedule. One overall pattern that did
emerge was that main contractors suffer more delays,
and more costly delays than subcontractors. This may have

simply been a scale related
fact i.e. the more work you do the more likely you are to
experience problems (which
seems to be substantiated in the related finding that

larger jobs tended to have more
delays than smaller ones), or it may have been to do with

the timing of their
participation in the works. The main contractor is likely

to be involved earlier in the life
of a project, and hence at a time when it is likely to be

least fully finalised, and when
the site is least prepared subcontractors tend to get

involved later on when things have
settled down, and problems causing delays are less likely

to arise. The general economic climate during the period
under study was one of recession
and high levels of unemployment, and this generally tended

to keep industrial action to
a minimum. Only two projects were affected by strike

action, and in both cases it was
the work of the subcontractor being delayed by a strike

affecting the main contractor
that was recorded. As a result, in those two instances,

what would otherwise have
been an excusable but non-compensable delay became

compensable as the
subcontractor claimed against the main contractor. By far
the largest factor leading to delays was the client
requiring changes or
additions to be made to the project. If the 'top ten'

causes for delays (by additional cost
incurred) are listed (see tabulation below) it will be seen

that the quality of the drawings
and specifications that the contractors' had to work with

appeared to leave much to be 70 Lewis and Atherley
desired. When the omissions, ambiguities and errors (items
4,7 & 9) in these documents are added to variations
required by the consultants, they accounted for claims
amounting to $1,528,365 and for delays totaling 72.5
weeks. The consultants who were interviewed indicated that
this was not a fair reflection of their performance or
competence as most of the variations and the problems with
drawings and specifications arose because of late design
changes that emanated from the clients. They, the
consultants, had to respond and make the desired changes,
and it was this which caused the delays and cost
increases. # Nature Cost (:Ii) Length 1 Additional work
by client 1,636,970 99 weeks 2 Variations by consultants
760,000 25.5 weeks 3 Claims for loss and expense 580,000
4 Omissions in drawings & specs. 509,285 23 weeks 5 Late
payment by client 320,000 56 weeks 6 Unavailability of
whole or part of site 212,700 39 weeks 7 Ambiguities in
drawings & specs. 179,746 11 weeks 8 Redo work damaged
by other trades 129,000 12 weeks 9 Errors in drawings
and specs. 79,334 13 weeks 10 Poor scheduling or change
of sequence 46,200 32 weeks It should also be added that
during recessionary times the process of decision
making on capital investments tends to slow down, as a

result of this the period over
which the design process takes place tends to expand. In

the projects examined, for
example, the design of project 19 (University buildings)

took 5 years from conception
to tender. Given the rate of technological change, it is

hardly surprising that the client
required changes to be made to the project definition

between the time of the brief and
the tender and before the completion of the building when
such time scales are
involved.
In addition to this, as Bromilow has noted " ...

Variations are needed to help the cost
steering process and to cope with new ideas, changes in

technology and mistakes; they
are, contrary to the view of many, an inevitable part of

the building process. "[I] We
are dealing with delays rather than variations, but in

practice, they tend to be
interdependent. Delays are often a consequence of

variations;
During recessionary times the pressure to meet cost targets

increases, and this leads
clients to 'tinker' with their projects in order to try to

effect savings. For example, on
this particular project, in the original design (carried

out during the boom years) all
services were centrally controlled, there were not even

light switches in the individual
rooms. With the onset of the recession before building got

under way, increasing
awareness of the need to control energy costs led the

client to demand a revision of the
design to allow lights to be switched off in each room.

Such 'cost steering' variations
led to design changes, which led to delays. Although the

effect of such tinkering may
be delays and extra costs in the short term, in the longer

term they may well be cost
saving, and hence very cost effective.

1. Bromilow, F. J. (1969). Measurements and Scheduling of
Construction Time and Cost Performance in the Building
Industry. Report of the Division of Building Research
Division. CIRlA: Melbourne. Analysis of construction
delays 71
2. ICE Conditions of Contract. (1979). Conditions of

Contract and Forms of Tender, Agreement and Bond for use
in Connection with Works of Civil Engineering
Construction. 5th ed., London: The Institute of Civil
Engineers.
3. Richter, I. E. (1983). International Construction

Claims: Avoiding and Resolving Disputes. New York:
McGraw-Hill.
4. Rubin, R. A., Guy, S. A. and Maevis, A. C. (1983).

Construction Claims Analysis, Presentation. Defence New
York: VanNostrand Reinhold.
S. Stokes, M. (1977). Construction Law in Contractors'

Language. New York: McGraw-Hill.
6. Trinidad and Tobago. Central Statistical Office.

(1992). Review at the Economy l!l!lL Port of Spain:
Government Printery.
7. Trinidad and Tobago, Central Statistical Office. (1992).

Annual Statistical Digest 1990' No. 37 Port of Spain:
Government Printery.
8. Trinidad and Tobago Institute of Architects. (1974)

Standard Form of Building Contract with Quantities. Port
of Spain: Trinidad and Tobago Institute of Architects.
CLIENT BENCHMARKING OF CONTRACTOR PERFORMANCE D.8aldry
Department of Surveying, University of Salford, Salford, UK
Abstract Substantial clients of construction with
extensive development programmes invariably employ a range
of contracting organisations. Some clients, notably in the
public sector, may employ widely from an extensive panel
of contractors, whereas others may adopt an approach in
which a single or limited number of contractors are
engaged for the completion of a programme, in a manner
which has become known as partnering. Notwithstanding the
procurement approach adopted there is an ongoing necessity
for clients to have some means of objectively assessing
the performance and reputation of these contractors as a
way of evaluating current activities and also influencing
future procurement directions. Benchmarking has emerged
as a means by which participants in an industrial or
commercial process may monitor performance by reference to
verifiable evidence from comparable activities, posSloly
derived from some mutual information sharing agreement.
This paper examines ways in which significant construction
industry employers may adopt this process as an integral
part of their procurement decision making and action as a
means of enhancing project performance and predictability.
Keywords: Benchmarking, contractors, performance,
procurement Sommaire Des clients importants de
l'industrie de la Construction, ayant de vastes programmes
de developpement, emploient en general une gamme
d'enterprises de sous-traitants. Certains clients, du
secteur public notamnent, peuvent employer a grande echelle
a partir d'un large panneau de sous-traitants, alors que
d'autres, peuvent adopter une approche dans laquelle un
seul sous-traitant est engage, ou bien il est fait appel a
un


E & FN Span. ISBN 0 419 22240 5. Client benchmarking of
contractor performance 73 nombre limite de sous-traitants
pour terminer un programme, ce qui s'est fait connaitre
sous l'appellation de partenariat. Bien qu'il s'agisse

d'approvisionnement, ou demande
d'achat, les clients doivent, en permanence, etre en

mesure d'6valuer objectivement
l'execution et 1a reputation de ces sous-traitants, de

maniere Ii 6valuer les activites
courantes et aussi Ii influer sur les orientations de

l'approvisionnement futuro L'evaluation des performances a
fait son apparition comme moyen par lequel des
participants Ii un processus industriel ou commerciel

peuvent piloter les performances,
en se referant a une evidence verifiable Ii partir

d'activites comparables, peut-etre
derivee d'un certain accord sur Ie partage mutuel de

l'information. La presente
communication examine les fayons dont les employeurs

importants de l'industrie de 1a
construction peuvent adopter ce processus en tant que
partie integrante de leur prise de
decision d'approvisionnement et d'action, et comme moyen de

rehausser les
performances du projet et sa fiabilite.
Mots cles: Evaluation des performances, sous-traitants,

performances, approvisionnement
1 Introduction
Benchmarking as a term has a long history of application in

the construction process,
being derived as it is from the technique used by map

makers and surveyors to measure
a current position against an identified landmark or

reference point known as the
"benchmark". In more recent times the term has become

analogous to the business
process of establishing best practices, improving

management systems, and providing
an aid to strategic procurement activities. For supply

side organisations the process has
provided the means for observing in a disciplined manner

the methods and practices of
others, both within a particular industry or area of

commercial activity and also beyond
to other areas which offer methods and techniques which

would be capable of beneficial
transfer, the intention being to adopt and adapt the most

successful modes of operation
in order to pursue competitive advantage. For demand side

organisations the approach
offers a way of developing a rigorous approach to supplier

evaluation, applicable at pre
contract, current, and post-contract stages, and as a
means of assisting in critical
decision-making to optimise the procurement outcomes in

terms of value for money,
certainty of performance, and operational reliability.

Benchmarking is characterised by a variety of definitions;
Cousins [1] identifies a
number such as that of the Xerox Corporation which is one

of the organisations
credited with the founding application of the approach:
"the continuous process of measuring products, services,

and practices against the
toughest competitors or those companies recognised as

industry leaders" Ajoint definition from Coopers and
Lybrand and the CBI states:
"the process for comparing business practices and

performance levels against other
performance. A well considered benchmarking process should

allow a client to focus
upon those issues of supplier performance which are

critical to the successful accomplishment of client
organisational objectives. For regular or prospective
clients of
the construction industry a benchmarking mechanism allows

for appropriate weightings
to be applied to contractor performance in terms of price

competitiveness, programme
reliability, technical expertise, experience of building

type, product quality, claims awareness, etc., to reflect
the significance of these issues for the project sponsors
primary business.
2 Expectations of Construction Clients
Sponsors and clients of construction services vary in their

level of experience,
sophistication, and degree of awareness of the
construction process and marketplace.
All however are seeking some degree of reassurance that

the procurement decisions
that are made, and in particular the selection of

contractual supply partners, are those
which are most likely to result in a high level of

customer satisfaction. Chicken [4]
suggests that major decisions are not the product of a

single event or action but arise
from protracted discussion, investigation, and

consideration. The final decision is often
the product of a whole series of subsidiary decisions and

the interaction of several
interested parties. The making of critical project

decisions is a fundamental element of
the project sponsor's duties. Gorog [5] describes the

strategic decision points in the
project process which largely determine the degree to which

organisational objectives Client benchmarking of
contractor performance 75
are realised, the selection of supply contractors having a

profound influence upon
project performance and outcomes. The factors which can be

identified which will influence the process of contractor
selection by the project sponsor may be stated as:
• General level of sponsor expertise and experience of the

construction process
• Specific expertise in innovative or unorthodox

procurement methods
• Awareness of supply organisations and their apparent

capabilities
• Access to professional advice either in-house or

externally commissioned
• Statutory controls over contractor qualification notably
as set by European Union codes
• Organisational policy over contractor qualification

particularly in the public sector
• Organisational requirements for project performance

priorities When proposing to sponsor construction
activity the client organisation enters a
process of selectivity to determine the supply

organisation which will be finally
appointed as contractor to the project . This selection

may take one of a number of
forms as determined by the procurement process of the

sponsoring organisation:
• identification of a single contractor organisation with

whom the sponsor intends to enter into a negotiated
contractual relationship
• formation of a restricted panel of selective contractors

required to compete for the project on a number of
criteria, commonly price, but also possibly including
resource capacity, design skills, management expertise, or
funding capability
• facilitation of an open tendering process in which a

large number of responding contractors compete for the
project having normally first satisfied some
prequalification criteria Whichever procurement approach
is adopted there is an overriding requirement for
the project sponsor to be in possession of expert

intelligence as to the characteristics,
merits, drawbacks, and performance record of potential

contractors. An active and
effective process of benchmarking can provide the

mechanism for determining criteria
against which past performance and current capability may

be measured, for
establishing a set of minimum standards as a means of

testing for prequalification, and
for forming the basis for negotiation in respect of risk
allocation, range of services to be
provided, and the terms of the contractual relationship to

be formed.
3 The Benchmarking Process
Benchmarking is commonly applied to key operational

processes within a business to
determine those critical factors which create

organisational success. The majority of
benchmarking activity has been in the form of peer

assessment in which a supply side
organisation measures its capabilities, competencies, and

ultimately its performance
outturns, against relevant and appropriate companies often

from within the same 76 Ba/dry industry. Codling [6] has
identified how three distinct types of benchmarking have
evolved from mutual information sharing relationships: •
Internal intra-company comparisons of practices and
procedures to promote harmonisation of perceived best
practice. • External information exchange for mutual
advantage occurring amongst organisations within the same
industry or on occasions across a range of industries.
This process often utilises the services of a third party
organisation to moderate information and, if required, to
maintain confidentiality of participants. • Best practice
the seeking out of the undisputed leader in a specific
business process which is critical to organisational
success. Competitive forces may mean that this approach
often requires a partnership relationship to be developed
with a leading organisation in an alternative relevant
industry to that occupied by the benchmarking
organisation. It may be recognised from the above that the
intensity of benchmarking activity occurs within
organisations which are part of a product or service
supply chain, being
both providers and procurers of resources and key

components. For an organisation
which is dominantly the end consumer of goods or services,

such as the sponsor of construction project services, the
process requires adjustment and refinement to reflect
the external location of the client organisation, its
limited direct access to market
intelligence, and its often infrequent and occasional

participation in the procurement
process. As has been noted the application of

benchmarking techniques has been widely
adopted in process industries and., in particular, taken

up with enthusiastic vigour by the
rapidly expanding facilities management industry which is

largely building related in its
activities. Some particular difficulties do emerge however

when applying the process to
a project based industry such as construction which do

need to be overcome if optimal
benefits are to be derived. An opposing view to this is

held by Karlof and Ostblom [7]
who propose that the project form of organisational

activity is highly suited to the
application of benchmarking techniques as the formation of

an optimal ad hoc team
with specialised qualifications offers flexibility and the

ability to operate outside regular
channels without being hampered by organisational

formalities. Nevertheless difficulties
do exist which to some degree distinguish construction from

other industries and
include:
• very few projects are alike given the variety of

locations, participants, and product content
• projects are invariably conducted by teams of

participants assembled for the duration of the project
only and which are broken up on completion
• the supply side of the industry is highly fragmented both

in the number and diversity of available organisations
• some project sponsors are regular and frequent

commissioners of construction services whilst others take
part once-in-a-corporate-lifetime Client benchmarking of
contractor performance 77 • the highly competitive and
commercial nature of construction activity does not
encourage either supply or purchasing organisations to be
forthcoming with information • the data generated from
construction activity may be complex and variable and
subject to differing interpretation
• the application of benchmarking in construction has only

minority penetration to date resulting in a lack of
knowledge and enthusiasm for its potential and often being
limited to cost comparisons only If these obstacles to
effective benchmarking are to be overcome a prerequisite is
an
improved industry wide culture of confidence and mutual

trust, a condition which the
industry has largely avoided during its modem history.

Hawke [8] highlights a quotation
from the Editor of Building magazine on the occasion of

that journal's 150th
anniversary: " .... one theme comes twinkling through, the

unchanging nature of human
behaviour. Professional jealousy, competitive friction, and

contractual wrangles
preoccupied the Victorian building industry." Similarly

Powell [9] identified how the
cultural image of the contemporary construction industry

was working against the
formation of values of trustworthiness and integrity. The

development and growth of
benchmarking is dependent on the existence of an atmosphere

of co-operation, which
does not necessarily lead to a diminution in

competitiveness, but may prove to be a
mechanism which is instrumental in assisting the creation

of such a culture.
4 A Benchmarking Process for Construction Clients
Construction clients are commonly obliged to enter into

demanding contractual
relationships with organisations with whom they have had

limited contact and of whom
they have incomplete and inadequate knowledge. Construction

projects contain a high
level of risk for both primary contracting parties, at a

level which in some extreme
circumstances could threaten the survival of the

organisation if a major risk impact was
to occur. Sponsorship of a major construction project

requires the client organisation to
make significant decisions, notable of which is the

selection of the contracting supply
partner (Chicken [4]). For major projects a process of

prequalification is often implemented which is
designed as the first part of a two stage process which

requires putative tenderers to
satisfy some basic criteria to test suitability and

capability to tender and to execute the
contract. Alternatively clients who are regular

participants in the construction
marketplace may retain a continuing "approved" list of

vetted contractors from which
an appropriately sized panel oftenderers may be drawn for a

specific project. This latter
approach is a common occurrence in the public sector as

described by Latham [10] who
particularly notes the CMIS list held by the Department of

Environment to which
private clients may have access to determine whether a

specific contractor is held on
that list. Latham goes on to comment how the preparation

and maintenance of a
multitude of lists represents a wasteful duplication of

effort which significantly adds to
client costs. To mitigate these costs some client

organisations have attempted to levy
charges on contractors for admission to an approved list,

an approach which has raised 78 8a/dry the ire and
contempt of contractors and their trade associations. The
conclusion of Latham is that it would be appropriate for
the DOE to develop the CMIS scheme as a centralised
national resource to assist clients and their advisers to
determine contractor competence against a range of
performance criteria. From a client's perspective this
paper suggests the following essential elements of an
effective scheme for benchmarking contractor capability: •
Comprehensive containing an adequate range of contracting
organisations to meet the clients requirements in terms
of frequency of contracting intentions, geographical
spread, and typical characteristics of contracts •
Interactive capable of presenting the client with choices
and alternatives with which the client may engage to
customise a search process • Regularly updated able to
illustrate the most current and meaningful information of
contractor performance and capability • Targeted capable
of allowing the client to select appropriate specialist
contracting organisations to serve expressed needs and
requirements • Economic demonstrate ease of access and a
reasonable cost profile so as to promote regular and
widespread utilisation
• Reciprocal encourage participative feedback from client

participants on contractor performance and capability in a
form which is defenSlole, appropriately confidential, and
which indemnifies contn"butors against actions in tort The
establishment of a national database of contracting
organisations offers the
possibility for the assembly of factual and measurable

information together with
verifiable value judgements to assist prospective clients

to identifY those companies
which would prequalify for consideration for bid or

negotiation opportunities by
satisfying whichever set of performance criteria the

client wishes to impose, in addition
to those imposed by some other agency such as the European

Union Works and
Services Directives. In this way a client may impose as

it's benchmark standard the
highest degree of satisfaction level which may be achieved

in those success criteria
which are most critical to itself and against which it

would be posSlole to identifY those
companies whose performance record and verified capability

came closest to matching.
The outcome of this approach would be to add an additional

option to the range of
benchmarking approaches, as noted earlier in this paper by

reference to Codling [6],
that of most desirable practice which would be an abstract

achievement which mayor
may not be attained by any participating supply

organisation but which exists as a pure
benchmark of performance. Any database formed would be a

combination of factual and evaluated information
derived from both the participating contracting

organisations themselves and former
clients. Herein lies a particular dilemma as to the degree

of access which should be Client benchmarking of
contractor performance 79 made available to contractors to
verify the factual data on record and update if necessary,
and, if deemed appropriate, to examine the performance
values placed against them by contnbuting clients. It is
proposed that it would be fair and reasonable, and
probably necessary to promote contractor confidence, to
allow contractors full access to the data file held
against them in order to secure feedback on past client
views on their performance, the specific identities of
these clients being necessarily concealed. If such a
benchmarking scheme is to maximise the potential benefits
available the
body charged with the responSIbility for management would

need to display the
following characteristics:
• be independent of contracting and client organisations or

confederations
• be equally accessible to public sector and private sector

client organisations
• be capable of providing a timely and efficient response

to client enquiries
• have sufficient and appropriate marketing and information

dissemination skills as to be able to promote the uptake
and utilisation of the scheme as widely as posSlble
without reliance upon powers of compulsory registration
• have the resources to process, manage, and intexpret data

in a consistent and reliable way to promote meaningful
comparability Latham is of the view that the DOE CMIS
scheme could provide the framework for a
central United Kingdom resource for public sector contracts

based upon an official
registration of contractors. It is suggested in this paper

that such a system would have
limited acceptance into the private sector as the DOE would

be too strongly identified
with the government in its role as a major client of the

industry. Furthermore the
reluctance of government to directly intervene in

commercial relationships in the
construction industry, and the limited capability of the

utilisation of such a scheme
without legislative authority, would effectively hamper its

widespread acceptance and
participation. A preferred solution would be the

formation of a benchmarking service which was
under the management of an organisation which was seen as
neutral by all participants
in the construction process and could be relied upon to be

effective custodians of the
client information service. The Building Research

Establishment and the Construction
Industry Research and Information Association are two

organisations whose function is
the conduct of research into building and associated

matters and yet display the
desirable characteristics noted above, in particular the

absence of any allegiance to any
sector of the construction market, demonstrable expertise

in the gathering and
management of information which would be a perquisite of

the service, and would be
likely to enjoy the support of contracting organisations,

consultancy practices and
professional institutions, and the collective body of

construction sponsors. In addition
the neutrality of such organisations should attract the

support and recognition of a
secondary layer of organisations who have an interest in

the success and efficiency of
the construction process, including material and component

suppliers, insurers, unions,
and consumer associations. 80 Ba/dry The identifiable

success factors of such an arrangement would be the
delivery of a service which came to be relied upon as the
authoritative source of support to the client procurement
decision making process. Watson [11] descnbes how these
critical success factors need to be measured in basic
business terms and become the basic process measures of a
TQM approach. For a sponsor of construction activity the
selection of a supply partner which comes closest to that
sponsor's specific model of supply excellence will enhance
the likelihood of the success of a contractual
relationship. Furthermore the spur of achieving and
maintaining a presence on a widely regarded and valued
database of suppliers of construction services may result
in an elevation of the standards of petformance of
contracting organisations to new levels of excellence and
customer satisfaction. 5 Conclusion Construction clients
are seeking to improve their procurement and supplier
selection
process to reduce project risk and create conditions for a

greater certainty and quality of contractor performance.
This paper has descnbed how the disciplined process of
benchmarking may be adapted from the conventional

inter-company supply side
comparator of process activity into a means for the

reliable and objective assessment of
contractor competence. Notwithstanding the obstacles

presented by the peculiarities of
the construction process, when compared to the

manufacturing or service industries,
and the particular necessity of the development of a

culture of co-operation, it is
proposed that an effective and workable system meeting

certain delivery criteria is
desirable and achievable. The types of organisation which

would be suitable to accept
the responsibility for managing such a service have been

reviewed and appropriate
bodies proposed. The outcome of the establishment and

successful operation of a
contractor petformance benchmarking system is predicted to

be a direct positive aid to
client procurement experiences, and it is also speculated

that improved contractor
performance may result from the competitive forces arising

from participation in a
formalised comparative process.
1. Cousins, R (1995) Guide to Benchmarking in Premises

Management, in Premises and Facilities Management,
February, pp. 45-48.
2. Varcoe, B. (1993) Benchmarking for Competitive

Advantage, in Premises and Facilities Management,
February, pp. 11-12.
3. France, G. (1994) On your Benchmarks, in Building, 2

December, p. 42.
4. Chicken, IC. (1994) Managing Risks and Decisions in

Major Projects, Chapman Hall, UK. Client benchmarking of
contractor performance 81
5. Gorog, M. (1995) Client Orientated Strategic Project

Management, in Proceedings of SOVNET Project Management
Symposium, St. Petersburg, Russia.
6. Codling, S. (1992) Best Practice Benchmarking, Gower

Publishing, UK
7. Karlo£: B. and Ostblom, S. (1993) Benchmarking: a

Signpost to Excellence in Quality and Productivity, John
Wiley, UK
8. Hawke, M. (1994) Mythology and Reality: the perpetuation

of mistrust in the building industry, Construction Papers
No. 41, Chartered Institute of Building, UK.
9. Powell, M. (1994) Building Trust, in Proceedings of

Sixth Annual Conference of ARCOM, UK.
10. Latham, M. (1994) Constructing the Team, Final Report

of the GovemmentlIndustry Review of Procurement and
Contractual Arrangements in the UK Construction Industry,
HMSO, UK.
11. Watson, G. H (1992) The Benchmarking Workbook,

Productivity Press, USA.
2 Productivity estimates
Table 1 14 -Net present value in case monthly inflation is

3% and client effectue this payment on
time and with delays of 1, 2 and 3 months. (monthly real

discount rate: 1 %) NOMINAL NET NET CASH N.P.V. NET
CASH N.P.V. NET CASH N.P.V.
MONTH DISCOUNT RATE CASH N.P.V. FLOW (delay (delay of1

FLOW (delay (delay of2 FLOW (delay (delay of 3 of 1
month, of2 monthsl ot3 month~ %3+%1=%4 FLOW month)
month& months
JANUARY 0.961 -5,000 -4,805 .5,000 -4.805 ·5,000

-4,805 -5,000 -4.805
FEB. 0.924 94,017 86,871 ·280,953 ·259,600 ·280,953

-259,600 -280,953 ·259,600
MARCH 0.888 206.385 183,269 -118,295 .105,045 -493,265

-438,019 -493,265 -438,019
APRIL 0.854 28,717 24,524 280.043 239,156 -44,637

-38,119 -419,607 -358,344
MAY 0.821 29,168 23.946 182,074 149,482 433,400 355.821

108.720 89.259
JUNE 0.790 -3,383 -2,672 51,391 40,598 204,297

161.:394 455,623 359,942
JULY 0.759 -30,909 -23.459 77.656 58,940 132,430 100,514

285,:336 216,570
AUGUST 0.730 -47,965 ~35.014 84,114 61,403 192,679

140,655 247,45:3 180,640
SEPT. 0.702 1:32,079 92,719 240,644 168,932
OCTOBER 0.675 132,079 89.153
TOTAL 262,660 180,129 110,660 43,728

time an d h ( thl I d' 1 01<) With delays of 1, 2 and 3

mont s. man y rea Iscount rate: ° NOMINAL NET NET CASH
H.P.V. NET CASH H.P.V. NET H.P.V.
MONTH DISCOUNT CASH H.P.V. FLOW (delay (delay of 1 FLOW
(delay (delay of2 CASH (delay of3 RATE FLOW of 1 month)
month) of2 months) months) FLOW months %4+%1=%6 (deiayof
3 month!'t
JANUARY 0.952 -5.000 -4.760 .5.000 -4,760 -5,000 -4.760

·5,000 -4.760
FEB. 0.907 90.498 82.081 -284,720 -258.241 -284.720

-258,241 -284,720 ·258,241
MARCH 0.863 197,032 170,038 -127,671 -110.180 -502,889

-433.993 -502,889 -433.993
APRil 0.822 16,661 13.695 267,974 220,274 -56,729 -46,631

-431.947 .355.060
MAY 0.783 18,970 14.853 171,867 134,571 423,180 331,349

98.477 77.107
JUNE 0.746 -15.160 -11,309 39,606 29,546 192,503 143,607

443.816 331.086
JULY 0.710 -40,331 -28,635 68,229 48,442 122,995 87,326

275.892 195.883
AUGUST 0.676 -51,321 -34.693 81,064 54,799 189,624

128,185 244.390 165.207
SEPT. 0.644 132,385 85,255 240,945 155,168
OCTOBER 0.613 132,385 81.152
TOTAL 201,270 114,461 32.097 46,461

time an d 'th d I f 1 2 d 3 th ( thl I d' t t 1 o/c) WI

eays 0 an mon s. mon y rea Iscoun ra e: ° NOMINAL NET
NET CASH N.P.V. NET CASH N.P.V. NET CASH N.P.V.
MONTH DISCOUNT RATE CASH N.P.V. FLOW (delay of1

month'(delay of 1 FLOW (delay (delay of2 FLOW (delay
(deiayof3 %6+%1=%6 FLOW month) of2 months months of3
month!!.
JANUARY 0.943 -5,000 -4,715 -5,000 -4,715 -5.000 -4,715

-5.000
FEB. 0.890 88,012 78,330 -287,458 -255,837 -287.458
-255.837 ·287,458
MARCH 0.839 187,588 157,386 -137.137 -115.057 -512,607

-430,077 ·512,607
APRIL 0.792 4,367 3.458 255.667 202,488 -69.058 -54,693

-444,528
MAY 0,747 8,468 6,325 161,355 120.532 412,655 308,253

87,930
JUNE 0.705 -27,408 -19,322 27,351 19,282 180,238 127,067

431,538
JULY 0.665 -50.228 -33,401 58,326 38.786 11:3,085 75,201

265,972
AUGUST 0.627 -54,876 -34,407 77,819 48,792 186,:37:3

116,855 241,132
SEPT. 0.591 132,695 78,422 241,249
OCTOBER 0.558 132.695
TOTAL 163.664 64,271 -39.624
In case both inflation increase and delays in payment by

client occur at the same time that is most
frequently experienced by contracting firms, the

expectation of contracting firm from the mentioned
project maybe determined by probability analyses. In such a

case, contracting firm should determine
all the probabilities concerning occurrence of alternative

situations during the realisation of project.
Considering the total value to be 100, probabilities

concerning the occurrence of all alternatives shall
be calculated. Probability rate for each alternative shall

be determined by taking into consideration
market conditions of the period, competition among firms,

economic conditions of the country,
1 Project planning
Lowe, J G, Moussa, Neveen G, and Lowe H C (1993) "Cash flow

management: An Expert System for the
Construction Clienf', Journal of Applied Expert Systems,

1993, Volume 1(2) pp 134-152
Moussa, Neveen G (1992): "Cash flow forecasting and the

client: an integrated database expert system
model", Unpublished MSc. Dissertation, Heriot-Watt

University, Edinburgh.
Saleh, Sherif Omar (1991): "Developing an expert system

model for cash flow forecasting in the construction
industry", Unpublished MSc. Dissertation, Heriot-Watt

University, Edinburgh.
Shafer, G (1976), "A mathematical theory of evidence",

Princeton University Press, Princeton.
Singh, S (1987) "A computer model for financial resource

planning of high rise building projects" in Lansley,
Peter R & Harlow, Peter A (Eds) "Managing Construction

Worldwide", E & F N Spon, London, 1987, 1,
1 Introduction
Though by introduction of computers the calculation proces

in time planing has been
significantly accelerated,nothing much has been achieved as

regards the accuracy of time
schedules. Superproject, Microsoft Project, Primavera, the

most widely used programmes
cannot guarantee completition dates foreseen in the

schedules. The research done at the
Faculty of Civil Eng. in Osijek *1 suggests that the main

reasone for this unreliability are
similar for all the schedules:inadequately defined duration

of the activities and the neglect
of external factors present in the course of realization of

the project.
The problem of the inadequately defined duration of

activities has been resolved through
the introduction of ''The Theoretical Lenght of duration

of the Activities"*2. The problem of
external factors affecting the duration of a project is

being addressed in this paper. Prior to
analyzing the imapct of external factors on the realization

of project, it would be advisable
to acquint ourselfes briefly with the notion of

theoretical times. This is necesary, for the
terminal time schedule can be done with the standard

(currently used) times Tas, and
theoretical times Tat.
To obtain the most accurate data regarding duration of the

activities an analysis of the
spent times, has been done on all the levels of the

operation complexities. It has been
noticed that on every level (from a single move up to the

project itself) the time can be
divided into a useful and uncontrolled. The term

uncontrolled is deliberately used here, for
up to know there has not been a way to get an idea about

what it is, irrespective of the
fact whether its use in practice is usefull or not.
In terms of organization these problems have been

recognized and entire scientific areas
have been created to deal with them. As regards the times

on the level of moves and
procedures, they are taken care of in 'Work Studies". As

for those on the level of
operations and processes they are accountet for in the

norms. The times on the level
of activities (from simple up to complex processes) have up
to now been defined by way
of deterministic and stohastic calculations, and the

tables used in complex processes
*3.There is an attempt to eliminate uncontrolled time on

the project level usualy trough
"ironong" of labour and equipment histograms.
Looking more closely at the times of activities used up to

the present date (let's call them
standard Tas) we shall see that times in effect indicate

duration of the main proces within
an activity. Such an approach distorts to a large degree

the lenght of the duration of an
activity. IntrodUCing a "tehnical normal" into calculation

enabled us to arrive at a typical
time *4. In Tehnical Normal it is possible to see

(gantogramicaly) what the relation is
among the processes in each of the activities. Normal gives

us an idea about useful times
Tk, reserve (i.e. uncontrolled) Tr times,and obtained times

Td. The obtained time is the
one we extract from the uncontrolled time.When an activity

is composed of a number of
processes then the time running from the beginning of the

first process to the completition
of the last is called Theoretical Length of Duration of an

Activity, Tat. When the same
technologies are concerned this time is stable, therefore

the schedules done with Tat are
more reliable. Neverthless, the schedules based on

theoretical times do not take into
account external conditions present in the course of

duration of the project. Therefore we
say that such a schedule is good as long as optimum
conditions are concerned, similar to
the theoretical capacity of machines, which are likewise

foreseen for optimnm working
conditions. 184 Petrovic Practical time (similar to

practical capacity) is opbteined when local and climatic
conditions are taken into account, of which more will be
said in the continuation. 2 Practical Time Every
project,irrespecctive of whether it uses stndard or
theoretical times of duration of activity, is bound to be
effected by various surrounding conditions in course of its
realization. It is truism that it is different to work in
rainy as opposed dry conditions, in situation when we are
well supplied with the needed materials as opposed to the
shortage of them. The question is now whether these
variable external factors can somehow be icorporatetd in
the process of time scheduling, thus ensuring their
automatic imp-act on the duration of the proceses. Can we
at the same time foresee the intensity of the external
conditions, their selectivness as regards the bearing they
have on individual types of works, which of them are
essential, which dominant. etc.? When the project "New
Methods of Time Scheduling" was initiated the target was a
universal model, which could be extended or reduced at
will, depending on the impact of the surrouding condition.
The problem of cold and rain will not be of much relevance
in Africa countries and will have to be replaced by
factors which will be of lesser importance in some other
countries of world.Cold in Siberia or Alaska will be of
more relevance there than in some other parts of the
world. As far es the Central Europe (and possibly wider)
is concerned the most relevant external factors are:
climate (Kk), logistic (KI), organization (Ko) and safety
(Ks). We departed from the assumption that for a possible
extension of the duration of an activity it is the most
prominent of the external factors that will be of the
highest relevance. The initial investigation has revealed
that as the rule there will be always one among the four
factors mentioned above that will be dominant, ie. all
others are not of sufficient magnitude and are not for the
time being taken into account. Practical time of the
duration of an activity is obtained via the folliwing
formula. Tap = Tat (or Tas) x max (Kk or KI or Ko or Ks)
(1 ) It is evident that the practical time can be derived
from the standard as well as from the theoretical
time.This time is multiplied by the largest coefficient
among the external factors separately for each day. The
formula also shows that the number of external factors can
be changed at will. *5. By selecting four groups of the
most relevant external factors a possibility is opend for
the creation of the entire model. The first step on the
way is to presume the contents of each of the groups of the
aforesaid external factors. A selection of the most
relevant ones is done again and we end up with having the
following sub-factors: Climatic factor Kk embraces the
following sub-factoes Time planning using the Zagreb
method 185
Kk = ( Kk1 ,Kk2,Kk3,Kk4 ) where (2)
Kk1 = impact of rain
Kk2 = impact of cold
Logistic factor Kk3 = impact of heat Kk4 = impact of

wind
KI = (K11 ,KI2,KI3) where (3)
KI1 = impact of the timely supply of materials KI3 = impact

of the avaible labour
KI2 = imapact of the use of plant and equip.
Organization factor
Ko = (K01 ,K02) where (4)
K01 = impact of general organization K02 = impact of the

site organization
The safety factor has for the time being only value
Ks = Ks1 where (5)
Ks1 = the impact of general safety on work efficiency.
The following step is breaking of each of the group factors

into two parts. The first part is
linked to the yearly calendar (termed schedule) with a

common denomination Kv. The
second one measures the sensitivity of each of the

activities to the exsternal condition,
bearing the common denominator Ka. In accordance with the

aforesaid the factors can
be expressed via the following formula
K = Ka x Kv
i.e.
Kk = Kak x Kvk
KI = Kal x Kvl Ko = Kao x Kvo Ks = Kas x Kvs (6)
Each of the four factors (Kk, KI, Ko and Ks) can be now
shown as a combination of
formulas 2, 3, 4 and 5 with formula 6, but bearing on mind

that the ten sub-factors (rein,
heat.... safety) are reflected both within time (terming)

and activity sensitivity. The rule that
the strongest factor is of utmost relevance would apply

here as well. Formula, would
therefore be: 186 Petrovic Kk = max (Kak1 x Kvk1 or Kak2

x Kvk2 or Kak3 x Kvk3 or Kak4 x Kvk4) KI = max (Ka11 x
Kvl1 or Kal2 x Kvl2 or Kal3 x Kv13) Ko = max (Ka01 x Kv01
or Ka02 x Kv02) Ks = Kas1'x Kvs1 (7) In order to be able
to carry out calculation we shall have to give,the
relations shown here their numerical values. Three degrees
of magnitude are foreseen for each sub-group of factors.
It is assumed that the sensitivity of an activity to
external conditions,ie.factor Ka ranges from A = least
sensitivity, B = medium sensitivity C = high sensitivity
On the other hand the intensity of the external influencies
is for the time being expressed through three degrees
relative to factor Kv, ie. a = weak influence b = fair
influence c = strong influence Numerical values for each
of the six said magnitudes will depend on what extension of
an activity we shall decide to take into account, is it an
extension from one day to two, three or four days. Limits
to these should be fixed in advance. There would be no
point, ego to monitor for months an activity suspended on
account of snowy conditions as though it were in progres
while the snowy conditions persist.On the contrary, after a
day or two we shall stop the activity and move the
labourers to another place, or threat them as disengaged
on account of inclement weather conditions. For the cases
of extension lasting 1, 2, 3 days we use the following
values: For an extension from one to two days up to three
days up to four days A=0,75 a=1,33 A = 0,67 a = 1,50 A =
0,50 a = 2,00 B = 0,90 b = 1,66 B = 0,84 b = 2,25 B =
0,75 b = 3,00 C = 1,00 c = 2,00 C=1,00 c=3,00 C = 1,00 c =
4,00 A calculation where we have two rows of ten
coefficients which can turn up in total of 60 numerical
values,performed for each day separately, can be
efficiently done only by a computer. The program which is
being prepared within the project New Mwthods of Tme
Scheduling is conceived in such a way that only the same
coefficients are automaticaly multiplied among themselfs.
Therefore the Kak coefficients will (unless it is zero)
seek only coeff. Kvk, etc. Coeff. linked to term schedule
(a, b, c) can equal zero, which is to say that no
external influence were registered. The result accordingly
will equal zero. Depending on the strength of sensitivity
and external influences we shall have the following values
for one day extension: A x a = 0,75 x 1,33 = 1,00 A x b =
0,75 x 1,66 = 1,25 Axc=0,75x2,00= 1,50 B x a = 1,20 Bxb
= 1,50 B xc = 1,80 C x a = 1,33 Cxb = 1,66 C x c =
2,00 Time planning using the Zagreb method 187
We can likewise calculate the results for extension lasting

two or three days.
The next task of computer program would be to pick from the

maximum of ten possible
results to one of the largest magnitude,which will then be

responsible for the extension in
the duration of an activity. The final time is arrived at

by adding up all daily practical
(altered) times
Tap = Tap daily = 1 (day) x K (8)
The procedure ',s repeated automaticaly for each day of

every activity beginning with the
initial one.
Due to the influence of the surrounding conditions there

will usualy occur an extension in
the duration of an activity, ie. Tap = Tas (or Tat). The

extension thus obtained will also
become subject to the influence of surrounding conditions

and will tend to be extended
further.
Thie Process can be seen in the following diagram I II

Tas ~ Toc 1 ~ , '\ Tap 1 lTac:2 Tap 2 LTc c 3
Tap 3 Fig. 1 Practical times
The calculation is done by adopting the following formulas

(for standard time)
if Tap1 Tas = Tae1 < 0,5 then Tap = Tap1 (9)
if Tap1 Tas = Tae1 > 0,5 (0,5 is the time relating to day
rounding up) 188 Petrovic next we carry out the procedure
mentioned above on time Tae1. The time extended in such a
way is also subject to the influence of external
conditions.Tae1 is, therefore a new, lesser extension
Tae2. Then we pose the same question again: if Tap2 Tap1 =
Tae2 < 0,5 then tap = tap2 if Tap2 Tap1 = Tae2> 0,5 then
time Tae2 is treated in likewise manner to get extension
Tae3 etc. The procedure is repeated until! we reach a
state where the length of the extension is less than 0,5.
This is reached in tree steps at most. Use of Computer
Investigation is under way and a program for the
calculation of practical activity (Tap) has not been
completed as yet. The description that follows is done on
the ssumption that such a program is completed. THE
FIRST STEP is a preparation of termed calendar with
coeff.for the entire company. Several sorts of termed
calendare are constantly updated and extended once they are
fed into a computer in planning department of a company.
These could be calenders with monthly, quarterly or even
longe term weather forecasts with date from multi-annual
calendars, logistic factors related to a state zones, or
areas,details concerning general organization patterns or
organizations on the level of company departmens etc. Term
calenders serve the entire compeny and it is up to the
project manager to choose which of them he is going to
use, ie. monitor. Likewise, we can use a calendar of the
actual external conditions. This one is done
subsequently, ie after the occurrance of the actual
external conditions. It is nesessary for us to be able to
check by a subsequent calculation whether the time on a
site is utilized effectively. A subsequent schedule will
help us to determine through a systematic monitoring which
of the factors are the most prominent and to what degree.
The program is conceivaed in such a way that it is
sufficient to indicate the first and the last day of the
influence factor, whereupon the same value is automaticaly
added to all the days inbetween. SECOND STEP in the
calculation of the practical time is the preparation of the
time schedule (let's take a network for an example) with
initial times (standard or theoretical). The network plan
has an innovation in the node. Now the node has nine
instead of eight pieces of information. A field is added
in the centre of the node in which practical time is
displayed. Time planning using the Zagreb method 189 Es
Tas LS Simb. Tap TF EF FF LF Fig. 3 Network node
If we set out with standard times (which are located in the

middle of the top row) then we
have two possibilities. The first one is the calculation

of the theoretical time. The procedure
is set in motion by activating the field containing

standard time (mouse, cursor). Further
stages are dealt with in the article which studies labour

histograms, and figure (6),
therefore we shall activate the mid (vacant) field,

whereupon a program for calculating
practical time is opend.
Activating the mid field (separately for each activity)

the following table will appear: <5 Kak 1 Kat 2 m Kak
2 Kal 3 :l: iii Kak 3 Koo 1 Kak I. Kao 2 Kat 1 Kas
Fig. 4 Activity sensibility table
Name ie. a symbol, is entered into the table and then in

accordance with the contents of
the process within the activity (predominatly the main one)

we estimate the level of
sensitivity (A, B, C) for the ten of possible external

influences. In case norms are adopted,
these tables can be made beforehand to accompany the norm.

In such event, when norm
activity is called, sensitivity factors are automaticaly

displayed. Evan when ther are no
readu tables an internal data bank will be formed in

course of time. 190 Petrovic THE THIRD STEP consist in
linking the activity data and the coeff.previosly fed into
the term caslendar. Entering the name of the initial
network plan into the term calendar the linking is
achieved. By linking the first activity. ego entering the
initial date by the symbol A, we set the procedure in
motion. In the bottom field of the calendar the first
activity is displayed gantogramically. The command to
begin the calculation of the practical time for each day
separately will instruct the computer to multipay the
complimentary coefficients, selects the highest and
multiplies it by the day. This is repeated until the last
day of the plan fed into the computer is reched.After
adding up 0,5, the practical time will appear on the
screen. In case the practical time is longer than the
initial one, the said procedure will apply to the
difference, ie. extension Tae and the extension prolonged
further. The computer will do likewise with all the
extensions until the value of 0,5 day is reached. After
the first, (now extended activity) the computer will
process the next column of activities, but it should be
noted that all the activities are in the extreme left
position for as yet we cannot tell which of them lie on
the cry tical path into two more positions (mid and right)
to be able to see which practical time is the longest
(being also the most relevant) which is then entered into
the node. The longest time can affect the route of the
criyical path. Doing one column at a time the computer
will come to the last one, thus indicating the terminal
date of a project. THE FOURTH STEP contains a command
instructing us to return to network plan from gantogram,
paying attention to technological links defined by the
initial plan and the practical times of duration of the
activities. The plan can possibly point to a new cry tical
path. This network plan is, of course,valid only for the
time (calendar) for which it is made. If the event the
beginning shifts, or a part of the plan is moved to another
time on account of updating, it is enough to register a
new beginning date and repeat the first four steps
mentioned above. The method of realizing the project and
the time within which it is realized are firmly connected.
A Practical Example The folowing example will illustrate
the procedure adopted in calculation of practical times.
The example will show how the computer behaves in course
of the calcilation. The initial network plan on which
technological links are based looks as follows: OjL L A
0 oj 0 L Time planning using the Zagreb method 191 L /
2 6 10/7 17 r-" B 10 rE 6 ILIL 16 16 I 6 ]3
...... L 16 10 ...... 10 I 3 13 13 /2 15 !:::* c 0
f-F 0 f-G S L 10 10 10 10 13 21( 8 n L I 5 9 13
110 23 L.-o L --0:: H 0 a I L 13 13J 0 23 Fig. 5.
Initial network A (4 days) digging for foundation B (2
days) digging trenches C (6 dayc) concreting foundation
slabs D (7 days) laying services E (5 days) backfilling
F (3 days) building walls and ceilings G (2 days) making
flors H (10 days) errecting roof structure I (7 days)
roofing works LEGENOA: ES Iti EF A/<TlV· iF LSIFF LF
... 2317 Xl r--! I 0 23 I 0 30 f
We can see that the initial plan ends on the 30th day, that
it has 5 columns and cry tical
path A-C-F-H-1. In accordance with Figure 5 a selection of

sensitivity coeff. is for the
acctivities we encounter in the initial plan
c K a k 1 C K a ! 2 C K a k 1 C K a l 2 C K a k 1 B K a ! 2
B ! < o k 1 A K a ! 3 8 K a k 2 A K a ! 3 8 K a k 2 8 K a l
3 B K a k 3 A K a o 1 A K a k 3 A K a o 1 8 K a k ] A K a o
1 A K a k I . A K a o 2 8 K a k l . A K a o 2 A K a k l . A
1 < 0 0 2 A K a l 1 A K a s A K c i 1 A K a s A K a ! 1 C K
a s A ' o E F K a k 1 B K a t 2 B K a k 1 C K a t 2 A K a k
t C K a l ] A K a k 2 A K a t 3 B K a k 2 B K a t 3 B K a k
2 B K a l 3 C K a k 3 A K a o 1 A K a k 3 B K a o 1 A K a k
3 A K a o 1 A ! < o k t . A 1 < 0 0 2 A K a k l . A K a o 2
A K d < l . A K o . o 2 A K a ! 1 A K a s A K a l 1 C K a s
A K a t 1 C K a s B ' ~ G H K a k t A K a t 2 A K a k 1 C K
a t 2 A K a k 1 C K a t 2 A 1 J < a k 2 C K a ( 3 B K c i k
2 B K a t 3 B K a k 1 B K a ( 3 A K a k 3 A K o o 1 B K a k
3 C K a o 1 B K a l e 3 C K o o 1 B K a k l . A K a 0 2 A K
a l e L B K a o 2 A K a k l . C K a o ] A K a f 1 C K a s A
K a ! 1 C K a s B K o . ( 1 C K G l . s C i F i g . 6 A c t
i v i t y s e n s i t i v i t y c o e f f i c i e n t s D /
F S ~ M T W T F S v ; t « T W T F S ~ M T W T F S ~ t « T W
T F S ~ t « T W D / I \ 1 2 X L 5 6 7 8 9 r § 1 1 1 1 1 3 l
L 1 5 1 6 ~ 1 8 1 9 1 0 1 1 1 2 2 3 ' 4 2 5 2 6 2 7 2 8 2 9
3 0 ~ 2 J L " " ~ ~ ~ < 0 ~ ~ ; ; ; [ j . . . . . . . . . I
I ' < D t I D ~ a s ; ; ; c . . . . . . . . . . ' " ' ~ < <
0 0 1 8 r ; D / G r ; : ! z I I ' < D c . r ' " 0 0 < 0 0 0
0 0 < 0 0 0 c . 0 1 0 1 0 1 0 1 0 1 < n 0 1 . . . . . ~ c .
K Y K T b b V a V a b b ' / c b V / / K Y K 2 / . v : V ' /
~ K Y K J V ~ v . ' i V / / K Y K L / / / / / V / V K Y L 1
a a / ' a a a a a a V , a Q a a a a ' i a a a a a a ' / a a
a a a a r / . a a ' a K Y L 2 / / b c b b b b V b b b b b b
/ b b b b b b V / b b K Y L 3 c c : / . c : c : c : b b c V
, , c c / / ' / : ' / K Y O 1 a a ~ a a a a a a V a a a G .
a a V ; a a a a a a / / " 7 K Y O 2 b b V b b V ' / v : t /
K Y S a a V / a a b b b b V b b b b b b v : ' / b b V b b b
~ ! J E ~ ~ ~ ~ 1 I ~ I ~ f ' / ~ B r : ; I / E V I I v : I
I [ 7 I I . . . L V . . . ( A I 0 : , F V I ~ I I ' L I I !
, V I r / I ' I V f . A c ' / . i F 7 ; : : I T 1 ' , / v :
~ / ~ o r ) H i . . . ( ~ ~ , / . ! I ~ t ! i ~ 0 I ( / . ~
T . ~ = r / i F i g , 7 T e r m e d c a l e n d a r 194
Petrovic In this instance we shall go for the the maximum
extension of a day per a day of an activity.Accordingly,
the sensitivity coefficients relating to the activities are
as follows A = 0,80 B = 0,90 C = 1,00 We have
likewise decided that the project will be in progres
during Sept. Oct. 1995 somewhere in central Croatia.
Working hours are 8 hours a day, six days a week. The term
calendar with a gantogram of the initial network plan and
the obtained after the calculation Oh practical times
(double line) would look as Fig. 7 It is evident that due
to the external influeces the completition date has been
siginficantly extended. Seing how the times of individual
activities varies until they settled. Initial Tae1 Tae2
Tae3 Tae4 A 4 6 7 B = 2 3 C = 6 9 11 12 0 5 8
10 E = 7 11 13 14 F = 3 4 5 G 2 3 H 10 17 20 21
22 I 7 10 11 Fig.8 Extension of activities Wi can
conclude that longer activies are more likely to be
extended, thus by the addition of new days being sorted
under new factors, which further extend duration of the
activities. The said days are obtained in the computer by
recurring calculations using the following tables. A part
is shown here only, which will suffice for the procedure to
be comprehended. See Figure 9. C 1 b K k l 1 . 5 K l l
0 K k 2 0 K I 3 B l c 1 . 5 7 5 K k 3 0 K o l A l a 1 . 0 K
k 4 0 1 < 0 2 B i b 1 . 1 2 K l l A l a K s D / a 1 . 0 1 .
0 K k 1 0 K l 2 0 K k 2 0 1 < 1 3 B l c K k 3 0 K o l A l a
K k 4 0 1 < 0 2 0 K l 1 A l a K s B I b C l b K k l K l l 0
K k 2 K k 3 K k L K I I K k l K k 2 K k 3 K k L 1 < 1 1 0 1
< 1 3 B l c 0 K o l A l a 0 K o 2 B i b A l a K s B l a 0 1
< 1 2 0 0 K i l B l c 0 K o l A l a 0 K o 2 0 A l a K s B i
b F i g . 9 F a c t o r m u l t i p l i c a t i o n t a b l
e s C i a K k l K I 1 0 K k l 0 K I 2 0 K k 2 0 K I 3 B l c
K k 2 0 K l l B l c K k 3 0 K o l A l a K k 3 0 K o l A l a
0 K o 2 B i b K k L 1 < 0 2 B i b K k L 0 K I I A l a K s B
l a 1 < 1 1 A l a K s B / a K k l 0 K I 2 0 K k 2 0 K i l B
I b K k 3 0 1 < 0 1 A l a K k L 0 K o 2 0 K l l A l a K s B
I b 196 Petrovic The tables are made for each day and the
highest coefficient is the one by which the day is
multiplied (which is to say that in fact the coff.are added
up). Therefore the first day the hihgest result was KI2
(8 x c = 1,575), the second day K01 (8 x a = 1,12) and the
third (extended) Kk1 (C x b = 1,5). The final network
plan shown in the next diagram suggests that the
completition date is much longer, 55 days (the date with
standard times is 30 days), which seems to indicate that
the external influences should not be ignored. In this
instance the influence of bad logistic and organization
were even stronger than rain which tended to prevail at
the time lEGENOA: 7 2 11 19 7 33 ES ti EF ~ B I.
21 rE 11. 13 AK Tat TF 18 8 32 32 13 1.6 lS FF
LF 0 I. 7 ~ 7 6 19 I19 3 11. 21. 2 17 ~ 1.6 7
57 A 7 0 C 12 0 ~ F 5 0 ~ G 1 19 ----..... I
11 0 0 0 7 7 0 19 19 0 11. 1.3 19 1.6 e.6 u 57
7 5 17 11. C 1.6 ~ 0 I() 7 H 12 01== 1£ I()
11. 11. 0 1.6 Fig. 10 Final network plan Conclusion
When making a conclusion it should be kept on mind that the
study carried out within the project New Methods of
Planing is still in progress. The results reported here
have yet to Time planning using the Zagreb method 197
be confirmed by thoroughly checked numerical values of the

factors (for which a
systematic surwey will have to be carried out in the

field). In addition, a comparison of
calculated and the actual dates of completiton of projects

will have to be made yet
A preparation of a computer program for calculation of

theoretical and practical times is
also foreseen by the project Although it is to be expected

that more knowledge will be
gained in the course of future work on the project, there

are facts thet can already be
applied.
Calculation of theoretical and practical times will become

so simple that it will be in use
with most of present programs concerning time scheduling. A

continual use of this sort of
plans will have for a result a creation of data

bank,adjustment of coefficients to not only
the local conditions bat the conditions prevailing within

one's own company, as well.
Specialists will apper in companies whose job will be to

term plans with coefficients.
Avaibility of more types of plans will enable us to
identify the best months for realization of
a particular project Moreover, it will be possible to do

this automaticaly using a computer
programe. The direct advantage of these will be a more

straightforward policy as
concerns the use of labour and provision of the necessary

materials. Simulation will reveal
up to what degree a bad organization or inadequate safety

can affect the dates of
completition, etc.
It should be noted that the model is devised in such a way

that it will allow new additions
that will surely arise in course of time.
Finaly, it ought to be pointed out that it was only after

practical times had been introduced
that the link between technology, organization and time

become evident What is more,
this link can be assigned a numerical value as well.
1. Petrovic, J., and Vidakovic, D., (1994) The New Method

of Time Scheduling, Civil
Faculty Osijek.
2. Petrovic,J. ,(1995) The Theoretical Lenght of Duration

of the Activities, Gradevinar, Zgb.
3. Nonveiller,S., (1982) Metode mreznog planiranja i

njihova primjena, Zagreb, FGZ,
pp 84.
4. Klepac, J., (1983), Organizacija gradenja, Zagreb, FGZ,

pp.171.
5. Wai-Kin Wa, R., Fuzzy Modus Ponens Deduction Technique

for Construction
Scheduling, Journal of Construction Engng. and Mgmt.,

120,pp 164.
6.Petrovic,J., (1996) Optimalization of Time Plane on

Relation Time-Work Forces, Zgb.
organizing and material interest stimulating methods,

constructions, materials,
workers, mechanisms, etc.) are selected by students basing

oneself on criteria
system reflecting their utility degree. The required

resources must be in maximum
conformity with the requirements of lifetime process of

the building. For this, it is
very important to pick rational suppliers. They must meet

many requirements, for
instance, to be reliable (to observe as accurately as

possible the conditions set in
contract), to be capable to take care that the supplied

resources are competitive, to
be able and could be trusted to make necessary alterations

in supplying process if
such are required by changes in the project. The quality

of used resources and means (equipment, cranes, tools,
constructions, materials, etc.) must meet all presented

requirements. The
efficiency of performed work also very much depends on

quality level, physical
wear-out and obsolescence of used various cranes,

mechanisms and tools. In other
words, the efficiency of construction process closely

depends on other industrial
enterprises connected with construction (extraction and

processing of raw
materials; manufacturing of cranes, mechanisms and tools).

228 Zavadskas and Kaklauskas New requirement') appear when
the construction object is completed and commissioned.
They refer to proper maintenance of the building. The
factors mentioned above are directly connected with project
efficiency increase process. But this is not suffieient
in order to ensure high quality of a building. A lot of
additional factors (economic capabilities, human relations,
passed laws, etc.) must be taken into consideration. The
students can analyse all above mentioned and other factors
by applying the multicriteria decision-making system. 2
The development of knowledge base In order to make a MOM
system to work efficiently, it is necessary to develop as
full as possible knowledge base describing the problems
under investigation. Retrieval of information needed for
the knowledge base, its systematization and coding in
computer language is a complicated, time and effort
consuming process. The knowledge base accumulates various
information enabling the MOM system to efficiently perform
alternative designing and multicriteria analysis of
various projects and their constituent parts. It also
stores various rules, recommendations and formulas by
means of which the knowledge base can be easily updated.
The MOM system is composed of two main parts: knowledge
base and decision-making subsystem' enabling to perform
alternative designing and multicriteria analysis of
projects or their constituent parts. Having at first
analysed various possible structures of knowledge base
and modes of interaction between its separate parts, we
have selected, the most rational one consisting of the
following integrated parts: 1) knowledge sheets for
multicriteria project analysis, i.e. sheets containing
information on systems of criteria describing projects
(their constituent parts) as weB as values and initial
significances of these criteria. 2) knowledge sheets for
alternative designing, i.e. sheets containing information
on possible changing combinations of processes, solutions
and interested parties; 3) knowledge sheets containing
graphical information characterizing the versions (plans,
sections, front views of buildings and so forth); 4)
recommendations on the filling-in of knowledge sheets. In
our opinion, the information of multicriteria analysis and
alternative designing knowledge sheets is best to be
recorded and stored in form of a matrix. In this case, it
can be most easily analysed, and, using a PC, various
mathematical operations can be performed over it. In
order to give more detailed explanation of knowledge
sheets, they will be considered in a context of formation
of knowledge sheets for multicriteria project analysis.
Formation process of multicriteria analysis knowledge
sheets consists of three main stages (determination of
general information on versions being analysed and Using
the multicriteria decision-making system 229 on criteria
describing them; determination of values and initial
significances of criteria; determination of links existing
between the versions being analysed and other projects
(their constituent parts) or processes and solutions
making them up). Formation process of multicriteria
analysis knowledge sheets is started by identitication of
information necessary for multicriteria analysis of
projects. This information is retrieved from the
following sources: various projects, technical
certificates; existing analogues or finished similar work;
experts, with simultaneous application of expert methods;
recommendations, norms, normatives, standards and other
divers literature. At first, general information on
alternatives and on criteria describing them is
established. Basing oneself on various information sources,
proceeds the establishment of alternatives on which the
student had expressed interest, system of criteria
describing the alternatives, types of criteria
(quantitative or qualitative), measuring units and
fluctuation range of values. The wider is the range of
criteria value assessment, the more accurate will be the
analysis of versions. Values of criteria describing the
alternatives are determined on base of projects under
investigation, expert methods, analogues, recommendations,
other documents. It is very important to get exact
knowledge fully reflecting character of the problem
because on this depends the objectivity while selecting the
most efficient version. It can be noted that quantitative
information acquired from compared projects is quite
objective. Each specific project has its specific price,
maintenance costs. The values of qualitative criteria are
rather subjective, but, in case expert methods are applied
for their determination, they markedly become more
objective. The initial signiticances of all criteria are
determined by means of expert methods. Also, using expert
methods, limitations can be set for various criteria
(cost, maintenance expenditures, etc.), and if they are not
complied with, the versions are not considered any more.
Each student has an individual task. Therefore, in each
specific case, the student can alter the number of
alternatives being analysed, the system of criteria
characterizing them, the values and initial significances
of criteria. One student, for instance, regards the
infrastructure advantages of a certain location as more
important than general comfortability of a building. The
other on the contrary. A student, wanting to express this
standpoint in numeric representation, can set different
values of initial signiticances for certain criteria; and
this will influence the assessment of the project on the
whole. Taking a detached view, this may seem as a
"tendentious" choice, a "rule of the thumb" decision.
Although this assessment will be rather subjective, its
outcome most adequatly will correspond to the student's
task, his knowledge and demands. In order to facilitate
amendment and updating of knowledge base, special
recommendations have been prepared. Following the
recommendations, one can easily update or amend criteria
systems, values and initial significances of criteria,
changing combinations of alternative processes and
solutions, graphical views, etc. 230 Zavadskas and
Kaklauskas KNOWLEDGE SHEET FOR MULTICRITERIA ANALYSIS OF
PROJECTS 1.Projectname
________________________________________________ __ 2.
Goals: 1. Determination of alternatives under investigation
and parameters describing them; 2. Determination of links
between the alternatives under investigation and other
projects or their constituent parts 3. Alternatives under
investigation: A(1). A(2) ... A(m) 4. Determination of
links between versions being analysed and other projects
(their constituent parts) or processes and decisions
comprising them, performed in order to find an efficient
life-time process of a building (selection of location,
stages of brief, design, construction and maintenance):
5. Determination of parameters describing the alternatives
Criteria giving exhaustive description Compared of
alternatives under investigation versions x(1 ) x(2) ...
xOl ... x(n) A(1) x(1.1 ) x(1.2) ... x(1 .j) ... x(1.n)
A(2) x(2.1) x(2.2) ... x(2.j) ... x(2.n) A(m) x(m.1)
x(m.2) ... x(m.j) ... x(m.n) Measuring unit M(1)
M(2) ... MOl ... M(n) Initial significance Q(1) Q(2)
... QOl ... Q(n) Limitations A(1) A(2) ... A(j) '"
A(n) Fig. 2.Typical multicriteria project analysis
knowledge sheet Using the multicriteria decision-making
system 231 In order to find a most simple and easy way to
enter the necessary data into knowledge base, to amend
and to update them and then to carry out efficient
calculations over them, there was chose~ a corresponding
standard form for multicriteria analysis knowledge sheets
(Fig.2). In the teaching process the same or similar forms
are used for the recording of necessary information during
the formation of knowledge base. Then this information is
stored in computer memory. In Fig.2, parts related to
multicriteria analysis knowledge sheet's standard form are
highlighted, and the answers to its questions are not. If
a multicriteria analysis knowledge sheet contains no
information on a necessary alternative or criteria
describing it, so it can be easily updated by entering
the missing information. Basing oneself on multicriteria
project analysis knowledge sheets, the initial
decision-making matrix can be worked out. Having this
matrix, one can easily perform alternative multicriteria
assessment and selection of the most efficient versions.
3 Conclusion The multicriteria decision-making system is
used in order to improve students' teaching process. With
the aid of this system (its application facilitates better
mastering of teaching disciplines) a considerable number of
problems can be solved: optimization of goals pursued by
various interested parties; . formation of versions of
projects and their constituent parts; determination of
factors having intluence on the efticiency of project and
its constituent parts and working out of criteria system
describing them; performance of project lifetime process
optimization taking into account economic, maintenance,
aesthetic, comfortability and other factors; determination
of rational interested parties which could increase
lifetime process efficiency of a building; preparation
of recommendations on project development; the students,
when defending their course projects and graduation works,
can compare during discussions the received results with
solutions suggested by lecturers. This enables to check
students' knowledge and their ability to effectively
analyse problems arising in course of work; the students
acquire better understanding of connections existing in
lifetime process of a building between its constituent
parts and making influence on its efticiency; the
students acquire better understanding of mutual
connections between various disciplines; working process
with the multicriteria decision-making system contains game
elements, therefore students can more easily master the
teaching materials. COST GROWTH IN PUBLIC SECTOR
BUILDINGS F.H. Giritli Faculty of Architecture, Istanbul
Technical University, Istanbul, Turkey Abstract
Infonnation on a total of 31 public housing projects has
been collected and this data was analyzed to investigate
the factors which might be responsible for cost overruns in
construction contracts. The analysis confirms that the cost
overrun rate is clearly a function of the percentage
difference between the contract amount and the estimated
tender value. It is expected that the results may be
suitable for developing strategies to reduce cost overrun
rate. Keywords: Public housing projects, cost overrun.
Resume Les infonnations sur tous les projets des maisons
publiques sont reunies et ces donnees sont analysees pour
rechercher les facteurs qui peuvent etre responsables pour
les couts surpasses. Les analyses confrrment que la
vitesse du cout surpasse est c1airement la fonction de la
difference de pourcentage, entre Ie montant envisage et la
valeur estimee de la proposition. On espere que les
resultats soient convenables pour developper les strategies
de diminuer la vitesse des couts surpasses. 1
Introduction The whole of the construction industry very
strongly depends upon the preparation of estimates for a
project that may be perfonned at some stage in the future.
In today's competitive environment, especially cost
estimating is a key factor contributing to the success or
failure of a construction project. In this context, a major
objective of construction economics research is to produce
an accurate cost estimate of a building. However, it is
common in the construction industry for the fmal cost of a
project to differ from its contract sum. Therefore, it is
important for management to identifY ahead of time the
factors that might be responsible for the probable cost
growth. Many options and discussions can be found in
management literature regarding the crucial need for
studies investigating the relationship between the true
cost at the end of a project and the estimated cost at
tender stage. Any client involved with the construction
industry would benefit from knowing potential cost
overruns at an early stage of the project. He would then be
able to adjust the contract sum to arrive at an estimate
for the fmal price. The Organization and Management of
Construction: Shaping theory and practice (Volume Two).
E & FN Spon. ISBN 0419 22240 5. Cost growth in public
sector buildings 233 The objective of this paper is to
examine data on patterns of differences between
contract award and final account. It also attempts to

pinpoint the factors having the
greatest influence on cost overrun rate.
2 Study methodology
This study is based on a set of data extracted from the

final account documents from the
I<:tanbul Public Works. The data base includes a total of

31 housing projects. For each
project in the data base the key items of data are

contract descriptions, overruns,
fluctuations, variations and claims. It is beyond the

scope of this paper to comment fully
on these data. A total of 31 housing projects was analyzed

to investigate the factors which might
influence the cost overrun. Past study on the subject has

shown that a number of factors
have close relations with the cost overrun. In the

literature the following factors have been found to
influence the cost overrun
rate: (1) the size of the project (2) the difference

between the contract award and tender
value (3) the level of competition and (4) the type of

construction. [I] [2] [3] . The dependent variable in this
study is cost overrun rate, which is defined as the
percentage difference in cost, plus or minus, between the

final price and the contract
amount. The independent variables (predicl.Ors) included in

the study are; (1) gross floor
area (2) contract amount (3) contract periods (4) the

percentage ditIerence between the
award amount and the estimated tender value and (5) number
of bidders. Due to inflation, all prices have been
standardized to the same basis. 1995 was chosen
as the referenc.:: year. Since fluctuations are outside

the control of project team and
management and since their forecast is a specialist

economic exerclse, this item was not
analyzed here. For this reason, the value of fluctuations

has not contained in the
standardized final value.
3 Development of the research model
This paper describes a model which has been developed to

enable the public client to
have an idea about the differences between the final price

and the contract amount. It
would then be possible to introduce such a factor

explicitly in to the calculations to cover
the overruns. A linear regression analysis was conducted

to determine if a linear relationship existed
between the dependent variable cost overrun rate and the
influencing variables.
Regression analysis of the data was performed by using the

SPSS sof',ware package. In
developing the regression model, the stepwise procedure was

u~ed to enter the
independent variables into the regression model. From a

few trials the following equation was derived.
2 Construction processplanning
1. Peurifoy, R.L. (1985) Construction planning, equipment

and methods, 4th edition, McGraw-Hill, London.
2. The Chartered Institute of Building. (1991) Planning

and programming in construction: A guide to good practice.
3. Hibberd, P.R. (1986) Variations in construction

contracts, Collins, London.
4. Powell-Smith, V. and Sims, J. (1989) Construction

arbitrations: a practical guide, Legal Studies and
Services.
5. Thomas, R. (1993) Construction contract claims,

Macmillan, London.
6. Pilcher, R. (1992) Principles ojconstruction

management, 3rd edition, McGrawHill, London.
7. Cooke, B. (1992) Contract planning and contractual

procedures, 3rd edition, Macmillan, London.
FINANCIAL AND ORGANIZATIONAL
IMPACTS OF PROJECT MANAGEMENT
Young Hoon Kwak and C. William Ibbs
Department of Civil Engineering, University of California,

Berkeley,
California, uSA
Abstract
Many organizations are projectizing their operations these

days, particularly non
construction enterprises. There is, of course, a range of

levels of Project
Management (PM) sophistication and tools that can be

adapted by such enterprises.
This study, sponsored by the Project Management Institute

(PM I) , examines current
PM levels and practices in various companies and

industries, and proposes a five level
model of PM sophistication. This paper summarizes proposed

PM process maturity
analysis methodology which can be used to evaluate

financial and organizational
impacts of PM to organizations. Also, a benchmarking

system is developed and
presented to quantitatively measure an organization's

level of PM sophistication.
This research is currently in progress. This benchmarking

methodology and the
resulting quantitative data will aid managers in making

wiser PM investment
decisions. Future research will continue to report

quantitative results and findings by
applying this research methodology.
Keywords: Benchmarking, Project Management, Project

Management Body of
Knowledge, Project Life Cycle, Project Management Process

Maturity Model
Resume
Actuellement, de nombreuses organisations planifient leurs

projets, particulierement
les entreprises hors du genie civil. II existe differents

niveaux de sophistication et une
grande gam me d'outils pour la gestion de projets, ceux-ci

peuvent facilement etre
adaptes aces entreprises.


E & FN Span. ISBN 0419222405. Impacts of project
management 253
Cette etude, sponsorisee par Ie "Project Management
Institute (PMI)", examine les
pratiques courantes et les niveaux de raffinement de

differentes compagnies et
industries en matiere de gestion de projets. Elle propose

ensuite un modele a cinq
niveaux pour leur classification, selon leur degre de

sophistication. Dans ce travail,
nous proposons une methode pour analyser Ie degre de

maturite de la gestion de
projets. Elle nous permet de quantifier l'impact financier

et organisationnel de la
gestion de projets sur la compagnie. Un "Benchmarking

System" est developpe et
propose afin de quantitativement mesurer Ie niveau d'une

organisation du point de vue
de sa gestion de projets.
Cette methodologie de "Benchmarking" est actuellement en

cours d'elaboration, elle
permettra avec sec resultats quantitatifs les managers de

mieux determiner les
investissements en matiere de gestion de projets. Nous

poursuivons actuellement nos
recherches afin d'etoffer nos resultats quantitatifs et

decouvrir les parametres affectant
la gestion de projets.
1. Introduction
Corporate organizations are facing enormous competitive

pressures these days. New
markets are hard to penetrate, technology is rapidly

evolving, organizations are
segmented and experts are decentralized. Many companies are

forming strategic
alliances to share their knowledge and resources to produce

and provide high quality
product or services. In today's time-based business

environment, the project-driven
organizational form appears to be attractive.
Project Management (PM) techniques and skills have been

growing and widely being
accepted throughout the industries for the last forty years

[1]. PM is the application
of knowledge, skills, tools, and techniques in order to

meet or exceed stakeholder
requirement from a project [2]. From the construction and

aerospace industries to
software development and pharmaceutical projects, PM has

been adapted to improve
organizational effectiveness. PM techniques allow

organizations to perform work
faster with fewer resources and to effectively implement

any changes during project
life cycle [2].
Each industry and even companies within same industry have

different levels of PM
sophistication. Some of the reasons are: the adaptation

timing of PM, market
situation, and top management's commitment. It is not

clear though "how much" PM
should be injected into a company. However, project

managers agree on the benefits
of applying PM tools and techniques. Some of the benefits

include fulfilling customer
satisfaction, meeting quality standards and improving

organizational effectiveness.
Generally, implementation of PM practices and processes in
organizations is hard to
justify economically. Rationalizing the benefits of PM

processes and the cost of
executing PM is hard to do in precise terms. PM

expenditures in terms of direct cost,
training, and equipment are hard to determine. Previous

research in PM identified
some of the qualitative benefits of PM. However, that

research is very general and
254 Kwak and Ibbs
not helpful to managers trying to answer the hard and

challenging questions that
senior managers raise regarding PM expenditures and

investments.
This paper briefly describes a PM process maturity analysis

methodology that would
be used to determine the financial and organizational

impacts to organizations that
result from the implementation of PM practices, processes

and tools. By determining
quantitative benefits and relationships, this study will

enable managers to promote PM
applications. Also, this study will provide organizations

an opportunity to use PM in
a more cost effective manner.
2. Background "We just need to get the work done. We don't

have time for implementing processes and systems to manage
projects. We have been managing our work successfully for
years. " Anonymous Business Executive
Often times corporate executives request what benefits PM

will provide them. They
demand a better understanding of the relationships between

PM maturity and the value
of the company in the business environment. Managers who

try to promote PM have
to convince executives that implementing PM is a worthwhile

investment. However,
management usually has trouble providing benefits and

paybacks from PM investment
with our current knowledge.
PM practices are unique or nearly unique compare to other

management disciplines.
It provides the tools to plan, control, monitor, track and

manage resources, schedules,
costs, and quality. PM enables project to be on the right

track within limited time
and budget. PM is probably the most suitable management

techniques that integrates
planning and controlling for schedule intensive and

one-of-a kind endeavors. In
today's high-risk, rapidly changing business environment,

effective use of PM
practices is thought to help improve an organization's

competitiveness.
Contemporary strategic planning tools help corporate

organizations to be in a better
position in today's uncertain circumstances. Total Quality

Management (TQM) ,
Business Process Reengineering (BPR) , and Continuous

Process Improvement (CPI)
are some of the few strategic planning applications [3].

PM tools and skills assist the
implementation of these strategic planning tools in

corporate organization.
Eventually, PM will embrace greater acceptance and interest

at the senior
organizational level with corporate awareness and

understanding [4][5]. This will
help PM move from a technical activity to a strategic

management practice. Figure 1
illustrates the relationships of PM with other management

practices. Impacts of project management 255 AU PM
Practices ~~:-,~~ \ Practices ~---Figure 1.
Relationships of PM with Other Management Practices
[Adapted from PMBOK [2]]
The PM process is an integrative series of activities. It

consists of and integrates five
basic management processes within a project life cycle:

initiating, planning,
executing, controlling, and closing [2]. The project life

cycle concept is important
because it underscores the influence that early project

planning has impact on overall
project success. Project success is determined by how well

the project is defined and
planned. In turn the sufficiency and effectiveness of

project planning is strongly
affected by an organization's PM preparedness.
The Software Engineering Institute (SEI) is advocating PM

practices for software
development companies. SEI has developed the Capability

Maturity Model (CMM)
for software development that describes the key elements

of an effective software
process [6]. The CMM can be used for software process

improvement, process
assessments, and software capability evaluations. It is

composed of five maturity
levels [Figure 2]. It is being used to evaluate an

organization's capability to perform
successfully on software engineering contracts.

Disciplined porcess --Standard, consistent process
~--Predictable process ~-Continuously improving process
Figure 2. Five Levels of Software Capability Maturity Model

[Adopted from [6]]
256 Kwak and /bbs
We believe the PM process and the software development

process are closely related.
This study modifies the CMM to systematically evaluate

corporate organization's PM
sophistication.. Our model blends the concept of PM life

cycle and software
development processes as shown in Figure 3. This research

will provide an improved
yardstick for determining and assessing an organization's

current level of PM
processes and systems throughout any project life cycle.

standard Project Tracking Basic Project Planning Ad Hoc
PM Process Advanced Project Planning & Management
Continuous PM Process Improvement Figure 3. Project
Management Process Maturity Model
3. Previous Related Research "Managers in the U.S. smiled

knowingly in the 1950's when Japanese engineers made the
rounds at trade shows, endlessly snapping photos. In the
early 70's, the smile faded as those photos led to
world-class products. Now, the U.S. is embracing an
effective response: Benchmarking. " Business Week, Nov.
30, 1992
3.1 Benchmarking
Benchmarking is a continuing discovery process that opens

the organization to new
and sometimes radical ideas that can playa pivotal role in

improving effectiveness. It
is a method to increase the competitiveness of a firm

through getting information
about the best practices and comparing top performing
companies. It has have been
widely applied to evaluate current practices and

performance of industries such as
construction, manufacturing, automobile, and hi-tech

manufacturing.
MIT's five-year, five-million-dollar study that compared

and analyzed world-class
automobile manufacturers introduced benchmarking to the

public [7]. An on-going
study of the semiconductor industry also uses benchmarking

to find where other
companies are standing and give incentives to companies

who participate [8]. Both
studies tested various performance factors in terms of

regions and companies and
correlate their research by gathering actual project

performance data. Impacts of project management 257
A study of Lotus Notes determined the impact on

organizational productivity and
financial impact of using a category of software called

groupware. Groupware is
designed to enhance productivity by allowing users to share

information, and
customize the view of information to suit individuals

needs. This study calculated and
quantified the return on investment (ROI) that resulted

from implementing groupware
in different organizations [9][ 10].
3.2 Project Management
Previous research on PM benefits and costs is limited to

identifying the "soft"
benefits of applying PM practices and tools. Most studies
were based on surveys of
corporate managers and failed to exploit quantitative

project performance data or a
methodology for developing such data

[11j[12][13JL14J[15][16][17]. Other studies
deal with determining the relationships between

organizational productivity and
organizational structures by comparing functional and

matrix organizational structures
[18][ 19][20J[21 J[22][23].
3.3 Software Development
PM and the software development process share a common

domain. Humphrey [24]
described SEI's capability maturity model and its impact

on Hughes Corporation's
software engineering division. He analyzed actual project

data to show performance
improvement in the division and correlated that with

levels of CMM maturity.
4. Research Methodology
4.1 Literature Review of Related Research
Table 1 compares some of the previous related research and

each study's research
methodology. The purpose of this table is to determine and

choose the research
methodology that is most suitable for our research. It is

also useful for determining
the areas lacking solid understanding.
4.2 Scope of work/Industry
As part of our research we are investigating a number of

companies in various
industries including High-Tech Manufacturing; Information
Movement and
Management; Engineering and Construction; and Utilities. We

are seeking companies
with any level of PM maturity and sophistication.
4.3 Variables
This research intends to identify and benchmark the key

variables needed to
understand where participating companies stand in the use

of PM practices. This will
be accomplished by asking detailed questions that

incorporates PMBOK criteria and
project life cycle phases [Figure 4]. This breakdown

structure will assess an
organization's PM sophistication level in moderate detail.
258 Kwak and /bbs Project Life Cycle I I I 1'1 I I

Figure 4. Blending PMBOK with Project Life Cycle Process
It also examines traditional project performances such as

cost, schedule, quality, and
customer satisfaction. These data are collected from

representative, recently
completed projects. One of the more challenging data that

we would like to collect is
determining annual rate of return on PM investment in the

organizations. This will be
hard to determine precisely, however this research attempts

to estimate these numbers
on an order of magnitude basis.
4.4 Research Steps
This research is a 2-step study.
• Step 1. Evaluating organization's PM maturity using 2

part questionnaire The objective of the 2 part
questionnaire is to effectively collect information about
the organization's current PM maturity level and
statistically correlate it with actual performance data.
This questionnaire is developed and modified to capture
the essence of PM practices in the organization [6][32].
~ Part 1 :Organizational maturity assessment It is used to
precisely evaluate an organization's level of PM
sophistication. PM levels are defined on a 1 to 5 Likert
Scale. 1. Organizational information: Organization's
size, product focus, project management practices return
on investment and quality management. 2. Initiate the
Project: Developing potential project proposal, analyzing
feasibility. Impacts of project management 259 3. Define
and Organize the Project: Defining the project, organizing
project team. 4. Plan the Project: Defining the scope,
establishing schedule, estimating resources and costs, and
risk management. 5. Track and Manage the Project:
Collecting and analyzing status, planning and taking
adaptive actions and reporting status to organization. 6.
Close Out The Project: Effectively brining a project to a
close. 7. Project-driven Organization Environment:
Budgeting for project management and process support,
compensation, and career advancement. =? Part 2:Project
Peiformance Assessment The purpose of part 2 is to collect
actual quantitative project performance information such
as cost, schedule, change, quality, and customer
satisfaction. Data that organization provides for this
research should be chosen from at least one specific,
recently completed project. Also, the chosen project should
represent organization's current PM practices.
This information will be statistically analyzed and

correlated to the responses of the
two part questionnaire. This two part questionnaire has

been pilot tested by
participating organizations and the PM process maturity

analysis methodology is
proven to be working.
• Step 2. In-depth interview with selected organization for

developing mini-case studies We will develop mini-case
studies that contain some particularly unique practices
and business aspects of project management from a
follow-up in-depth interview.
4.5 Research Assumptions

* All of the participating organizations are treated
equally.
* All questions have the same weight for assessing

organizational maturity.
* Quantitative data from at least one specific, recently

completed project represent company's current PM
practices.
I N
S T
Y J a s e l s k i s [ 2 5 ] c o n s t r u c t i o n R u s s
e l l [ 2 6 ] c o n s t r u c t i o n C I I [ 2 7 ] c o n s
t r u c t i o n H e r b s l e b [ 2 8 ] s o f t w a r e P e
a r c e [ 2 9 ] h i t e c h [ 3 0 ] m a n u f a c t u r i n
g I b b s [ 3 1 ] c o n s t r u c t i o n
I A
L E
S /
F A
T O
S p r o j e c t s u c c e s s p r o j e c t s c h e d u l e
p r o j e c t c o s t p r o j e c t i n p u t c h a r a c t
e r i s t i c s p r o j e c t f a i l u r e , n o n f a i l
u r e p r o j e c t c h a r a c t e r i s t i c s t r u s t
i n d i c a t o r c o s t i m p a c t p r o c e s s i m p r
o v e m e n t c o s t p r o d u c t i v i t y d u r a t i o
n q u a l i t y b u s i n e s s v a l u e t i m e c o s t q
u a l i t y p e r c e n t c o m p l e t e c h a n g e c o s
t b u d g e t p r o d u c t i v i t y 8 P M B O K c r i t e
r i a S p t o j e c t l i / e c y c l e p h a s e s s c h e
d u l e , c o s t a n d q u a l i f J ' c u s t o m e r s a
t i s J a c t i i J n c R O H f t . P M . f J r a c t i c e
s
L O
Y q u a n t i t a t i v e m o d e l s t a t i s t i c a l l
y c o r r e l a t e p e r f o r m a n c e a n d p r o j e c
t i n p u t c h a r a c t e r i s t i c s s t a t i s t i c
a l a n a l y s i s : n u m e r i c a l : s t u d e n t t t
e s t q u a l i t a t i v e : c h i s q u a r e t e s t r e
g r e s s i o n a n a l y s i s b e n c h m a r k c o s t i
m p a c t s t a t i s t i c a l a n a l y s i s e m p i r i
c a l m e t h o d s m i n i c a s e s t u d i e s 1 t o 7 L
i k e r t s c a l e c h i s q u a r e t e s t c o r r e l a
t i o n a n a l y s i s l i n e a r r e g r e s s i o n m o
d e l s t u d e n t ' s t t e s t c o r r e l a t i o n a n
a l y s i s r e g r e s s i o n a n a l y s i s " d e v e w
p . q u a t t t i t a t i v e m o d e l 1 t o 5 L i k e r t
s c a l e b e n c h m a r k P M l e v e l
O
N
T R
I B
T I
N p r o j e c t m a n a g e r s c a n p r e d i c t t h e i
r c h a n c e s o f a c h i e v i n g s u c c e s s f u l p
r o j e c t o u t c o m e s b a s e d o n p r e d i c t e d
r e s o u r c e a l l o c a t i o n s t r a t e g i e s c o
n t r a c t a d m i n i s t r a t o r s c a n b e t t e r u
n d e r s t a n d t h e i m p a c t o f c o n t r a c t o r
f a i l u r e s t a t i s t i c a l l y s u p p o r t t h e
n o t i o n t h a t t h e i n c r e a s e d l e v e l o f t
r u s t b e t w e e n p a r t i e s l e a d s t o p r o j e
c t c o s t b e n e f i t s i d e n t i f y s u b s t a n t
i a l g a i n s i n p r o d u c t i v i t y , e a r l y d e
f e c t d e t e c t i o n , t i m e t o m a r k e t a n d q
u a l i t y b y i m p l e m e n t i n g C M M b a s e d s o
f t w a r e p r o c e s s i m p r o v e m e n t d e m o n s
t r a t e t h a t P M p r a c t i c e s p r o v i d e a t l
e a s t o n e w a y o f m a i n t a i n i n g t h e n e c e
s s a r y f o c u s w h i l e b r o a d e n i n g t h e f i
r m ' s b a s i s u n d e r s t a n d h o w c h a n g e o c
c u r s a n d a f f e c t s p r o j e c t h e t f e r u n d
e r s t a n d t h i ! J i n t l f t c U z I a n d o r g a n
i z a t i o n a t b e n e f i t s o f u s i n g P M p r a c
t i c e s i n c o r p o r { J t e o r g a n w t i o n s T a
b l e 1 . C o m p a r i s o n o f R e l a t e d R e s e a r
c h M e t h o d o l o g i e s
S A
P L
S I
Z E 7 5 p r o j e c t s ! 1 0 7 p r o j e c t s 2 6 2 p r o
j e c t s 1 3 o r g a n i z a t i o n s 3 1 7 f i r m s 1 0
4 p r o j e c t s Impacts of project management 261
5. Expected Results/Contributions
5.1 Academic point of view
This research will provide solid, comparative studies on PM

practices among industry
and across industries. Comparing the organizational aspects

of PM practices and
correlating such to the project performance data is a

principal research methodology
and product of this investigation. Statistical analysis

will assure the reliability of the
qualitative and quantitative data analysis.
Benchmarking will provide a framework for identifying

different PM levels by
blending the project life cycle concept and PM body of

knowledge with quantitative
project information. This system can be easily used and

further modified to assess
different aspects of PM practices in more detail.
5.2 Practical point of view
This research will provide an independent reference point

on best PM practices and
skills. The level of PM in the organization and actual

project performance data will
be statistically analyzed to plot possible correlation.

This study may help managers to
better promote PM practices for less PM-sophisticated

industries. Understanding
what level of sophistication is appropriate for a specific

project or environment will
provide greater insight into appropriate levels of PM use.
Executives will even be able to determine the necessary

practices for achieving a fully
project-driven organization [33]. By presenting

relationships between PM practices
and project performance, it may convince top management

that PM is a appropriate
management discipline area in today's time-based,

resource-limited, and highly
competitive environment. The benefits to companies will be

promotion of better
project management practice and a better project management

future.
This study will benefit strategic planning people to plan

and implement PM practices
in the entire organization to achieve and maintain

competitive edge. By comparing
PM practices to similar or different industries, managers

can assess the current PM
level of their own organization and of the competition, and

set more realistic goals for
achieving a more appropriate level of PM sophistication.
An attempt to calculate the PM ROI will assist managers to

determine required future
investments to achieve any specific level of PM maturity.

This will convince top
managers to be aware and invest more on PM practices and

tools.
6. Conclusions
This paper summarizes PM process maturity analysis

methodology that will be used
by the authors to find financial and organizational impacts

of PM to corporate
organizations. A benchmarking system is developed and

presented to quantitatively
measure an organization's level of PM sophistication. It
is expected to have benefits
that such quantitative data and methodology will aid

managers in making better PM
262 Kwak and /bbs
investment decisions. Future research will continue to

report quantitative results and
findings by applying this research methodology.
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edition, McGraw Hill.
2. The PMI Standards Committee. (1994) A Guide to the

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M. (1993) Key Practices of the Capability Maturity Model,
Version 1.1, Software Engineering Institute,
SEI-93-TR-025.
7. Womack, J., Jones, D. and Roos, D. (1991) The Machine

that Changed The World., HarperPerennial.
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Competitive Semiconductor Manufacturing Survey: First
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9. Henry, J., Blum, P., and Salloway, E. (1992) The Impact

of Lotus Notes on Organizational Productivity:
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10. International Data Corporation. (1994) Lotus Notes:
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Management Techniques To Construction and R&D Projects.
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the Software Project Management Process to Project
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Management Problems and How They Can be Avoided Through
The Use of Self Managing Teams. 1990 IEEE International
Engineering Management Conference
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Element In Implementing Project Management. Project
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Responsibility
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Leadership for a New
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More than a Fad.
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Project Management
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Conceptualization and LearningThe
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Vancouver,
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Matrix Organization Size
and Number of Project Assignments on Performance. IEEE

Transactions on
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Structural Factors in
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Software Process
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11-23.
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S.D. (1994)
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THE APPLICATION OF
CONSTRUCT ABILITY PRINCIPLES IN
THE AUSTRALIAN CONSTRUCTION
INDUSTRY
A.C. Sidwell and V.E. Francis
School of Building and Planning, University of South

Australia,
Adelaide, Australia
Abstract The concept of constructability first emerged in

the United Kingdom and the United
States in the late 1970's, following studies into how cost

efficiencies and quality
improvements could be made in the construction industry.

The lack of integration of
construction knowledge into the design process, encouraged

by traditional procurement
methods hindered the "ability" to construct, and was found

to contribute to projects
exceeding budget and schedule deadlines. The approach to

studies in the UK and the US have differed in many
respects.
Experience in the US, through the work of the Construction

Industry Institute (CII),
based at Austin Texas, has been particularly successful.

There the emphasis has been on
the development of a management system rather than

focussing on techniques and detail
such as site productivity by design rationalisation, as was

done in the UK. The reported
benefits of constructability from the US have indicated

cost benefit ratios as high as 50: 1
and average project savings of 6%. This paper reports the

development of a constructability principles file in
AustraIia
comprising guidelines, general principles and strategies as
well as an expandable data
base compiling constructability examples.
Keywords: Constructability, Australian case studies.
Sommaire
Le concept de constructabilite a apparu au Royaume Uni et

aux Litats-Unis vers la fin
des annees 70, a la suite des recherches faites sur les

cOuts et laqualite; des
ameliorations pouvaient alors etre envisagees dans

l'industrie du batiment. Le manque
d'integration des connaissances dans Ie domaine de la

construction et dans Ie domaine
du dessin des projets, ainsi que les methodes

traditonnelles d'achats des materiaux, ont
entrave la 'capacite' de construire, et ont contribue a la

creation de pro jets qui
depassent les budgets et les dates d'echeance. Les

recherches au Royaume Uni et aux Etats-Unis sont abordees
differemment
It bien des egards. L'exptSrience aux Etats-Unis, par

I'intermediaire du travail du
Construction Industry Institute (CII), base a Austin

Texas, a particulierement bien
reussic. La on a insiste sur Ie developpement d'un systeme

de management plutOt que
sur des techniques et des details tels que la

productivittS du site par la rationalisation du
pro jet, comme au Royaume Uni. Les benefices de la

'constructabilittS' reconnus aux
Etats-Unis montrent un benefices des cOuts de l'ordre de

50: 1 et une moyenne
d'econornic de 6%. Cette communication presente Ie
developpement du dossier sur les principes de
constructabilite en Australie. Ce dossier comprend les

idees directrices,les principes


E & FN Span. ISBN 0 419 22240 5. Application of
constructability principles 265
generaux, les strategics ainsi qu'une banque de donnees des

examples de
constructabilites. Mot-eles: Constructabilite, etudes de

cas en Australie.
1 Introduction
The concept of constructability, or buildability, fIrst

emerged in the US and UK in the
late 1970s. It evolved from studies into how improvements

could be achieved to
increase cost efficiency and quality in the construction

industry. These studies found
that the lack of integration of construction knowledge

into the design process hindered
the "ability" to construct and this was cited as one

reason for projects exceeding budgets
and schedule deadlines. The separation of the design and

construction processes, partly
due to traditional contractual procedures, was seen as a

major factor hindering
constructability.
Constructability has been enthusiastically and widely

adopted in the United States. A
survey by the University of Wisconsin [1] of 62

organisations indicated that 68% had a
formal, or informal, constructability program and
estimated cost savings of
5.7%.Research by the US Construction Industry Institute [2]

indicates cost benefIts as
high as 50: 1, that is the returns in the form of savings

against expenditure on
constructability.
Constructability is an approach which links design and

construction processes which
have traditionally been isolated in the industry. The

increasing complexity of many
projects makes it more and more difficult for designers to

be fully aware of all the
implications of their designs on construction costs.

Making use of construction
knowledge, from the earliest stages of a project where the

ability to influence cost is at
its greatest, makes sense from both practical and fInancial

viewpoints. The well known
cost influence curve, Figure 1, illustrates how the

ability to influence costs is greatest at
the conceptual phase in the project life cycle and reduces

as the design is developed and
firmed up. HIGH
en
o FEASIBILITY
z
w
..J
LL
:::i
iIi
<C
LOW START TIME
Figure 1 Cost Influence Curve [2] POST CONSTRUCTION

COMPLETION ..
266 Sidwell and Francis The CII in the United States is

currently concentrating on education and
implementation of its constructability concepts. In

Australia the emphasis is still on
gaining wide acceptance of the principles and the

development of implementation
strategies.
2 Review of approaches to constructability The most widely

accepted definition's of constructability, or buildability,
are those
developed by the Construction Industry Research and

Information Association (CIRIA)
in 1983 [3], and the US Construction Industry Institute

(CII) in 1987 [4]. Both
definitions emphasise the integration of construction

principles into the design of
buildings. The initial CIRIA report was followed by a
further study by Adams in 1989
[5] in which the original seven categories of buildability

principles were further
developed to present sixteen, more definitive, principles.

This study is most purposeful
since, although it still focuses on design, it does begin

to widen the perspective of
buildability and point the way towards recognising the

complexity of the issues
involved. In 1990 the Royal Australian Institute of

Architects [6] cited factors working
against implementation of buildability as 'the isolation

of designers from the realities of
the construction process ... ', , ... a closeted approach

to practical experiences tends to
keep problems from becoming common knowledge, leading to a

repetition of the same
problem.'
A number of studies in the UK have identified the tendency

for the traditional
procurement approach to militate against the integration

of construction knowledge in the
initial design phases of the project, for example the

Banwell report of 1964 [7], and the
Wood report of 1975 [8]. The difficulties surrounding the

determination of conceptual
boundaries for buildability have been discussed in studies

by Bishop in 1985 [9] and
Griffith in 1985 [10]. It was the narrow focus, together

with the complexities of the
traditional building process, that led to the diminishing

interest in buildability concepts
within the UK construction industry during the late
1980's. The most recent review of
the construction industry by Latham in 1994 [11] reiterates

the difficulties created by the
traditional system in facilitating innovation.
Application of constructability principles in the UK and

US differ in may respects.
Generally, the early work in the UK was narrowly focussed,

highlighting techniques
and details, with an emphasis on productivity by design

rationalism. There was not the
emphasis on management systems and the involvement of

owners and contractors as
was the case in the United States. These factors, together

with the traditional segregated
nature of the building process and a backlash against

building styles developed by
rationalisation, have led to a lack of interest by the

industry in the UK and resulted in
minimal further research. Costs have been reduced

relatively by the use of fast tracking
and management of costs. Where the limits of these methods

have been reached, certain
clients have begun to address constructability.
The US approach, spearheaded by the American CII,

capitalises on a direct link
between owners and contractors. It relies heavily on the

adoption of a management
system rather than detailed check lists, thereby espousing

principles for guiding thought
and creativity. This is in essence the difference between

the approached in the UK and
US and has been used as the basis for the research work by
the Construction Industry
Institute in Australia (CIIA). The approach involves owners

and contractors working
together and concentrates on development of a

constructability management system, ie.
the process not the product.
The American CII developed its Constructability Concepts

File during the late 1980s
and this has spawned a number of other applications by, for

example, the Houston
Business Roundtable, the oil company Chevron, contractors

Kelloggs and Brown Root
Braun. Their success is due to:
• Partnership between owners and contractors driven by the

objective of savings.
• Emphasis on the management system, the development of a

constructability program. Application of constructability
principles 267
• Implementation program stimulated by the CII system.
• Continued momentum stimulated by the CII education

program.
3 Australian research
In 1992 the CIIA identified constructability as an approach

with the potential to bring
significant cost and time savings to the Australian

building industry. At the same time
the use of value engineering was quite widespread but

tended to be applied in a typical
40 hour workshop at a point when design had largely been

developed, thereby missing
out on the maximum savings.
The only research had been by Hon [12] who found some
evidence of application of
constructability and undertook simulated studies and post

facto evaluations. Subsequent
work by Griffith and Sidwell [13] identified examples of

the application of
constructability on a number of Australian projects.
The CIIA established a task force with a carefully balanced

membership of client,
architect, structural engineer, quantity surveyor, project

manager, builder and
researchers. Their objective was to evaluate existing

knowledge and practice and
develop a constructability principles file appropriate to

Australian industry context. If
the US experience could be repeated in Australia, the

adoption of these principles has the
potential to bring improvements in cost efficiency and

quality in the construction
industry.
The Australian researchers visited the United States and

the United Kingdom to
evaluate latest developments and leam from the experiences

of practitioners and
researchers. Companies in the United States were able to

provide hard evidence of
actual savings.
Some of the constructability concepts files developed in

the US for particular
applications are more specific and detailed, however the

system we have developed in
Australia focuses on principles.
The principles developed, which consists of a system for

improving the level of
constructability achieved on a project, is dependent on the

client being committed to its
inclusion in the project procedures from the start. It

involves the whole project team,
from the very beginning of the project, considering the

effects of their actions on the
construction process. Construction personnel, or their

representatives, are encouraged
to be involved; in an ideal situation, the final contractor

should be included in the project
team from the inception stage onwards.
The research team evaluated the overseas concepts against a

series of local case studies
and developed a set of principles tailored to the

Australian industry. These were
evaluated and tested on some twenty examples included in

the database.
The system developed for Australia consists of a best

practice Constructability
Principles File [14] with the following contents:
• Implementation advice on how organisations can establish

a constructability program.
• Flow chart indicating the applicability of the

constructability principles at the various stages of the
project life cycle.
• Executive summaries of the constructability principles.
• Twelve constructability principles.
• Database to record examples of constructability savings.
The implementation section is kept intentionally brief to

account for the individual
cultures of many organisations. Key issues for successful

implementation are covered,
rather than providing specific procedures which may not

suit all organisations and
therefore reduce the likelihood of their continued use.
The flow chart or roadmap is shown in Figure 2 and advises

the user which principles
are most likely to be relevant at particular stages in the

project life cycle.
268 Sidwell and Francis ~A8ILiT_~ FLO-W C-HART--~~--=J

~ASIBILIT.61CONCEPTUAL DESIG~I!TAII:I!D DllSlchNSTRUCTION.1
POST CONSTRUCTION FEASJU ILITY CONCEPTUAL DESIGN DETA
ILED DESIGN CONSTRUCTION POST CONSTRUCTION •
Inlt,rariOll • Inttlrorion 0 InttgrtJlion 0
Inttgrmion 0 Imt'lrtlrion 0 Constl'uction •
ConSlruClion 0 COIISlructiOll 0 Construction 0
Corportltt Know/nlgl KnO'A·/tllgt Kno",I,,~t
Kno'l'l'/,tlgt Objtc';'~$ • Tf'om SkUls • Tf'OmSkills
• TtamSkills • Pro&rmn • F"tlbod • Corpomtt •
Corpora" • A, mi/oblt Rtsourus • Acussibiliry Objf'Cli
l'tS Objter;I'ts • A ''(Ii/obi,. Rnourcrs • Ami/obi,
Rtsourcrs 0 Exumal Facton • COIlJlrucr;on Kno'A'I,dtt
• Exttmal Factors • Exuma/ Factors • Pro8rom 0
Program • Prolmm • Cons /ruction MnlKxlol°IY 0
Construction • Construction • Acctssibility MnhlNlolov
MnhotlololY • Acctssibility • Sptcijicmions Figure 2
Constructability Roadmap [14] The principles file
comprises twelve overriding concepts of constructability.
They
represent current best practise in constructability that

are aimed at encouraging the project
team to apply them, where appropriate, to their projects.

While the team may find some
principles directly applicable to their particular project,

the aim of the file is to stimulate
thought about constructability and how to make it work. The

system avoids a "check
list" approach that stifles creative thought, while

addressing the difficulties associated
with implementation by indicating the relative importance

of each principle at particular
stages of a "typical" project. The twelve principles are

given in Figure 3.
The database contains examples of constructability savings

from some Australian
projects. These are intended as samples only and it is

anticipated that individual
companies will use the database to record their own

experiences. In this way
constructability can be improved in projects in the future

as "lessons learned" can be
recalled and reused where appropriate. The database has

been designed to run on a PC,
stored on the hard disk and updated at the completion of

every project. A pro forma has
been provided so that examples can be recorded as they

arise. This may be during the
project or at the recommended post construction

constructability reviews.
DEFINITION
Constructability is a system for achieving optimum

integration of construction
knowledge in the project delivery process and balancing

the various project and
environmental constraints to achieve maximisation of

project goals and building
performance.
Construction Industry Institute, Australia [15]

Application of constructability principles 269
4 Application of the Principles
The first three principles, Integration, Construction

Knowledge and Team Skills
address the importance of making constructability part of
normal project procedures and
involving the 'right people' from the very beginning of

the project. The next principle,
Corporate Objectives, looks at how constructability can be

enhanced when the project
team understands the corporate, as well as project

objectives. Available Resources and
External Factors address the issue that constructability

will often be affected by factors
over which the project team has little control, but whose
influence can be minimised if
identified early.
The principle entitled Program outlines the importance of

having a realistic,
construction sensitive program which has been developed and

agreed by the whole
project team. Construction Methodology, Accessibility and

Specifications relate to issues
that need to be integrated into the final design and

documentation of the project.
The eleventh principle, Construction Innovation, addresses

the use of construction
knowledge to improve the effectiveness of operations on

site. Where constructability is
correctly integrated into a project, the best solution has

already been identified, evaluated
and documented, with the constructor's assistance, prior to

tender. Therefore, although
the ability to influence cost during construction is less

significant than in the feasibility or
design stages, collectively constructability savings made

during this time can be
substantial.
The final principle, Feedback, relates to the concept of

the life cycle of a project being
a cyclical, cumulative process rather than linear, whereby

information can be used in
similar projects in the future. Two post construction

reviews are recommended. These
are especially concerned with evaluating the effect of

constructability decisions on
construction efficiency and the operational efficiency of

the project.
270 Sidwell and Francis CONSTRUCTABILITY PRINCIPLES
1. INTEGRATION Constructability must be made an integral

part of the project plan.
2. CONSTRUCTION KNOWLEDGE Project planning must actively

involve construction knowledge and experience.
3 . TEAM SKILLS The experience, skills and composition of

the project team must be appropriate for the project.
4 • CORPORATE OBJECTIVES Constructability is enhanced when

the project team gains an understanding of the clients
corporate and project objectives.
5 . AVAILABLE RESOURCES The technology of the design

solution must be matched with the skills and resources
available.
6. EXTERNAL FACTORS External factors can affect the cost

and/or program of the project.
7. PROGRAM The overall program for the project must be

realistic, construction sensitive and have the commitment
of the project team.
S. CONSTRUCTION METHODOLOGY Project design must consider

construction methodology.
9. ACCESSIBILITY Constructability will be enhanced if

construction accessibility is considered in the design and
construction stages of the project.
10. SPECIFICATIONS Project constructability is enhanced
when construction efficiency is considered in
specification development.
11. CONSTRUCTION INNOVATION The use of innovative

techniques during construction will enhance
constructability.
12. FEEDBACK Constructability can be enhanced on similar

future projects if a post construction analysis is
undertaken by the project team.
Figure 3 Twelve Constructability Principles [14]
5 Implementation strategy Following publication of the

constructability principles file the CllA has changed
emphasis to dissemination of the principles and the

development of implementation
strategies to ensure take up by industry. Major funding

for the next stage of this
research was awarded by the Australian Research Council for

a joint project with
Professor D. McGeorge at the University of Newcastle, New

South Wales. Their first
objective has been to conduct a number of case studies of

industry applications of
constructability principles to evaluate optimum research

methodology. The present
study includes:
• Case studies to analyse the application of

constructability principles.
• Industry workshops backed up with questionnaires to

explore the right methodologies for industry.
• In a parallel study McGeorge and his team are analysing a

series of school projects built by the NSW Department of
Public Works. Application of constructability principles
271
• The joint team is exploring decision support systems and

multi-media approaches to the display of
constructability. An indication of the level of savings
achieved is illustrated in three of the case studies
conducted so far, figure 4.
PROJECT Savings achieved by constructability

im31lementation
AUSTRALIS MEDIA CENTRE • Project completion in 9 months

compared to 12-15 months for equivalent project. • A$1.1m
saving on the A$12m project, half
7300 sq m. National Customer Service of which attributed

to constructability.
Centre for Galaxy Media • Enhanced level of fitout.
TOYOTA CAR • Project completion in 107 weeks, 3 weeks
MANUFACTURING FACILITY ahead of schedule. • A$18m savings

on total project cost of A$161m.
120,000 sq m. building area to • Award winning quality

and safety record.
manufacture 100,000 cars per year. • High client

satisfaction.
MELBOURNE MAGISTRATES • Project completion 6 months ahead

of
COURT original 24 month schedule. • Completion within

maximum guaranteed
18,500 sq m. floor area with magistrates price of A$53m

with A$1.1m returned to
courts & chambers, hearing rooms and the client as part of

a 80120 cost sharing
custody centre. agreement. Figure 4 Summary of results

from case studies
6 Conclusion It is our contention that the application of

constructability in the United States has been
more widespread and successful than in the United Kingdom,

and that this would appear
to be due to the different emphasis in the United States

towards treating constructability
as a management system, rather than a design tool. In

particular constructability is used
as the vehicle to bring construction knowledge further

forward in the project delivery
process right up to the initial considerations by the

client. Very often it is client driven
rather than consultant driven. Clearly we must convince

clients of the value of
constructability, as well as consultants in the industry.

In Australia the Cll is pursuing
an implementation strategy that includes a program of

publications, presentations at
conferences and conducting industry workshops to

disseminate the principles. As part
of this process we are collecting data on perceptions of

the barriers to implementation of
constructability. The primary reasons appear to be the

difficulty in including
construction expertise early on in the traditional

procurement process, and the lack of
awareness amongst consultants and owners. This is yet

another example of the
drawbacks in the traditional process and encourages the

search for ways to safeguard the
competitive advantages inherent in the traditional process

and yet overcome the major
disadvantage of the lack of construction knowledge at early

stages. We have not made
much progress since 1964 when Sir Harold Banwell said ' .
.in no other industry is the
responsibility for design so far removed from the

responsibility to construct.'
272 Sidwell and Francis
8 Acknowledgments
The Constructability Implementation Task Force consisted of

a group of industry
members of CIIA and researchers from The University of

South Australia and the
University of Newcastle. The three year project is funded

by CIIA and the Australian
Research Council. The contribution of the task force

members and others providing
case study data is gratefully acknowledged.
1 . University of Wisconsin Madison (1992) Project Level

Model and Approaches to Implement Constructability CII
Source Document 82, the University of Texas at Austin
2. Construction Industry Institute (1986) Constructability

a Primer CII, the University of Texas at Austin, United
States, publication 3-1
3. Construction Industry Research and Information

Association (CIRIA) (1983) Buildability: an Assessment.
CIRIA, London.
4. Construction Industry Institute (1987) Constructability

Concepts File CII, the University of Texas at Austin,
United States.
5. Adams, A (1989) Practical Buildability Construction

Industry Research and Information Association (CIRIA)
Butterworth, London.
6. Royal Australian Institute of Architects (1990)

Buildability: the Effect of Design and Management on
Construction. Practice Division Report, July, RAIA,
Canberra.
7. Banwell, H. (1964) The Placing and Management of

Contracts for Building and Civil Engineering Work. HMSO,
London
8. National Economic Development Office (NEDO) (1975) The

Wood Report: The Public Client and the Construction
Industry. HMSO, London
9. Bishop, D. (1985) Buildability: the Criteria for
Assessment. Chartered Institute of Building (CIOB), Ascot.
10. Griffith, A (1985) Buildability: Time for

Re-assessment. Building Technology and Management, Journal
of the Chartered Institute of Building (CIOB), February,
Ascot.
11. Latham, Sir H. (1994) Constructing the Team HMSO
12. Hon, S.L. (1988) A Study of Buildability within a

Project Management System. M.Bldg. Thesis, University of
Melbourne.
13. Griffith, A and Sidwell, AC. (1995) Constructability in

Building and l!,ngineering Projects. MacMillan,
Basingstoke
14. Construction Industry Institute, Australia, (CIIA),

(1993) Constructability Principles File, CIIA,
University of South Australia, Adelaide.
15 Construction Industry Institute, Australia, (CIIA),

(1995) Constructability Executive Summary, CIIA,
University of South Australia, Adelaide.
OPERATIONAL PROBLEMS FACING A
SAMPLE OF CONSTRUCTION FIRMS IN
TRINIDAD AND TOBAGO
T. Michael Lewis
University of the West Indies, St Augustine, Trinidad and

Tobago
Deogratius D. Mugishagwe
Lee Young & Partners, Port of Spain, Trinidad and Tobago
Abstract
This paper presents the results of a survey of some of the

operational problems facing a
sample of construction firms in Trinidad and Tobago. A

comparison is made with
previous studies of operational problems faced by firms in
the industry within the
Caribbean region.
Sommaire
Ce travail present les resultats d'une recherche sur les

problemes courants qui
affrontent un echantillon des firmes de construction a

Trinite et Tobago. Ce travail
compare les problemes courants dans cet echantillon avec

ceux examines auparvant en
firmes a l'industrie aux antilles.
Keywords: Operational problems, surbvey, construction

industry, Caribbean,
Trinidad & Tobago
1 Introduction
The construction industry has often been identified as

important not only because it
provides the basic infrastructure, shelter and other

facilities necessary for economic and
social development, but also because it plays an important

role in employment
generation and in capital formation. Although it is so

important the industry is also
peculiarly susceptibile to problems that can cause

disruption. Because it tends to be more labour intensive
in structure than most other
industries, the construction industry's role as an

employment generator is considered to
be especially significant in these times of high levels of

unemployment. However, this
characteristic also makes the industry particularly

susceptible to labour related
problems. Similarly, the construction industry tends to
involve large quantities of materials
and the supply and management of this flow of materials

itself creates problems, as


E & FN Spon. ISBN 0 419 22240 5.
274 Lewis and Mugishagwe
well as leaving the industry particularly prone to problems

of supply. The industry is also unusual in that most of
its output is custom built, under
conditions that are unique to the specific project. Because

of this, the construction of
any structure always presents a different set of problems.

Since it is also generally
uneconomic to build construction products in advance of

demand, for stock, the
industry is susceptible to problems of fluctuations in

demand. Within the industry, the constructor's task is to
assemble finance, personnel,
materials and equipment to produce a construction product

within a given time frame
and because this takes place within the dynamics of a

changing economic, social and
technical environment, it is a task that is liable to

suffer from problems. One of the most important agencies
regulating the performance of the industry
in any economy is the government. This is because

governments establish policies
which manage the overall economic activity as well as

establish performance codes
which regulate the technical quality of the products of

the construction industry. Thus
when examining the operational problems of the industry,
the role of the government is
likely to be significant. Developing countries, like the

islands of the Caribbean, also face particular
problems in addition to those troubling the industry

elsewhere. For example, there are
problems related to the shortages of skills, questionable

material quality and shortages,
doubtful plant availability, problems of exchange control

regulations and currency
fluctuations and restrictions, as well as problems related

to environmental conditions. Although it is relatively
easy to anticipate what type of problems may occur, it
is important to know what the industry itself, in practice,

perceives as its major
operational constraints, as this may assist in the

structuring of policy to help reduce or
avoid the problems that are responsible in future.
2 Scope
The survey reported here records the responses of a sample

of contractors about
problems they experience in Trinidad and Tobago. The

problems can be allocated to
two broad categories, firstly there are those which are

within the contractor's
jurisdiction such as the effective management of his

workforce, his site, plant and
materials, and his choice of approach to construction.

Secondly, there are the problems
which are beyond control of the contractor, such as the

availability of work, the
prevailing legal and financial frameworks, the level of

government investment in
construction and the capacity of the local materials
supply industry to meet both the
specifications and the demands of the construction

industry. Although it may be possible to identify and
categorise the problems, it is often
difficult to isolate or generalise their effects. For

example, the recent flotation of the
Trinidad and Tobago dollar was clearly beyond the control

of the industry. The
floatation was effectively a devaluation and it had the

effect of increasing the cost of
importing materials and construction equipment as well as

pushing up the cost of
borrowing funds from financial institutions. Whilst this

made life more difficult for the
contracting side of the industry, the devaluation was a

welcome measure for
consultants and other firms who were exporting labour

skills and exporting materials
and components, because they became cheaper and more

competitive in the
international market. Procedurally, the study was

conducted by questionnaires which were sent to a
random sample of construction firms selected from those

listed in the Telephone
Directory's yellow pages. On a number of occasions this

was followed up by an
interview of the respondents in order to extend and

clarify some of the issues raised in
the questionnaire. Although care was taken over

questionnaire design, there remained
shortcomings in the detail and quantification of the

problems identified. For example it Operational problems
facing construction firms 275
was not possible to determine whether the problems reported
were due more to the
inefficiencies of the firm than to problems with the

environment in which they were
operating. Similarly, the problems identified will have

been conditioned by the status
of the respondent within the firm, and it was not possible

to get a person with a
consistent status to answer the questionnaire, with

respondents varying from the
company owner to a relatively junior technician. In order

to try to ensure a reasonable level of response, the size
of the
questionnaire was necessarily limited, which restricted the

number of questions that
could be asked. A brief trial was made with a longer

questionnaire with more
comprehensive questions, but it was quickly rejected by

respondents who in general
were unwilling to spend more than a few minutes answering

the questionnaire. The starting point for any study must
be the types of operational problem that
have been noted previously in the industry in this part of

the world.
3 Previous Studies in Caribbean Countries
There have not been many published reports of studies

undertaken on operational
problems faced by the construction industry in the

Caribbean. Jenkins [1] looked at the
construction industry in St. Kitts, analysed its problems

and made recommendations on
improvements. He found that the construction sector was

mainly devoted to housing
as is the case in many developing countries although the

construction of tourist
facilities and infrastructure was of growing importance.

It appeared that St. Kitts had an ample supply of tradesmen
and labourers but a
shortage of supervisory, technical and managerial

personnel. There was also a
shortage of appropriate equipment. Salaries and wages were

low and it was felt that
this had contributed to the workforce being poorly

motivated. Overall, not
surprisingly, the levels of productivity in the industry

were very low. As far as materials were concerned, the
industry depended on the majority
being imported. This seemed to result in them being either

very expensive or of very
poor quality. The local materials supply sector was poorly

developed, and no efforts
were being made to develop them for large scale commercial

use. Douce [2] looked at the constraints affecting
construction planning on large
scale state-sector projects in Jamaica. He approached the

subject through an analysis of
the Blue Mountain Water Project. One of Douce's key

findings was the overwhelming
importance of the socio-political environment in state

planning. Political concern over
public opinion often dictated planning strategy, and the

short-term horizon of political
life normally led to longer term planning being neglected.

When this was allied to a
shortage of competent planners and managers in the state

sector, poor results were
inevitable.
4 Trinidad and Tobago

The situation in Trinidad & Tobago has been somewhat
different from that in many of
the other countries of the Caribbean. Trinidad & Tobago has

always had one sector
which has been economically active and attractive. In

recent times it has been the
offshore oil and gas industries. The dramatic fluctuations

in the prices of these
resources have led to similar fluctuations in the economic

fortunes of the twin island
state, and the engineering industry has responded in true

Keynesian fashion to these
booms and busts by exaggerating them. Because it is such a

restricted market, the boom conditions served to undermine
the workings of what should have been a competitive market

in the construction
industry. The boom created a huge surplus of work for the

available contractors, who
were able to push up their profit margins on their bids.

The difficulty of finding
substitute contractors led to clients and consultants being

reluctant to enforce penalty
clauses and other punitive contractual clauses. The

collapse in the price of oil in the early 1980s, together
with the effects of
inflation led to a sudden slump in the fortunes of the

industry and the country.
Construction firms had to compete vigorously for the

limited work available, and to
look very closely at their cost structures. A number of

commentators have written about the effects of this cycle
of
economic boom followed by bust, on the construction
industry in Trinidad & Tobago.
For example, Khan [3] characterised the construction

industry in Trinidad and Tobago
in 1986 as being highly fragmented, with a with a large

number of independent
professionals involved in the design and construction of

projects. This occasionally
caused inconsistency in decision making and delays in

project execution. Khan also cited a number of managerial
shortcomings in the local construction
industry which caused operational problems on site. These

included: (a) a lack of effective co-ordination between
client, consultant and contractor. (b) Improperly planned
safety measures leading to site accidents and labour
dissatisfaction. (c) The lack of effective motivation
mechanisms, so that good performance was rarely rewarded
appropriately. (d) The lack of modem management systems,
capable of taking into account the prevailing local
conditions, for the planning and execution of projects.
Andrews [4] discussed the failure to implement
recommendations put forward
by previous studies, during his Keynote Address to a

Symposium on the Construction
Industry in May 1984. He painted a gloomy picture of the

state of the construction
industry. "The depletion of special funds casts a gloomy

shadow on the state of the
industry today. The general contraction of the economy has

led to the decline of
activities in construction. Capital work appropriations

were restricted principally to the
financing of on-going projects. It is significant to note,

that the number of special
funds for long term projects was reduced from 54 in 1982

to 18 in 1983 and ultimately
to one in 1984 from which $2,341 million was appropriated.

Reduced demand, surplus
of some materials and resources, idle capacity, unemployed

labour, retrenchment and
falling prices are beginning to characterise today's

construction sector" . Andrews noted the positive effects
of this financial squeeze being the lower cost
of labour and materials and of experienced professionals in

the industry. However, for
contractors the situation was made much worse because there

was now more serious
competition for the few available jobs. This competition

also meant lower profit
margins as well as more rigid control from clients and

consultants who were well
aware of the ready availability of alternative contractors

if problems should arise. While Andrews concentrated
detailing the economic problems of the
construction industry, Lewis [5] carried out a much

broader review of the causes of the
problems facing the industry in 1984. The most deep seated

of these problems were
those of the legal and bureaucratic structures, many of

which were inherited from
colonial times and had remained unchanged since. The

situation was exacerbated by
the autocratic approach adopted by the then Prime Minister,

Dr. Eric Williams. Dr. Williams had been in power since
Trinidad & Tobago gained independence
some twenty years previously. With the country's new found

oil wealth, during the
1970's, he had advocated development through major capital

projects setting up
primary processing industries. These projects were largely

implemented by joint
ventures set up through government-to-government
arrangements. It was anticipated
that such arrangements would enable Trinidad and Tobago to

obtain better performance
from firms which were beholden to the governments which

nominated them. This system was instituted to avoid the
cumbersome contract letting procedures
which the government itself had instituted. Not

surprisingly, local firms and Operational problems facing
construction firms 277
professionals objected to the implementation of a system

designed to afford preferential
treatment to foreign firms. The construction industry also

faced significant problems in dealing with the
gross inefficiencies of the public utilities. Electricity

and telephone lines were
overloaded and regularly out of commission. Water and

sewerage lines were
constantly being breached causing interruptions to supply

as well as trenched repair
work in the roads, which caused traffic disruptions on the

already congested roads and
also led to further erosion of the road pavement.

Construction operations were also plagued by low labour
productivity and the
common wisdom was that a poor work ethic was the cause.
This was defined to mean
a lack of a willingness to give a fair day's work for a

fair day's pay. Trades unions
were generally unwilling to discuss productivity

improvements instead relying solely
on confrontation to try to raise wage levels, improve work

conditions and increase job
security. In addition to these labour related problems

there was also a significant lack
of sophistication in the managerial skills employed in the
industry. In 1992, Atherly (6) conducted a detailed
analysis of a number of construction
projects carried out in the previous few years in Trinidad

to determine what problems
had been encountered and what their effects had been. His
interest was mainly in the
causes, cost and responsibility for delays, and he

concluded that: (a) The client was responsible for 55% of
delays by cost, and for 47.4% of the total delay time.
(b) The consultants were responsible for 38% of delays by
cost and for 17.3% of the total delay time. (c) The
contractors were responsible for 6% of the delays by cost,
which involved 31.6% of the total delay time. (d) The
weather was responsible for 0.8% of delays by cost, which
involved 2.7% of the total delay time. (e) The approving
and statutory authorities are responsible for 0.2% of
delays by cost which involved 1 % of the total delay
time. AtherJey's analysis showed that there was no direct
relationship between the
time involved in delays and the cost of the delays, and,

furthermore that the clients and
consultants were responsible for more delays than the

contractors. Thus, the
operational problems tended to result more from the

specification and design of the
projects than from factors under the contractors' control.
5 The Survey
A questionnaire was used to gather responses from

construction firms. Two
questionnaires were mailed to a randomly selected sample of

fifty-five construction
firms whose names appear on the Trinidad and Tobago

Telephone Directory out of one
hundred and eight listed. Some of the mailed

questionnaires did not reach the prospective respondents
either due to the improper address given in the Telephone
Directory's Yellow Pages or
due to mail screening at the respondent's organisations.

Telephone follow-ups and
visits helped to improve the response rate. Out of the

eighty questionnaires mailed to fifty five construction
companies
listed in the yellow pages, only twenty four questionnaires

were returned from 18
construction companies. The response from companies was

32.7% of those firms
which had questionnaires sent to them. The response time

for questionnaires returning varied from one month to four
months with intermediate reminders being sent to some of

the respondents. The 18
firms which responded to the questionnaires represent

sixteen percent of the total
companies listed in the telephone directory's yellow pages.
6 Discussion of Results
In order to get worthwhile results it was important to get

a response from persons in
senior managerial positions as others would not have a

clear overview of the firms'
operations, in this regard it was very satisfying to get

75% of respondents as Managing
Directors or Senior Engineers of their firms. As far as

personnel was concerned, two thirds the firms indicated
that they had
moderate to serious difficulty hiring the professional and

skilled personnel that they
needed. This can have serious consequences, as was seen in

the boom days of the
1970's, when unskilled people were put in positions to do
work for which they had not
been trained. However, it does not appear that this

situation has yet been reached
during this economic upturn, because firms have not yet

started bidding up salaries for
qualified people. If the upturn continues, however, this is

a problem that will become
worse before it gets better, as there have been very few

students from T&T studying
civil engineering over the past five years or so (although

freedom of movement for
qualified persons amongst Caribbean states has been

proposed, it is not yet in
existence). This situation is improving but will take

three years to work through the
system. In general, the respondents were satisfied with

the quality of personnel in the
industry. Three quarters of respondents were satisfied with

the performance of local
tradesmen who seem able to perform to the required

standards. This is probably one of
the spin-off benefits of the boom years when a large number

of trademen acquired and
improved their skills. The comparatively lower level of

work now means that only the
best tradesmen are being hired. Half of the respondents

were unaffected by labour union problems and this is
almost certainly as a result of the extensive use of

subcontractors and of the high level
of unemployment in the country. However, this general

satisfaction with the local
labour force is also reflected in the fact that workers

from T&T are used occasionally
by contractors in over 40% of their overseas projects,
despite the additional problems
that are involved in doing so .. Respondents were less

satisfied with the industry consultants, as only just over
one third of the respondents were happy with their

performance. Although there is a
tradition in T&T of the relationship between contractor

and consultant being
adversarial, the situation seems to be exacerbated by the

style of supervision used by
consultants on site. This level of dissatisfaction by

contractors may also be partly
explained by the large number of problems the contractors

reported associated with
contract documentation. Respondents indicated that there

were few problem in hiring or acquiring
appropriate construction equipment. The only problem seemed

to be with the expense
involved with the high hire rates and the high custom
charges levied on imported
equipment. Some 70% of the respondents reported problems

in obtaining the bulk of
construction materials locally. The problems with local

materials mainly involved their
quality, shortages in supply and unreliability of delivery.

The cost of materials sold
locally was also reported to be high enough often to

justify importing significant
quantities of materials, despite their bulk. Half of the

respondents used an average content of more than twenty
percent of
imported materials in their projects. This is a relatively

high proportion of imports, and
it imposed a number of particular problems. Procurement,
for example, requires sound
planning and good administration to ensure that the

materials are available when needed
but are not delivered so early as to cause storage or cash

flow problems. It is a
problem that is only exacerbated by problems with exchange

rate variations and
currency risk. Over 70% of the respondents borrow from

financial institutions in order to fund
their construction projects. This naturally leaves them

susceptible to changes in interest Operational problems
facing construction firms 279
rates and the availability of funds within the banking

sector. This does not currently
seem to be a problem as the vast majority of the

respondents reported no problem in
acquiring working capital, bonds or credit for their

projects. As a general rule, the contracting firms tended
to make heavy use of smaller
sub-contractors wherever possible. There were a number

resons put forward for this,
mostly involving risk-reduction by the main contractor. It

was noted that sub
contarcting work eased cash flow problems, reduced labour

problems with unions and
passed much of the bidding risk onto the

sub-contractor(s). In a very competitive, high
risk economic environment this is a sound strategy for

firms which can afford risk
aversIOn. Nearly 70% of contracts were let on the basis

of the traditional bills of
quantities and 45% were let as 'fixed price' contracts.

'Cost plus fee' contracts were
used on 26% of the projects and 'design and build'
contracts on 22%. This indicates a
fairly traditional approach to contract procurement, though

there was some anecdotal
evidence that the 'design and build' style of project

letting was on the increase,
especially on larger government contracts. On a related

question, it was discovered that over 80% of the
respondents had
encountered significant problems with contract

documentation such as ambiguous and
inconsistent specifications, poor drawings with inadequate

information or mistakes,
and contradictions with other documents. Whatever the

reason, this almost certainly
contributed to the contractors' lack of satisfaction with

the consultants. Anecdotal
reports suggested that this problem may have been a result

of either the consultants
being pressured to produce these documents within too short

a time period or a lack of
adequately trained personnel. It is also possible that

there is incompatibility between
the products supplied mainly from the U.S.A. and the

consultants' preference for
specifications based on the UK data. The liberal use of

various design codes (British,
American, Canadian) and measurement units, metric and

imperial, however, was not
considered a problem by over 70% of the respondents. This

does seem slightly at odds
with the problems reported above with specifications and

other documentation. Half of the construction firms
responding to the questionnaire undertook
construction activities equally distributed throughout
Trinidad and Tobago. Because of
the recent economic upturn, firms did not have much trouble
finding work, but things
had been much more difficult until just a few years ago.
Recognising that one of the
natural responses to problems finding work in one's own

region or country is to look
outside for work, it was of interest to discover how much

work was being undertaken
by contractors from Trinidad & Tobago in other Caribbean

territories or elsewhere in
the world. The respondents indicated that just under 30%

had work outside T&T,
which is quite a high level of involvement in activity

outside one's own country.
However, one contractor still lamented that preferential

treatment was being accorded to
local contractors in those territories, and this was the

main reason why more Trinidad
and Tobago companies were unable to break into overseas

markets. In dealing with the immediate work environment,
the firms seemed less than
happy. The state of roads and volume of traffic

significantly affected the operations of
over 60% of the respondents. This was mainly a problem with

regard to the delivery
of materials. Furthermore, just over 40% of the

respondents' operations were
significantly affected, and a further 50% silghtly

affected by the unreliability of public
utility services. Power fluctuations and interruptions,

poor telephone communications
and water suply problems were mentioned, however, this does

not seem entirely
consistenet with the fact that very few problems with

communication were reported,
except in remote areas which had no reliable wireless or

telephone communications. Some 75% of the respondents
reported that their operations were affected
significantly by inclement weather. Obviously, this

problem particularly affects
outdoor operations such as foundation excavations,

concreting operations and hot-mix
asphalt paving works, however, the figure is higher than

may have been expected as
contractors are familiar with the climate and should

generally be able to make provision
for it. The respondents were generally satisfied with

clients' honouring of their
contractual obligations. This was perhaps surprising, given

that some three quarters of
the respondent's firms did a significant proportion work

for the government, and
government agencies are not normally considered prompt

payers for services received.
The amount of work being done for government was not

really surprising given that
nearly sixty percent of firms felt that the private sector

demand was low to very low. The reported performance of
government agencies in other regards was also
surprising as delays in approvals from regulatory agencies

did not seem to be a serious
problem except for those firms which involve themselves in

fasttracking, design and
build or undertake special projects with continuous

interaction between design and
construction. In summary, the respondents also indicated
the following as being the other
special problems the construction industry faces in

Trinidad and Tobago; (a) Tender award procedures as well
as prequalification procedures and lack of contractor
classifications. (b) Lack of management and supervisory
skills. (c) Extreme fluctuation in construction demand.
Similarly, the special problems facing Trinidad and Tobago
contractors in other
Caribbean countries were: (a) Logistical problems. (b)

Unnecessary red tape and bureaucracy. (c) Resentment,
uncooperative attitudes of the local work force. (d)
Preferential treatment of indigenous and industrialised
world contractors in contract awards over contractors from
Trinidad and Tobago.
7 Conclusion
Construction firms in Trinidad and Tobago face some of the

problems in their operating
environment which have been classified as 'systemic' in

nature (i.e. stemming from the
adoption of inappropriate systems and procedures Okpala et

al [8]). These problems
include: (a) Poor contract supervision and documentation

by consultants (b) Lack of a classification of
contractors and of uniformity in tender award procedures
and criteria. (c) Low and fluctuating demand for
construction products. There is some scope for reduction
of these problems, and indeed some steps
have already been taken. More information is needed before

any conclusions can be
drawn about the performance of the consultants. A

construction industry institute
could easily take on the task of providing guidelines for

the classification of contractors
and providing a unified basis for tender awards. As far as

demand is concerned, the
government is trying to manipulate demand for construction

by scheduling the
commissioning of new works to try to stabilise the quantum

of demand in dollar terms.
The use of tax and other financial incentives have mainly

been used to encourage
construction work of any description at any time. Other

problems which are classified as 'structural' in nature
(i.e. related to the
nature of the indigenous construction itself Ofori [7])

include the following: (a) The dependence on imported
materials. (b) Auctuations in material prices. (c) Low
worker productivity levels and poor contract management.
(d) Inadequate support infrastructure power, roads and
water supply. (e) The disruptive effects of bad weather
conditions. Operational problems facing construction firms
281 These problems are a little more difficult to deal
with. The use of imported
materials can only be reduced if the contract

specifications change accordingly.
Because of quality problems with locally supplied

materials, reducing imports may
have quality implications for clients. The fluctuations in

the prices of materials could, of course, be reduced
thorugh
government controls. However, the government has taken a

policy decision (at least
partly forced on it by the IMF's 'structural adjustment'

requirements) to reduce
governement subsidies on all goods, and without subsidies,

price controls are difficult
to maintain. Much has been written about 'worker

productivity' over the years, and it
seems clear that more of the blame lies with bad management
than with the bad 'work
ethic' of the workers. The support infrastructure is

improving all the time, and recent moves to de
nationalise the public utilities has gone a long way in
this direction. The water and
sewerage authority has recently become the latest utility

privatised, and it is anticipated
that the new private partner (Severn Trent Water Authority)

will help to continue the
improvement of services. Nothing can realistically be done

about the weather. The violence of tropical
storms is difficult to contend with, although larger

projects can use enclosures
effectively to provide a dry work environment.

Improvements to the national drainage
system could help to avoid the floods which are a regular

feature now, and this would
have immediate benefits it is to be hoped that the

expertise provided by Severn-Trent
will help the local authority in this regard.
2 Douce, Courtney, E.A. (1983) Constraints Affecting

Construction Planning on Large-Scale State Sector
Projects. An Analysis with Particular Reference to the
Experience of the Blue Mountain Project Proposals Jamaica.
M.Sc. Project Report, Programme in Constr. Engineering and
Management, The University of the West Indies, St.
Augustine.
3. Khan, Zaffar. (1986) Management and Cost Effectiveness

in the Construction Industry in Trinidad and Tobago.
M.Sc. Project Report. Programme in Constr. Engineering and
Management, UWI, St. Augustine.
4 Andrews, Richardson. (1984) Keynote Address: Symposium on

the Construction Industry Hosted by Trinidad & Tobago
Management Development Centre in collaboration with The
Association of Professional Engineers of Trinidad and
Tobago, May 15-17, 1984, Trinidad Hilton.
5 Lewis, T.M. (1984) A Review of the Cause of Recent

Problems in the Construction Industry of Trinidad and
Tobago. Journal of Construction Management and Economics,
Vol 2, pp 37-48.
6 Atherley, Beville A. (1992) Analysis of Construction
Delays. M.Sc. Project Report, Programme in Construction
Engineering and Management, The University of the West
Indies, St. Augustine.
7 Ofori, George (1991) Programmes for Improving the

Performance of Contracting Firms in Developing Countries:
A Review of Approaches and
282 Lewis and Mugishagwe Appropriate Options. Journal of

Construction Management and Economics, Vol 9, pp 19-38.
8 Okpala, D.C. and Aniekwu, A.N. (1988) The Effect of

Systemic Factors on Contract Services in Nigeria. Journal
of Construction Management and Economics, Vol 6, pp
171-182. INTEGRATING SITE-RELATED ACTIVITIES INTO THE
PLANNING AND SCHEDULING OF CONSTRUCTION PROJECTS
Abstract: This paper first reviews briefly some of the

common methods used by current building
construction firms in their attempt to integrate

site-related activities into the planning and scheduling
of construction projects. These methods are then analysed

and consequently a computer-based model
which seeks to achieve the needed integration is proposed.

The model at present implemented within
a prototype system demonstrates the potential of

integrated knowledge-based and virtual reality
systems in tackling problems associated with the planning

and scheduling of the entire construction
project in general and site-related tasks in particular.
Sommaire: Cet article commence par revoir brievement

quelques unes des methodes usuelles
employees couramment par les compagnies de construction du

biltiment, dans leurs efforts d'integrer
les travaux de site dans la plannijication et l' emploi du

temps des projects de construction. Ces
methodes sont ensuite analysees, et un modele informatique,

qui cherche a obtenir l'integration
demandee, est propose. Le modele a present implemente a
l'interieur d' un systeme prototype,
demontre Ie potential des systemes bases sur une

connaissance integree et ceux de realite virtuelle, a
resoudre les problemes associes arec la' plannijication et

l' emploi du temps du project entier de
construction en general, et des travaux de site en

particulier.
INTEGRATING SITE-RELATED
ACTIVITIES INTO THE PLANNING AND
SCHEDULING OF CONSTRUCTION
PROJECTS
Theophilus Adjei-Kumi
Department of Civil Engineering, University of Strathclyde,
Glasgow, UK
Arkady Retik
Glasgow, UK
Aviad Shapira
Department of Civil Engineering and National Building

Research
Institute, Technion-Israel Institute of Technology, Haifa,

Israel
INTRODUCTION The integration of site-related activities

into the planning and scheduling of construction projects
has received little attention in practice. In practice many

firms either defer them until the
commencement of construction works or provide for them in

a crude manner. Site-related activities as
mentioned here include items and processes which are both

essential and necessary to assist in the
execution of the permanent works, though at times not

directly. Examples of such activities are
scaffolding and gantries, heavy plants and their

operations, form work etc. which would be classified
in this paper as auxiliary activities, and site

accommodation, temporary services, fencing and access
roads which are also classified hereby as on-site

facilities. The effective planning and scheduling of
site-related activities therefore demands a clear

understanding of how they are generated (Illingworth,
1993). Two industrial sutvey works undertaken separately

by McLellan (1994) and Adjei-Kumi (1994)
form the basis of the analysis of current practices. The

former saw 80 actively practising construction
contractors responding to the administration of a

questionnaire on the use of project management
procedute by construction contractors. A much more specific

survey organised by the latter considered
some aspect of McLellan (1994) (i.e. project planning and

control). This second exercise presents a
survey of the current practice of planning and scheduling

of site-related activities as an integral part of
the construction project. Key questionnaire responses of

the second survey and the work of current
researchers are presented and analysed below.
ANALYSIS OF CURRENT PRACTICES In all, 54 sets of the

questionnaire were sent out to building contractors. Out
of this number 26
responded, giving a response rate of about 50%. 12 out of

the 26 responses were found to be very
informative. The relatively low number of responses was

compensated for by the depth and quality of
respondents' answers. Hence these responses should be
considered as indicative rather than


E & FN Spon. ISBN 0 419 22240 5.
284 Adjei-Kumi, Retik and Shapira
representative of the current practices of building

construction firms. Responding firms comprised 10
building and 2 civil engineering contractors.
Rating System To assist in the quantitative analysis of

the responses, a three-level rating system was introduced
in which the highest level of response carried the maximum

points of 5 with the lowest level
attracting no points. Other responses considered as

Moderate attracted 3 points each. These points
were added up for each enquiry in respect of the twelve

respondents, to give the Aggregated Points for
each response (a maximum of 60 and a minimum of 0). Key

responses to the questionnaire are
discussed under their appropriate headings below:
General Items of Operation in the Firms The contractors

were presented with a list of items and asked to indicate
which of them are
undertaken or used by their outfit. The list of items and

the graphical representation of the responses
are as shown in Fig.I. The responses show that much thought

is given to some of the basic procedure
required for the effective planning and scheduling of

site-related activities. For instance, site layout
drawings which are a major concern in the scheduling of

site-related activities are embraced almost as
much as the usual and more traditional construction

programmes and bar charts. Moreover, site visits
were found to be very much a part of the firms' practices.
Importance and Level of Study of the Project Documents

Here the contractors were asked to indicate what they
consider to be important project documents
for the planning and scheduling of site-related tasks and

the depth to which such documents receive
attention from their outfits. The responses are as in

Fig.2. The nature of the responses suggest that an
appreciably high level of importance is given to some

site-related activities through site plans. Quite
apart from the common practice of taking measurements from

the working drawings and reconciling
the values with those in the BOQ, which could be part of

the reason for the trend established in Fig. 2,
the idea of having to study drawings and site plans in

great detail gives the fIrms much more
opportunity to consider site-related activities.
Company Data Here the respondents were asked to indicate

the level of comprehensiveness and the frequency of
revision of their company's data on resources. The result

of this enquiry is presented in Fig.3. The
responses depict that though the available data in the

firms are adequately revised, the level of
comprehensiveness of some of these data leaves much to be

desired. For example, data on plant
which is one of the very expensive site-related items was

found to be lacking comprehensiveness, a
fact which affects its planning on site.
The Use and Update of Documents Responding firms were

asked to indicate their frequency of use and update of
some relevant
activities and documents. The responses of the fIrms are

shown in FigA. Just a few contractors were
identified as frequent users of site layout drawings. Half

of the respondents fail to update these
drawings to reflect the changing form of the site as

construction work proceeds. To some extent this
attitude of fIrms can be attributed to the lack of

convenient tools. On the contrary, method statements
appear to be very much in use and are frequently Updated.
Timing of Operation Under this section, the respondents

were asked to indicate the timing of some vital operations
in
their fIrms. The response to this enquiry is presented in

Fig. 5. The results indicate some operational
lapses in the fIrms at the pre-tender stage of projects.

It is hardly believable that some firms prepare
method statements only after the contract has been secured,

and construction works are to start. This
practice questions the authenticity of the resulting

estimates and schedules. Moreover, the responses
on site layout drawings show that this exercise is mainly

considered only as a pre-tender activity,
presumably when the set-up of the site is drawn to aid in

the estimation of the preliminaries section of
aBOQ. Integrating site-related activities 285 In summary,

the above analysis presents an indication of the existence
of certain work practices
which does not auger well with the effective planning and
scheduling of the totality of the building
construction process. This brings to light the fact that,

attempts by practising firms to plan, schedule
and control site-related activities have not achieved the

desired results. Efforts to consider some site
related activities (e.g. on-site facilities, scaffolds and

plant) via documents like site layout, fall short of
expectations as these are rarely updated to reflect the
changing form of construction sites. Shapira and
Laufer (1993) reached a similar conclusion based on an

extensive study in the United States. It is worth noting
that updating such documents manually is very tedious and
hence the neglect.
With network-based planning and scheduling tools in full

use by construction firms, it is expected that
though the progress of work would be well monitored in

time, the spatial representation of progress is
not taken care of. Planners are therefore left in a state

of abstract visualisation of the perceived spatial
configuration of the work. This aspect of visualisation of

work even becomes much more complicated
when site-related items like plant which are sometimes

dynamic are considered. It is therefore very difficult to
plan and schedule the entire construction project using
existing
practices. The section following would tend to review some

of the related effort by the research
community to promote the integration of all tasks on the

construction site.
REVIEW OF CURRENT RESEARCH Much research work has recently

been undertaken concerning the modelling of the planning
and
scheduling of the entire construction project. Most models

enjoy the current advancement in computer
graphics (CO) and artificial intelligence (AI) tools.

Depending on the dominant tool on which the
development of a particular system was based, models can

be described as CO-dominated, AI
dominated or integrated systems. In the CO-dominated

approach, not much work has been done in respect of
construction planning
and scheduling. Models, more often than not, come in the

form of computer-aided design (CAD)
systems. An example of this model type is Bechtel's W

ALKTHRU (1991) which uses real-time
animated images and links together three-dimensional(3D)

graphics packages and engineering
databases but can also be modified and used for materials,

temporary facilities and equipment layout
on site. Another example is PROVORIJ (psunder & Nekrep,

1994). Some of the problems identified
with this system type is the full responsibility placed on

planners to generate all the knowledge
required for planning and to re-draw the proposed building

using a CAD system. During operation,
the simulation is effected with respect to the building

product erection without considering the
processes (which are mainly site-related activities) which

assist in the erection. Interaction with the
resultant simulation is also very difficult to achieve

using this system type, a situation which makes it
quite unrealistic working with this model type for site

organisational purposes. ~oing by the AI-dominated
approach, models are developed to implement methods in a
manner
similar to an expert's effort to aid in decision making.

The use of heuristic knowledge in these models
is common place. More often than not and where necessary,

solutions are displayed graphically using
simple graphical representations in the form of barcharts,

lines-of-balance etc. Examples of this
approach can be found in the following: aTOP (Kakhonen,

1993), HISCHED (Warszawski and
Shaked, 1995) and Sirajuddin and Mawdesley (1990). MovePlan

(Tommelein and Zouein, 1993) also
attempts to construct a sequence of layouts to span the

entire duration of a project based on an activity
schedule input via a network-based project management

software without indicating the progress of
work. Hence in using this approach, though the progress of

work could be well monitored in time, the
spatial representation of progress is not taken care of.

Users are therefore left to imagine the spatial
state of work progress. Planning and scheduling of the

entire construction process using this model
type can therefore be very difficult even for experienced

planners. The third research area, integrated systems
approach, which attempts to integrate both the product
(drawings and 3D modelling of a building structure) and

the processes (scheduling, cost forecasts etc.)
of a project (Retik, 1993), bears all the advantages of the

previous models and hence appears the most
prospective. These advantages notwithstanding, most of the

main problems identified with the CO
dominated approach persist in this system. An example of

this approach can be referred to in Morad
and Beliveau(1991). This paper presents an integrated

system called KNOW-PLAN which integrates
AI technology with CAD technology to generate and simulate

construction projects.
286 Adjei-Kumi, Retik and Shapira The field of virtual

reality (VR) which has recently developed out of experience
gained in other
related fields, such as computer graphics and

human-computer integration, is also growing in appeal
to the research community as a very useful tool for future

work. VR is an advanced tool for design,
prototyping and implementation of human-system interfaces,

which is centred on 3D computer
generated and simulated environments. The key elements of

this technology and the environment it
creates are the abilities to navigate in 3D, manipulate

virtual objects and their related data and
interact with the virtual environment. The real

significance of VR lies in the nature and structure of
the data underlying the graphics. This technology is aimed

at visualisation and is seen as an extension
of earlier work on simulation, visualisation and animation

(Hendrickson and Rehak, 1993, Stone,
1993). An application using VR techniques especially for

construction planning and scheduling is yet
to be developed. Such is the nature and direction of

current research which makes bare the fact that though much
has been achieved through the use of computer-based models

in construction planning and
scheduling, the issue of realistic representation of the

entire project picture in a way which assists
planners during planning and monitoring of work progress

is yet to be well addressed. A proposed
approach towards this end is described in the section

following with more emphasis on site-related
activities' integration.
PROPOSED APPROACH This section outlines essential

attributes of a computer-based model still under
development
which seeks to address the problems in existing practices

and models, through the intelligent
simulation and visualisation of the entire construction

project.
General Characteristics of Proposed Computer Implementation

Model The main idea behind this model is to plan and
schedule the entire construction project employing
knowledge-based simulation of the construction progress.

The approach is based on the creation of
real 3D pictures of the project's building structures and
site, and subsequent visual simulation of the
construction process. The main components of this system

are presented in Fig.6. Operations of the
model are: Plan formulation (generation of construction

and site-related activities and their sequence,
schedule generation and resource allocation etc.) via

automated or manual means, automated
(intelligent) and manual (non-intelligent) mapping of

activities and facilities to their appropriate
graphical representations and the projection and simulation

of the progress of work in a virtual
environment on-screen based on the project schedules. In

this approach plans are either generated automatically by
the knowledge-based system after the
user have input certain information defining the project in

question or prepared manually and
supplied to the system via a project network-based

scheduling tool. Automatically generated solutions
can also be relayed to the scheduling tool for schedule

preparation and thus giving planners the
opportunity to make any changes whatsoever to their plans.

With the view of visualising the progress
of work, the system interface provides the linkage between

items in the schedules and a prepared
library of graphical representations of elements on site.

Using the system, this linkage is achievable
manually and antomatically through a non-intelligent

(Visual Basic Interface) and an intelligent
(knowledge-based system) interface respectively. These

mapped items are then projected onto screens
via a visualiser at a pace dictated by the pre-prepared

schedules.
DISCUSSION
Site Organisation The organisation of resources present on

a construction site changes as construction works
proceed according to planned schedules. These schedules

invoke resources onto sites as and when they
are required and take them off after they have served their
purpose. Some of these resources can be
classified as long-term or short-term depending on their

duration on site, dynamic or static, or
activity-independent or dependent. Moreover the path and

location at any particular time in relation to
the associated work, of dynamic resources (for example, a

rail-mounted crane) would have to be well
monitored to offset interference with other plant, laydown

areas etc. Integrating site-related activities 287
Monitoring all the above and many other resources therefore
demands an interface which permits
the visual simulation of the entire construction project

based on the planned schedules and facilitates a
very high level of interaction between the user and the

system. The proposed system demonstrates this
interface and its importance especially in relation to

site organisation.
Facilities and Activities Unlike the planning and

scheduling of construction activities which has received
the attention of
much research work, the planning and scheduling of

site-related activities is yet to be addressed
comprehensively. To integrate these two in a realistic

manner, construction activities should be
considered as the basis for the planning and scheduling of

site-related activities. During this process,
facilities needed to support construction operations must

be identified, their sizes and shapes
determined and their positions within the boundaries of the
site located. Examples of such facilities
are batch plants, warehouses, changing rooms, lay down

areas, fabrication areas etc. Care needs to be
taken in determining their duration on site (Le. some

facilities depend on certain activities or
construction phases, some on the availability of certain

materials, some on the total project work or
the height of operation above the ground). All these must

be taken into account during activity/facility
generation and scheduling. To automate such a system

demands the acquisition of certain
technological and heuristic knowledge which would generate

the list of activities and facilities
required for a particular project and establish their order

and sequence and possibly their duration.
Scheduling Method Like any other professionals, planners

have to select the right tool for the job, a choice which
is
generally dependent on the type of project. Considering the

available scheduling techniques, the
network analysis method has been found to lend itself most

readily to comprehensive scheduling of
the actual and auxiliary activities and on-site facilities.

Quite apart from being appropriate for
resource analysis, networks lend themselves well to

software applications. This system utilises a
network-based construction management software to assist
users to input
their project data manually. With this, firms would still

be reaping from investments made in
network-based systems and planners will still be using some

of the applications they are very much
used to without the need for any special training. With

this choice of scheduling technique, on-site
facilities are included in schedules as hammock activities
and auxiliary activities as normal activities.
These tools are also efficient as far as resource

allocation, levelling and optimisation and the
production of reports are concerned. However during

operation, the system allocates default resource
values (if the user fails to provide them) which form the
basis of activity duration determination.
Controlling and Monitoring Bar charts tend to be an

excellent tool adopted for communicating schedules to
users. On these
charts the actual project status at any control date is

represented alongside the planned status, and
deviations are clearly displayed. The presentation of any

deviations from plans are quite difficult to
understand in a spatial context using bar charts. To

improve on these presentations, the proposed
system uses 3D computer graphics which promotes the viewing

of the project on-screen as it is in
reality. At a user specified date, the actual and expected

status of activities are displayed graphically
using different colours. By this, planners would have the

opportunity to view deviations at their points
of occurrence.
SYSTEM PROTOTYPE The system prototype has being developed

to serve as an environment for the planning of multiple
residential units (low-rise and multi-storey). Emphasis is

placed on realistic graphical presentation
and the development of an interface suitable for

construction industry professionals (see example of
output in Appendix A). A library of the graphic elements to

represent construction activities and plant
has been developed via the use of Superscape's Shape

Editorl. Automatic incorporation of these
lShape Editor is a Superscape VRT 4.0 facility used to

create 3D shapes which can be colow
duplicated and transformed. These shapes are then used to

furnish the Virtual World.
288 Adjei-Kumi, Retik and Shapira
elements into the construction process, assigning

intelligence to the objects, as well as identifying the
appropriate scenario is under development. The prototype

system's interface was made possible
through the use of a non-immersive Desktop VR toolkit,

Superscape VRT 4.0 2 , which provides
dynamic interaction with a virtual project. Appendix A

presents some of the prototype system's outputs. I and II
show the fIfth and seventh
weeks of the erection of a three-storey building using

industrialised construction methods. The
pictures also show some accommodation on site, site fence,

a crane running on rails and the general
system interface. Simulation can be played forward,

backward etc. III is just another view of work
progresses at week seven bringing into picture site access

roads. IV displays some aspects of the
expected state of work on site during the thirty-second

week by highlighting among other things, the
arrival of a truck-mounted concrete mixer. Below is a

brief description of the knowledge-base system in use and
the mode of visualisation of
this prototype system.
Knowledge Base It is worth noting that the main objective

of the proposed system goes beyond just the visual
simulation of the construction process. The additional

objective here is to attach some intelligence to
the whole process. Object-oriented technology appears to
facilitate a near-reality and structured
representation of this knowledge and hence its choice in

the development of the prototype. One of the
most important features of this technique is the coupling

of data and operations. The association of
knowledge to similar objects is simplified by putting these

object in groups. It is also possible to
represent the behaviour of each object using procedures

called 'methods'. This structure therefore suits
the ongoing processes on a typical building site (i.e. a

series of activities working together to change
the form of a building site into the proposed building

facility). Modelling such an environment
therefore demands information about the product (e.g.

building elements, components, facilities) and
about the ~cess (i.e. construction operations). The

knowledge-based system, organised within
Kappa-PC objects is currently under development.
Visualisation Visualisation of the construction progress

can be effected in a virtual environment developed by a
non-immersive or desktop VR system. Such an environment

appears to be ideal for simulating site
operations as it would allow activities and equipment

within the site to be modelled. Using this
system, spatial planning as far as site-related activities

are concerned will be facilitated. Construction
sites can be viewed on plan (as in site layout planning)

and the locations of facilities well determined
via the constant simulation of the work progress.

Interference detection between two or more facilities
would be promoted using this interface and any correction

effected with the least of effort. The use of the dynamic
visual status of all project activities during the entire
requires the presentation of a comprehensive picture of the

project, including the new construction
(buildings), landscape development and site organisation

with plant and facilities, and their schedule.
CONCLUSION This paper has identified the methods used by

practitioners in planning and scheduling of site
related tasks and outlined a computer-based model which

would achieve the needed integration of the
actual project and the site-related activities. The paper

proposes the use and development of a model
with an added attribute of aiding practitioners to

visualise not only the actual building works, but also
the progress in the site organisation, as well as using a

virtual reality interface. In this respect the
planners do not only observe simulated projects under

differing scenarios but can also interact with a
virtual project by moving equipment, plant and facilities

about to their requirements. 3D dynamic presentation
facilitates the visual validation and simulation of the
project progress
and creates new possibilities for the planning process

which are not available by conventional
methods.
2 Superscape VRT 4.0 is a Virtual Reality Toolkit of

Superscape Ltd.
3 Kappa-PC is an object-oriented applications development

system of IntelliCorp Ltd. Integrating site-related
activities 289
Acknowledgement
The authors wish to express their profound gratitude to all

the construction finns who responded to
the questionnaire and to Douglas Gourlay and Edward Coutts

(both Research Assistants) who helped
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Construction Contractors, PhD Thesis,
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1991, pp. 1-12.
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Construction, September 20-24, 1994,
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Project Resource Scheduling Using Site
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and Robotics in Construction, Bristol,
June 5-7,1990, pp.535-542.
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Civil Engineering and Construction", SERC
Conference, September 1993, pp. 327-336.
Tommelein, 1.D. and Zouein, P.P. "Interactive Dynamic

Layout Planning", Journal of Construction
Engineering and Management. ASCE, Vol. 119, No.2, June

1993, pp. 266-287.
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Software.Inc, User's Manual, 1991.
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Construction Planning of High-rise
Buildings", Journal of Construction Engineering and

Management, ASCE, VoU21, No.2, June,
1995,pp.172-182.
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V i s u a l u s e r
292 Adjei-Kumi, Retik and Shapira APPENDIX A Examples of

project pictures from implemented prototype. (I) (II)
(Ill) (IV)
CASH FLOW TRENDS FOR
INFRASTRUCTURAL WORKS IN
RESIDENTIAL DEVELOPMENTS
S. Singh
National University of Singapore, Singapore
Abstract
This paper discusses the established cash flow trends

(profiles) for major
infrastructural works, based on the most recently completed

projects by Public
Utilities Board, Singapore (electrical cables and

gaslines) and Ministry of
Environment, Singapore (drainage and sewer lines). Based on

the s-curves derived,
cash flow projections for any given contract and market

conditions can be arrived at
for any future projects from the view point of clients,

contractors and developers.
Kevwords: Cash flow, financial planning, building services,

external works,
inf;astructural works. construction.
Sommaire
Le present papier discute les tendances en vigueur des
liquidites pour les
travaux infrastructurels majeurs, sur la base des projets

les plus recents
conduits a terme par Ie Public Utilities Board, Singapour

(cables electriques et
conduites de gaz), et par Ie Ministere de l'environnement,

Singapour
(evacuation des eaux et egouts). Basees sur les derivees de

courbes en S, les
projections de liquidites pour tout contrat et sous toutes

conditions du
marche peuvent etre atteintes pour n'imporle quel projet

futur du point de
vue des clients, des entrepreneurs et des promoteurs.
1 Introduction
Amongst all the construction resources, cash flow

management is most important
since from the contractors' considerations relatively more

construction firms appear
to fail through lack of liquidity than do so by inadequacy

of planning and control of
other resources. Cooke & Jepson [1] and Harris & McCaffer
[2] have discussed the usefulness of
s-curves and Singh & Phua [3] have shown the importance of
establishing s-curves
for different categories of building projects since their

profile varies quite
substantially from one building type to another Cash flow

profiles for infrastructural works in buildings have never
been reported
to have been established, the author therefore made an

attempt to establish the same.
This paper therefore discusses the nature and general
characteristics of

Edited by DA Langford and A. Retik. Published in 1996 by E

& FN Span. ISBN 0 419 22240 5.
294 Singh
infrastructural works, data collected, mathematical models,

cash flow profiles, and
comparison between electrical cables, sewerlines, gaslines

and drainage works. The auth.or was keen to develop
profile for waterlines as well, however, due to
the difficulty of getting access to the past records of

such works, the same could not
be established.
2 Alternative Methods for Cash Flow Projections
Broadly speaking there are two methods for cash flow

projections of constf].lction
projects viz. cash flow based on programme planning

techniques and cash flow
projections based on value-time envelopes or standard

s-curves [1,2,4].
2.1 Cash Flow Projections Based on Programme Planning

Techniques
Normally for all medium and large sized construction

projects, a master-program is
developed for executing the construction project using any

convenient technique such
as bar charts, network based on CPM or PD, line of balance

etc. Based on this
program cash flow projections can be developed by

considering the cost of various
resources needed for different operations and other
information such as contract and
credit conditions of material suppliers, subcontractors

etc. A full explanation of the
calculations based on this approach is exhibited elsewhere

by Singh [4].
2.2 Cash Flow Projections Based on Standard S-curves
Past cost information of completed projects have shown its

immense value in cost
planning during the development of design for approximate

cost estimation,
developing cost plan and for use in bidding after

necessary adjustment etc. Such an
information can also be utilised for establishing the cash

flow trends in different types
of projects and these in turn can be utilised for cash flow

planning of construction
projects from the view point of clients, contractors and

developers. Based on the
trends, standard cumulative percentage of value versus

cumulative percentage of time
curves (s-curves) can be evolved.
3 Nature and General CharacteristiCs ofinfrastructural Works
The construction of infrastructural works like drainage,

sewerlines, gaslines and
electrical cables are external works relating to buildings

which are highly susceptible
to many uncertamtles. For instance, weather conditions,

unforeseeable ground
conditions, terrain and topography of site, and the nature

of works. As the construction of infrastructural works is
completely exposed throughout
the entire project duration, flooding during rainy season

necessitates frequent
pumping of water and unnecessary making good. Likewise,

high water table coupled
with high tide (Singapore environment) can cause flooding

to excavated trenches in
certain areas. Cash flow trends for infrastuctural works

295 The congestion of underground services like electrical
cables, telephone lines, sewerlines, gas and water mains
under roads impose great difficulties especially in
creating space for underground cable installations. In
electrical installations, tunnelling work is required in
order to construct the pipe system to under cross
underground services, drains and culverts. The congestion
of the underground services is aggravated by the
constraints of having to install services at least 2 metres
away from existing trees. This requires services to be

installed close together which
results in overcrowding of the same. Diversion of

sewerlines from their proposed path of works to avoid large
cables
and other obstructions (boulders) is relatively common.

Laying works, especially cables in the city centre must be
carried out at ni'ght to
minimise traffic obstructions and noise pollution. This

requires sectional completion
which impedes the progress of work. Drainage construction,

like large culverts and canals can be an onerous task when
diversion of roads and traffic flow is essential,

especially within a city area. Diversion
of roads and traffic flow further impedes work progress.
4 Data Collection
Table 1 shows the sample size of various types of projects

used in the computation of
s-curves (Figs. 1 to 4). Table I. Sample Size of Completed

Projects Analysed Source Project Type Ministry of
Environment, Singapore Drainage Public Utilities Board,
Singapore
5 Mathematical Equations Sewerlines Electrical cables
Gaslines Sample Size 20 12 16 25
Based on the data collected, the best-fit mathematical

equations were established
between the cumulative percentage of value and cumulative

percentage of time for
various types of works and the same are shown in Table 2.

The general form of the
polynomial established was of the form Y = aX + bX 2 +

cX 3 + -----------+ Z where Y X a b Cumulative
percentage of value Cumulative percentage of time First
degree coefficient Second degree coefficient
296 Singh c = Third degree coefficient, etc z = Constant

The coefficient of correlation varied between 0.7103 to
0.9658 (Table 2) for
various works. Using the mathematical models,

computer-based soft wares can be written and
perfected to develop the cash flow projections as already

shown by Singh [5],
Trimble [6] and Tucker [7 to 9].
Table 2. Best-Fit Polynomials for Infrastmctural Works

Category of Project Electrical Sewer Gas Drainage cables
lines lines
First degree coefficient 0.3083 0.7339 -0.6036 10654
Second degree coefficient 2.4440 0.0123 15.6214 0.3136
Third degree coefficient -1.7774 1.8957 -50.7056 -0.1918
Fourth degree coefficient -1.6270 63.6506 0.0023
Fifth degree coefficient -27.5320 -0.2008
Constant 0.0375 -0.0212 -00017 0.0067
Coefficient of correlation 0.9384 0.9658 0.7103 0.9552
Standard error of estimate 0.3725 0.3598 0.4838 0.3359

Coefficient of detemlination 0.8806 0.9327 0.5055 0.9124
6 Cash Flow Profiles
Cash flow profiles for electrical cables, sewerlines,

gaslines and drainage works were
established for the data collected based on the established

procedures by Singh [4]
and the results are shown in Figs. I to 4 for the above

services. In each case,
statistical mean curve has been shown which in turn can be

used for projection of
cash flow for the respective works based on any given

contract and market
conditions.
6.1 Cash Flow Trends for Electrical Cables
The gradient of the statistical mean curve (Fig. I) shows

relatively constant rate of
progress at the initial about one-third of the project

duration. The rate of progress
increases when cable installation works commence

afterwards. Two projects (shown
dotted) displayed an extremely wide variance band from the

mean curve and the
remaining project curves.
6.2 Cash Flow Trends for Sewerlines
Fig. 2 displays the trends for sewerlines. The mean curve

has the usual
characteristics of an s-curve. Like electrical cables, the

progress rate is relatively
uniform at the beginning of the project, increases as the

project progresses,
presumably due to the installation of sewerpipes, and

consequently tails off nearing to
the completion stage. Cash flow trends for infrastuctural
works 297 In this case, the individual curves which are
identified as exceptional are the two curves below the
mean curve which deviate substantially from the other
project curves. 6.3 Cash Flow Trends for Gaslines
Fig. 3 exhibits a distorted mean s-curve for gaslines. The

double hump s-shape may
be attributed to the return of excess materials by the

contractors during the project
duration. It is the practice of the Ministry of

Environment (Gas Department) to issue
materials at the commencement of the project, so that

excess materials returned can
simply be credited back to the Board's account during the

updating process. This
explains the slow down in the rate of progress at the

35%-60% stage of the ptoject
duration. The sudden escalation of rate of progress during

the 60%-90% stage of
project duration can be attributed to the high value of

cathodic protection for
gaslines. Although cathodic protection is extremely

expensive, it is needed in certain
gasline installation
6.4 Cash Flow Trends for Drainage
Fig. 4 shows the best-fit mean curve for drainage works. It

is almost linear for about
the first half of the project duration. This is in distinct

contrast to mean curves in
other figures.
7 Comparison of Cash Flow Profiles
Fig. 5 shows the cumulative percentage mean value-time

trends for various works. It
can be seen that all works exhibit some consistency in
trends, except gaslines which
demonstrated a distorted s-curve. Initially, due to

mobilisation and arranging construction resources, the
cumulative
percentage of value is low as compared to the corresponding

cumulative percentage
of time, say upto about first quarter of the project

duration. Later, all works, more
or less follow the same trend except gaslines which showed

a distorted s-curve. Further, during about the first half
of the project duration, the rate of work done
for drainage works is greater than electrical cables. This

is due to the high value
work content required in the former for excavation, piling

works, machineries and
dewatering. However, between about 50% to 85% of the

project duration, the rate
of work done for drainage works slowed down, while

electrical cables and sewerlines
picked up at a faster rate. This may be the stage where

electrical cables are delivered
at the site and installed. Prior to completion, all the

three curves tailed off at different
rates, depending on the value of the ancillary works. At

first glance, gaslines deviates substantially from the
other services. The most
appropriate explanation for this is the highly specialised

work involved in installing
gas pipes compared to other types of projects. In addition,

the practice of the
Department in crediting accounts for excess materials

returned is unusual among the
other projects. Consequently a distinct double s-curve is

formed for gaslines.
298 Singh
8 Applications
Based on the mathematical polynomials established or

otherwise by using the
statistical mean curves (Figs 1-4), the cash flow

projections for electrical cables,
sewerlines, gaslines and drainage works can be established

using the contract and
market conditions from the view point of clients,

contractors and developers [I to 4].
9 Concluding Remarks
It is hoped that the established profiles for

infrastructural works in the form of mean
s-curves will be found useful for cash flow projections of

projects related to electrical
cables, gaslines, drainage and sewerlines in residential

developments The established
mathematical equations (Table 2) or mean s-curves (Figs.

1-4) can be used for cash
flow projections from the view point of clients,

contractors and developers
1. Cooke, B. and Jepson, W.B. (1987) Cost and financial

control jar construction firms. The Macmillan Press Ltd.,
London.
2. Harris, F. and McCaffer, R (1986) Modern Construction

Management. The Granada Publishing Ltd, London (UK).
3. Singh, Sand Phua, W.W. (1984) Cash flow trends for high
rise building projects Proceedings oj the 4th
International Symposium on Organisation and Management oj
Construction, Waterloo (Canada), pp. 841-54.
4. Singh, S (1995) Managing cash flow in the construction

industry. Proceedings oj the Inter-Faculty Conjerence on
Effective Management oj Construction Projects, compiled by
School of Building and Estate Management, pp. 1-35.
5. Singh, S. (1995) A computer model for financial resource

planning of high rise building projects. Proceedings oj
the International Cmiference on Managing Construction
Worldwide, London, pp. 337-48.
6. Trimble, E.G. (1982) Microcomputers in construction

management. BlIilding Technology and Management, Vol. 2,
No.4, pp. 11-13.
7 Tucker, S.N. (1984) Building project cash flows and life

cycle costing Proceedings C!f the International Cmiference
on High Rise Construction Techniques and Management jor
the I 990s, Singapore, ClB, National University of
Singapore, etc., pp. 48-61.
8 Tucker, S.N. (1986) Formulating construction cash flow

curves using a reliability theory analogy. Construction
Management and Economics, Vol. 4, No I, pp. 179-188
9. Tucker, S.N and Rahilly, M. (1988) A construction cash

flow model. Australian Institllte oj Building Papers, 3,
pp. 87-99. Cash flow trends for infrastuctural works 299
CULMULATIVE % VALUE 120
300 Singh CUMULATIVE % VALUE
150
100
50 10 20 30 40 50 60 70 80 90 100 CUMULATIVE %
TIME ~ BEST FIT EXCEPTION
Fig. 3. Cash Flow Trend for Gaslines CULMULATIVE % VALUE
120
Fig. 4. Cash Flow Trend for Drainage 120 100 80 60 40

20 CUL\1 ULA TI VE % VALUE ~ /. ~~ ~.~ / ~ ~ 10 20 30
Cash flow trends for infrastuctural works 301 ..~ ~~ 40
50 60 70 / ~ / / 80 90 100 CUL\1ULATIVE % TIME ~
ELECTRICAL CABLES SEWERLINES ~GASLINES -DRAINAGE Fig_ 5 .
Comparison of Cash Flow Profiles
1 Project procurement
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Determinants of Australia's Imports, Reserve Bank of
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into the Australian Construction Industry, School of
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3. Lindert, P. H., (1991) International Economics, Richard

D. Irwin, Homewood, III.
4. ABS (1994) Australian National Accounts: Input-Output

Tables Commodity Details 1989-90, Commonwealth of
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5. ABS (1994) Australian National Accounts: Input-Output

Tables 1989-90, (Commonwealth of Australia. Canberra.
6. Rawlinson, (1994), Australian Construction Handbook,

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7. Gray, H. P., (1976), A Generalised Theory of

International Trade, Mcmillan, London.
8. ABS (1993) Foreign Trade Australia: Merchandise Exports

and Imports, Commonwealth of Australia, Canberra.
PROCUREMENT OF A MOTORWAY A CASE STUDY BengtHansson
Department of Construction Management, Lund University,
Lund, Sweden Abstract When procuring a motorway of 18 lan

in length in Sweden afunctional contract was chosen,
(design and construction contract with extended operating
responsibility) i.e. the client procures the construction
of a motorway with associated operation and maintenance
for a seven year period after the project's completion. The
chosen procurement form was judged to be the most
favourable long-term solution for the road authority and
society. The procurement was primarily based on the land
acquisition plan as the only source of information. The
motorway was built between 1992-1994. An evaluation shows
that a functional contract gives the possibility of an
early build-. ing start, short construction time and
production adapted design. Overall production costs with a
traditional construction contract have, in this case,
been judged to be barely 8% higher than with the chosen
functional contract. If traffic benefit is included in
the conclusion due to completion being two years earlier
the cost for the general contract form is over 19 %
higher than the chosen functional contract form. Keywords:
Functional contract, motorway, procurement. Sommaire Des
sommes importantes ont ete investi dans l'aggrandissement
du reseau routier suedois, en vue de favoriser la
productivite du pays. Une autoroute d'environ 18 lans a,
de 1992 a 1994, ete construite pres de Nyk5ping. Lors de la
negociation avec les partenaires a ete choisi un contrat
dit "de fonction" (l'entreprise assurant 1a construction
dans sa totalite ainsi que la maintenance de l'ouvrage) ce
qui veut dire que Ie maitre d'ouvrage a achete une
autoroute faite pour une certaine densite de circulation
et avec cela l'entretien et la maintenance de la
construction pendant 7 ans. La forme du contrat choisi, a
ete considere comme, a long terme, la meilleure solution
pour Ie maitre d'ouvrage ainsi que pour la societe
d'etat. Le contrat a ete signe, en principe uniquement,
sur la base du plan de travaux. Une evaluation du projet a
ete realisee, suivant les techniques, la duree des travaux,
lorganisation et leconomie, pour obtenir une comparaison
avec un contrat de construction traditionel. Cette
evaluation montre que Ie "contrat de fonction" a donne'
les possibilites de demarrer Ie chantier plus vite,
d'ecourter sa duree et d'en planifier mieux la production.
Le cout total de la production avec Ie contrat de fonction
a ete estime a 8% moins cher quavec Ie contrat
traditionel. Si Ie benefice de circulation, 10rsque 1'0n
termine Ie chan tier deux ans plus tOt, etait inclus dans
les calculs de couts, Ie contrat de fonction serait 19,3%
moins cher (46 millions de couronnes suedoises) que Ie
contrat traditionel.
1 Introduction
1.1 Background
With the intention of developing procurement fonus and road

construction tech
niques as well as accelerating the expansion of the road

network, the Swedish Nation
al Road Administration Region Malardalen has negotiated the

realisation of a 18 km
expansion of the E4 to the motorway section comprising the

design and the construc
tion as well as operation and maintenance of the motorway

during a seven year

E & FN Spon. ISBN 0 419 22240 5. Procurement of a motorway
317
period. The contract will be carried out in partnership by

the Swedish National Road
Administration Production East and Skanska Mellansverige AB

(the largest contrac
tor in Sweden). The decision to build a new motorway was

taken by the government
in May 1992 and it was opened for traffic in September 1994.
1.2 Evaluation
Responsible for the evaluation of the construction project

has been Dr. Bengt Hans
son. The evaluation has been carried out focusing on the

technical, time, organisa
tional and economic differences obtained with a comparison

with a traditional pro
curement. The result of the evaluation is presented in

this paper and a more complete
report (1).
1.3 Terms
Some of the terms and keywords used in this paper are

explained below:
• Operation Operation refers to the necessary actions for

a road, bridge or traffic installation to
continuously have the functional characteristics it is

designed for.
• Function Such usability of necessary characteristics for

usability that can usually be estab
lished through measuring, testing or utilisation.

• Functional Contract Contract form in which essential
characteristics of the final product are defined
with (measurable) functional requirements and where

continuous operating responsi
bility is included for a number of years. A contract form

where the contractor has re
sponsibility for design as well as for carrying out the

work.
• Functional requirement Functions specified in measurable

terms.
• General Contract Contract form in which the contractor

normally has responsibility for carrying out
the entire construction contract.
• Design and Construction Contract Contract or

sub-contract where the contractor in relation to the client
is responsible
for the design and construction. Contract form in which a

contractor normally has
responsibility for designing and constructing the entire

construction contract. The
contractor has responsibility that the erected construction

also complies with certain
defined functional requirements. Some design and planning

for the program is done
by the client, but the large part of the detail planning

takes place under the contrac
tor's responsibility .
• Maintenance Maintenance refers to the implementation of

actions the purpose of which is to re
store characteristics of constructions, installations and

devices to the level intended
with the original design or with later improvements.
• Construction Contract Contract or sub-contract where the

client answers for the design of the project and
the contractor for the construction.
2. Functional requirement
2.1 Principles of a functional requirement
The function procurement is seen by many as a new

phenomenon for which there are
no developed routines for how the undertaking should be

formulated, evaluated re
spective how the functional requirement should be

described. It is also seen difficult
to see whether the demanded requirements have been complied

or not. The functional
contract form can however normally be managed based on the

tradition of design and
318 Hansson
construction contracts that exists. Parties with no

experience of design and construc
tion contracts most certainly also experience uncertainty

with functional contracts. The reason why many people see
the function procurement as a new contract form
is the functional requirements demanded with a functional

contract concerning
operations during longer periods and not only the

functional requirements with
commissioning. Generally there is reason to believe that

the client makes functional requirements
formulated as design and construction requirements,

because the operations procure
ment is new and unfamiliar. It is easier to formulate and

measure design and con
struction requirements. In cases where this is done the

scope of the operation
responsibility will decrease for the contractor. The
intention of the client in formulating a functional
requirement instead of a
detail requirement is to allow room for the contractor

carrying out the project to deve
lop his own technical solutions, which meet the demanded

functional requirements to
the lowest overall cost. In those cases the client requires

a certain specific design, for
example, a road surface of asphalt of a very expressed

quality, it is no problem to
formulate specific detail requirements within the framework

of a operations descrip
tion as long as the client is aware that one then takes the
functional requirements
from the contractor for these parts. The removal of

function requirements from cer
tain parts can affect the function of adjoining parts.
2.2 Functional requirement of this motorway project
When procuring this motorway project the client, the

Swedish National Road Admi
nistration Region Miilardalen, prepared a functional

description. In this functional de
scription was several detailed specifications about

designing and constructing the ro
ad. When the client describes in detail the product'S,

road's technical design, the
contractor will fulfil these and not develop better

solutions complying with more
generally formulated functional requirements. The problem

with operations procurement is to specify the requirements
that shall
be complied with during the period the operation is valid

(here the motorway for 7
years) and which requirements are to be demanded of the
road bed that is passed on
to the client (when the road is seven years old). In this

actual operations description
there are no limit values for when the road's operation is

considered to be fulfilled
and how these are to be measured. However, the client ought

to state for how many
vehicles per day the motorway should be constructed for

work. The client must
describe what should happen if the volume is different or

if the conditions change,
e.g. that studded tyres are banned. Under which weather

conditions the motorway
shall remain trafficable? What happens if several extreme

winters occur during the
operations period? Another problem is to produce an

estimatable basis for the functional contract. It is
difficult, for example, for the client to know how

extensive soil explorations that the
client must carry out for the tendering documents. The

results of the soil explorations
must be sufficient for enabling the contractor to dimension

and produce a tender. Yet another problem is the
construction's service life. Wooden piling under a road
and installation can, for example, last 7 years, i.e. the

length of time the contractor
has responsibility for the construction. However, the

client wants, of course, roads
and installations that hold significantly longer. Against

the background of the completed motorway project some
observations can
be made. Conditions in the form of laws and climatological

conditions are not clearly
established. For example, the laws regarding road
construction are not primarily for
mulated as a functional requirement but as design

requirement which leads to condi
tions for function sliding into design requirements for the

contractor. Procurement of a motorway 319 3. Design and
planning In this case a design and construction contract
(functional contract) was chosen. The . difference between
general and design and construction contract is exposed in
Fig 1. The structure plan with general respective design
and construction contract. Note that there is no time
scale in the figureit only illustrates the order and the
structure. Fig 2 shows the time schedule for design and
construction with a design and construction contract for
the studied project called NEWROAD 94, as it was
implemented, alternative general contract. The designers
and planners meant that "the land acquisition plan" must be
more complete and thoroughly worked out to make up a good
tender document for a functional contract than what was
the case here. In addition, it would have been preferable
to produce construction documentation for a part of the
work so that a quick building start was obtained. General
contract Design ~ Procurement Construction
o~----------~~~----------~)9~-------------------~ Design
and construction contract :rocurement~ Design ~ )00....
..... ....... .... , Construction .................. !"o
"'0 Figure 1. The structure plan with general respective
design and construction contracts. 1991 1992 1993 1994
ActIVItIes
Desi2n and construction contract
Actual course
Design
Stage 4.5 10 km
~tage 10 HS km
~tage 1.4 4.5 km
Detailed design stage
Land acqUlsition plan onstructlOn

Procurement l1li
General contract
IAlternatIve course
IDeslgn
Procurement IIIIIIIIIIIII
l onstrucUon
Figure 2. The time schedule for design and construction

with a design and construc
tion contract in the studied project, called NEWROAD 94, as

it was implemented,
alternative general contract.
320 Hansson
The designers' and planners' point of view should be seen

against the background that
the contractor in this project put the planners under

immense pressure with the inten
tion of producing documentation quickly and in a certain

order. Planning and design
was in this case carried out for approx. 1/3 of the road
when work as started. The contractor's point of view
should be set against this, i.e. it is more important
that the tender documents, land acquisition plan with

geotechnical findings make up
computable information, than it being planned. According to

the contractor, the
tender documents do not need to be so thoroughly worked out

as the planners believe,
but at least estimatable. The contract form seems to lead

to large planning and design input during a short
period. The documentation produced is approximately the

same as with a traditional
contract. The planners develop and learn more about
production due to the direct and
continuous co-operation with production. The administration

period will also supply
further knowledge and experience to the planners and

designers. A representative for the client, the Swedish
National Road Administration Region
Miilardalen, expressed the following opinion of the work

carried out in this project,
NEWROAD94:
• This functional contract is not representative for the

contract form's problems and possibilities. This is
because the actors, especially within the Swedish National
Road Administration previously worked in the same
organisation and therefore know each other well. Out of
habit the planners took contact with the client directly .
• In the actual project the designers and planners had won

a "head start" through the planning of the construction
documentation being started before the order of the
contract.
• The requirement of producing related documentation

resulted in the planners not being able to leave
"everything" to the construction site's personnel to solve
and design the documentation must at least be drawn up
afterwards within the framework of the contract, and given
to the client to show how the construction was carried
out. The land acquisition plan gives the conditions for
planning irrespective of the
procurement form. The road zone should probably be extended

to give more freedom
to the contractor and planners when placing the road bed

vertically and laterally. Amongst those issues remaining
are the questions concerning the scope of the
geotechnical information required to provide estimatable

information for tendering. The planning phase's content
and result has changed with a functional contract in
relation to a traditional implementation. The introductory

phase of the planning work
however took place with the Swedish National Road
Administration Region
Miilardalen as the client. The designers and planners have

been interviewed on their experiences. Below is
presented the advantages and disadvantages of the

functional contract (design and
construction contract) formulated by the undersigned and as

approved by the plan
ners:
Advantages
• There is always someone on site with whom one can discuss

the different technical solutions before selecting a
solution.
• The selected solutions due to the co-operation between

those responsible for production are of a better quality
and result in lower overall costs.
• In some cases the production personnel's needs have

increased the planning rate.
• The conditions for exchanging experiences are more

favourable with a design and construction contract form
than with a traditional construction form.
• The possibilities are greater with a design and

construction contract for so-called active design but have
not been utilised in the project.
• The construction phase started one year earlier than what

a traditional general contract would have allowed.
Procurement of a motorway 321
• The intense time schedule also resulted in a need of

documentation for several different parts of the road
route at the same time meaning planners work under pressure
to produce the documentation quickly. This led to lower
planning costs and short design and planning time.
Disadvantages
• Planning has been juggled around to quickly receive

documentation for different sections. Site and project
management have changed the order of included activities
while work was in progress which also resulted in the need
to change the planning order. Planners have had to adapt to
production which initially made scheduling and
implementation of planning difficult.
• Planning order was governed by the order production

required documentation and not in which order had been
most logical to plan.
• The intense time schedule also resulted in a need of

documentation for several different parts of the road route
at the same time meaning planners work under pressure to
produce the documentation quickly. This led to difficulties
for the planners but at the same time helped planners to
develop. The risk of mistakes during the intensive
planning increased.
4. Organisation
The responsibility forms with a traditional general

contract respective with a design
and construction contract are evident from the

organisational chart in Fig. 3. In the
figure companies and organisations have been placed under

the appropriate functions.
The design and construction contract refers to the

responsibility form with the NEW
ROAD 94 project such as it was really carried out and in

the organisational chart for
the general contract the same companies have been entered

for the sake of compari
son. The most important difference between both

responsibility forms is that the cli
ent with a design and construction contract receives one

responsible contractor and
agreement party for the operation and associated stages

such as planning, construc
tion and maintenance. The client sees the following

advantages/disadvantages with the functional contract
(design and construction contract with extended operating

responsibility):
Advantages:
• Early building start can be obtained as work can start as

soon as appropriate parts of the construction
documentation are completed.
• Short construction time as planning and construction can

partly take place in parallel.
• The client only has one agreement with one responsible

company.
• The control requirements can be reduced during

construction if the operation is to be provided over a
number of years.
• Durable technical solutions as the contractor shall

fulfil the operation for a long period.
• The co-operation between planners and contractor should

give lower costs to meet the required operation, better
conditions for production adapted solutions.
• The system for the exchange of knowledge created at the

contractor which improves the conditions to provide
operations at a lower cost.
• Good conditions created for technical development as

planning, contractor and operation are all in the same
organisation.
Disadvantages:
• Functional requirements difficult to formulate.
• The evaluation of the tender can in some cases be

difficult to do as the client shall judge to what degree
the contractor can live up to his undertaking.
• The system for the exchange of knowledge is created at

the contractor and not the
322 Hansson Client (Orderer) The Swedish National Road

Administration Region Malardalen General
contractor
The Swedish Natio

nal Road Adminis
tration
Production East +
Skanska
General
contract Operations The Swedish National Road

Administration Production East Planning The Swedish
National Road Administration Production East Operations
Planning The Swedish The Swedish National Road National
Road Administration Administration Production East
Production East Client The Swedish National Road
Administration Region Malardalen Design and
construction contractor The Swedish National Road
Administration Production East (and Skanska) I I
Construction work The Swedish National Road
Administration Production East Skanska Design and
construction contract
Figure 3. The organisational chart showing the

responsibility forms design and
construction contract for the project and the optional

general contract.
client.
• Reduced number of companies that can submit tenders. The

site management, object manager and deputy object manager
have been inter
viewed regarding their experiences. Below is presented the

advantages and disadvan
tages of the functional contract (design and construction

contract) formulated by the
undersigned based on the experiences of this project and

some interviews and as such
approved by the contractor:
Advantages:
• The number of companies that can submit a tender is

reduced so that the probability of the submitted tender
winning the contract increases .
• Early building start can be obtained as work can start as

soon as appropriate parts of the construction
documentation are completed.
• Short construction time as planning and construction take

place in the same organisation and can thereby be carried
out partly in parallel.
• The contractor has responsibility for the entire project,

that is, planning and conProcurement of a motorway 323
struction.
• The co-operation between the planners and contractor

ought to give lower costs to meet the demanded operation,
better conditions for production adapted solutions.
• The system for the exchange of knowledge created at the

contractor which improves the conditions to provide
operations at a lower cost.
• Good conditions created for technical development as

planning, contractor and operation are all in the same
organisation.
• Work is targeted to achieve a product of the right

quality instead of searching for loop holes in the
contract documentation as is the case in some general
contracts.
Disadvantages:
• Functional requirements up until now have been unclear or

lacking, which has led to the contractor formulating the
wording himself. In turn this results in one choosing
unnecessary costly solutions.
• Evaluation of the tender can in certain cases be

difficult as the client must judge to what extent the
contractor can live up to his undertaking.
5. Construction
The functional contract naturally brings about a greater

tendency for the contractor to
take a responsibility that the operation is fulfilled

directly in connection with the con
struction without further costs for repairs and
maintenance. This has, in this case, re
sulted in a higher quality road bed being chosen (thickness

and choice of ballast in
the surface course). In addition there is a greater

tendency with the chosen contract
form to dig out doubtful material so as not to risk

settlements.
6. Economic consequences
The planning phase has through the design and construction

contract procurement
given a quicker construction start than with the use of a

traditional general contract
procurement. When implementing the project, the client

selected to run it as one large
project instead of dividing it up into a number of smaller

ones. Thereby the produc
tion time was shortened by approximately one year, Fig 4.

The choice of the procurement form and the organisation,
i.e. a functional contract
or a design and construction contract with extended

operating responsibility has giv
en a quicker building start by one year compared to a

traditional general contract and
besides a one year shorter overall construction time.

Below there is a cost compilation, Table 1, for the
project for the procurement
forms, functional contract respective general contract. A

shorter construction time gives in itself a reduction of
the joint cost on the con
struction site that are time dependent by SEK 4 million.

The choice of production
adapted solutions probably lead to a cost saving in the

region of SEK 8-10 million. The capital costs during
planning and construction have been calculated to approxi
mately SEK 38 million with a functional contract respective

SEK 58 million with a
traditional implementation. The overall two year shorter

project time gave capital
costs that were not quite SEK 20 million lower than what a
traditional general con
tract would have given. The benefit of the motorway has

been valued by the Swedish National Road Ad
ministration to approximately SEK 23 million/year or SEK 46

million for two year. In summary a calculation shows that
the order with the selected method of a func
tional contract needs to invest 436 404 = SEK 32 million

less than if a general con
tract had be chosen. The investment is nearly 8 % higher if

a general contract had
been chosen. A traffic benefit is obtained through the two

year shorter project period.
The total effect becomes SEK 78 million (19.3%).To this the

client's lower costs for 324 Hansson Design and
construction contract 400 1 ~ ............ . 20 0 0 +
__ ---=<:f6:="". F· "" .. ",,< ",,< ",,<:a:: ",,: :",,:
:",,: :",,: :",,: :'T: ",,: :c:: ::c:: :c:: :0:: i-_--,
;:::;;:;;;;;;;; I D Constr. costs [ill] Planning costs
General contract '-0 '-0 'f '-0 iJ; tv UJ Vl 6 6 6 6
6 '-0 'P 'P '-0 'P W UJ UJ W UJ 0 0 0 0 0 ID
Constr. costs [JIJ] Planning costs Figure 4. Cost
consumption with a design and construction contract
respective general contract. Table 1. Cost summary
Cost Summary
Project costs excl. runmng and maintenance
Capital costs during planning and construction
Time dependent common costs
Production adaptation actions
Total project cost inc!. capital costs

Traffic benefit with two-year shorter project period
Total Functional General contract contract SEK millIon

SEK millIon 366 366 38 58 4 8 404 436 7,9% 46 404
482 19,3% procurement, management and control with the
selected procurement form should be added.
7. Conclusions and experiences Based only on one practical

case it is relatively limited conclusions and experiences
that can be generalised. Here are a few opinions regarding
generalizability. Procurement of a motorway 325
Knowledge changes
Each new operations procurement that the parties carry out

will give new experienc
es. They give the parties involved a build up of knowledge.

This will be utilised in
the next project irrespective of whether it is procured as

a functional contract or not
The effects of the know ledge development is greater the

more operations are encom
passed by the contract (planning, construction as well as

operations and mainte
nance). The functional and design and construction contract

forms are a more educa
tional organisation that the general contract form. This

experience is generalizable.
Earlier start and short construction period
The design and construction contract and the functional

contract (comprising plan
ning and construction) give the possibility to plan and

construct simultaneously,
which in tum gives the possibility of an earlier building

start. Simultaneous planning
and construction normally give a quicker building start and

a shorter overall project
time than a traditional implemented general contract. This
experience can be general
ized but it should be noted that an early building start

and more or less parallel con
struction can also be carried out with a very divided

contract. However, using the first
solutions produced by the planners, which used crushed

material in the road bed and
surcharge loading with bad ground conditions, it would not

have been technically
possible to construct in such a short time with a general

contract as with a design and
construction contract.
Reduced overall costs
The overall investment cost is reduced if the construction

period is shortened through
capital costs and time dependent joint costs being reduced.

This element is generaliz
able. However the time dependent joint costs rise if the

construction period is short
ened too much. A shorter construction period is achieved in

this case through the
choice of a design and construction contract instead of a

general contract. The possi
bility of further cost reductions increases through

production adapted planning. This
experience is also generalizable.
Functional requirement
A superficial analysis of the functional requirements

included shows the need of ex
tensive development input to produce a system of how

functional requirements
should be formulated for a road and motorway project. This
is a generalizable experi
ence.
Residual value
Processing of the residual value when the contractor hands

over to the client needs to
be studied further.
Administrative experiences
The administration of functional contracts contains a

number of elements that are not
sufficiently clarified to work under other circumstances

than those taking place in this
contract.The system for evaluating tenders regarding

functional contracts should be
developed. In those cases the evaluation is seen as too

subjective by the involved
parties the procurement, seen from a European

point-of-view, can be questioned.
1. Hansson B (1995) A motorway as afunctional contract,

Evaluation of the Gammelsta project, Department of
FRENCH BUILDING PROCUREMENT
APPROACHES INPUT TO THEORY
AND PRACTICE
G.S. Birrell
Centre for Property Development and Management, University

of
Manchester Institute of Science and Technology,

Manchester, UK
ABSTRACT
After a brief introduction to the building procurement

process, this paper will present three major
approaches to building procurement in France. These are

(a) Equipement/Grand Project, (b)
Complex/Large and (c) Simple/Small. Each serves a

different segment of the building market as (a)
is primarily for large, prestigious government backed

projects, (b) is for complex and large commercial
projects and (c) is for simple, small, projects usually

with local or vernacular constituents. Each
description will be supported by a diagram in which there

will be (i) the set of phases and sub phases
of the approach alongside (ii) the required roles and their

lines of communications. This unique mode
of presentation greatly assists the understanding of each

approach as to its degree of complexity and
how to carry out the work required in each major phase of

the whole procurement process under each
approach. After describing these three French approaches,

the paper will consider their salient features
and then go on to relate them to the major UK and USA

building procurement approaches and discuss
where the latter could benefit from considering inclusion

of some major features from the French
approaches along with required changes to the UK and USA

approaches to enable inclusion of these
French features.
SOMMAIRE
Apres une introduction breve au processus d'obtenir les

projets de construction, ce papier presentera
trois facons principales d'aborder I'obtention des projets

de construction en France. Elles sont (a)
Equipement/Projet Immense (b) Complexe/Grand et (c)

Simple/Petit. Chaque description sera
accompagnee d'un diagramme qui inclura (i) Ie groupe de
phases et sub-phases de la faeon d'aborder
la question et (ii) les roles necessaires et leurs moyens

de communication. Le papier se developpera
en considerant les traits principaux des trois facons

francais d' aborder les projets de construction, et
en les comparant aux methodes britanniques et americaines.

Le papier discutera les moyens duquels
Le Royaume-Uni et l'Amerique pourraient profiter des idees

francaises, et comment ils pourraient
s'adapter pour en incorporer. Le papier est tire des

resultats d'un projet de recherche pour Ie gouvernement
francais (I) dont
I'objet est de demontrer les faeons principales d'obtenir

les projets de construction en France et au
Royaume-Uni. The paper is drawn from the results of a

research project for the French government (I) to map
out the major building procurement approaches in France and

the UK with especial consideration of
the relationships of work and role teams in the Design,

Contracting and Construction phases and
present comparative views on these approaches from

architectural professionals in both France and the
UK.
Keywords: Construction, design, features, French, phases,

procurement, roles, transfer.


E & FN Spon. ISBN 0419 22240 5. Building procurement 327
The Conceptual Building Procurement Process
The simplest presentation of the building procurement

process is the set of required phases in that
process in a realistic, general sequence (2). However, it
should be realised that for some projects
under some circumstances some of these phases may be

carried out in parallel in time or different in
sequence from these presented here. On some projects some

phase or sub phase may be ignored for
an array of reasons from ignorance through to superb

knowledge of building procurement. Generally, more work
and expenditure of time and money is created in later
phases and lack of
quality in the end product by poor work or lack of

definition in earlier phases. Also, the choice of
a procurement approach which is inappropriate for the

project situation can increase cost and duration
of the procurement process and reduce quality of the end

product by putting inhibitions on the
satisfactory use of the completed building over its many

years of subsequent use. IDEA NEED IDENTIFICATION ~
FEASIBILITY STUDY DECISION ~ CHOICE OF PROCUREMENT
APPROACH ~ DESIGN DESIGN '\v CONTRACTING '\v I
CONSTRUCTION DELIVERY ~ I COMMI~G 1 USE
328 Birrell Each of the following set of phases is

described only briefly to introduce the concept of the
building
procurement process within the concept of building

procurement having to deal with decision, design
and delivery (3).
Idea/Need Identification. Defining the need for a future

building and the what, why, where etc
characteristics of the future building in functional,

aesthetic, economic and physical and other desired
features.
Feasibility Study. A study in economic and social terms of

the whole proposed building project so that
it can be evaluated objectively usually as one economic
alternative for the expenditure of capital
investment by the client for the project.
Choice of Procurement Approach. No later than the

completion of the feasibility study a choice
should be made on which alternative approach to building

procurement will be most appropriate for
the procurement of each specific project. The choice

should be made at this time because it has
implications for hiring of agents and communication

patterns among agents throughout the remainder
of the process. All of these can affect the effectiveness

and efficiency of both the building procurement
process and the end product building as a useable asset by

client and users.
Design The phase in which the design of the building to be

built will be crystallised. It will usually
comprise the sub phases of (a) project definition

(brief/program) by the client and advisors, (b)
conceptual design creating the image externally and

internally of the building/end product and (c)
design development which carries the design concept to the

stage of complete drawings and plans from
which the building can be built.
Contracting This phase is in three sub phases parts (a)

creating the contractual documents by the
client and his agents (b) estimating and bidding by

contractors and (c) evaluation of bids and selection
of contractors.
Construction The process and management of the actual

construction work including the flows of all
resources to and on the site under the contractual formats

and the chosen approach to building
procurement.
Commissioning The processes of checking that what has been

built is in good working order for use
of the building and ensuring that all building systems

operate effectively for the user. This may include
the entering of the building by the various users and

their furniture etc as it becomes a useable,
functioning asset for the project client and its occupying

users.
USE The whole raison d'etre of the building is what it is

used for by the various parties involved.
This can span from economic and financial for the client to
functionality and satisfaction of the users
of the building to the aesthetic and social compatibility

or signal to the surrounding neighbourhood and
public at large. Building procurement 329
THE THREE MAJOR FRENCH APPROACHES
Each of these descriptions will comprise an overview and

consideration of the work in each of the
phases of Design, Contracting and Construction as the

phases of which are the focus of building
procurement
French Equipement/Grand Projet Approach (see Appendix 1 for

diagram)
Introductory Overview and Client
This approach is used primarily on major public and

government projects in which government or
national prestige and image considerations are involved or

the building will be a major element of its
urban scenario. This will have effect over a very long

duration of use and usually there will be public
access to such a building and considerable influence from
the building upon the public and its
surrounding location. A major feature is that the

selection of the design concept is by competition among
proposing.
designers. This is usually rather separate from the

subsequent carrying out of the remainder of all
project procurement activities including design

development. This approach gives considerable
consideration and benefit to long term image

appropriateness and aesthetics of the future building and
much less consideration to costs and duration of

procurement and maybe even of functionality of the
bUilding.
Design Phase
At the beginning of the design phase the maitre d'ouvrage

(client) will hire a maitre d'ouvrage delegue
(project manager) who is skilled in handling all

management aspects of the design, contracting and
construction of such prestigious buildings. Selection

criteria will include the past experience, capability
of interaction with government officials at many levels,

handling design competitions, design
development, contracting and construction. The design

phase is in two parts (a) the competition to select the
design and to a lesser extent its
designer and (b) the development of the concept design to

enable contracting to hire the construction
contractors. The design competition sub phase begins with

a considerable amount of work by the project
manager to establish the client's needs, often from many

parts of a large government department and
fairly frequently from many levels of many government

departments plus from outside agencies which
have related interests to the use of the subsequent
building and it's image and use. This work
culminates in the production of a project brief/program to

which the competing designers respond by
providing their conceptual design. Such a brief/program is

often is of a complex and voluminous
nature. Another part of the design competition is (a) the

finding or selection of the competing designers
and (b) the process of selection of the winning

concepteur/maitre d'oeuvre (conceptual designer).
Both of these parts will usually be under the guidance of

the project manager and his organisation will
consult with the client on the format of the competition.

The various designers will each produce a
design in response to the brief/program and each will

primarily and perhaps exclusively be judged by
its external and internal conceptual image with perhaps

some consideration of its functionality. The
selection of the design will usually be by a panel of

experts or interested parties with degrees of
national prestige depending on the level of importance of

the end product building to "La France", and
there will be little consideration of the cost or

constructability of the design. This part of the design
phase ends with the selection of the conceptual designer

by the selection of his design submission.
While the chosen/winning conceptual designer now joins the

project manager on the "project team" it
is reasonably frequent that his work has been mostly

completed by the creation of the design concept
which he submitted in the competition. His position in the

project team on subsequent phases of
procurement may be mostly consultancy to ensure that what

follows as design development,
contracting and construction remains faithful to the

competition winning design concept. The major purpose of
design development sub phase is that a feasible working end
product can
be built. Added to the project team for this is the role

of the bureau d'etudes (design development
agency) along with the array of required specialist

designers in that organisation or as ad hoc specialists
330 Birrell as would be needed for any prestigious, large

and complex building. In this design development work the
design concept will be developed to the design of a full
building. While there may be some
consideration of constructability and construction cost

these will be relatively weak compared to
ensuring that the design concept is faithfully expressed

throughout the developed design. The
conceptual designer will be consulted to ensure the

fundamental compatibility of the design to it's
concept. The design development agency will be appointed

usually as a result of the combined views of the
client and the project manager with some input from the
conceptual designer. The past experiences
of the design development agency, their speciality

expertise for types of buildings and also the
familiarity of and degree to which these various roles

have worked together or is anticipated they will
work together are the major parameters in choosing the

design development agency for a project. It may be that
in design development that a l'enterprise general (general
contractor) will be brought
into the team as a construction advisor on at least an

equal footing with the design specialists
Design/Construction Interface (Contracting/Tendering For

Construction)
Towards the end of the design development there will be an
appraisal of possible general contractors
for the construction work by the whole of the clients team

of agents. Generally selection of the general
contractor will be in the form of a lump sum competitive

bid from a chosen set of general contractors
for that position on the project team. Each bidder will bid
for the construction of the whole building
including the use of their own subsidiary production

propre (trade contractors) and other required sous
traitants (free standing sub contractors) for each required

lot separe (sub trade). While total bid price will be a
consideration in selection, again the delivery capability
and
experience on a project of this type, size and complexity

and previous interactions with the client and
his agents of each building general contractor will be

seriously considered in that selection and may
be the deciding factors.
Construction Phase
The construction work will be carried out by the winning

general contractor and his sub contractors.
However, this construction contractor will be part of the

network of roles which formed the team of
managers and design developers prior to him being

contracted to construct the work. Most likely there
will be considerable amounts of interactions among these

roles as the developed design and its
construction process intertwine with each other. This may

mean a fragmented construction process
with a considerable number of what would be termed

change/variation orders with their price and
duration effects on the final price and completion dates.

However, it seems that these matters are
expected as a normal part of interactions and are settled
out among these roles during construction.
Also, as the client is less concerned about the cost and

completion date of the building than he is
concerned about the quality of image of the end product

throughout its future life in that location or
neighbourhood, there may be some concern about major (but

not minor) cost increases and less concern
for time extensions to completion dates.
French Complex/Large Approach (see Appendix 2 for diagram)
Introductory Overview and Client
This approach is used primarily on large, complex

projects, mainly but not exclusively, for private,
commercial maitre d'ouvrage (clients) or the client may be

a group of private clients or a promoteur
(property developer). The objective is for a balanced

concern between economics, functionality,
procurement duration, and aesthetics. This approach tries

to balance the provision of an attractive eye
catching image for customers and functionality of the

building over its life with concern for capital
costs and duration of procurement to meet a market demand

for its use.
Design Phase
The design work in this phase is usually of a continuous

evolving nature from conceptual design
through to completion of design development with all

appointed roles participating usually under a
"rolling" leadership from within the team of concepteur

(conceptual designer) through to the bureau
d'etudes (design development agency) while the maitre

d'oeuvre (architect) and maitres d'ouvrage Building
procurement 331
delegue (project manager) participate throughout the

process. The promoteur/maitre d'ouvrage
(property developer/client) will also be involved during

the design process and its interactions with the
three major parameters of quality, cost and time. In

addition the client might well have expert
knowledge and as a client of a commercial nature be

vitally interested in balancing aesthetic appeal,
minimising cost and minimising duration of procurement.

There can be variations in the execution of
the design work by selecting professional roles either

simultaneously or in different sequences. This phase
begins with the property developer/client hiring a project
manager who is capable of
balancing out the above objectives and managing all the

required professionals and contractors in the
procurement process. Usually, the brief/program for the

design will be produced by these two parties
and present the specific, complex objectives of this

project for the designers of the building. The
production of the brief/program may be aided by the

architect if he has been hired by that time. The design
process will be usually a continuous flow of conceptual
design and then design
development or one which matches the needs of the

particular project or its clients needs or
circumstances. The many design decisions will be guided by

the client and the project manager seeking
the best balance for the project between the major

objectives of an attractive building, a reasonable
capital and functioning expense and a minimum procurement

duration. There will be careful consideration in hiring
the conceptual designer by either (i) competition or
(ii) by appointment or (iii) as a member of the team of the

architect. The relationship between the
architect and the conceptual designer has to be carefully

set out and managed if both are hired to the
project team as separate roles. Another alternative is

that only one of them is hired and works with
the design development agency to carry out the whole design

process. The work of the conceptual
designer will be primarily dealing with the external

facade of the commercial building with maybe
some considerations of the aesthetics of the internal

areas, especially those to which the public is
exposed. A l'enterprise general (general contractor) may be

brought in as a member of the design
team to assist their work. The capability of each design

role participant to professionally deliver the required
service for that
project to the client along with, and traded off with,

their ability to coordinate with the other role
participants on the team will be major factors in their

selection by the client advised by the project
manager.
Design/Construction Interface (Contracting/Tendering For

Construction)
Towards the end of the design development there will be an

appraisal of possible I' enterprise generals
(general contractors) for the construction work by the

whole of the clients team of agents. Generally
selection of the general contractor will be in the form of

a lump sum competitive bid from a chosen
set of general contractors for that position on the

project team. Each such bidder will bid for the
construction of the whole building including the use of

their own subsidiary production propre (trade
contractors) and other required sous traitants (free
standing sub contractors) for each required lot separe
(sub trade). Alternatively the property developer may

negotiate with one or more general contractors,
especially if an overlap of construction with design is

desired. While total bid price will be a major
consideration in selection, again the delivery capability
and
experience on a project of this type, size and complexity

and previous interactions with the client and
his agents of each general contractor will be seriously

considered in that selection and may be the
deciding factors.
Construction Phase
The construction work will be carried out by the winning

general contractor and his sub contractors.
However, this construction contractor will be part of the

network of roles which formed the team of
managers and design developers prior to him being

contracted to construct the work. While the
commercial client is concerned about the cost and

completion date of the building he is also concerned
about the quality of image of the end product throughout

its future life in that location or
neighbourhood. Thus there is a pressure to minimise change

orders in the construction process which,
in tum, generates pressure to have a complete design and

contract prepared before bidding by the
general contractors. Most likely there will be considerable

amounts of interactions among all project
roles as the developed design and its construction process

intertwine with each other. However, it
seems that these matters are expected as a normal part of

interactions and are settled out among these
332 Birrell roles during construction. French
Simple/Small Approach (see Appendix 3 for diagram)
Introductory Overview and Client This approach is mainly
used on relatively simple or small or local projects where
the client is usually not complex and the construction
resources available and required are local and may be
generalised in skills. Usually, the client for a simple
project may only require or seek the services of one
local, relatively general agent to advise and control the
whole project for him. The client's concern or objectives
may be of domestic scale, maybe with vernacular
compatibility to its surroundings as well
as meeting the available budget of the small client. Such a

client may require considerable advice from
his agent on what he needs as a design and as a project as

well as hiring his ability in management of the phases of
the procurement process
Design Phase
At the beginning of the design phase or before it, the

maitre d'ouvrage (client) will hire by appointment
a local cabinet d'architecture (architect or general

building agent) as his primary advisor and manager
of procurement. Usually the architect will produce a

design brief/program either in writing or verbally with the
client after discussions with the client. The client

probably having little knowledge of building designs
and procurement and may be primarily concerned with not

exceeding his budget and having a design
that is comfortable to his needs and fitting in to the

neighbourhood. The conceptual design will be
produced by the architect, discussed with the client and

adjusted to suit the client's subjective opinions.
Then the architect will develop the design and produce the
documents required for
contracting/tendering for construction. Probably to a large

extent this design will contain features
which are compatible with the local architecture and be of
components available in the local
marketplace. These constituent features of the building

will also be chosen by considering the
capability of local tradesmen to carry out the work. All of

the design will tend to be a trade off
between the needs of the client and the capabilities of the

local construction trade contractors, which
is an ingredient in maintaining of the vernacular of the

neighbourhood and locality.
Design/Construction Interface (Contracting/Tendering for

Construction)
During this phase or towards the end of design (or perhaps

shortly after his own appointment) the
architect will advise the client on the appointment of a

construction pilote (site inspector/manager) who
will supervise the quality and execution of the work as

well as guide and coordinate the work being
carried out on site. The site manager is probably a former

high quality tradesman familiar with all
trades works and who knows and is known by all the local
sub contractors. The architect usually
forms the construction team from the local sous traitants

(sub contractors) for each lot separate (trade)
although the client may have to begin construction work

with only the estimate of cost of some of the
trades which enter the construction process later in that

process. The architect will consider the qualities of the
various sub contractors in each trade required for
the project. He will advise which subcontractors in each

trade should be called on to bid for the work
in each trade given their skills, current work load and his
experience of their performance on past
projects. He will then call for competitive bids from these

sub contractors for each trade either all at
the beginning of the construction process or for each trade

prior to it's work beginning in the
construction process. He may negotiate the contracts for

some specifically required aspects of the work
and may take into consideration work loads of required

local subcontractors in making his decisions.
Construction Phase
The construction work will be carried out by the team of

sub contractors hired and it will be managed
primarily by the site manager with the architect operating

as overall supervisor and linkage to the
client. Usually on a project of this nature the work is

relatively simple and suitable for local skills and
it's design will have been produced with that in mind. It

may contain parts which are of a vernacular Building
procurement 333 nature by a local specialist but that
situation will have been included in the design prior to
contracting
and construction. The construction process for such a

project will usually be on a relatively small site
and thus it may be that construction work is somewhat

sequential as only one or two sub contractors
may have work space on site simultaneously.
Salient Features of Three French Approaches
Equipement/Grand Projet Approach
The salient feature of the Equipement/Grand Project

approach is that a design concept for a building
of national prestige lasting for decades will be put in

place at the end of the procurement process. The
image/concept component of the building during it's

subsequent use is the primary objective of the
client and the procurement team. The cost and duration of

procurement are of considerably less
importance than maintaining the original design

image/concept under this approach. This creates
mainly a procurement management issue in the design

development sub phase which the requires
considerable resistance to simplifying the winning

conceptual design to reduce the cost or the
construction duration or simplify its constructability. The

design developers in France adhere to
developing the winning design concept rather than

simplifying it for ease of procuring the end product. It
is probable that a great part of the complexity of this
approach comes from having to interact
with multiple clients i.e. the government agencies etc.,

as the project client. Their large numbers,
different levels and also inclusion of the opinions of

relative non government agencies in the thinking
of the involved government agencies on the end product and

building procurement can pose
considerable difficulties for the procurement team,

especially in the very early sub phases of creating
the design brief/program and managing the design

competition and ensuring the user needs are satisfied
in the beginning of design development.
Complex/Large Approach
The salient feature of the Complex/Large Approach is the

difficulties in striking a balance between (a)
providing the image/concept desired by the commercial

client for the market place and (b) the cost
minimisation and procurement duration of a purely

commercial project. Thus the scope of the image/concept
aspect is usually only for the external facade of the
building
with perhaps some similar consideration of the internal

public areas. Also, all of this image/concept
work has to be carried out within the strictures and

objectives of a pure commercially driven end
product which has to make a property development profit.

As such it's procurement is probably more
complex to manage and create a design wisely because of

the above difficult interface having to be
satisfied within a desired short time window. However, that

the property developers/commercial client
is relatively closely involved in design and contracting

can provide faster and more explicit decision
making by such a client and the design and contracting

team. Indeed this can induce continuity,
overlapping and combination of design and contracting.

Nonetheless, if such a client is of a multiple
client nature the resolution of such speedy decision

making may benefit from having one prime client
who coordinates the other clients and the procurement

process.
Simple/Small Approach
The salient feature of the Simple/Small Approach is that

the end product is simple and small and is
usually required in a small town or suburban or rural or

semi-rural location. To achieve a balance
between the desires of a client in such a location for

such a building as to it's quality, cost and duration
will primarily require the services of someone who not

only can design the building but also knows
the local market participants among the array of locally

available building trades and sub contractors
including their current and future work loads and

particular work strengths and weaknesses. Such a
role player is a local architectlbuilding manager and

therefore he is the focal role in all phases of the
whole building procurement process.
334 Birrell
Transfer of French Procurement Constituents
To the UK and USA Procurement Approaches
There appears to be three major features of the French

approaches which could benefit the UK and
USA approaches.
Conceptual Design
The major feature in the French approaches which could

benefit UK and USA projects is the
considerable concern for the quality of the conceptual

design and it's effect on the activities
surrounding the building/end product during it's subsequent

use and lifetime. Put simply, that so many
buildings in Paris (and other French cities) have been

procured under this prinCiple may lead to the
French urban scenario of vistas and unique images of

buildings. It can be this concern for conceptual
design in the procurement process which makes visual

excitement and stimulation in French cities and
expectation of what might be round the next street corner

in Paris. When compared to the relatively
prosaic urban scenarios in the UK and USA, stimulates

thoughts and poses the question "how has this
difference come to exist and why do French urban areas

have such architectural excitement which is
considerably less so in UK and USA urban areas?" It is

suggested that the differences between
building procurement in (a) France compared to (b) the UK

and USA enables this visual excitement
of buildings and vistas to be untrarnrnelled by somewhat
prosaic considerations of capital costs and
procurement durations.
Project Management
Another major feature of difference in building

procurement in France from the UK and the USA is
that in France a project manager has been used for decades

whereas in the UK and USA this concept
is recent, perhaps at most, of some two or three decades in

the USA and more recently in the UK.
In the EquipementlGrand Project and the Complex/Large there

is the maitre douvrage delegue and in
the Simple/Small there is the cabinet d'architecture, both

of which are project managers with the
knowledge and expertise appropriate to manage these very

different types of project. Perhaps just as
the project manager becomes a more normal feature of

building procurement in the UK and USA will
enable the other French procurement characteristics of (i)

maintaining the design concept throughout
procurement and (ii) consideration of availability and

skills in the local construction market place as
a creative positive force in the design of buildings to

become more central in building procurement in
the UK and USA as well as providing (iii) linear

coordination during the whole building procurement
process.
Design Competition
The third major feature in the French approaches which

could benefit the UK and USA is the use of
the design competition to select the designer, or more

correctly to select the conceptual design. In the
UK and USA the cornmon approach is to appoint the
architect/designer on the basis of his past record
and experience and then he carries out the design work for
this project which may include writing the
brief/program but certainly producing the conceptual design

as well as design development and may
continue into the creation of the contract documents at

the beginning of the contracting phase. In France the
client and advisors prepare the brief/program and it is
used as the call for conceptual
designs in a competition which can be closed or open. Thus

the competition creates and selects the
conceptual design for the future building/end product and

it's creator is paid the prize and a contract
as a consultant to the design development team. Thus the

conceptual design is selected from an array
of different conceptual designs from different creators and

is known before the design development
agency is appointed. At best in the UK and USA the client

may see two or three alternative
conceptual designs from one source. after his appointment

This crucial point is that the competition
usually selects the design concept and is not just a means

of selecting a designer. The creator of the
winning conceptual design has done most of his work by the

time his conceptual design has been
selected as the winner. The subsequent design development

work is by the design development agency
not by the conceptual designer but the latter is a

consultant on the design team to ensure that design
development remains faithful to the chosen design concept.

To incorporate this approach to the UK and USA situation
would require disturbance to the normal Building
procurement 335
processes because not only would the decision processes and

architect selection process be changed but
there would have to occur the evolution of the equivalent

of the design development agency to carry
out the design development sub process. While large UK and

USA architectural practices are staffed
to do this it would require perhaps the breaking of such

practices into two one part becoming
conceptual designers and the other part becoming design

developers with all the engineering specialists
required in that sub process. However, such an evolution

would not be incompatible to the desires of
most architects (and especially architectural schools) in

both the UK and USA that the architect
provides only the conceptual design.
(1) Birrell, G S. (1994) Array of Building Procurement

Approaches in France and Britain, Centre for Property
Development and Management, UMIST, Manchester/Plan
Construction at Architecture, MInistere De L'Equipement Du
Logement et Des Transports, Paris.
(2) Birrell, G S, (1989) So You Need A New Building? A

Guide to Clients on Procurement Approaches, School of
Building Construction, University of Florida/State of
Florida Building Construction Industry Advisory Committee.
(3) Hastings, R F, (1968) Proposal: A New and

Comprehensive System for Design and Delivery of Buildings,
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INTEGRATING COMPLEXITY I.C. Jennings and R. Kenley
Faculty of Architecture, Building and Planning, University
of Melbourne, Melbourne, Australia Abstract Construction
industries are characterised by the use of an increasing
number of specialist firms for the procurement of
buildings and facilities. This phenomenon is accompanied by
corresponding increases in project complexity and
exacerbated by the temporary nature of project
organisations. To complement such differentiation of firm
scope into more refined specialities, explicit integration
of such firms in the formation and ongoing management of
the project organisation is required to maintained project
performance. Traditionally this function has been provided
by architects and principal contractors however, specialist
managers have begun to emerge from the range of
professional consultants to embrace the complexity of
this integrative role. This paper examines the emergence
of integration specialists within the context of the
construction industry's evolutionary development. In
particular, within the application of the systemic
approach, the role of integration for building project
organisations is discussed with project management as an
example. Keywords: building life span, complexity,
integrative role, project organisations, systemic
thinking, quality culture. Sommaire Les industries de
construction sont caracterises par I'usage qU'elles font
d'un nombre croissant de firmes specialisees dans l'
equippement du biitiment. Ce phenomene est en fonction des
augmentations correspondantes de complexite et de
specialisation des firmes industrielles de pieces
detachees, ceci allant de pair avec la nature temporaire de
I' organisation des projects. Pour complementer une telle
differentiation de I' envergure des firmes il est
necessaire que leur specialisation devienne de plus en plus
ramifee en specialisation; I'integration explicite de ces
firmes it I'interieur de la forrnatin et de la gestion
progressive de l' organisation de projet est essentielle
si les progres des travaux en copurs doirent continuer.
Cette fonction est traditionellement I' apanage des
architects et des principauz entrepreneurs, cependant des
organisateurs specialises commencent it emerger des rangs
des conultants professionei pour embrasser la complexite
du role d'integration necessaire aux projets. Cet expose
examine Ie deveioppement des specialistes d'integration en
tant qu'ecemple du developpement evolutionnaire de
l'industrie du biitiment. En particulier, it travers un
modele systematique, Ie role de l'integration dans I'
organisation des projets de construction sera discutee
avec la gestion des projets comme exemple.


E & FN Spon. ISBN 0419222405.
340 Jennings and Kenley
1. Introduction
The increasing complexity of project organisations

established for building procurement
and use has been accompanied by a complementary increase in

the number and diversity
of industry specialists [1]. This industry characteristic

is a product of a market based
structure and highlights the need for management strategy

to cater for the growing com
plexity of projects and associated project organisations

[2] [3]. Traditionally the role of
managing project organisations has been fulfilled by an

interplay between project archi
tects and principal building contractors [4]. However, this

structure has begun to be
challenged by the emergence of specialist managers

fulfilling the role, for example, proj
ect managers [5]. The temporary associations of firms

which project organisations represent, has di
verted attention from the project organisation to the more

permanent, often more tangi
ble, component firms [6] [7]. These being the professional

practices and contractors
responsible for procurement, and having a relatively

constant structure. They subse
quently attract considerable attention from management as

they are readily studied,
modelled, and provide scope for the development,

implementation, and assessment of
medium and long-term management strategies. This phenomena

is seen in industry
firm-based schemes such as quality assurance, fair

tendering practices, distribution of
contractual risk and responsibility in subcontract

relationships. There is little question
that while focus on the component firms of the industry is

invaluable and can impact
significantly on a project's performance, attention on the
management of the temporary
project organisation is still necessary [8] [9]. The

paper commences with a brief discussion of the impact
which both the indus
try's structure and the complexity of building projects

have on the formation, manage
ment, and divestment of project organisations. This

introduces some of the characteris
tics of the project-based structure of the industry, and

provides the basis for discussing
the relationship between building life span and project

organisation. Within this scope,
the use of a systemic approach is presented. The approach

is subsequently considered
within an industry wide context which establishes the

importance of the role of integra
tion. Given this base, the emergence and role of project

managers as specialist project
integrators is discussed. The paper concludes with a

projection of the future role of
project integration given further increases in project

complexity.
2. Evolution of the construction industry
To study the construction industry and how it has and may

continue to evolve, requires
acknowledgment and appreciation of the cumulative affect

of the interaction between
industry components over time [10] [11]. This largely

takes the form of assessing how
the attributes of components relate, interact, and change

under both static and dynamic
conditions. From this understanding a distinct industry

profile can be created to provide
insight into the industry's organisation for ensuing
building procurement processes, and
how its component firms respond to the environment such as

to develop and maintain a
competitive advantage. It is from an interpretation of

these industry characteristics that
the role of integration in project management is discussed.
2.1 Characteristics of a contemporary construction industry.
The construction 'industry' consists of many markets and

projects rather than being an
industry in an hierarchical sense [12]. Narrowly it may be

perceived as being composed
of the individuals and firms concerned with the assembly

and construction of fixed Integrative role in building
procurement 341 Trading relationships with a market [16]
Example of the use of the project organisation as the
market place Figure 1. Industry market structure. Project
organisations embody a market place for firms to interact
i.e. trade their goods and services.
physical facilities. More widely, it is seen to embrace

suppliers who may have their
primary interests in other fields, and government and

financiers who set and administer
the rules and regulations with which the industry

interacts. Three major dimensions to
the complexity of project organisations can be identified:

firstly construction processes
utilise many specialities; secondly each project occurs at

an open, unique site; and
thirdly, project organisations are temporary. This fluid

structure dispels any notion of
applying purely hierarchical management and organisation to

project organisations but
rather, demands the adoption of a market and hierarchical

approach as exhibited in the
use of sub-contracted and internally supplied production

resources [3] [13] [14]. When
applying a market model, the determinants and processes of

creating and maintaining
relationships between market components (factors of

production) are considered vital.
The participants in procurement processes must similarly

establish relationships with
each other from positions separated by task and profession

boundaries [15]. The
boundaries, representative of competitive and practical

differentiation, must be perme
ated by the formation of relationships in the project

organisation if a useful association is
to occur [9]. This process of relationship creation

illustrates the role of managing re
sources in a market or project based environment. I A

prominent characteristic of the market model, that of the
temporary nature of proj
ect organisations, has become dominant in forming industry

perceptions, particularly for
clients. Clients regularly characterise the construction

industry as being fragmented
based on their relationship with consultants/contractors.

The client originates from a
position similar to that of a consumer and may therefore,

be considered as instigator of
the procurement process. However, few

consultants/contractors have the ability to sat
isfy all client needs without association with others. More

than one practitioner will be
required to provide the necessary project skills. If one

adopts an hierarchical approach,
similar to that of many other industries such as
manufacturing, an initial reaction would
be to expect that given particular client objectives,

processes will be quickly enacted to
fulfil the building or facility's specifications. To solely

adopt this expectation is
incorrect [3]. Using a market approach, project production

capacity is created by
assembling individual consultants and contractors from

independent positions for each
and every project. A new set of consultants/contractors and

relationships are therefore
created for each project, in other words, each project

represents a new market (refer to
Figure 1). This characteristic subsequently presents

clients with a seemingly unassociR.H. Coase in 1937
introduced the theory that alternatives to the market
mechanism for resource allocation exist in advocating
firms are one such alternative [18]. This notion of markets
(e.g. projects) and hierarchies (firms), was taken up by
microeconomics and in particular, transaction cost
economics in seeking to explain the economic affects of
internal and external organisational relationships [13]
[19]. 342 Jennings and Kenley
ated array of consultants and contractors from which a

project OIganisation must be
created. Hence, the fragmented and less orderly industry

characterisation. The action of creating procurement
organisations is complicated by a clients' relative
industry inexperience and lack of expert knowledge,

coupled with the potentially mis
leading expectation that the industry operates

hierarchically i.e. that there is a one-stop
shop selling buildings [7V Therefore, it is not until the

association between practitio
ners is made that a client has an organisation, or process,

that can respond to their
needs. This subsequently fuels perceptions of an already

fragmented industry, leading
to the interpretation of the market based attributes as

problems, rather than inherent char
acteristics of the necessary project structure [17V

Cumulatively, these attributes along
with other aspects such as fixity to site and project

uniqueness, result in project organi
sations being considered as temporary multi-organisations;

an exponent of a project or
market-based industry structure [21] [22]. This notion

plays a leading role in shaping
client perception of the construction industry including

the specific structure and man
agement of project organisations.
2. 2 Industry change-project complexity and specialisation.
Despite the range of possible evolutionary models used to

explain how and why a given
industry or system has evolved, there is little doubt that

the increasing complexity of
projects has and is still continuing to playa significant

role" Complexity as a concept
represents the quality or property of an organisation,

project, or more generally a
system, which is derived from the combined interaction of

the four determinants out
lined in Table 1 [23].
Table 1 Detenninants of system or project organisation

complexity. Generic determinants Project organisation
determinants with examples number of elements comprising
the system number of trades and/or consultants required,
scale of individual finns attributes of specific system
elements different belief structures and social affiliation
e.g. sentient differences between developer and planner
[24] number of interactions among system elements
regularity of group communication and action e.g. client
and site meetings, number of issued directives foreman per
day degree of inherent system organisation familiarity
with traditional versus a custom construction methods e.g.
trade versus activity based organisation This approach is
reminiscent of the traditional method of building
procurement where a client would engage architectural
services to conduct and manage all requirements for
procurement i.e. complete client agency. In other words,
the architect provided the one-stop-shop for
building/facility procurement. Fragmentation is an
attribute of the Australian and U.K. construction
industries that requires definition. It refers to the
relative concentration (%) of work conducted in a
particular industry by a selection of the largest finns.
In Australia the largest twenty finns are used as a scale
with approximately 22% of the work being conducted by
them, where as in mining approx. 68%, and
telecommunications 98% [20]. Various theories of
organizational evolution exist such as organizational
ecology and organisational systematics. The fonner seeking
understanding of dynamic interactions within and among
organizational componentry, the later presents a theory of
organizational differences to explain the processes by
which the practices and structures of organisations air
fonns persist over time [10]. Integrative role in building
procurement 343 Given adaptation of the above criteria to
assessing project organisations, it can be
readily concluded that construction projects are complex

and have manifested dramatic
increases in the diversity and number of specialists used

in project organisations [25]
[26]. Further-more, the potential diversity of such

projects is wide. Project organisa
tion complexity can subsequently be considered as

originating from its component
firms, the relationships between these firms, and/or the

organisations overall structure
and management [1] [27]. However, more generically,

project complexity can be
gauged by the variance and initial division or

differentiation within and between firms
that are destined to form the project organisation.

Various strategies are employed by industry members to
combat project complexity.
Firms, and on a larger scale professions, divide their

tasks into components that enable
specialisation e.g. engineering services may be divided

into mechanical, electrical, and
hydraulic. By reducing complex tasks to more manageable

parameters, work is
arranged in a manner that increases production certainty.

Therefore, by reducing the
number of elements of a system, more effort can be directed

to assessing the attributes
and relationships of the remaining elements [28] [29].

This enables a more complex
project to be tackled efficiently and effectively by

restricting scope of work by individual
producers to manageable limits. The differentiated market

structure of the construction industry implies, without
explicitly identifying, the vital role of integration. As

presented so far, increases in proj
ect complexity have been identified as causing an increase

in number and diversification
of specialist firms. This is accentuated by the competitive

opportunistic construction
environment which catalyses the creation of more distinct

comparative and therefore,
competitive firm boundaries in the form of further

specialisation [30] [31 V
Cumulatively, this has the effect of increasing the number

of relationships to be created
and managed in project organisations. This task of

creating and maintaining relation
ships between firms participating in a project
organisation, may be seen as an
integrative role-relationship management of system

componentry [32]. The importance of the integrative role
matching the complexity of projects has led to
its evolution into a specialist role, especially on more

complex projects. On smaller
projects the role of integration may be implicitly

conducted by task organisations such as
between architect and contractor howevet; on larger

projects specialist project managers
have emerged [4]. Similarly, integration as a task in

itself can be assessed using the
criteria of system complexity presented in Table 1.
3. The role of building procurement systems
The procurement process is undoubtedly the foundation on

which perception of the con
struction industry and therefore, the role of integration

is based. The previous section
presented the industry as an amalgam of specialist firms

that form temporary multi
organisations for individual project procurement. More

specifically, the practice of
managing project organisations is derived from the

individual attributes including objec
tives of specialist firms, project and firm integration

strategies, and the respective
objectives of the client. Therefore, rather than viewing

the construction industry as 'an
industry' with a relatively constant hierarchical

structure, a dynamic market model is
more appropriate. The impact of a market model on the

structure, organisation, and
integration management of project organisations is further
illustrated by examining the
impact of building maturation. The use of a systemic

approach to interpreting project
organisations and their associated integrative role is

presented.
5 Competitive opportunistic environments are a

characteristic of most capitalist based economies. In this
situation a primary motive for firms is the enhancement of
perceived competitive advantage to ensure their survival
and/or increased profitability. 344 Jennings and Kenley
3. 1 The building life span-stimulus for project

organisation evolution
facilities), requires the completion of many activities

that utilise a diverse range of skills
and material resources; all of which must be integrated

and managed by the project
organisation. This is complicated further by the varied

logistical time based relation
ships between associated firms-sequential, reciprocal, and

simultaneous inter-depend
ent relationships [35]. The influence of the time dimension

on firm and relationship
selection is derived from the corresponding completion of

project objectives. In-turn,
these objectives are a function of the buildings

progression through its life span i.e.
building maturation. The building's relative position in

its life span therefore plays a
deciding role in catalysing change in the project

organisation [33] [36]. Assuming the
objectives are relatively identifiable and discrete, the

evolving project, or building
organisation, can be categorised according to the phase of

the building life span it repre
sents. Table 2 outlines five key systems of activity

arising from corresponding building
phases.
Table 2 Building life span phases (derived from [33J and

[34]). conception the system which results in the decision
that the client needs to acquire real property to achieve
its objectives; inception the system of activity which
results in the client deciding upon the form their real
property which is required to achieve client objectives
should take; realisation the system of activity which
encompasses the design and construction of a building;
use the system of activity where the building is managed to
maximise the expectations of owner/occupant objectives i.e.
building considered as a factor of production by the
occupant and/or owner; refurbishment the system of
activity that develops and implements appropriate
refurbishment or divestment strategies to maintain
investment and occupational viability of a building or
alternatively, the system that determines the demolition or
sale of a building or facility i.e. divestment. The
objectives driving the project organisation evolve as the
building progresses
through its life span. Similarly, the project organisation

also evolves by altering the
number, type, and association of component firms to reflect

the changing objectives
(e.g. [37] [38]). This causes the structure of the

organisation and the role of integration
to change. Therefore, both the project organisation and

integrative role are dynamic.
Despite having some elements of the respective systems in

common, such as a developer
and architect through conception, inception and

realisation; or a property consultant and
occupant throughout use and divestment/refurbishment

systems; the required integration
of firms for each project are different. Therefore by

definition, it may be considered that
the evolution of the project or building life span, demands
a corresponding evolution in
the roles of the project organisation. Figure 2 illustrates

the sequential maturation of
project organisations as a function of the building life

span. Common system groupings
of procurement and use are highlighted [34].6 The effect

of the relationship between building life span and project
organisation
integration is well illustrated in the realisation system.

Firms required to commence the
realisation of a building or system are often carried over

from the previous inception
system e.g. architect, quantity surveyor and project

manager from concept design work. Note procurement is
linear where as the building use is cyclical. This model
can also be used to associate other useful characteristics
of the project life span such as the impact of short medium
and long term decisions e.g. life cycle costing and
assessment of long term investment feasibility.
Integrative role in building procurement 345 BUILDING
PROCUREMENT SYSTEMS Figure 2. Project organisation
evolution. BUILDING USE SYSTEMS
Building upon the initial selections, others must be

selected and subsequently integrated
for the project and the organisation to progress. As the

realisation system enters the
construction phase more firms will become associated with

few likely to depart. The
organisation then has a very large number of elements when

construction activity is at its
peak and most trades will be associated with a continued

involvement by professional
consultants remaining for supervision and certification

duties. This period of organisa
tional growth must also be associated with a period of

rapid leaming by the constituent
firms and managers (integrators) to ensure relatively

harmonious operation. This
involves both the firms leaming who and how they need to
work with others, and how
the integration managers may best facilitate these

relationships and disseminate project
objectives. As more of the project is completed natural

attrition of organisation members
occurs with subsequent changes in integration strategies.

The decline of project organi
sation membership will occur until the realisation of the

building has occurred or until
the next phase of the life-span is commenced.
3.2 Systemic modelling
As previously discussed, the increase in complexity of

projects has seen a dramatic
increase in specialisation and number of discrete firms

involved in project organisations.
Similarly, just as there are limits to production scope of

individual firms, there are limits
to the comprehension of the construction industry and its

structure. Our limited or
bounded rationality can be addressed through the use of

metaphors to provide a more
accessible representation of a given case [39] [40].

Different ways of designing, inter
preting and managing organisations can be developed using

ready-made metaphors for
organisation that would have otherwise not been considered.

Further-more, metaphors
relieve managers of the necessity to comprehend and debate

their ontological position
(philosophical theory of knowledge) and methodology, but
rather provide a way of
thinking that can be readily adopted [41]. This paper

proposes the use of a systemic
approach derived from the organismic metaphor for

interpreting project organisations as
part of the integrative role. The consideration of

integration as a function of the complexity of project
organisa
tions (derived from the organisations temporary nature and

building maturation), helps
in identifying the complexity of the role. However, it does

not provide a structure to
interpret such complexity for development of management

strategy. A systemic method
may achieve such clarity. Systemic thinking involves a

means of interpreting a given
phenomena, such as in this case, the integrative role in

project organisations. This is
achieved through the identification and consideration of

all possible significant elements
which contribute to the organisations fulfilment of

objectives and also act as determi
nants of complexity [42]. These elements mayor may not be

explicitly included in the
organisation. A relationship will however, be formed

between them and the project
regardless of their orientation in order to achieve

objectives. The notion of a systemic approach advocates
not only the representation of the proj
ect organisation as a dynamic model, but also the

incorporation of human and cultural 346 Jennings and
Kenley issues often not included in traditional management
strategy. The recognition of nontechnical considerations
highlights the considerably more complex integrative role
through the incorporation of elements such as events,
patterns of behaviour, systems, and mental models [42].
Further-more, given that the integration of firms occurs
via a human interface, recognition of human
considerations is not only logical but vital. The systemic
approach facilitates the integration of technical with
non-technical attributes of an organisation through the
recognition and gradual approximation towards a quality
culture. This culture unites both the reasoning of systems
thinking with the ongoing search for reliable options in
enhancing standards of quality and productivity as
presented in total quality and productivity management
[43]. Table 3 Towards a systemic quality culture (derived
from [43]). Tools Systems thinking Cybernetic
interpretation Synergetic endeavour Concept Outcome the
representation of the phenomena the organisations
responsible for the procure in question as a discrete
unit or and use of a building being considered as sys
system in order for ready understandi.e. the systems and
sub-systems of the bui ing and assessment of its change
in life span ego refer to Table 2 or Figure 2 dynamic
situations acknowledgment of the functional presence of
the intrinsic concept of feedback in human thought and
action devising and determining individual and colle
performance mechanisms to assess the fulfil of objectives
e.g. cash flow monitoring and agement, site meetings the
functional presence of the acknowledgment of the
collectives role and re~ intrinsic concept of ~ sibility
of project organisation member, (cooperation's need) in
the human procuring a building or facility i.e. adequate
mind for making possible individual formance can only be
achieved as a functio survival e.g. reflection of the
whole many elements in harmony rather than in isoJ; being
greater than the sum of the e.g. design team, site
management tearr parts. foreman, leading hands etc.
(Mohsini 1989) More practically, the representation of a
'systemic' quality culture and transposition to an
illustrative model for organisation assessment and design,
is achieved through the utilisation of three intellectual
tools: systems thinking, cybernetic interpretation, and
synergetic endeavour [43]. A description of the concepts
espoused by the theories and their implications for the
project organisation are presented in Table 3.
Systemically interpreting the procurement organisation
involves considering the organisation as a system open to
its environment. Hence the systems approach builds on the
"principle that organisations, like organisms, are open to
the environment and must achieve an appropriate relation
with that environment if they are to survive" [40]. This
metaphoric foundation provides a foundation to launch
investigation and discussion based on the importance of
identifying the relationships between elements, and the
impact of the elements interaction. This can be transposed
to issues such as how the project organisation may evolve
over time; what attributes and strategies of the project
are responsible for particular outcomes; and what role do
the external and internal elements related to the project
organisation play in characterising its performance. A
systemic approach helps to clarify both the static and
dynamic properties of the
construction industry, and how the role of integration may

be implemented in project
organisations. In particulru; through its ability to

clarify and order complexity, application of the systemic
approach is seen as advantageous for integration
management.
Though the range of cases to study are all very rich in

material, the majority of past
organisational analyses focus on the realisation system as

opposed to other forms of the Integrative role in building
procurement 347
project organisation exhibited throughout the building life

span i.e. the design, docu
mentation, and construction of a building or facility. 7
4. Project integrators
The application of a systemic model involves more than

representing an organisation in
terms of interrelated subsystems defined by task, or wholes

within wholes to infer the
interdependence of components within an organisation.

Though this is an important
aspect in representing a phenomena such as a project

organisation systemically, the
complexity of integration will not be accurately

represented without the consideration of
the system's attributes. The development of specialist

integrators such as project man
agers is a direct response to the need for accurate and
strategic management of such
attributes. Following is a brief outline of some of the

salient issues concerning the role
of integration, the application of systemic thinking and

the development of integration
management in the future.
4.1 Project managers: the specialist integrator
In practice the role of integration varies depending on the

complexity of a given project.
It may be an explicit role assigned to a particular

individual or firm that involves coordi
nating relationships between firms (external to the firm),

or it may be part of the role of
members within one firm to assure assimilation of task work

within their firm or work
group [3]. This general example can be readily related to

the construction industry as
illustrated in the following examples of integration:

residential, and large commercial
projects. A large residential project may involve an

architect, client and contractor. As a con
sequence of these three, the client objectives,

architectural design and specification, and
contractors method and means of construction, are all

brought together to form the
project organisation. The role of integration is more

heavily placed on the architect
during the design and documentation of the residence,

where as the contractor plays the
larger role of integration during construction.

Procurement can therefore be considered
as consisting of two relatively distinct systems: design
(managed by architect), and con
struction (managed by contractor). The roles of both

parties involve integration, with
the burden of the role shifting between architect and

contractor to suit the maturation of
the building i.e. match the correct profession to the

required expertise of the building
phase. The roles of ordering tasks, monitoring, and

assigning resources-system,
cybernetic, and synergetic considerations-must therefore be

coordinated between these
two parties. Large more complex projects tend to attract

the use of specialised integrators. In this
case, the responsibility of integration and the management

of client objectives is not un
dertaken by task related consultants such as architects

and quantity surveyors whose role
is limited to the traditional form of their professions.

The reasons for the use of
specialist managers are largely related to project

complexity presented earlier (refer Table
1). A common example necessitating specialist managers is

seen in a complex project
organisation where there are a large number of firms

involved i.e. the mUlti-organisation
nature of project organisations [21]. This will most

likely necessitate numerous
specialist integrators such as a construction manager,

design manager, and an over
seeing project manager along with the traditional

managerial roles conducted in firms
such as foremen for construction, and project architects

for design. The difficulty in in
tegrating highly disparate firms may also necessitate an
integrator to provide The past decade has seen a dramatic
increase in the appreciation of the value of effectively
managing the use phase of a building life span. This has
been illustrated by the rise to prominence of the
facility management profession that specialises in managing
buildings and facilities to ensure effecti ve and
efficient use and investment return.
348 Jennings and Kenley
communication between such firms as acoustics engineer,

information technology
consultant, etc.. However, specialist managers may also be

vital to ensure the correct
representation and achievement of client objectives given

the probable conflict between
individual objectives of the project organisation's

component firms and the client's
objectives [45] [46]. The examples above primarily relate

to the role of integration once a project is run
ning (the dynamic role of integration), however

integration also plays a vital role in the
design and planning of the project organisation [38].

Transaction cost economics is
particularly useful in this case as it provides tools for

assessing the relative benefit or
cost of intemal versus extemal relationships for

production i.e. illustrated by the make
or buy scenario. U sing such a methodology, one may

compare the technical and
economic cost of managing inter-firm relationships either

independently or using another
party as facilitator [9]. Project managers seen as

specialists are used when their benefits
exceed their costs. In other words, through the creation

and/or enhancement of working
environments and operational relationships between firms,
project managers primarily
facilitate others' work rather than conducting 'work'

themselves.
4.2 The future for project integration
Project management has developed along with an increasing

awareness of the key
success factors that clients apply to building projects.

Better coordination of the
disparate component firms was quickly recognised causing

project management to
develop into a central and overall coordinating role as

agent for the client. Methods to
manage time, quality, and cost were soon developed and

adopted as part of the project
management role e.g. scheduling, developing

work-breakdown-structures, cost control,
quality assurance, contract administration etc. [47].

Though many of these activities
reflect the scope presented by the systemic model such as

the cybemetic and systems
considerations, they do little in representing and

applying the synergistic properties of
the project organisation, a property of human endeavour

often left untapped in manage
ment strategy. The concept of synergetic relationships

demonstrates the necessity and value of
managing the relationships between elements in order that

the product, and the added
value from the relationship will occur. However, the

expertise created by specialisation
stimulates the development of sentience by individual

firms to their professions i.e.
affiliation to professional groups and associations [24].
This causes a strengthening in
the differentiation between the firm and the rest of the

environment. Their specialisation
provides the ability for the firm to increase their

effectiveness and efficiency in produc
tion, however their product, be it material or service,

will still have to be integrated with
outputs from other firms. To bring such strongly

differentiated firms together is both
necessary for their products to be used and so as not to

waste the benefit of their spe
cialisation [3] [9]. A role of integration is to ensure

that synergistic potential is not
wasted. However, skills will develop over time for greater

integration of factors that are
important in facilitating synergy despite sentient, social,

psychological, technical, and
organisational differences between component firms. An

additional benefit of adopting a systemic approach that
facilitates system, cyber
netic and synergetic properties of project organisations

in integration strategy, is to
provide a catalyst for organisational learning. A degree of

success can be achieved in
initial planning and design of the procurement

organisation, but the ability to learn and
adapt is vital if a quick response to any disturbance is

to be readily achieved, or to
conceive opportunities for increasing efficiency and

effectiveness [48]. This can be
facilitated by the strategy of assimilating and managing

firms by groups, associated,
directed, and managed by task rather than discipline [49]
[50]. In such cases, objectives
of the project would be suitably rephrased in terms for

multi-disciplinary work teams
based on their relative significance in production. This

exposes the firms to the
synergetic nature of their work and therefore contributes

to instilling a greater sense of
work responsibility. Integrative role in building

procurement 349
5. Conclusion
The proliferation of specialists in the construction

industry, has led to a dramatic
increase in the number of discrete firms involved in

project procurement organisations.
Just as there are limits to the production scope of

individual firms, there are limits to the
comprehension of the construction industry and its

structure. The systemic approach
assists in providing an interpretation of the complex

social and technical interplay
between firms in the industry and within project

organisations by stressing the necessity
for explicit recognition and application of the

integration role. The specification and
subsequent management of integration is derived from a

large variety of factors that
impact significantly on this role and project performance.

Several factors stand out:
location of work at sites, complexity of buildings and

facilities, specialist diversity, the
temporary nature of the project organisation, and the human

interface of firms. The
demand for integration, and the form in which it is
presented (e.g. project managers),
will continue to develop and change to suit the industry.

However, greater reliability of
management performance is assured with increases in

explicit appreciation of the com
plexity of the role through the use of a systemic quality

culture, whether integration is
achieved by a specialist or as part of shared

responsibility between firms.
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Integrative role in building procurement 351
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in the UK construction industry. Construction Management
and Economics 5: pp. 141-155. TOTAL RESOURCE ASSESSMENT
BASED ON EXTENSION OF TRADITIONAL PROCUREMENT SYSTEMS
c. Elliot Department of Building Engineering and
Surveying, Heriot Watt University, Edinburgh, UK Abstract
All buildings are composed of a combination of raw
materials and energy. Present systems evaluate these
resources in terms of cost and measure that cost against
the benefit derived from the building. However increasing
emphasis on environmental issues means that this system
of evaluation is no longer adequate as it makes no true
assessment of the resources used. This paper aims to
provide an alternative system of evaluation that can be
incorporated ink} cxisting procurement systems by extending
the use of the bill of quantities to encompass total
resource assessment Keywords: total resource assessment,
nlW materials, energy, embodied energy, evaluation of
resources, sustainable development, bills of quantities.
Toutes constructions contiennent les materiaux bruts et

I'energie. Miantenant les methodes d'acquisition des
constructions evaluent ces ressources seulement en fonction
du cout fiscal. lis comparent Ie cout fiscal avec I

'avantage de la construction. Cependant
la vie modeme aCL'entue les matieres de I'environnement et

cette methode d'attaque du probleme est insuffisant, parce
que son estimation des ressources utilisees est imparfait.
Cet article presente une technique nouvelle d'evaluer les

ressources qui peut etre
utilisees par les methodes d'acquisition. La technique

etend Ie devis pour comprendre
tous les ressources, fiscal ou non. Introduction

Definition: Total resource assessment is the evaluation of
raw materials, energy, waste
and pollution used or gcncrated by the construction of a

project.
Any building is composed of re.'IOurces taken from the

environment. Under existing
procurcment methods these resources have no real basis of

assessment other than the
cost of the building. Cost however, being a factor of both

market forces and
government control, is an artificial measure against which

to assess resource use, which
has a very large environmental impact. A more realistic

system would be to make an
assessment based on the resources that have actually been

used,
This paper analyses a project by assessing the resources

used in its construction. The
paper further indicates how a rating system can be used to

allocate to buildings an
environmental factor based on resource usage. It is

intended that this total resource
assessment could be used as a standard against which to

compare the environmental
performance of different projects.
2 Resources
Resources come from two sources, raw materials and energy.

The output of using
energy to extrdCt and convert materials into building

products and then buildings is
pollution and waste. In assessing resources we need

therefore to look at these four
basic factors. That is; raw materials, energy, pollution
and waste.
Th~ Organization and Management of Construction: Shaping


E & FN Spon. ISBN 0 419 22240 5. Total resource assessment
353
2.1 Raw Materials
The current method of examining raw materials is through an

assessment of cost and
quality. Generally, once the level of quality has been

established through either national
standards, client preference or architectural

specification, then the lowest cost is sought.
In terms of total resource assessment this is meaningless

and a truer means of
evaluation would include a measure of sustainability,

length of life and degree of reuse.
None of these three items are difficult to evaluate since

a large body of knowledge
exists for most products used in the construction industry.

It is known that timber taken
from the rain forests is not sustainable and that softwoods

can be replaced at a much
faster rate than hardwoods, and that the average life of

floor coverings is between 10 to
20 years. In addition current research into re-use of

materials highlights that steel can be
effectively recycled but that recycling of plastic is much

more difficult. It is therefore
possible, based on sustainability, length of life and

degree of reuse to rate all the raw
materials used in a construction project. This idea is not

far from the system of green
labelling that is presently corning to the fore. When the
advances that have been made in
food labelling over the last 15 years are considered it

must be recognised that for
manufacturers to state the contents of their products or

to rate them based on a pre
determine scale is by no means a difficult task and one

that could be achieved in a
relati vely short space of time.
2.2 Energy
The diagram below shows the definitions of energy as

commonly used. Energy can be
primary energy as mined, delivered energy which is that

delivered to the consumer, or
embodied energy, which for construction is defined as the

energy consumed in the
production, delivery and fixing of products on the site.

For the purposes of analysing
resources it is necessary to calculate the amount of

embodied energy that goes into the
materials that make up the project. This is shown in the

diagram. CONSTRUCTION PRODUCTS MANUFACTURE CONSTRUCTION
SITES TRANSPORT OF Figure 1 Common definitions of energy
354 Elliot and Palmer
Howard (1991) argued that there is scope for energy

improvement in construction
through the substitution of materials with those of lower

embodied energy. The
building products sector used 11.5 % of total industrial

energy consumption in 1984
and considering that iron and steel were excluded from this
calculation it is probable that
the potential saving achievable is significant. Connaugton
(1987) compared energy
usage in buildings with the saving that could be made by

examining the embodied
energy and argued that the production of materials can

take five times more energy than
is used in running the building for the first year. Brennen

(1995) also concluded that a
typical industrial building consumes more energy in its

construction than through its
entire life. Connaugton suggested estimating the embodied

energy value of a building
over a range of different building types by analysing

bills of quantities and devising
material coefficient per m2 of floor area for each

building type. In effect he recognised
that to calculate the embodied energy value in buildings is

a fairly simple process. It is
made easier by the fact that a small number of building

materials account for a large
proportion of the total embodied energy of a building.

Stein et al (1981) also recognised
this and outlined that only eleven industries contribute

more than 50% of energy
requirements for new construction. Examination of these

products will therefore
encompass a large percentage of the total energy used.

This means that by selecting the
major quantities of material from a bill of quantities it

is possible to calculate a large
proportion of the embodied energy used in the construction

of the building. This
calculation could then be used as a mean of comparing or

rating different alternatives.
For, as Connaughton said," a comparison of the energy
intensity of different building
assemblies ... can provide the basis by which the embodied

energy of construction may
be reduced by material component substitution at the

design stage."
(It should be noted that the figures quoted above do not

relate to the embodied energy
per unit of material but to the overall quantity of the

material, and therefore overall
energy, used in the building.)
2.3 Pollution
One of the major pollution problems caused by the

manufacture of building products is
the emission of C02 and the subsequent environmental damage

this causes. Howard
illustrated that the amount of C02 generated relates to

fuel used in the creation of the
material, and the main scope for reducing this comes from
substituting materials with
lower embodied energy. He also calculated the amount of

carbon dioxide release in the
manufacture of a kilogramme of each major construction

material. As there is a
relationship between the amount of embodied energy and the

amount of C02 emission,
the group of materials responsible for the largest

percentage C02 emission is the same
group that contributes the largest proportion of total

energy used. As such the figures
for C02 emissions when applied to the major quantities of

materials in the BQ will
account for a large percentage of the total C02 emission
caused by the manufacture of
components and construction of the building.
2.4 Waste
The Dutch Building Research Foundation defined building

waste as all materials,
auxiliary materials and packaging supplied in connection

with the realisation of the
building project, which must be removed from the building

site as useless, during or
after the realisation of the project.
Verschuren et al (1987) argued that the first signs of

waste appear on the designers
drawing board and he developed an index that measures waste

by valuing design and
construction aspects of projects. From this he calculated

a waste index which is an
estimate of the waste to be expected on a project. The

waste index is calculated over the
whole building based on a total of 65 factors relating to

design and construction. Total resource assessment 355
Moavenzadeh (1994) outlined that with any waste there is a

hierarchy of preference;
Control it at the source by changing the material or

production technique.
Recycle it.
Treat it.
Dispose of it.
In terms of evaluating a building for the amount of waste

produced,Moavenzadeh's
work is much simpler than the waste index of Verschuren,

as it is possible to rate major
groups of materials depending on whether they can be
recycled or must be disposed of.
However in making such an assessment it is necessary to

include some calculation of
the energy required to recycle the product. As such the

evaluation of waste is probably
the most difficult of all of the four aspects under

examination in this paper, in that it
relates to the design, materials used and the nature of

manufacture. For this reason no
evaluation of waste is included in the total resource

assessment outlined below.
However if total resource assessment is to be fully

developed it is necessary to include
some allowance for waste.
3 Using the BQ as a means of total resource assessment
A bill of quantities for a factory extension was the basis

for the total resource
assessment. The work involved breaking out the existing

surface and constructing a
single storey steel framed building with trussed roof and

external steel profiled cladding
with roof lights. Substructures were mass concrete filled

bases with a reinforced
concrete floor.
As outlined above three items were to be considered in the

total resource assessment;
namely embodied energy, pollution in the form of C02

emissions and finally the raw
materials used. These are examined below.
3.1 Embodied energy and C02 emissions

As outlined above major product groups contribute a large
percentage of total energy
used and these quantities were therefore extracted from the

BQ. [Quantities of material extr~cted f~om the BQ--------1
1_ Hardcore . conc;~;~-t· _m Ste~;u Brick TSOftWOOd r
-~'-'--, I I 1115m3 180lm3 238tn 14m3· 10m3 i 7m3
IQu~;;tities in-;-OOO Kg ____ ~~=___________ --=-1 1784 I
2701.5 J 238 I 31.5 i 6.1 I 14 Table 1 Major materials
extracted from the bills of quantities
Figures of embodied energy values and C02 emissions were

then collated. Embodied energy content Mj/Kg -I I=::~~ore
G~!e r~¥~TS~ft;::Bl~ckl Table 2 Embodied energy values
In order to evaluate the energy content and C02 emissions

of the materials used it is
necessary to have some means of comparison or standard.

However at present no
standard is available so this paper has compared the

project as designed and built with
the same building but substituting the steel frame for a

reinforced concrete frame. The
recalculated quantities are shown in Table 4 below.

Quantities of material with reinforced concrete frame
Hardcore I Concrete I Steel I Brick j Softwood I Block
1115m3 I 2585m3 I 73tn I 14m3 I 10m3 I 7m3
Quantities in '000 Kg I 1784 I 3877.5 I 73 I lliI
6.1 I 14 Table 4 Major quantities using a concrete frame
A comparison of the embodied energy and C02 emissions is

shown in Table 5 and
Figure 2. As Designed and Built (steel) With Concrete

Frame Embodied energJ CO2 emitted Embodied energJ CO2
emitted Material content Mj Kg content Mj Kg Hardcore
1,784,000 178,400 1,784,000 178,400 Concrete 2,701,500
270,150 3,877 ,500 387,750 Steel 11,900,000 1,190,000
3,650,000 365,000 Brick 315,000 3,150 315,000 3,150
Softwood 30,500 1,220 30,500 1,220 Block 28,000 1,400
28,000 1,400 Total 16,759,000 1,644,320 9,685,000 936,920
Table 5 Comparison of steel and concrete frame Embodied
energy; steel and concrete frame
20000000,-------------------------------, 15000000
10000000 D Steel •. Concrete 5000000 o Figure 2
Embodied energy content for steel and concrete frame Total
resource assessment 357 C02 Emissions; steel and concrete
frame 2000000,-------------__________________ ~ 1500000
o Steel 1000000 • Concrete 500000 o Figure 3 C02
Emissions for steel and concrete frame
4. Making a total resource assessment
Having examined the raw material, energy and C02 emISSIOns

a total resource
assessment can be made for the project. As outlined above

the important items with
regard to the raw materials is sustainability, length of

life and re-use. These three items
have been rated on a scale of 1 to 10. A rating of 1 means

poor sustainability and re-use
whereas 10 represents a sustainable source that is

completely recyclable. Sustainability
is based on the sustainability of the source and the

quantity available. In the interests of
simplicity rating of materials has been carried out only on

the major materials. Energy
and pollution are rated on the basis of the percentage

improvement that could be
achieved by an economically viable alternative which in

this case was judged to be a
reinforced concrete frame. (It could be argued that a

timber frame is also a viable
alternative but it was viewed that the fire protection

could not be adequately achieved.) Steel frame Concrete
frame I ~ Materia Quantit Sus'ity Reuse Total Quantit
Sus'ity Reuse i Total
In the example above the average rating per kilogramme of

material used was calculated
along with the quantity of carbon dioxide emissions and

energy used. For the latter two
a figure was derived showing the percentage of the total

energy and C02 emissions that
could be achieved by using a viable alternative design.

That is only 58% of the energy
and 57% of carbon dioxide generated by the steel frame

would be used or generated if
the design was changed to concrete. Although there is

little difference between the two
buildings in terms of financial cost the calculations show

that the steel framed structure
is much more energy intensive, produces more carbon dioxide

and is less sustainable.
If the quantity of materials is viewed in relation to the

amount of energy used and the
degree of pollution produced and these are used as

multiplying factors for the resources
used a steel building has a rating of 12.65 to 4.16 of

concrete. That is, on this scale the
steel frame is a much worse use of resources.
The paper does not suggest that these figures can be taken
as anything other than a
guide to the materials used and an illustration that total

assessment of resources using
the BQ is fairly easily achievable.
5 Conclusion.
Moavenzadeh said that in a market economy those which

produce at the lowest cost
carry the greatest burden and therefore while this system

remains then there is no
incentive for the environmental cost of construction to be

considered. The free market
alone without government intervention does not compel
producers to carry the full
burden of their actions. It is necessary therefore for

systems to be developed that can
assess the total resource assessment of building

construction.
Global environmental awareness and impact measurement is

now becoming a mature
area of research. At present the most useful tools

available are Building Research
Establishments Environmental Assessment Methods (BREEM)

which environmentally
assesses residential and various types of commercial

property. The system is based on
applying a checklist of facilities and standards to

properties. Another method of
assessment is local environmental impacts which are less

easily identifiable and require
considerable qualitative analysis. Both these systems

however although attempting a
more global assessment of construction are still failing

to recognise the resource use,
which is ultimately a global problem.
This paper has attempted to illustrate that by using the BQ

it is fairly simple to make an
assessment of the materials and energy used in a project

along with an estimate of the
carbon dioxide emissions produced. The system as outlined

is fairly crude, largely due
to a lack of available data, however it could be developed

relatively quickly. Naturally it
will only compliment existing methods but as some clients

are already interested in
greener developments or at least in promoting a green image
there is a need for change.
There is no doubt that energy content and environmental

assessment will have to be
considered much more in the future and methods that can

evaluate this need to be
considered now in order to meet this future need.
The system suggested by this paper is in effect a

combination of the macro and micro in
that it examines the building at the micro level but by

making a total resource
assessment assesses the material use at the macro level.

The intention of the paper is to
show that the existing system of procuring construction

work in Britain could very
easily be adapted to make a much broader resource

assessment than it does now.
Ultimately governments may produce a rating within which

construction projects must
comply. By feeding back data taken from the BQ, typical

ratings could be calculated
therefore avoiding abortive design work. Total resource

assessment 359
2 Connaugton IN. The energy cost of construction crn

Fourth International Symposium on Building Economics.
Copenhagen 1987 pp. 171-184
3 Brennan, J. Embodied energy in buildings. Resurgence Nr

169 March/April 1995 PPAO-45
4 Stein, R.G. et al Handbook of energy use for building

construction. US Department of Energy 1981
5 Dutch Building Research Foundation Publication nr 123
6 Verschuren, C. Peter &. Spekkink, D Waste costs in

housing construction projects; methods for calculating the
waste index. crn Fourth International Symposium on
Building Economics. Copenhagen 1987 pp. 80-91
7 Moavenzadeh, F Global Construction and the environment.

Wiley-Interscience 1994 ISBN 0-471-01289-0
8 Building Research Establishment (1993) BREEAMINew

Offices: Version 1193 BRE, Watford
THE RELATIONSHIP BETWEEN
CONSTRUCTION PROCUREMENT
STRATEGIES AND CONSTRUCTION
CONTRACT DISPUTES
J.T. Conlin and D.A. Langford
Glasgow, UK
P.Kennedy
Department of Building and Surveying,
Glasgow Caledonian University, Glasgow, UK
Summary
This paper details and discusses the results of research,

funded by the Engineering and Physical
Sciences Research Council (EPSRC) and jointly run by the

University of Strathciyde and Glasgow
Caledonian University, and which has been set up to examine

the sources, causes and effects of
disputes in the construction industry in the United Kingdom.
It has been found from the results obtained from the

research so far that there is a correlation between
the type of procurement method adopted and the types and

frequencies of disputes occurring.
Twenty-one recently completed projects were analysed

covering five main procurement options
currently in use in the United Kingdom. The sample returned
483 individual dispute events.
In addition to identifying the frequency and type of

dispute found on particular procurement options
the research has also identified which member of the

project team instigated the dispute and what the
main effects of each dispute were on the project.
It is hoped that the results of this research will provide

the industry with a suitable benchmark for
assisting in assessing the risks associated with particular

procurement options as well as creating an
increased awareness, among the project team members, of

likely dispute types and frequencies.
Keywords: Procurement Strategies, Contract Disputes,

Sources of Conflict, Effects of Conflict.


E & FN Spon. ISBN 0 419 22240 5. Procurement strategies
and contract disputes 361
Background
It is widely accepted that the construction industry in the

UK has, in recent years, become highly
adversarial and contentious with many writers and

researchers believing that the presence of conflict
is inherent within the organisational framework of the UK

construction industry (Clegg
1992)(College 1992)(Baden-HeUard 1992)(Langford et a/1992).
The emergence of these conflictual attitudes has resulted

in a dramatic increase in the number of
disputes in which organisations within the industry have

become involved. These disputes manifest
themselves at all levels and can culminate in full blown

litigation, arbitration or, more frequently
nowadays, some form of infonnal dispute resolution.
Many writers and researchers have attempted to identify the

true extent of conflict within the UK
construction industry in a number of ways, although the

vast majority of commentary on the extent of
construction specific conflict has been anecdotal. Fenn and

Gould (1994) suggest that very little
evidence has been produced to support the views that the

construction industry produces more
disputes than any other industry and that most of the

writing has been largely anecdotal.
Fenn (1991) discussing the incidence of disputes in the UK

found that over a period of around twenty
years (to 1986) the number of cases coming before the

courts was stable at around 150 per annum.
This low number is primarily due to the workload of the

courts being at full capacity and therefore
wlable to take on any more cases. To highlight this, Fenn

(1991) also identified that the number of
actual litigation initiations increased dramatically over a

similar period (200 in 1960 to 1150 in
1986).
To reinforce Fenn's findings, figures produced by Newey

(1992) show a 100% increase in litigation in
the period 1973 to 1980 with increases of aroWld 15% per

annwn in the period 1980 to 1989.
Both of these writers have attempted to establish the

magnitude of conflict in the UK construction
industry by examining the extent of litigation proceedings

and litigation initiations in the court
system. This "top down" approach is useful in that it

defmes the situation at one end of the spectrwn
thereby setting parameters for further research.
Other writers and researchers have attempted to examine the

extent of construction conflict on a more
detailed level than that afforded by the "top down"

approach. Heath et al (1994) carried out a survey
of 28 quantity surveyors in industry to try to identify the

incidence and extent of conflict. This
approach attempted to examine the layer of conflict that

cannot be identified by examining litigation
statistics and which, in general, makes up the greater

proportion of construction disputes occurring in
the UK. The results of the research carried out by Heath

et al (1994) appear to be concerued mainly
with disputes which result in fonnal claims submitted by

one party or another with no differentiation
or identification of those conflicts that cause problems

but which never reach formal claim position.
The findings produced by Heath et al (1994) are valuable

in that they provide a further benchmark
and parameter for further research into the nature and

extent of conflict in the UK construction
industry.
Research into the Sources, Causes and Effects of ConOict
The research which has been carried out so far into the
extent of construction conflict has been useful
in that it has provided certain bodies of knowledge for

other researchers to build upon.
The research program has been developed to identify and

quantify the sources, causes and effects of
disputes in the UK construction industry within the

parameters set out in the research methodology.
Objectives
The main objective of the research project was to widen the
understanding of conflict in the UK
construction industry by carrying out research into what

types of disputes occur within the industry, 362 Conlin,
Langford and Kennedy which member of the project team was
the source of the conflict, what was the true cause ofthe
conflict and what the effects of the conflict were.
Sources of Conflict
When carrying out the research the research team abstracted

data from recently completed
construction projects on who was the original source of

conflict. These sources included: clients,
consultants, contractors, subcontractors, suppliers,

financiers and extra contractual third parties.
This information allowed a picture to be built up of who

the conflict iuitiator was.
Causes of Conflict
The cause of conflict was another very important piece of

information that was required when
building up a picture of the type and extent of conflict.

The causes of conflict that were identified
came under a number of headings but included: budgetary

problems, technical problems, commercial
problems and interpersonal differences. Examples of these

causes included: budget overspend due to
variations, spatial co-ordination problems between

suspended ceiling subcontractor and heating and
ventilation subcontractor, subcontractors going into

liquidation and personal differences between key
design team members.
Effects of ConOict
Determining the effects of each conflict event was also

important when collecting data on conflict
events. The range of effects of conflict had to be
documented in order to ascertain how significant the
conflict event was, how avoidable it was and how severe it

was. By carrying out the research in this
manner a sliding scale of conflict significance,

avoidability and severity was built up for each type of
conflict.
In addition to the three broad objectives described above

the research project has also identified,
within the conflict events documented, whether patterns of

conflict emerge as a result of the
following functions: • Procurement type • Project type •

Project value • Client type • Technical complexity •
Form of contract • Geographicallocation
It is anticipated that the data collected from the

research, which includes information on the above
functions, will be sliced in such a manner as to

facilitate the building up of profiles to show how the
above functions affect the type, range, incidence and

frequency of conflict occurring within the UK
construction industry.
Methodology
To obtain an accurate picture of the type, incidence and

frequency of conflict occurring within the
UK construction industry, it was necessary to collect data

on a project by project basis.
The methodology forming the framework of the research is

based around the detailed abstraction of
data from recently completed construction projects. These

projects, chosen at random within project
values of£lm to £IOm are representative of the type of

mainstream work undertaken by the UK
construction industry within the last six years. Overall,
twenty-one projects were examined,
abstracted and documented. These projects covered the range

of procurement methods currently in
use in the UK, the main forms of contract used in the UK, a
range of client types, project values,
geographical locations and technical complexities.

Procurement strategies and contract disputes 363 Once
infonnation was collected on the project itself the
research team then began to read through all the project
documentation to extract any infonnation relating to any
conflict events. By using this method the researchers
were able to build up, not only a picture of the conflicts
arising on that project but also a pathology of how a
conflict progressed through the duration of a project. This
technique
allowed the true source or cause of a conflict to be

identified in relation to what the dispute appeared to be
at that particular point in time. The conflict was then
tracked through the duration of the project
to see how it developed, how it was resolved and what its

consequences were.
After the twenty-one projects had been documented the data

was sorted in a number of ways to
identify how project specific factors affected the type,

incidence, frequency and outcome of conflict.
Dis.putes and Procurement Method
As indicated, the choice and implementation of procurement

methods currently used in the UK
construction industry has been shown to be one of the

causes of conflict identified.
Within the study the procurement methods documented

covered five main options commonly found
in the UK at present. These methods were: traditional

Bill of Quantities (Private Client) traditional Bill of
Quantities (Public Client) traditional Bill of Quantities
(Local Authority Client) design and build (Public Client)
design and build (Private Client)
The conflict events documented in this study were grouped
together under six main headings that
covered the main areas of dispute identified. These main

areas are: Payment and Budget conflicts Perfonnance
conflicts Delay and time conflicts Negligence conflicts
Quality of materials/workmanship/management conflicts
Administration conflicts
Each of the main headings had a number of conflict

classifications contained within them that
allowed an accurate picture of the cause of the conflict

to be built up. The full list of conflict
classifications, along with their respective codes, are

shown in Appendix A.
Pll)'IDent and Budget
The first group of conflicts that were examined were those

which came under the heading of Payment
and Budget problems. Figure I shows the frequency, and

spread, of the conflict events occurring
under this heading and illustrates which procurement

option gave rise to which type of conflict.
It can be seen from figure I that, on the whole, conflicts

occurring within the payment and budget
subgroup had a tendency to occur on the traditionally

procured projects rather than projects procured
under design and build options. Only one conflict event,

namely the non-return of retention money,
was apparent on design and build projects with a private

client (DBPR), where the average number
occurring was 5.50 per project.
The three other variants of traditionally procured

projects returned a spread of conflict events that
were, on the whole, broadly similar. Variation claims by

the contractor, as a cause of conflict,
occurred on traditional private client (TPR) and
traditional local anthority (TLA) projects where they
returned an average number of conflicts per project of

1.17 and 2.67 respectively. Non-payment of
interim payment to contractor and non-payment of interim

payment to subcontractor, as causes of
conflict, returned an average of 0.67 and 2.67 for

traditional public client (TPU), 0.67 for TPR
projects and 1.53 for TLA projects.
364 Conlin, Langford and Kennedy Aver.r.ge number

ofconflcts pM' projllct Figure 1
The only procurement option to return an average number of

conflicts per project for the
non-payment of the balance of the contract sum to a

subcontractor was a TLA project where the
average was 1.33 conflicts per project. The average number

of conflicts per project arising out of
liquidated damages' disputes was 1.33 with all occurring on

TLA projects.
Conflicts arising out of problems with professional fees

occurred only on TPU projects where
additional fees and the basis of the fees accounted for an

average of 0.50 conflicts per project.
Extension of time costs also only occurred on TPU projects

where they accounted for an average
number of conflicts per project of 0.83 .
Conflicts occurring over general budget issues and

additional work occurred only on TLA projects
where they returned an average of 2.67 and 1.33

respectively.
In general , the results obtained from the payment and

budget subgroup show that the types of
conflicts that arise on traditionally procured projects

vary significantly from those obtained on design
and build procured projects. The high average number of

conflicts apparent in DBPR projects, which
are caused by the non-return of retention money, is

significant because it ties in with a high incidence
of conflicts caused by quality issues.
It can be seen then, taking the DBPR project out of the

analysis, that conflicts caused by payment and
budget issues have only occurred on traditionally procured

projects. This can, perhaps, be attributed
to a number of factors, namely: more competition in

bidding for the contract, a higher degree of
incomplete design at tender, more individuals and

organisations involved in traditional procurement
methods, greater degree of client input in traditional

projects and a single point of responsibility
prevalent in design and build projects.
Performance
The second conflict subgroup identified in the study is

Performance. Figure 2 shows the average
number of conflicts per project arising out of performance

issues. Procurement strategies and contract disputes 365
In comparison to the results shown in the previous section

the Performance subgroup is small. There
were no instances of conflicts caused by performance

issues in DBPU, DBPR or TPU projects. In the
case ofTLA projects the study identified that there was an

average of 2.67 conflicts per project
caused by the main contractor failing to proceed in a

competent manner. In comparison TPR projects
returned an average of 1.17 conflicts per project caused

by both the contractor and subcontractor
failing to proceed with the work in a competent manner.
A reason for the lack of conflicts of this nature on design

and build projects may be that the client
finds it difficult to monitor the performance of the

contractor or subcontractor and that the client may
be relying on the contractor for all his technical

information. 2.50 ./ 2.00 3.001 Av ... __ ~r of
conftlcts p« project 1.50
Delay and Time 1.00 0.50 O.OO .---=-.v 0& B Prhele

Client 0& 8 PublIC aienl Figure 2
Conflicts that were caused by delay and time issues

represented a significantly greater proportion of
disputes than those caused by the previous conflict

subgroup. Figure 3 shows the conflict pattern for
the delay and time subgroup.
In general, most of the conflicts caused by delay and time

issues occurred on traditionally procured
projects although there was an average of 3 conflicts per

project on DBPU projects and 0.50 on TPU
projects where the cause identified was the client being

concerned with the progress of the work.
366 Conlin, Langford and Kennedy Figure 3 0& B Prhete

Client 0& B PublIC Client
TIle overall picture of conflict caused by delay and time

issues in the traditionally procured projects
was shown to be biased towards TLA and TPU projects where

the majority of conflicts occurred. TPR
projects only returned an average of 1.17 conflicts per

project where the cause was identified as being
a delay in completion due to the fault of the contractor.
Conflicts caused by extension of time issues were well

represented between TPU and TLA projects.
Extension of time (EoT) conflicts, where the contractor

claimed due to the fault of the client,
occurred on TPU and TLA projects on average 0.50 and 2.67

times per project respectively. EoT
conflicts, due to the contractor claiming because of

matter's outwith the control of the parties
occurred only on TLA projects where the average per project

was 1.33. EoT conflicts caused by the
fault of the design team resulted in an average of 0.83 and

1.33 conflicts per project for TPU and
TLA projects respectively.
The remaining conflict issues that occurred within this

subgroup were those conflicts due to delay on
the part of one of the parties. Delay has been identified

as being different from EoT conflicts because
delay issues represent the actual dispute about the cause

of delay whereas EoT conflicts represent the
dispute about the length of EoT being awarded.
Delay in completion (DiC) was split into four main

categories: fault of contractor; fault of
subcontractor; fault of design team; fault of client. In

the first instance the TPR projects and TPU
projects returned an average of 1.17 and 0.50 conflicts per

project respectively. In the second
instance, where the fault was identified as being the

subcontractors, TPU projects had an average of
0.50 conflicts per project. The remaining causes of

conflict, namely fault of design team and fault of
client, resulted in an average of 1.33 conflicts per

project both on TLA projects. Procurement strategies and
contract disputes 367
The pattern shown in figure 3 is one that shows that delay

and time conflicts tend not to manifest
themselves on design and build procured projects and where

they do occur they tend to be where the
client has been concerned with the progress of work.
In general, the EoT and delay issues tend to occur on

traditionally procured projects.
Negligence
This group contains conflicts that are caused by delictual,

duty of care and negligence issues. 1.40 ¥ 1.20 15. 1
1.00 , 0.80 .. i 0.60 r 0.40 ! 0.20 0.00 ~r--~ __ v
--~ conl:rldor Figure 4 01 B P ...... I. 01 ... 01 IS
Plobtic Cienl
In general, only two main causes of conflict within this

subgroup were identified: negligence of the
architect and negligence of the contractor. The former

cause of conflict occurred on both TPR and
TPU projects where the average number of conflicts per

project was 0.67 and 0.83 respectively.
Negligence of the contractor occurred only on TLA projects

where the average was around 1.33 per
project.
In the quality subgroup, issues such as defective

materials, perceptions of quality and workmanship
problems were identified. Figure 5 shows the pattern of

average conflicts per project for the quality
subgroup.
368 Conlin, Langford and Kennedy 12.00 1 10.00 // 8.00

Average number of 6.00 conflicts per project 4.00 2.00
0.00 Figure 5 o & B Ptiwle Client
It can be seen from figure 5 that, in the quality subgroup,

the causes of conflict occur more often on
the design and build methods than on any of the other

subgroups. For instance, defective materials
and poor construction co-ordination both occur on DBPR

projects with an average number of
conflicts per project of 11.60 respectively. DBPU projects
also returned causes of conflict such as:
clients' perceptions of specialist subcontractor's design

(5.75); non-timeous design infonnation (3);
and poor co-ordination of subcontractors (3 .25).
The traditionally procured projects returned a wider spread

of causes of conflict but at an overall
lower average number per project. TLA projects had a number

of causes covering: defective
materials; clients/design team's perception of quality of

contractor's workmanship; client's perception
of contractors design solution; non-timeous design

infonnation; and poor construction co-ordination.
Each of these causes returned an average number of

conflicts per project of 1.33 respectively.
In the case of TPU projects the spread of conflict covered

issues such as: poor design co-ordination
between consultants (050); poor design co-ordination

between consultants/contractors/subcontractors
(0.83); non-timeous design infonnation(1.33); poor

co-ordination of subcontractors(0.83); poor
construction co-ordination(0.83); differing site

conditions(0.50); restrictions placed on contractors
working methods(0.50).
Projects that were procured tmder the TPR method showed a

much narrower spread than the other
two traditional methods with only three causes of conflict

being identified. Poor design co-ordination
between consultants returned an average of 2.67 conflicts

per projects whereas differing site
conditions and restriction on contractors working methods

both returned 0.60 per project.
The study would appear to indicate that design and build

projects returned a high average number of
conflicts on issues such as defective material, quality of

workmanship and co-ordination of work
because there was a lack of adeqnate supervision on behalf

of the client and the lack of ability on the
clients part to adequately specify and interpret their

requirements. Procurement strategies and contract disputes
369 The spread of causes of conflict relating to
traditionally procured projects, coupled with their
relatively low average nwnber of conflicts per project,
seem to indicate that there may be problems associated
with the interface between members of the design team,
between the design team and the contractor and between the
contractor and subcontractor.
Administration
Within the administration subgroup (Figure 6) the causes

of conflict identified covered issues that
were related to information flow, administrative and

contractual procedures and issue's outwith the
control of the contracting parties.
It can be seen from figure 6 that all the procurement

methods included in the study had causes of
conflict from within this subgroup although design and

build projects returned a much narrower
spread than traditionally procured projects.
Within OBPR projects only one cause of conflict was

identified. Lack of information from design
team/client was responsible for almost 11 .50 conflicts on

average per project within the OBPR group.
In comparison, within the OBPU group, the contractor's

non-adherence to administrative procedures,
poor feedback from the contractor and extra contractual

third party problems all returned an average
of3 .25 conflicts per project respectively.

As was shown in the quality subgroup the traditionally
procured projects had a wider spread of causes
of conflict but returned a lower average nwnber of

conflicts per project than the design and build
methods. 12.00 10.00 8.00 6.00 4.00 2.00 0.00

Figure 6
TLA projects included conflicts caused by: lack of

information from the client; contractor's
non-adherence to administrative procedures; lack of

information from design tearn/c1ient; and
subcontractor's non-adherence to administrative procedures.

Each of these causes returned an average
number of conflicts per project of 1.33. 370 Conlin,

Langford and Kennedy Within the TPU projects the spread of
causes was as wide as that seen in the TLA although the
average number per project was more variable. Within the
TPU projects the main causes were: contractor's
non-adherence to administrative procedure; design team's
non-adherence to administrative procedure; and extra
contractual third party problem. Each of these causes
returned an
average number of conflicts per project of 1.33

respectively. The three others represented included: lack
of information from client; poor feedback from contractor;
and wrong information from design
team. Each of these causes returned an average of 0.50

conflicts per project.
TPR projects returned a narrower spread of conflict causes

within the administration subgroup than
either TLA or TPU projects. Within the TPR projects poor

feedback from the contractor, lack of
information from design team/client and subcontractor's

non-adherence to administrative procedures
all returned an average number of conflicts per project of

1.17 whereas the contractor's non-adherence
to administrative procedures returned an average of 1.83.

It can be seen from figure 6 that, as in the case of the
quality subgroup, design and build projects
return a much narrower spread of causes of conflict but a

higher average number of conflict events
per project than traditionally procured projects. This

could suggest that, due to the greater number of
organisational units involved in a traditionally procured

project, the potential for administrative
conflict is higher than on design and build projects.
Conclusion
This paper has identified that there has been a substantial

gap in the available knowledge of the
sources, causes and effects of conflict in the UK

It has been shown that many writers and researchers have

attempted to ascertain the extent of conflict
in the UK construction industry by examining the problem

from a top down viewpoint. This approach
has been acknowledged as misrepresenting the true picture

of the sources, causes and effects of UK
construction conflict. To overcome these problems the

authors have documented and analysed a
number of recently completed projects to build up an

accurate picture of the true extent and nature of
conflict in the UK construction industry.
One of the main findings of the study was that the

procurement method used, and the type of client
procuring the project, had an effect on the nature,

frequency and spread of conflict occurring on a
project. Six broad groups of conflict causes were

identified, each relating to a specific type of dispute.
These groups covered: payment and budget; performance;

delay and time; negligence; quality;
administration
By using these conflict groups the research team identified

that certain types of conflict occurred on
certain types of procurement method. In the case of payment

and budget issues it was established
that, in the main, it tended to be the traditionally

procured projects that returned disputes that were
caused by payment and budget problems.
The performance group of conflicts highlighted that, for

the most part, it was traditionally procured
projects that were, again, returning disputes. This picture

was broadly the same for conflicts occurring
within the delay and time group. It was shown that, within
the delay and time group and negligence
group, it was mostly traditionally procured projects that

returned disputes.
One conflict group that attracted a high average number of

conflicts per project on design and build
projects was the quality group. Within this group it was

shown that disputes relating to material
quality and quality ofworkroanship were more significant

on design and build projects than on
traditional projects.
The final conflict group, administration, shows that, as

in the case of the quality subgroup, design and
build projects return a much narrower spread of causes of

conflict but a higher average number of
conflict events per project than traditionally procured

projects. Procurement strategies and contract disputes 371
Overall, the study has shown that, in the main, conflicts

relating to administration and quality are
more prevalent on design and build projects than on

traditional projects but conflicts relating to
payments and budgets, delay and time, negligence and

perfonnance are more prevalent on traditional
projects
Baden-Hellard, R (1992) Construction Conflict Management

and Resolution, Construction
Conflict: Management and Resolution, Peter Fenn and Rod

Gameson (Eds), pp 35 46, E & F. N.
Spon, London
Clegg, S. R (1992) Contracts Cause Conflicts, Construction

Conflict: Management and Resolution,
Peter Fenn and Rod Gameson (Eds), pp 128 -144, E & F. N.

Spon, London.
College, B (1992) Construction Contracts: Towards a New

Relationship, Construction Conflict:
Management and Resolution, Peter Fenn and Rod Gameson

(Eds), pp 229 249, E & F. N. Spon,
London.
Fenn, P (1991) Managing Corporate Conflict and Resolving

Disputes on Construction Projects,
ARCOM
Fenn, P and Gould, N (1994) Dispute Resolution in the UK

Construction Industry, Procedings of
First Plenary Meeting ofTG15, Kentucky.
Heath, B. C., Hills, B., & Berry, M (1994) The Origin of

Conflict Within the Construction Process,
Procedings of First Plenary Meeting ofTG15, Kentucky.
Langford, D. A., Kennedy, P. and Sommerville, J (1992)

Contingency Management of Conflict: An
Analysis of Contract Interfaces, Construction Conflict:

Management aud Resolution, Peter Fenn and
Rod Gameson (Eds), pp 64 71. E & F. N. Spon, London.
Newey, J (1992) The Construction Industry, Construction

Conflict: Management and Resolution,
Peter Fenn and Rod Gameson (Eds), pp 21 -24. E & F. N.

Spon, London. THE PROVISION OF INFRASTRUCTURE SERVICES
IN DEVELOPING COUNTRIES W.H.E. Suite Department of Civil
Engineering, University of the West Indies, St Augustine,
Trinidad Abstract Infrastructure development is accepted
as a necessary pre-condition to economic development. So
convinced of this critical factor are the development
economists and planners that they have accorded it a
priority listing on their prescription for the developing
countries since the decade of the 1960s. Three decades
ago, the focus was on the construction of hydroelectric
mega-dams and super-highways. These have given way to
more modest but continued interest, in micro dams and in
road network systems per se, particularly agricultural
access roads and bridges. The new focus has now shifted to
water management, flood control and restoration and
extension of potable water systems with particular
interest in industrial water demand. Against this
background, the central problem facing the planners of the
South is not (only) technical but rather the question of
procuring the necessary funding to carry out these works.
The paper is a case study of the Trinidad and Tobago
situation and a review of the efforts in pursuit of
innovative methods of financing of its infrastructure
needs. The paper discusses the challenges which are being
presented and the problems being encountered in dealing
with all these sectors of infrastructure development.
Keywords: Divestment, infrastructure provision, novel
management approaches, private sector financing,
privatisation, public sector reform, user fees. Sommaire
Le developpement infrastructural est accepte camme une
condition necessaire pour Ie developpement economique.
Les economiste et planeurs du developpement sont assez
convainyu de ces facteurs critiques qu'lls les ont
stipules depuis des 1960 sur les listes prioritoires au
pays du developpement. Avant 30 ans Ie foyer etait la
construction des grands barrages hydroelectriques et des
grand chemins. En ce moment l'accent est sur des petits
barrages et sur les reseau routes et en particulier sur
les routes d'acces et des ponts pour les communautes
agricoles. Cet foyer nouveau est sur l'administration de
reau, la surveillence des deluges, a pourvoir de l'eau
potable et en particuliera pourvoir de l'eau a
l'industrie. Avec cet fond,la probleme primaire rencontn~
par des planeurs au sud est tant technologique q'une
de procurer des fonds necessaires pour faire ces travaux.
Ce travail examine la situation en Trinite et
Tobago et revoit les essais pour obtenir des fonds pour ces
besoins infrastructural. Ce travail discute
les demandes et des problemes reconrrees en tels secteurs

des developpement infrastructural. Mots principaux:
Depouillement, provision infrastructural, approches
nouvelles de l'administration.
finance par Ie secteur prive, privatisation, reform en

secteur public, honoraires payes par l'usager.


E & FN Spon. ISBN 0 419222405. Infrastructure services in
developing countries 373
1 Introduction
Developing countries invest some US$200 billion a year in

new infrastructure which is more or
less 4 percent of their national output and about a fifth

of their total investment (World Bank. 1994).
The terrible backlog of needed infrastructure. a need to

replace losses occasioned by natural .
disasters. population growth. increasing urbanisation and

above all. a drive to fully develop the
economic resources and potential of developing countries.

have signalled increased spending in this
area. Governments of developing countries are now

desperately in search of vast sums to be
invested in infrastructure projects. Of the US$200 billion

annually spent on infrastructure. 90
percent or more of it is generated through government tax

revenues or intermediated by
governments. Almost half of government investment spending

is in this sector. Governments have
sourced funds mainly through foreign financing for
infrastructure. Three streams have been used to
facilitate this investment. publicly guaranteed private

loans. multilateral loans and bilateral loans. A
decade and a half ago (1980). the dominant stream was from
publicly guaranteed private loans (50
percent approximately). with bilateral and multilateral

loans representing approximately equal share
of the remaining 50 percent Governments have found it

increasingly difficult to continue offering
guarantees and consequently. both bilateral and

multilateral streams have increased while guarantee
loans have decreased [World Development Report. 1994].

Today. less than 25 percent (-US$50 b)
are through guarantee. approximately 40 percent.

multilateral ($80.0 b) and 35 percent ($70.0 b)
bilateral loans.
The problem faced by most governments of developing

countries is their inability to continue to
fund even maintenance and replacement of existing

infrastructure systems. after decades of
post-independence neglect and increasing usage. The demands

of increasing urbanisation.
population expansion and new excursions in

industrialisation are not being met and in some cases.
plans for expansion of the sector have been cornmissioned

and completed more than a decade ago.
But above this hum of activity is the increasing criticisms

of the inefficiency. questionable
management. waste and often instances of corruption. They

have all served to intensify the focus on
the state-run infrastructure services. Traditional sources

of funding are no longer willing to provide
unlimited funding and the population is not prepared to
agree to payment of increased rates. New
and innovative mechanisms must now be generated to create

the necessary funding to meet the
increasing demands on the public sector in meeting its

statutory obligations of provision of utilities
and the society's infrastructure systems. The situation

appears so much like the proverbial "chicken
and egg" situation. The existing condition (status) of

utilities and infrastructure requiring repairs.
refurbishment. at times even complete replacement in the

face of almost total collapse. This is
accompanied by plans for expansion or the introduction of

new technologies to meet new industrial
and commercial opportunities and to service a growing

population. The other side of the coin is an
unwillingness of the dissatisfied customers to pay

increased rates or taxes. at least not before the
system is improved. Governments are therefore faced with

the dilemma. on the one hand. a call to
improve the system before increased rates. while on the

other being desperately short of funds. This
situation so often describes the utility or infrastructure

system. overburdened with a backlog of debt
that continues to mount.
It is against this background that the paper attempts to

discuss the Trinidad and Tobago situation.
The study is presented. conscious that the present

predicament in several of the commonwealth
Caribbean islands is almost identical in most of the

utilities and infrastructure systems.
374 Suite 2 Funding of Infrastructure Projects It would

be accurate to say that 100 percent of all infrastructure
and utilities costs, i.e., development
capital expenditure and recurrent costs were for the

account of the central government's coffers, up
to 1990. Annual allocations were made through the national

budget and these represented the
principal financial source since rates collected were

invariably insufficient to meet costs, far less
pay outstanding debts or fund development programmes. The

Public Utilities Commission Act, No.15 of 1966 [Chap.
54:01] was "an Act to permit a Public
Utilities Commission to determine rates for public

utilities and to perform certain other functions
respecting utilities". The initial focus was for rate

setting for telephones, electricity power, Airport
and Port charges, postal charges and water and sewerage

rates. The mechanism which was
employed was that the management would prepare the case in

support of new rates which was
submitted to the Public Utilities Commission (pUC). The

PUC would then publish the intention to
raise rate, inviting the public to peruse and study all the
supporting documentations in their
possession and submit comments or counter arguments. The

PUC would hold public hearings after
which a decision would be taken as to whether the

increased rates would be allowed and if so to
which new rate and for how long. It has generally been felt
that the reason why rates have not been
increased in keeping with increased cost of service is

mainly because of a failure of the management
of the various utilities to present a substantiated case in

support of this. Others have maintained that
it is the government's reluctance to raise rates because it

may consider this issue too politically
sensitive during the years of plenty (1974-83) and moreso
during the lean years from 1983 to the
present. In some cases, rates have not been increased for

Water and Sewerage since 1938. In the
case of telephone and electricity, rates have increased. In

the decade of 1980's, the
telecommunication sector went through a heavy capital

(equipment expansion and modernisation)
upgrading. Soon after, the domestic telephone (TELCO)

company and the international link
(TEXTEL) were merged into a single company (TSTT) and

later privatised. The international
British Cable and Wireless Company now owns majority shares

and the government holds minority
shares. The electrical power generating and distributing

company, T &TEC, has undergone major changes
in the last year (1994). Up until 1983, the debt incurred

by T&TEC was covered by the central
government by way of annual subsidies. These were reduced

in 1983 and by 1988 had stopped
altogether mainly because of the central government's

inability to continue to cover accumulating
debts incurred by the public sector statutory authorities

and companies and not because of any
policy change. The T&TEC had to carry these debts through

borrowing. In 1994, it sought external
funding by entering into a new arrangement with a foreign

partner through a mechanism of
divesting itself of its generating capacity. In this

separate company, PowerGen, T &TEC holds 51
percent shares. PowerGen will now supply T&TEC with

electrical power through a Purchasing
Agreement entered into for the next IS years. All

electrical power-generated must be sold to T &TEC.
It cannot sell directly to a private consumer. The question

of setting new rates for the public
consumer still lies with the PUC and assumes new

proportions. The purchase price by T&TEC
from PowerGen has been set by agreement. In the case of

the Water and Sewerage sector, the Water and Sewerage
Authority (WASA) is
responsible by law, through the Water and Sewerage Act,

Chap. 54:40, earlier Act 16 of 1965, "to
provide for the development and control of water supply and

sewerage facilities in Trinidad and
Tobago and matters of sanitation incidental thereto, the

promotion of the conservation and proper
use of water resources; and for the establishment of an

Authority to administer the several purposes
aforesaid and matters connected therewith". While there is

little debate that rates have not Infrastructure services
in developing countries 375
significantly changed, based on the mechanism employed, the

annual rateable value (ARV) of
property, one is reminded that the WASA Act clearly

identifies under the caption "Financial
Provisions" [26(1) of Chapter 54:40].
"The Authority shall so exercise and perform its functions

as to ensure that its revenues are not
less than sufficient to:
(a) Pay instalments of compensation required by Section 39;
(b) Cover operating expenses, including taxes, if any, and

to provide adequate maintenance and depreciation, and
interest payments on borrowings;
(c) Meet periodic repayments on long-term indebtedness to

the extent that any such repayment exceed the provision
for depreciation;
(d) Create reserves for the purpose of future expansion;
and the sums required for any of the
purposes of the Authority shall be met out of the funds

and resources of the Authority".
It is clear that these provisions in the Act had little

impact on the Board or Management of WAS A,
definitely not the Cabinet nor the PUC.
While the government had raised revenue through the general

taxation of road users, through
licensing of drivers and vehicles, in 1981, the government

established a TT$35 million Road Fund
which was financed from earmark petroleum revenues. The

fund was used to cover overall
maintenance and general development of the road network.

With the downtum in the economy after
1983, the fund was discontinued and the money in the fund
returned to the consolidated fund to deal
with general debts. In 1993, the Government found itself

once more unable to finance the
maintenance of the 9,638 km of the national roads networlc

including 350 bridges and more than
400 landslides, with at least 150 of them in a very serious

condition. A 5 percent fuel tax was
imposed. The revenue generated is to be kept in a dedicated

fund for the exclusive use of road
maintenance and repairs.
Another mechanism employed in respect of generating

revenue for road repairs and expansion is
related to a priority bus route. A priority or dedicated

bus route was built in stages from 1980's to
the early 1990's along an abandoned railway track and

closed to general traffic. The route of
approximately 12 miles in length ran parallel to a major
East-West highway leading east from the
capital city was intended for use by publicly owned buses

but was later opened up to privately
owned minibuses (passenger load of 12, 17, 25). These

minibuses had to pay a special registration
fee to permit use of the route. The route was also opened
to VIPs who had to be granted special
permission for use by the minister responsible for roads

and transport. It has been proposed that this
permission could be extended to a broader class of users

for a fee which could be used as a source of
revenue dedicated to repairs and maintenance of the route.
Since the route was crossed at several points by existing

local roads, this would have prevented the
use of toll gates at the ends. In fact several of the

local roads had to be restricted to generate
sufficient right away on the priority route and to ensure

safety. In fact, the permitted intersections
even today represent the cause of most fatalities and

accidents on the route.
Direct taxation through licensing of vehicles and drivers

and fuel taxes have been the main
approach to raising revenue in small states the use of

toll gate are not very easy to implement
because of the number of small communities existing along

all routes as well as the fact that there
may be alternate and even illegal routes to avoid the toll

gates. Developing countries, particularly
small island states, have therefore been pursuing several

novel approaches for raising financing for
new construction as well as for maintenance and repairs of

existing infrastructure systems, even
though some of the traditional approaches in the developed
countries may not be readily applicable.
376 Suite
3 New Approaches Generally, infrastructure and utilities

are provided and maintained by the public sector or
government in most developing countries. The problem of

sourcing funding for maintenance and
repairs as well as expansion of existing system or the

introduction of new systems continue to be the
problem of the central government. Today, earlier sources

of aid have either disappeared or are
unwilling or unable to meet the growing needs of

developing countries. Multilateral and bilateral
international lending agencies have now raised in unison

the call for privatisation and divestment as
a precondition for any further loans. The infrastructure

system and the utilities have been specially
singled out for early transfer to the private sector. We

are led to believe the partial or complete
divestment would not only relieve the state of the

responsibility and financial burden of locating
funding for maintenance and repairs but for new works. It

is expected to attract more financing
through the new opportunities for local and foreign private

sector investment and loans. To meet the
considerable demands for funding the state has sought joint

venturing consequent upon the fate of
shares or partial divestment. A number of new approaches

are being attempted. In the Airport sector in Trinidad and
Tobago, the car park facilities have been leased out to
another
public sector Company operator who will be responsible for

the upkeep of the car park and its
security. Within the terminal building, private

concessionaires were invited to make prepayment
towards the construction of duty-free shopping booths. The

money realised then financed the
construction. The intention is to expand concessions

within the departure and arrival halls, as well
as the rest of the landslide to accommodate a wide range

of customer facilities. Similar advanced
investment of private sector interests permitted the

Airports Authority to provide facilities for
banking outlets, taxi service and a range of take-away

snacks and gift shops. All these have been
used to raise revenue to carry out the maintenance

programme of the airports. The main thrust in the
direction of funding for a new airport and aviation

industrial/commercial estate has been with the
search for a developer!investor willing to enter into a

Build, Own, Operate and Transfer contract
with the Airports Authority. Such a partner has been

selected after a process of inviting international
proposals. The airport assets are to be vested in a new

company and would then represent the shares
or equity of the Government of Trinidad and Tobago while

the preferred partner is to locate funding
for development of the estate. In this way, the funding

would represent the share of the developer
who would share in In this way, the funding would

represent the share of the developer's equity who
would then share in the ownership and operation of this

facility. After a prior agreed period (17
years), the assets will be sold or transferred back to the

Government of Trinidad and Tobago. This
project has been stale-mated at the stage where the

selected developer has not yet been able to
secure the funding even after two years have passed. The
government seems hopeful that funding
will be located and the project started. In the Sea port

subsector, the public sector ports operated through a
State-owned Port Authority of
Trinidad and Tobago has sought to generate a land

development or land use plan. Through this, it
has identified two separate thrusts to attract financing.

The first is to invite the private sector to enter
into partnership in developing the lands under the

jurisdiction of the port but which is not needed for
actual port operations. This plan has been developed by

independent consultants. Proposals include
hotel facilities, high income executive type apartments, a

convention centre, a cultural centre for the
performing arts. The second thrust stems from the port's

proposal to subdivide its basic functions
into independent financial/corporate entities. The aim is

for the Port Authority to become as far as
is possible, a landlord. Here separate companies, which in

the first instance would be public sector,
will immediately move either to sell shares on the open

market or will seek private sector block Infrastructure
services in developing countries 377
partnership. The leasing out of port lands to private

operators who carry out maintenance and repair
services for pleasure craft at the Chaguaramas Development

Authority, a public sector owned port,
has already commenced.
Joint venturing, sale of shares, leasing and concessioning

are already being explored in both the
air and marine transport sub-sectors. This is together with

contractual arrangements for new works
via the now growing popular, Build, Own, Operator, Transfer

(BOar) system or one of the many
permutations, (BOO and BOT) or variations on the basic

theme.
Within the mandate to provide potable water and sewer

collection and treatment facilities, the
government has again sought to break new ground in the

Caribbean. The Water and Sewerage
Authority (WASA) entered into a management contract with a

UK-based company Severn-Trent!
Wimpey to provide management services to the Water

authority and at the same time to source and
make available a loan to the Authority. This loan is to be

converted into equity into the fully divested
authority at the end of three years. The management

contract has already been entered into and the
contract has recently been initiated.
The basis of these thrusts is two-pronged. The first is to

free the state of the responsibility to raise
the initial quantum of funding by

privatisation/divestment, thus reducing the liability of
the state.
The other thrust is intended to exact from the user, the

cost of maintenance and repairs, as well as
some fraction to be put aside for replacement and

expansion. The second approach has included the
award of maintenance contracts paid for by user fees and

tolls. SOURCE OF FUNDING ~ AID I LOANS i \~ I
Multilateral Bilateral I NEW APPROACHES Pri .. //
vatlsatIon / User Fees Tolls Divestment I Sale of
Shares Joint Venture BOOT Leases Concessions Bonds
Deducted Taxes Maintenance Contracts Advance Payment of
Rates
378 Suite
4 Discussion It must be pointed out that most of the

approaches discussed in this paper have only recent! y been
undertaken in the Trinidad and Tobago situation. Some have
not yet gotten off the ground and
others have not yet run enough of their course to have

presented useful lessons to be learned or help
to anticipate the difficulties which may yet arise. While

some of these have been tried elsewhere,
with varying degrees of success, this is not to say that

they will be applicable in small island states
or all developing countries. The experience here has shown

that it is necessary for the state, contemplating
privatisation, to
undertake a realistic evaluation of all the assets of the

entity to be privatised or divested. This should
include all the non-material assets. The subsequent

management and ownership structure is very
critical. But since this paper is not exclusively intended

to deal with privatisation/divestment, the
only otherissue to be considered is the servicing of that

sector of the market that may not be able to
pay the market price for services. While tolls may be

readily applicable in larger countries, in smaller states,
the small volume of
users or the existence of alternative routes may decrease

the atractiveness of this option. It was pointed out that
the selection of a preferred developer for the airport
project has not yet
borne fruit. The quest for the US$75 million has not been
successful after more than two years since
the contract was signed. The management contract with the

Water and Sewerage Authority has begun to raise several
questions since Severn-Trent has not sought to put in

place support staff with a view to
understudying and strengthening the existing leadership in

implementing the new thrusts. Instead,
they have recommended the replacement of the entire senior
management. This could prove
problematic for the transition to private ownership, if

the intention is to maintain local ownership of
the utility. So far, the leasing and the concessions have

worked very well. The dedicated fuel tax is to be used
by a Privatised Road Authority but even this was initially

to be put in place by 1995 but already
resistance has pushed the schedule for commencement to

1997. Critical to the entire process of seeking private
funding for utilities and infrastructure systems is
the question of surrendering or sharing ownership and

control, but underlying the process is the
reduction of labour force. This represents a major

objection to the issue of privatisation. By way of
caution and concern, we must admit that the government and
management of state
agencies responsible for infrastructure and utilities in

developing countries are in an extremely weak
position. The utilities and infrastructure are in a

terrible condition, and in search of vast sums of
money for rehabilitation or replacement and in some cases,

expansion. They are unable to raise
rates for a number of reasons including the economic state

of many of these countries coupled to the
facts that the public is completely up in arms against

years of poor service but at the same time,
lulled into believing that rates should not be related to

cost of operation. The international lending
agencies are in complete unison that privatisation and

divestment of state agencies in general and
those in the infrastructure and utilities systems in

particular, are necessary preconditions. Third
world academic institutions have joined the call. No one

dares resist the drive to de-state
infrastructure and to privatise. Nevertheless, three issues
must be raised. The new approach to
funding does present certain concerns: (i) There is the

definite fear that only those who can pay the market price
for services will be able to have them. That communities
and individuals on the periphery of the economic process
of wealth generation will be neglected or even denied
access. Infrastructure services in developing countries
379
(ii) Since the driving force for the new philosophy in the
infrastructure/utilities market place must be based on
the ability to pay that priority industrial and commercial
activities, generating foreign exchange say, or involved
in the export thrust or a favoured sector will have
greater access to service before principally
domestic/residential communities. There is the danger
which already has begun to appear that social and
collective needs may not always qualify for priority under
the strict application of market analysis, economic
financial justifiability and return on investment criteria.
(iii) The other areas of concern relates to the resistance

to strengthen environmental and health and safety
regulations and legislation since it is generally perceived
that such a move will be a deterrent to the foreign
investor and intensified industrialisation. Here, it is
often stressed that consistent with the new philosophy,
the state's role is that of facilitator not regulator or
principal actor.
Already those three facts have become serious issues to be

dealt with by those piloting the new
privatisationldivestment thrust and the drive for

innovative private sector financing of infrastructure
works in developing countries.
l. World Development Report. (1994).lnJrastructureJor

Development. Published for the World
Bank, Oxford University Press. 1994.
2. Public Utilities Commission. Act 15 of 1966. Later Chap.

54.0l. Revised Edition of the Laws of
Trinidad and Tobago (1980). ALTERNATIVE DISPUTE RESOLUTION

METHODS IN CONSTRUCTION A TRINIDAD AND TOBAGO CASE W.H.E.
Suite Department of Civil Engineering, University of the
West Indies, St Augustine, Trinidad Abstract During the
period 1974 to 1983, Trinidad and Tobago experienced a
virtual construction boom. It was to generate a dramatic
rise in the incidence of construction disputes some of
which were to end in legal action while others ushered in a
surprising number of arbitration proceedings. Today, 12
years later, some of these disputes have not yet been
finally resolved as they remain trapped in prolonged
arbitrations or appeals in the courts. The construction
process was to yield the first instances of Mareva
injunctions in the local jurisdiction. In these,
sub-contractors and local joint-venture partners sought to
prevent foreign contractors from liquidating their assets
and leaving the jurisdiction while outstanding claims
remained unpaid and disputes unresolved. In this climate,
there were a wide range of disputes which led to claims by
clients, consultants and contractors. Many of these have
not been resolved but have simply been abandoned by the
claimants, either because they were considered to be a lost
cause, in pursuing the proverbial "man of straw" or
because the claimant was no longer financially able to
pursue the claim. The arbitrations have proved more costly
than initially expected and the promise of prompt
resolution has not materialised. The general
disillusionment in the prompt resolution of disputes
through arbitration or litigation has raised serious
questions as to the possible use of other methods of
conflict and dispute resolution. The paper reviews the
experience in Trinidad and Tobago over the period
(1974-1983), the economic boom years and the subsequent
period of economic contraction. It discusses the weakness
in the present system of arbitration and offers a reason
why other methods have not been explored. The paper
concludes with discussion and recommendations for
improving the arbitration process and explores the other

alternative options of dispute
resolution.


E & FN Spon. ISBN 0 419 22240 5. Alternative dispute
resolution methods 381
Sommaire
Pendent des ans 1974 et 1983, Trinite et Tobago eprouve une
grande hausse en construction.
Ceci ont amene aux conflicts de construction. Quelques-uns

d'entre ceux ont fini par des
proces juridiques, l'autres ont amenes It l'arbitrage.

Maintenant, apres 12 ans quelques-uns
d'entre ceux sont encore irresolus parce qu'ils sont

attrapes en tribunaux.
Le procede de construction It amene premierement It un

arret de sursis dans les tribunaux
regionaux. Voila les sous contractants et les associes

regionaux ont prevenu les contractants
etrangers a liquider leurs actifs et a quitter Ie pays

quand les demendes etait non payees et
les conflicts irresolus.
Dans ge situation on avait pleusieurs conflicts qui amene

a demendes par les clients, les
consultants et les contractants. Un plupart de ces

demendes sont abandonnees par les
reclamateurs parceque l'autre part etait ruine ou parceque

les reclamateurs sont failli pour
suivre les demendes. Les arbitrage sont devenu trop cher

et une resolution dans un court
temp n'est pas realisee. Cet desillusionnement general a

amene It une perquisition a l'autre
methodes de resolution des conflicts. Cette etude est sur

les developpement en construction
Ii Trinite et Tobago pendent les annees de grande hausse

(1974 1983) et apres ca pendent
les annees de contraction economique. •
Ce travail discute la debilite de l'arbitrage et offert

raisons pour n'a pas avoir explore
l'autres methodes. Ce travail termine avec discussion et
recommendations pour ameliorer Ie
procede de l'arbitrage et explore autres options de

resolution des conflicts.
382 Suite
1 Introduction
We can begin by saying that the majority of the disputes

which arose within the construction
sector did so because the various actors in the

construction drama had very little prior
knowledge of the mechanics of how disputes arose. Neither

did they give prior thought to
their resolution and as construction activities rapidly

increased, they were simply
overwhelmed. The result was that some of the parties

sought to wish them away in an
authoritariar. manner (consultants) while others simply

thought they would go away in the
increasing frenzy or at the final delivery of the works

(contractors). Yet again others began
to make costly trips to the civil courts which they found

often functioned too slowly and not
necessarily to the satisfaction of the aggrieved party.

The parties had engaged in works, the
contract documents of which included arbitration clauses

but they themselves had little
definite knowledge of the process. When disputes had

arisen in a few instances where
arbitration had been employed, the arbitrators were

lawyers. The professional bodies,
architects, engineers and quantity surveyors generally had

employed the standard form
contracts, e.g., ICE, RIBA, JCT, FIDIC etc., but in some

cases had introduced
modifications in an attempt to indigenise or adapt. These

professionals and by extension,
the professional bodies made provision for or at least

purported to hold themselves out as
being capable of providing arbitration services in the

event of disputes. But, they were
simply not prepared. The architects and the quantity

surveyors may have been better
prepared for arbitration than were the engineers since the

academic programme of training
of engineers contained little or nothing about disputes,

conflict resolution or arbitration. In response to this
growing problem within the construction sector and
involving
engineers in particular, the Association of Professional

Engineers of Trinidad and Tobago
(APETT), in an ad hoc manner, organised one of its

luncheon lectures in 1985 to treat with
the topic of arbitrators. The speaker was an

attorney-at-law, and has since risen to the office
of Chief Justice of Trinidad and Tobago (1995). This

introduction so wet the appetites of the
engineers that a workshop/seminar was organised to follow

(1985). Invited presentations
sought to expose the engineering fraternity to the question

of arbitration in Trinidad and
Tobago from the perspectives of the five related

professions:
1. The Architect
2. The Quantity Surveyor
3. The Engineer (Design)
4. The Lawyer and

5. The Contractor This was the first serious attempt to
deal, in a frontal manner, with this important issue.
The issue was to be treated at two subsequent formal

training sessions by the staff of the
Department of Civil Engineering, Construction Engineering

and Management Programme.
The first was a seminar/workshop entitled, "Contract Law,

Contract Administration and
Contract Practice" organised for the Central Training Unit,

Personnel Department of the
Government of Trinidad and Tobago. This two-week programme

was aimed at construction Alternative dispute resolution
methods 383
staffin the public sector (June 27 July 8,1988). The

specific focus was on arbitration as a
mechanism for conflict resolution in construction reviewing

the Trinidad and Tobago
experience. The other occasion was a one-day

seminar/workshop on the Design and Build
Procurement System organised by the Quantity Surveyor's

Society of Trinidad and Tobago.
The specific focus was "The Factors which tend to frustrate

the Arbitration Process in a
Small Developing Country" (Suite 1990). As the construction

sector heated up with activity
and the disputes began to proliferate, the question of

other dispute resolution methods,
conciliation, mediation and arbitration began to be

introduced as part of the courses
included in the ppstgraduate programme in Construction

Engineering and Management
being offered at the Faculty of Engineering at The

University of the West Indies, St.
Augustine, Trinidad. The latest initiative out of the
Faculty of Engineering were two short
courses entitled, "Contract Management and Contract Law for

the Construction Sector",
and "Preparation for Arbitration in the Construction

Sector". (April, 1995).
While there have been several calls over the last ten years
to APETT to initiate the
formation of an Association of Arbitrators in Trinidad and

Tobago, this has not materialised.
Recently, just such an initiative has been taken by the

Chamber of Commerce, recognising
the need for a body of arbitrators to serve local and

regional business in the resolution of
conflict.
At this juncture, the issue of Alternative Disputes

Resolution (ADR) has found new
resonance in the wider field of business: Construction

disputes are therefore to be seen as
only one area in which disputes resolution techniques may

be required.
In spite of these efforts, one can make several

observations:
1. The general knowledge about arbitration within the

related professions is still very low.
2. The number of persons with direct experience in

conducting an arbitration is relatively small.
3. There is need for some type of training in the conduct

and process of arbitration even if only through a short
course of lectures.
4. There is need for a registrar of persons who could

competently serve as arbitrators, possibly an Association
of Arbitrators.
5. There is a need to engender among the professionals

within the construction sector and contractors as well,
the position that the least costly approach to dispute
resolution is on the site and as soon as they may have
arisen.
6. There is a need for all parties to recognise and embrace

the position that there should be greater recourse to all
the other forms of alternative dispute resolution
strategies before turning to litigation.
A great deal has been written in recommendation of better

contracts and less construction
disputes and conflicts through better specifications and

more specifically better contract
documents (precision, frankness and clarity).
A great deal has been written in respect of better

contracts and less disputes through
greater risk sharing, full declaration and the minimal use,

if any, of exculpatory and
disclaimer clauses. But while these two factors, contract

document and risk-sharing are
384 Suite
necessary conditions to a less dispute-charged contract

climate and to speedier resolution of
conflicts when they do arise, they do not constitute

sufficient conditions to obviate all
conflict. The spirit of give and take, the willingness to

sit and listen and to accept
responsibility for all our actions or inactions, will not

come from a moral revival in
construction. It will come only from a full recognition

that the route of prompt conflict
resolution serves the bottom line and is indeed the least

costly solution. It may be useful to list, even if not
define, the full range of alternative options open to the
participants in the construction sector on the occasion of

conflict and nascent disputes, the
alternative dispute resolution mechanisms, alternatives to
litigation or a trip to the civil
courts.
2 The Alternatives to Litigation
There are several alternatives to litigation, only a few of

which have been employed here is
Trinidad and Tobago.
2.1 Conciliation
Conciliation is an agreement by parties to a dispute to

seek the intervention of a neutral
third party to assist in the resolution of their disputes.

The idea of early resolution of conflict
as offering the least expensive route has still not caught

on. Nevertheless, it is the author's
opinion, based on the general lack of knowledge about

conflict resolutions, that this method
does offer great promise if it is advocated by the

professional bodies involved. The difficulty with the
method, is that with Arbitration, it requires the selection
of a
person knowledgeable in the area central to the dispute,

commanding the respect of both
parties as being independent and clear in his analysis and

thinking. But while the arbitrator
may be selected for nothing more, the conciliator must have

developed skills in reducing
hostility and getting the parties to see the arguments of

the other side. It is important that he
remains impartial. The professional bodies have not really

advanced this option although it
is well-established and has been operating in the area of

industrial or labour disputes by the
labour officers of the Ministry of Labour since 1965.
2.2 Mediation
Mediation is not unlike conciliation, but the inherent

function of the mediator is to evaluate
the merits of the respective cases of the parties. The

exercise may be conducted by separate
discussions or with both parties present. Here, the

mediator must be much more positive in
that options should be formulated and presented to the

disputants by way of resolution. This
method has not been employed in the local construction

sector but may offer advantages.
The mediator would have to command considerable respect of

the disputants based on
knowledge, experience, independence, impartiality and

clarity. Alternative dispute resolution methods 385
2.3 Mini-Trials
This is an "abbreviated trial in which management is

engaged either with or without legal
representation in the settlement process of the dispute as

it allows them to hear and assess
the strengths and weakness of their respective cases"

(Trevor Lee Sc. 1995). A facilitator is
usually utilised to provide the parties with the "best

chances position" should the Mini-Trial
be aborted and the matter has to proceed to litigation or

arbitration. Needless to say, this
avenue is totally unexplored in the local construction

sector.
2.4 Adjudication
We are told that adjudication is a form of arbitration, in

which evidence and written
arguments are submitted by the disputants, together with
all supporting documents, to
permit the adjudicator to arrive at a quick decision.

Usually, the adjudicator is a technical
specialist in the area in question. This option has not

been utilised in Trinidad and Tobago
but should offer speedy and cheap resolution. It offers the

advantage of excluding the direct
adversarial presence of legal representatives allowing the

specialist to quickly and expertly
arrive at a solution.
The parties can enter into agreement to have the findings

binding. As has been said before,
all these methods require a person knowledgeable in the

areas of the disputes and skilled in
getting directly to the centre of the issue at dispute. He

must above all be able to command
respect, while generating confidence in his ability to

remain objective and impartial. Some
methods require him to keep the parties at the table.
The reasons for delay and hence high cost of litigation

have been well documented in
several texts on arbitration and more recently in those on

Alternative Dispute Resolution
mechanisms. The reasons are the same here in Trinidad and

Tobago. The problems which
have frustrated the local attempts at utilising the

Arbitration process in a small developing
country are generally the same problems which have acted to

inhibit the introduction of the
other dispute resolution methods.
3 Arbitration in Trinidad and Tobago

Arbitration is given legal sanction under the Arbitration
Act Chapter 5:01 (Revised Laws of
Trinidad and Tobago, 1980, Ed.), previously, Act 5 of 1939.

All the contract forms
employed in Trinidad and Tobago include arbitration clauses

which make provision for the
aggrieved party to a contract to invoke the arbitration

process in a series of clearly identified
steps once a dispute has arisen. The arbitration process is

designed to avoid the formality
and rigidity of court procedures but with the all pervasive

involvement of attorneys, the
process has grown more and more into one identical to

formal court procedure. The local
practice has drifted more and more into being very similar
in form and operation to the high
courts. This situation has developed partly because the

attorneys would be more
comfortable in their environment but the shift is more so

because of the failure of the
construction professionals to consciously inform themselves

about the mechanics of
arbitration and to demand accountability and prompt service

from their attorneys and the
386 Suite
arbitrator. They have failed to set about training a cadre

of arbitrators. In fact, these
professionals are at sea when faced with the prospect of

litigation or arbitration. The
impending commencement of either of these is sufficiently

daunting and intimidating
prospect to both consulting engineer and contractor.

Neither actually looks forward to them,
even when action has been initiated. The first response
of aggrieved parties is to seek redress by way of the
traditional courts,
even if there is an arbitration clause. This experience

has invariably meant costly legal
actions, long delays and above all, court decisions which

often are not informed by the
soundest technical appreciation of the facts, or of the

unique environment of construction
processes. Increasingly, arbitration has become the

inevitable recourse. Nevertheless,
developing countries have found a plethora of obstacles

strewn in the path of what initially
was conceived of as being the more appropriate conflict

resolution mechanism. The main
obstacles to Arbitration will be presented hereafter as

well as the reasons for the more
recent quest for even more efficient and effective

alternative dispute resolution mechanisms. Small island
states attempting to have recourse to arbitration are faced
with several
problems. A few of the more critical are presented here:
1. Too small a pool of personnel from which to select the

arbitrator(s).
2. Potential arbitrators have too little experience and no

formal training and may actually be ill-suited and as a
result, the unfortunate selection may do the process more
harm than good.
3. No Arbitrators' Association or Institute is in existence

and therefore no collegiality has been able to develop
among arbitrators.
4. Frequently, the arbitrators have had and may in the

future have business relations with one of the parties or
may even be related by way of family or old school or club
connections.
5. There is no roster or register of potential arbitrators

to provide quick information on available resources. All
these problems apply to the other conflict resolution
avenues. In fact, the lesser
known approaches may present even more problems. Within the

Caribbean region where
populations may be as low as 10,000, the problems of

arbitration would be several fold.
Arbitrators would therefore have to come from the other

territories with a stronger, more
numerous and experienced body of construction

professionals. While this would increase
the element of independence, it will increase costs since

the arbitrator may have to be brought
in from the United States or the United Kingdom as has

been the case. One of the critical issues faced by
conducting the arbitration process stems from the
inexperience and hence lack of confidence within the

construction sector for the arbitration
process. Frequently, one disputant procures a team of

attorneys, including Senior Council
(SC) (equivalent to the British QC) and junior and

instructing attorney (previously the
solicitor). The immediate response is for the contending

side to procure an equally powerful
team. The effect of this is to drive the costs up but

above all to present a nightmare of Alternative dispute
resolution methods 387
scheduling dates on which the senior legal persons can

attend. This is particularly a problem
since the arbitrator has no back up staff and lacks the

confidence and machinery to compel
the attendance of parties and witnesses. The entire

process is based on consensus and the
arbitrator has to be constantly concerned that the

process, once started, is not aborted. There
is always the risk of long drawn out schedules biasing
this consensus. There is always the
risk of abortion as the lawyers constantly seek to

transform what should be an informal
climate into a formal court setting and as they seek to

exclude some submission or to
introduce what they maintain is a point oflaw. They

frequently calion the arbitrator to give
rulings on different points. These could later be the

basis of appeals. The question of a convenient place
(room) with support facilities to hold the arbitration
hearings does present considerable problems which may not

exist in developed countries.
Frequently, arbitrations are held in hotels or in the

conference rooms of the lawyers involved.
Several of the alternative disputes resolution mechanisms

require space that would permit
staging of hearings and the problem will apply to

conciliations, mediations and mini trials
as well. Another problem that may appear as a huge

obstacle to arbitration is the question of
taping of evidence and or the use of palantypists to record

verbatim all that transpires. It is
not likely that the arbitration will be able to procure the

services of a palantypist and if
evidence is recorded manually, then it must be transcribed

at the end of each day. These
difficulties could loom large in a small developing country.
The fact that the Arbitrator has no coercive machinery such

as is available to the judges
of the high court nor the capacity to exercise sanction to

an offending party, means that his
modus must be based always on consultation and consent.

This introduces an element of
caution and hence the question of delay is always an issue.
It is clear that there has been very little experience in

the several alternative dispute
resolution methods in the construction sector here in

Trinidad and Tobago and for that matter
in the rest of the Commonwealth Caribbean states. What

experience there has been is in
arbitrations and as we have seen, even this practice

leaves much to be desired. One may ask
"Why entertain the other dispute resolution methods?"
To answer the question, we must understand how disputes

arise in general and in the
construction sector in particular. We must understand why

they fester and what causes them
to explode. Are conflicts inherent in the construction

process? Can they be averted or reduced?
It is obvious that some of the characteristics of the

construction sector favour the occurrence
and development of conflicts e.g.:
1. Ease of entry of new form.
2. Low level of skill experience and knowledge of many of

the new entrants.
3. High rate of failure and bankruptcy.
4. All pervasive adversarial relationships.
5. Expectation of high return on investment.
6. Little self-policing and monitoring with the sector of

quality of goods and or services
exchanged.
P
r e
s e
n t
o u
t e
p l
o y
e d r E N D ~ E N D \ I ; t ~ I C o n c i l i a t i o n l ~
I T I M i n i T r i a l ~ R r b i t r a t i o n I ~ E N D D
i s p u t e \ l I E N D ( C o n s u l t a n t C o C o n t r
a c t o r R e s o l u t i o n ) ~ ~ 1 > 1 M e d i a t i o n
I + " ' f ~ \ I I 4 E N D , ~ , . . F i g . 1 . A l t e r n
a t i v e D i s p u t e R e s o l u t i o n F l o w R d j u
d i c a t i o n 1 t \ 4 ' 1 1 1 1 1 1 1 1 1 1 1 1 I > E N D
1 1 1 1 1 11 1 \ V l i t i g a t i o n I ~ E N D
Alternative dispute resolution methods 389
7. Low level of training for and within the sector in

general but in dispute resolution in particular. It is
clear that the local experience in the use of the
arbitration process has produced
frustrations attendant upon the inordinate delays and the

high costs. The local experience is
that arbitration involves on as average at least five

years and in some cases as much as ten
years to produce a resolution. But it yet appears a better

route than the courts. This would
suggest that the sector must undertake both a serious

re-evaluation of the local practice to
find ways to make the process more effective by reducing

the period between the initiation
of arbitration and the final resolution. The next thing
would be for the participants within
the sector to explore the use of alternative dispute

resolution methods, particularly those
that have been successfully employed in other areas of

business activity e.g., industrial
disputes.
4 Discussion The objectives of the construction sector in

respect of appropriate methods of dispute
resolution can be set out as follows:
1. To avoid conflicts and disputes and to solve them

immediately when they do occur. This can bedone by better
specifications, replacing the adversarial relationship
between consultant and contractor with one of dialogue,
partnership and risk-sharing.
2. Should the dispute develop, all attempts should be made

to deal with it as swiftly as possible, while seeking to
minimise the impact by containment and employing one of
the alternative dispute resolution methods.
3. Parties to building contracts must become better aware

of the spectrum of resolution methods available and how to
prepare to employ them.
It is clear that the present approach has been to have

recourse to arbitration, based on the
inclusion of an arbitration clause in the contract

document. However, arbitration should
definitely not be the first course of action. One or other

of the Alternative Disputes
Resolution methods, such as conciliation, mediation, mini

trials and adjudication could, to
better effect be tried even prior to resort to Arbitration.
1. Trevor Lee. Sc. "Arbitration, Conciliation, Mediation

and Other Methods of Alternative Disputes Resolution".
Presented at a Short Course on Contract Management and
Contract Law for the Construction Sector by the Continuing
Engineering Education Centre, UWI, St. Augustine. April
1995.
390 Suite
2. Suite, Winston H.E. "The Factors which tend to Frustrate

the Arbitration Process in Small Developing Countries".
Workshop organised by the Quantity Surveyors Society of
Trinidadand Tobago and the Faculty of Engineering, UWI.
1990. CAPITAL WORKS PROCUREMENT:
OWNER'S OBLIGATIONS UNDER THE 'TENDERING CONTRACT'
R.W. Craig
Department of Civil and Building Engineering, Loughborough
University, UK
P. Davenport
Faculty of the Built Environment, University of New South

Wales,
Sydney, Australia
Abstract
This paper examines the New Zealand case of Pratt

Contractors in which the court held
that a 'tendering contract' had been created between

plaintiff tenderer and local
authority, that the contract was broken when the authority

accepted a non-conforming
alternative tender, and that the plaintiff was entitled to

damages. The basis for
establishing the quantum of such damages is argued. The

paper concludes with advice
to building owners with regard to the 'tendering contract'.
Keywords: Australian law, Competition, Construction

procurement, Engineering,
procurement, English law, New Zealand law, Tenders.
Sommaire
Ce papier approfondit la cause de la maison Pratt
Contractors en Nouvelle-Zelande
dans laquelle Ie tribunal a tenu qu'un contrat de

soumission (,tendering contract') fut
cree entre I' offreur plaignant et Ie defendeur, que Ie

contrat fut viole au point ou
I'autorite a agree une contre-soumission non-conforme, et

que Ie demandeur a ete
habilite a des dommages-interets. Pour conclure, Ie papier

renseigne des proprietaires
au sujet du contrat de soumission (,tendering contract').
1 Introduction
For many years an invitation to tender was considered to be

no more than an invitation
to treat, creating no obligations for either party until

the essential elements of a binding
contract were present. The inviter appeared to be free of

any obligation and could reject
any or all offers. There was in fact one restriction placed

on the inviter: there must be
the intention to award a contract, otherwise the invitation

is a fraud giving an invitee a
cause of action in the tort of deceit. The costs of

tendering are normally borne by the


E & FN Span. ISBN 0 419 22240 5. 392 Craig and Davenport
tender, with expectation of recovery of those costs only
through successful tenders which result in the award of
contracts. But when the inviter indicated to the lowest
tenderer that a contract award was likely, asked for more
information beyond the scope usually necessary for the
consideration of tenders, then abandoned the project, the
court held that the lowest tenderer was entitled to
restitutionary recompense on the basis of a quantum
meruit. J Recently, the court established the tenderer's
right in contract to have his tender, submitted in
accordance with detailed procedures prescribed by the
inviter, duly
considered if other tenders are considered. Here the

inviter's contractual obligation to
consider all conforming tenders arose, not out of an

express term of the invitation, but
by implication in the circumstances. 2 The inviter was

obliged to pay damages for the
breach of contract. Similar cases exist in other

jurisdictions, 3 and from these cases we
can observe the recent emergence of the 'tendering

contract' where the inviter becomes
contractually obliged to give consideration to all tenders

which are submitted in
accordance with the inviter's stipulations.
2 The Pratt Contractors case
The New Zealand case of Pratt Contractors Ltd v.

Palmerston North City Council,4
highlights the problems for all building owners associated

with 'alternative tenders' and
the 'tendering contract'. The plaintiff contractor sued the

local Council for damages
because it did not obtain the contract. The Council

required tenders for the construction of a flyover
interchange.
Interested parties were required to submit a non-refundable

deposit of $100 at pre
registration stage. The tender documentation was detailed

and included provisions for
the evaluation of tenders received. There were two tender

evaluation methods open to
the Council: in this case the process to be adopted was
described as "lowest price
conforming tender method". This process involved each

tenderer submitting
information against six non-price attributes. The Council

was then required to assess
each tenderer's responses against each of these attributes

on a pass-fail basis. A fail on
any of the attributes meant that the relevant tender was

not a conforming tender and
would not therefore be considered. Only a pass on each

attribute permits a tender to be
considered on price alone the lowest tender is the

successful tender. Four conforming tenders were received.
Pratt Contractors submitted the lowest
conforming tender and on that basis expected to be awarded

the contract. But one
tenderer submitted an alternative tender in addition to

its conforming tender. Tendering
procedures had contemplated alternative tenders, which

might be permitted as a means
of encouraging or permitting innovation. Proposals for

alternative construction methods
or choice of materials are considered but such proposals

must not alter the scope of the
final product. The alternative tender outlined a different

design solution which would
achieve the same product: "the saving in the construction

costs would be in the order of
$250,000.,,5 Certain other claims were made for the

alternative scheme and it
concluded: "We would be happy to meet and discuss this

proposal or forward any
further information you may require ,,6 The saving offered

by the alternative tender was attractive to the Council.
After
some negotiation over the exact status of the alternative

tender, the Council accepted The tendering contract 393
same and advised the other tenderers of the contract award
decision. When matters were fully resolved a formal
contract was executed between the Council and the
submitter of the alternative tender. Pratt Contractors had
submitted their tender, not only in expectation of making
a
profit from the completed contract, but also as a means of

establishing for itself a track
record in this type of work. Aware that their tender was

lower than the successful
tenderer, and in the full knowledge that they had passed

the attributes test, Pratt was
aggrieved with the Council's decision and commenced

proceedings for damages. They
contended, inter alia, that by submitting their tender a

contrace was created between
themselves and the Council, whereby the Council became

obliged to consider only
tenders which complied with the tender stipulations. They

further argued that this
contract had an implied term obliging the Council to treat

Pratt fairly and equally with
other tenderers, and that should another design option be

put forward by the Council,
Pratt would be given the opportunity of pricing that

option, and that there would be no
negotiation with another tenderer. Pratt alleged that

implied and express terms of the
contract documents had not been complied with, and as a

result they had lost (i) the
cost of preparing the tender; and (ii) the profit on the

contract which should have been
awarded to Pratt; and (iii) the opportunity to gain
qualification for other substantial
construction projects, and consequently further lost

profits. In defence, the Council argued that their request
for tenders was no more than an
invitation to treat, and that therefore no contractual

obligations arose. The Council
denied the alleged failures catalogued by Pratt, and argued

that, even if this was not
correct, Pratt had no basis for recovery. They contended

that the contract had been
properly awarded on the basis of the alternative tender,

properly submitted In
accordance with the tender documents, and that Pratt had no

right to damages.
3 The issues considered in detail
3.1 Do the Council and Pratt have a contractual

relationship?
The first issue is whether the submission of the tender by

Pratt creates a contractual
relationship. Having considered several authorities, Gallen

J said: "Authority makes it clear that the starting point
is that a simple uncomplicated request for bids will
generally be no more than an invitation to treat, not
giving rise to contractual obligations, although it may
give rise to obligations to act fairly. On the other hand,
it is obviously open to persons to enter into a
preliminary contract with the expectation that it will lead
in defined circumstances to a second or principal
contract, along the lines of the analysis in the Canadian
cases. Whether or not the particular case falls into one
category or the other will depend upon a consideration of
the circumstances and the obligations expressly or
implicitly accepted.,,8
Did the parties intend to create a contractual relationship

with respect to the submission
of the tender? Gallen J thought that there were several

factors pointing to the answer
yes. "First, this was not a situation where there was a

mere calling for tenders and nothing more. The first
advertisement requested contractors to register their
interest for the construction of the project. In order to
tender at all, interested contractors had to register their
interest and pay a $100 non
394 Craig and Davenport refundable deposit before they

received the tender documents for consideration. The actual
submission of a tender was therefore contemplated as a
second step and moreover, one which followed upon a
declaration of interest backed by a non-refundable
deposit. This is I think a significant point. Its is at
least as strong and in fact in my view rather stronger,
than the suggestion in the Blackpool case that the
selection oftenderers was a significant factor. Secondly,
the tender documents were extensive, detailed and
substantial. They set out not only the nature of the
project contemplated, supported by detailed specifications
and drawings, but also set out the conditions of contract
which would apply if a construction contract were entered
into. Most significantly they included an addendum to the
conditions of tendering which contained the following
clause: l.(b) Tenders will be evaluated by the Lowest
Price Conforming Tender Method, as prescribed in the
Transit New Zealand Manual of Competitive Pricing
Procedures, Volume 1: Physical Works and Professional
Services (CPP Manual). Attributes shall comprise the
following: • Relative Experience • Track Record •
Technical Skills (personnel) • Resources (plant,
equipment, material) • Management skills • Methodology •
Price This tender evaluation process shall be conducted in
two stages: (i) The first stage shall consist of
determination of tender acceptability when assessed against
each of the six non-price attributes and no others. Each
attribute shall be scored on a pass! fail basis. Any
attribute which scores a fail will exclude that tender from
further consideration. Any tender which alters the scope
of the end result shall be excluded from further
consideration. (ii) The second stage shall consist of
determining which of the remaining (non-excluded) tenders
has the lowest price. The Principal shall only enter into
a contract for the non-excluded tender with the lowest
price.,,9
Gallen J said: "That indicates in detail the precise way

in which the Council will evaluate tenders and indicates in
mandatory terms, the basis on which a contract will be
entered into. If that is to impose obligations upon the
Council so that it is required to act in accordance with
its indicated intention, then of course it may become
binding in a number of ways. That is evidence by the number
of causes of action pleaded in this case, but in a
commercial setting of the nature of the tendering process,
by far the most convenient framework within which
obligations may be said to arise and within which they can
be considered, is a contractual one ...... . The Council
has here sought interested tenderers who were required to
express their interest in obtaining the tender documents,
by the paying ofa non-refundable deposit [NZ$100]. The
basis upon which tenders were sought is detailed and
complete and is in itself required to be accompanied by a
substantial deposit of $10,000. Under those circumstances,
ifthe Council were to attempt to deal with the tenders on
any basis other than that contained in the tender
documents, at least the elements for an estoppel argument
would be present but I think it is far preferable to deal
with the matter in terms of contract." I 0 The tendering
contract 395 It was true that there were distinguishable
facts in the previous tender cases, but the one thing they
all had in common was that in order to give effect to the
various stipulations contained within the tender documents
it was necessary to recognise a contractual relationship.
The court was satisfied that a contract was created by the
act of submitting
a tender in accordance with the Council's requirements.
3.2 Is the Council in breach by failing to award the

contract to Pratt?
Having established that a contract has been created, the

second issue is whether the
Council are in breach of that contract. What are the terms

of that contract? They are to
be found within the policy and specifications upon which

the tender was submitted. And
that includes the promise to evaluate tenders in

accordance with the tender conditions.
But is it a term of that contract that the Council is

obliged to award the contract to the
lowest conforming tenderer? The tender conditions state

that: "The principal shall only
enter into contract for the non-excluded tender with the
lowest price." A Canadian court held that a provision
that "no tenders need necessarily be
accepted" did not cancel an award provision which stated

that the award "will be made
on the basis of the highest offer made by that tenderer ..

,,11 But here the Council
argued that where an invitation to tender is no more than

an invitation to treat, it is
unnecessary for a building owner or employer to state that

there is no obligation to
accept the lowest tender. But is this the position when

there is a contractual relationship
rather than a mere invitation to treat? Seeking to avoid

any obligation, the Council
relied on words which footed the tender form: "We

understand that the Principal is not
bound to accept the lowest or any tender he may receive".

They argued that it was of
no consequence that Pratt Contractors won the competition;

they were not obliged to
accept Pratt's tender. But the court did not find any
conflict in the several provisions within the tender
documents. The Council's general powers of rejection are

not compromised by the
other provisions. The Canadian court's words had to be put

into context. Gallen J said: .. that a Council could not
be permitted to use the general power to reject tenders to
make an arbitrary choice. In selecting a particular
tender, the Council is in my view bound by the terms it
has itself imposed. as well as the requirements of
fairness and equity which may well have an application.
To hold however that a Council retains a power to reject
all tenders. is not the same as allowing it to use such
power to select tenders.,,12
The court therefore rejected Pratt's claim that they were

entitled to the contract award
since they had submitted the lowest price conforming

tender. The Council is not in
breach for failing to award the contract to Pratt.
3.3 Is the alternative tender a conforming tender capable

of acceptance within
the Council's tender conditions, or is the Council in

breach for accepting same?
Pratt argued that the alternative tender was not a tender

at all because it lacked
certainty of price, and that it did not meet the specific

requirements laid down in the
tender conditions. The language used in the alternative

tender was too vague on which
to found a contract. 13 Gallen J agreed and said: 396

Craig and Davenport I do not see how that could possibly
be regarded as having the certainty to found a contract,
nor did the Council so see it. (The) Council's advisers
sought additional information and also carried out there
own cost assessment. 14 If the conforming tender had been
couched in such vague terms as the alternative
tender, it would not have been considered to be

conforming: "in any event (the
alternative tender letter) refers to a saving in

construction costs and not to a price at
all." 15 The alternative tender is therefore not a

conforming tender. It is insufficiently
precise to be capable of acceptance within the Council's

tender conditions. The Council
themselves realised that the alternative tender could not

be accepted in the form
submitted, and sought clarification. The alternative tender

did not therefore comply
with the Council's tendering stipulations. In purporting to

accept the alternative tender
the Council is in breach of the 'tendering contract'.
3.4 Does the law impose a duty of fairness on the Council

when dealing with
tenders, and, if so, was that duty broken?
Gallen J said: "There is also an aspect of fairness. It

was conceded by ... (the Council), that the Council was
obliged to proceed in a manner which met the general
requirements of that indefinable term 'fairness'. To
accept as an alternative tender and thus deprive the lowest
conforming tenderer of such opportunity as that
qualification gave it, a document which is indefinite in
terms of price, which required elucidation and
confirmation, was I think unfair. That comes close to
negotiating with one of the tenderers within the tender
process, but not on terms which apply to other tenderers.
,,16
It appeared from the evidence that the cost savings offered

by the alternative tender
were not wholly due to more efficient design, but instead

due to the omission of items
which would be required an any event. Gallen J sensed not

only unfairness, but danger.
He said: "Effectively therefore, (the alternative

tenderer) was indicating that it would be prepared to
reduce its tendered amount by a substantial sum, which
did not result from the proposed change. That could give
rise to very real dangers in the contracting process and
could easily enough be manipulated to ensure that an
unsuccessful tenderer could reduce his or her tender, by a
sum sufficient to secure the contract by a means which
was disguised by reference to some form of alternative
construction .... ... an unscrupulous tenderer, could not
only achieve success over other tenderers in the way
already described, but if that tenderer was in fact the
lowest tenderer, could avoid being held to the alternative
if the proposal was insufficiently precise to give rise to
contractual obligations. 17
It is dangerous to consider alternative tenders without

sufficient definition of the term.
An adequate basis of assessment is needed for sound

management and to avoid
unfairness to tenderers. Here there is a breach of the

Council's duty to treat all
tenderers fairly. The tendering contract 397
4 Quantum of damages
The court had thus found for the plaintiff tenderer against
the Council. It remained only
to fix the quantum of damages. The general principle should

be consistent in all breach
of contract cases. The successful plaintiff is to be put,

"so far as money can do it ... in
the same situation ... as if the contract had been

performed.,,18 In fact what Gallen J
said is that "the plaintiff is entitled to be restored to

the position it would have been in
had the Council complied with the obligations imposed upon

it."19 The significance of
this restatement is argued below. Pratt sought damages

under three heads: the wasted expenditure in preparation of
their tender, the loss of profit which would have been

earned had they been awarded
this contract, and loss of future profits which they would

have earned from future
contracts, but for the loss off attributes caused by the

failure to win this prestige
contract.
4.1 Wasted expenditure
Pratt tendered on the basis that tender costs would not be

directly recoverable. But
since the Council was in breach of the tender conditions,

Pratt was entitled to recover
its wasted costs of tendering. Pratt recovered $17,822

under this head of claim.
4.2 Loss of profit due to the failure to secure this

contract
Pratt argued that it would have been awarded the contract

had the alternative tender not
been accepted, and that it would have made a profit in the

amount claimed, based on a
percentage of their tender submitted. The Council argued

that, had it not been for the
alternative tender, no contract would have been awarded due

to the excess of tendered
price over budget. They also contended that had Pratt been
awarded the contract they
would have sustained loss rather than profit. The judge

did not accept that the project
would not have proceeded without the acceptance of the

alternative tender. It
represented a saving of only 6.7% on a budget of $3m. On

the evidence, the judge
concluded that had it not been for the alternative tender,

Pratt would have been
awarded the contract. But what profit would have been

earned by Pratt if it had been awarded this
contract? The Council produced evidence to demonstrate the

lack of profitability in the
contract. The judge accepted that this had proved a more

difficult contract to perform
than had been anticipated, but he was not prepared to

accept that Pratt would
necessarily have earned no profit. Gallen J made his

"overall assessment in the round",
and awarded $200,000 to Pratt. This was the amount by which

the successful tenderer
had reduced the price to secure the contract. Gallen J
said: The $200,000 is not disproportionate to the savings
that the Council made by adopting a practice which I do
not consider was open to it. It bears some relationship to
the sums which the successful contractor effectively wrote
off its non-conforming tender and it is comparable to the
savings which were identified by the Council's advisers.
2o 398 Craig and Davenport 4.3 Loss of future profits due
to the loss of attributes caused by the failure to
secure this contract
In Pratt's most speculative claim, they argued that the

current system of tendering
placed great emphasis on the pass/ fail test applied to

the attributes of each tenderer.
Winning this prestige project would have enhanced Pratt's

attributes when under
consideration on other projects. Evidence was adduced which

demonstrated Pratt's lack
of success in being considered for other work. This lack of

success, it was argued, was
due to the lack of attributes which would have been earned

had they been awarded this
contract. But the Council was able to demonstrate that

even if Pratt had been awarded
this project, and successfully completed it, there would

have been little impact on its
ability to secure these other projects. But the court held

that this claim was too
speculative and remote. Pratt therefore succeeded on the

first two heads of claim, but
not on the third. They recovered $217,822 against the

Council and were entitled to
costs.
5 Davenport's criticism of the decision by Gallen J21
Gallen J is criticised for awarding Pratt Contractors

reliance loss and expectation loss at
the same time. Gallen J awarded Pratt Contractors their

wasted tendering costs when
the Council, in breach of the 'tendering contract',

awarded the contract to other than
the lowest tenderer. Pratt incurred that tendering cost

before the Council breached the
contract. The cost was therefore not caused by the breach.

Pratt would have incurred
these costs even if they had been awarded the contract in

question. The wasted
tendering costs could only have been recovered as reliance

loss, whereas Pratt's claim
was, in truth, for expectation loss, that is the loss of

profit which would have been
earned but for the Council's breach. The award of

$200,000 to Pratt for loss of profit, was, with respect,
not based on a
logical method of assessing damages. An Australian court,

faced with the same claim
and without proof that Pratt would have made a profit if

awarded the contract, would,
it is submitted, follow Amann Aviation 22 and award only

reliance loss, which here is the
cost of tendering. On the other hand, given proof of loss

of profit, the court would
award that loss of profit, but not in addition to the cost

of tendering. In no
circumstances should Pratt be able to recover both cost of

tendering and loss of profit.
6 Craig's defence and support of the decision by Gallen J
In cases of breach of contract the classical analysis23

produces three situations in
awarding contract damages: (1) where the injured party in
reliance on the other, has
conferred some benefit to the other who has failed to

perform; the policy here is to
prevent unjust enrichment and may be termed the

restitution interest; and (2) where the
injured party has relied on the other and changed his

position to his detriment and may
be termed the reliance interest; and (3) ignoring

enrichment and reliance, a policy which
seeks to give the value of the expectation created by the

contract which may be termed
the loss of bargain or expectation interest. Admittedly,

the English court has only
recently taken on board this sort of analysis, and maybe a

less than wholesale adoption.
The restitution measure is not normally used in England in

breach of contract claims: an The tendering contract 399
examination of what the injured party has lost is more

likely than an assessment of what
the other has gained, but frequently the expenditure will

more or less be about equal to
the gain.
6.1 The recovery of wasted costs as reliance loss
In the case of Anglia Television v. Ree(P a leading actor

repudiated his contract after
the plaintiff TV company had committed expenditure on other

actors etc. Note that not
only was this wasted cost expended before the breach but
some part was expended
before the contract with Reed was made. Lord Denning MR

said that in such a case a
plaintiff was not limited to claiming expenditure after

the contract was made:
expenditure could be claimed which arose before the

contract was made "provided that
it was such as would reasonably be in the contemplation of

the parties as likely to be
wasted if the contract was broken. ,,25 Recovery of the

pre-contract expense is justified
because that loss cannot be avoided after the breach 26 To

paraphrase Lord Denning
again: when Palmerston North City Council broke its

'tendering contract' it must have
known perfectly well that much expenditure had already been

incurred on the costs of
preparing the tender. They must have contemplated, or at

any rate it is reasonably to be
imputed to them, that if the contract was broken, all that

expenditure would be wasted,
whether it was incurred before or after the contract (or

its breach). They must pay
damages for all the expenditure so wasted and thrown away.
6.2 Recovery of lost profit as expectation loss
Davenport criticises the New Zealand court for awarding

both the wasted cost of
tendering and the loss of profit caused by the City

Council's failure to award the
contract to the plaintiff. At first glance this objection

receives support from Lord
Denning in the Anglia Television case: " ... a plaintiff

in such a case as this has an
election: he can either claim for his loss of profits; or

for his wasted expenditure. But he
must elect between them. He cannot claim both." Lord

Denning cited Cullinane v.
British 'Rema' Manufacturing Co Ltef? as authority for this
statement of law. But the
question must be asked: what is meant by the term

'profit'? Is it gross profit or net
profit? If the former, then clearly the statement is

correct, otherwise double recovery of
wasted expenditure would occur. That is gross profit would

include the expenditure
necessary to secure the contract, namely the costs of

tendering. But if the term refers to
net profit, then surely there is no objection in principle

to recovery of both the wasted
expenditure to secure the contract and the profit net of

all costs necessary to perform
the contract. In Hydraulic Engineering Co Ltd v. McHaffie,

Goslett & C0 28 the
plaintiffs recovered wasted expenditure and the net profit

which would have been
earned had the contract been performed without breach. In

Miller's case 29 the plaintiff
recovered the price paid for defective machinery

(restitution), installation costs
(reliance loss) and net loss of profits resulting from the

breach (loss of bargain!
expectation loss). It seems clear from the judgment of

Gallen J that net profit was
awarded here, and awarded quite properly, to the plaintiff.
6.3 Recovery of both wasted costs and lost profit as

restitutio nary compensation?
To hark back to Fuller and Perdue's analysis: on what basis

should the breach of I
contract damages in this case be classified? Is it

restitution interest, reliance interest or
expectation interest that is being protected and
compensated? Davenport suggests the
400 Craig and Davenport
wasted tendering costs are a reliance loss and the loss of

profits are an expectation
loss, and that on well-founded principle both types of

damages cannot be recovered.
That is the conventional position. At first glance Gallen

J does not appear to help us on
this point. But the clue is in the statement: "The

plaintiff is entitled to be restored to the
position it would have been in had the Council complied

with the obligations imposed
on it.,,30 Gallen J sees this award as restitutionary

compensation. This type of damage
is appropriate when there is a total failure of

consideration, as there is in this case. Pratt
relied on the Council under the terms of the 'tendering

contract' and conferred a benefit
on them. The Council failed to discharge their obligations

and should be forced to
disgorge the value received from Pratt, who therefore

recovers his expenditure on
tendering, plus the amount by which the Council has

benefited. The policy is to prevent
unjust enrichment. The restitution interest comprises the

two elements of reliance and
resultant gain.
6.4 Conclusion on quantum of damages
The traditional view held in England and Australia is not

to use a restitution measure to
assess damages for breach of contract. For example in Tito

v. Waddell (No2) Megarry
V-C said ··First. it is fundamental to all questions of

damages that they are to compensate the plaintiff for his
loss or injury by putting him as nearly as possible in the
same position as he would have been in had he not suffered
the wrong. The question is not one of making the defendant
disgorge what he has saved by committing the wrong. but
one of compensating the plaintiff ... 31
Clearly the New Zealand court takes a different approach.

In England there are
exceptions which do allow the recovery in restitution of

the profit made by a contract
breaker. 32 It has been argued that this remedy should be

more widely available. 33 The
English contributor submits that breach of the tendering

contract is a worthy exception
where recovery of the restitution interest should be

available. The Australian
contributor disagrees.
7 Conclusion
7.1 Owners should be mindful of the 'tendering contract'

which places obligations on
the owner: mainly to treat all tenderers fairly and to

consider all conforming tenders.
7.2 Owners could seek to avoid the obligations of the

'tendering contract' by reducing
all tendering conditions to the very minimum (consistent

with other obligations), on the
basis that it is the requirement for compliance with

demanding tender regulation which
creates the 'tendering contract'. This advice is

inconsistent with advice given below,
particularly in the matter of alternative tenders.
7.3 Owners could place an exclusion clause in every tender

notice and invitation to
tender. An example would be: This invitation to tender is

not an offer capable of acceptance. This invitation to
tender is an invitation to treat. The submission of a
tender does not create any contract between the tenderer
and the owner. The owner does not warrant compliance with
the conditions of tender or with any tender codes or
regulations. The tendering contract 401
7.4 Owners should not ask for cash or deposits from

tenderers. Such payments could
be construed as an element in the formation of the

'tendering contract'.
7.5 If the tender conditions incorporate other documents

(or parts of documents) by
reference, this must be clearly drafted to avoid ambiguity.

Any confusion in the drafting
will be construed against the owner. If the owner is

obtaining funds from a funder who
requires compliance with specific provisions as to

tendering, these provisions must be
included within the owner's conditions of tendering.

Failure to do so effectively could
breach the funding agreement.
7.6 There are good public policy reasons for considering

alternative tenders.
Alternative tenders "are an important means of ensuring

that innovative approaches as
to contracts are available to tendering authorities ...

the public may very well benefit to
a considerable degree from the encouragement of such

innovation and the availability of
cheaper methods of construction than have been contemplated

by the tendering
authority or their advisers. ,,34

7.7 The taking of and consideration of 'alternative
tenders' presents pitfalls to the
unwary. If alternative tenders will not be considered in

any circumstances, this should
be clearly stated in the invitation and the tender

conditions. If alternative tenders will be
considered, the invitation and conditions must make clear

exactly what 'alternatives'
will be considered and the means of their evaluation.

Thought must be given as to
whether an alternative tender merely adjusts a previous

tender, or stands as an
independent offer capable of acceptance without reference

to the previous tender. Does
the consideration of the alternative tender mean that

reassessment of the tenderer's
attributes must be made?
7.8 Provisions for the consideration of alternative

tenders must be made with a clear
policy on the degree of departure from the original scheme

which is permitted. The
New Zealand conditions stated that any proposal must be

"within the scope of' the
request for tenders. But what does "within the scope of'
mean? Subsequently a
definition of the word scope was provided: "Scope is the

project's principal purpose(s)
and service( s) to users as specified in ... ". It was

suggested in evidence that this a
practical definition that would suit the contracting world.

35 Other evidence suggested
that scope should "be considered in relation to the nature

of the project, as distinct from
its purposes and in that case, its conformity became a
matter of degree." Other
suggestions would limit the definition of scope, such as a

provision proposing that
"alternative methods or materials which may alter the

quality or durability but not the
scope of the end result". 36
7.9 The concept of a conforming alternative tenders must

not be defined to tightly so
as to restrict innovation, but must be not so broad as to

permit a different design
proposal, which would be unfair to tenderers who submit

conforming tenders.
7.10 Any departure from the conditions of tender risks

unfairness to the tenderer(s).
The owner's obligation to be fair to all tenderers should

not be compromised by bad
management.
402 Craig and Davenport
I See the authors' paper Capital Works Procurement: A

Comparative Analysis of
Procurement in England and in New South Wales, Australia

presented to the CIB W92
Procurement Systems Symposium, Durban, South Mrica, January

1996 at page 97.
2 Blackpool & Fylde Aero Club v. Blackpool Bor. Council

[1990] 1 WLR 1195 (CA).
3 See CIB W92 (Durban) Proceedings, supra, for a list of

the relevant cases.
4 [1995] 1 NZLR 469, in the New Zealand High Court,

Palmerston North.
5 Reference to the alternative tender letter, reproduced

ibid. at 473115-38.
6 Ibid. at 473/37-38.
7 That is the 'tendering contract', not to be confused with

the building contract.
8 [1995] 1 NZLR469, at 478/51-479/5.
9 Ibid. at 479/48 480115.
10 Ibid. at 480116.
II Canamerican Auto Lease & Rental Ltdv. Canada (M ofT)

198777 NR 141 (Can.)
12 [1995] 1 NZLR 469 at 481152-482/1.
13 A saving of $250,000 was mentioned, but not as a price,

merely as a 'saving in
construction cost'. The figure was not given definitively,

but put 'in the order of.
14 [1995] 1 NZLR 469 at 482/33-35.
15 Ibid. at 483/4.
16 Ibid. at 483/34-41.
17 Ibid. at 483/47-53 and 484110-13.
18 Robinson v. Harman (1848) 1 Ex 850,855.
19 [1995] 1 NZLR 469 at 487112-13.
20 Ibid. at 489122-26.
21 See Davenport's article in (1995) Australian

Construction Law Newsletter (ACLN).
22 C'wealth of Aust. v. Amann Aviation Pty (1991) 104 ALR

1; (1992) 23 ACLN 35
23 Fuller and Perdue (1936) 46 Yale LJ 52,52-56 The

reliance interest in contract
damage; see Beale, Bishop & Furmston (BBF)(1990) Contract

Cases and Materials
(2nd ed.) Butterworths, London, at pp. 466-467 and 562.

24 [1971] 3 All ER 690 (CA).
25 Ibid. at 692c.
26 CCC (London) Films Ltd v. Imperial Quadrant Films [1985]

QB 16.
27 [1954] 1 QB 292; [1953 2 All ER 1257 (CA).
28 (1878) 4 QBD 670.
29 Miller's Machinery Co Ltd v. David Way & Son (1935) 40

Com Cas 204.
According to Treitel (1987) The Law of Contract (7th ed) at

p.726, there is no logical
objection to combining these types of claims, so long as

the plaintiff does not recover
the same loss twice.
30 [1995] 1 NZLR 469 at 487112-13.
31 [1977] Ch 106, 332.
32 See (BBF) (1990) Contract Cases and Materials at p.553.

The example is that ofa
party in breach who owes a fiduciary duty to the injured

party.
33 Refer to Jones (1983) 99 LQR 443 and Birks [1987] LMCLQ

421, cited by BBF.
34 [1995] 1 NZLR 469 per Gallen J at 485122-26.
35 Ibid at 486/7.
36 Ibid. at 486/8-18, ref TNZManual of Competitive Pricing

Procedures (CPP)
2 Partnering
4. Lehtinen, U. (1991). Alihankintajarjestelma

1990-luvulla. (Supplier system in the 1990 's.) Sitra no
114. Helsinki. (in Finnish)
5. Schonberger, R. J. (1986). WCM World Class

Manufacturing. The Free Press. New York.
6. Kano, N. (1986). Laatu turvaa tuloksen -TQC, yrityksen

uusi toimintatapa. (Results with Quality -TQC, the new
way). Suomen laatuyhdistys ry. (in Finnish)
7. Tanskanen, K. (1987). Osahankintayhteistyo

yritysesimerkkeja (Customer-supplier Co-operation Case
Examples). MET 3/87. Helsinki. (in Finnish)
Mots-cles: l'arbitrage; Ie "dessin-construire"; Resolution

des con flits; Latham; Les


E & FN Spon. ISBN 0 419 22240 5. A US review of the Latham
Report 415 Etats-Unis, des differences de la part de
Royaume-Uni. 1 Introduction and Background The early
1990s were a terrible time for the construction industries
in the United States and the United Kingdom. Overbuilt
markets, overheated economies, overextended developers
and, indeed, simple greed and mismanagement, led to a
significant decline in construction volume. The effect on
each country's economy -construction accounts for 8% of
GDP in the UK [1] and 4. 4% of GDP in the US [2] -cannot
be understated. However, it can be argued that the
industry's litigiousness as much as anything else played a
major role in its difficulties. In the UK, disputes
surrounding major projects such as Canary Wharf and the
Channel Tunnel came to exemplify what many saw as the
decline of a once-magnificent industry which had built an
Empire. In the US, where the absolute number of claims
peaked in 1989 [3], somewhat earlier than reported in the
UK, the cost per claim for design professionals insured by
one professional indemnity carrier climbed steadily from
$179,000 in 1985 to $268,000 in 1993 [4]; and similar
results were reported for the aggregate amount of damages
claimed in construction arbitration cases in general [5].
Whether the claims explosion of the '80s and early '90s
was a cause, symptom, or effect of the construction
industry's other difficulties may be left to others to sort
out. What is certain is that -on both sides of the
Atlantic -the industry's factiousness cannot have helped
to ameliorate an already desperate situation. In sorting
through the debris, one might examine a number of possible
explanations for this phenomenon. Undoubtedly, there are
many opinions: high· interest rates, inflation, feverish
competition for fewer projects, and speculative frenzy can
all take their place in the line of suspects. Certainly,
however, poor project organisation -a lack of attention
to the details relating to project structure,
communication, and execution -can be singled out
anecdotally as a key factor in many claim-ridden projects.
In response to this perception, Sir Michael Latham, a
former Conservative MP and ex-director of the UK
Housebuilders Federation, was commissioned by HM
Government to lead a year-long, £250,000 enquiry with the
purpose of ending "the culture of conflict and
inefficiency that dogs Britain's biggest industry" [6].
The report, entitled Constructing The Team, Final Report
of the Government / Industry Review of Procurement and
Contractual Arrangements In The UK Construction Industry
[HMSO, London, 1994 (hereinafter "the Report")], was
initially greeted with "almost universal praise" [7]. In
addition to reviewing the state of the UK construction
industry, Sir Michael makes 30 recommendations for
improving the industry. Among the recommendations were:
creation of a standard form of contract based upon the
New Engineering Contract; establishment of a building
clients' lobbying organisation (called 'NewCo' by Sir
Michael [8]); clarification of building liability
responsibilities; implementation of lO-year building
defects insurance similar to the insurance utilised in many
parts of Europe; implementation of productivity
improvements leading to a 30 per cent reduction in 416
King real construction costs (Sir Michael points out that
construction costs about 30 per cent more in the UK than
in the US [9]); requirement of trust funds to ensure
companies get paid; broader utilisation of so-called
"alternative dispute resolution methods"; and more
extensive use of contracting strategies such as design and
build. This paper focusses on the final two
recommendations in the foregoing list. These
recommendations are discussed in chapters 9 and 3,
respectively, of the Report. Chapter 9 of the Report is
entitled "Dispute Resolution", and Chapter 3 is entitled
"Project and Contract Strategies and Briefing". After
summarising each chapter, the paper will describe how the
issues raised and recommendations made by Sir Michael
have been dealt with in the US; attempt to explain the
differences; discuss the similarities; and suggest how the
US experience might be of use in developing a further
understanding of Sir Michael's recommendations. 2
Discussion 2.1 Summary In Chapter 9 of the Report, Sir
Michael expresses dissatisfaction with the current methods
available for resolving disputes in the UK construction
industry. He recommends development of a project
adjudication process which would permit speedy resolution
of disputes essentially as soon as they arise. As
recommended in the Report, the US construction industry
has also moved to establish dispute resolution methods
other than arbitration, and seems to have travelled
farther down this road than the UK industry. In Chapter
3, Sir Michael emphasizes the importance of developing
appropriate project and contract strategies so as to
establish proper allocations of risk, divisions of
authority, and lines of communication. In the US, employers
have been utilising design and build on private projects
for many years, with considerable success in avoiding
claims. 2.2 Chapter 9: Dispute Resolution Dissatisfaction
not only with the frequency of construction disputes but
with the manner of resolving them seems strong in both
the US and in the UK. Arbitration, which until recently
has been a favoured method of resolving such disputes, is
under attack in the UK because of its "perceived
complexity, slowness, and expense" [10]. Similar
criticisms [11] have been levelled in the US, where
arbitration for many years has been well entrenched as the
preferred method of private construction dispute
resolution [12]. Interestingly, however, despite the
superficial similarities of the criticisms levelled
against arbitration in the US and the UK, Sir Michael
summarises a basis for dissatisfaction with arbitration in
the UK which is the exact opposite of the main cause for
criticising arbitration in the US. In the UK, it is the
"constant spectre of appeal" to the High Court from an
arbitrator's decision "which has emasculated the whole
{arbitration} process" [13]. In contrast, in the US it is
precisely the lack of ability to appeal from an
arbitrator's decision in most cases, except for the most A
US review of the Latham Report 417 egregious circumstances
such as demonstrated fraud or bias [14], combined with the
lack of a requirement for the arbitrator to offer any
reasons whatsoever for his or her decision, which has
resulted in the most withering attacks upon US-style
arbitration [15]. In the US, according to one study, "a
significant number of arbitrators" admit to not following
either the law or the parties' contract in rendering their
awards [16]. Although an arbitration award can be set
aside because the arbitrators exceeded their authority
(which presumably includes the duty to apply the parties'
contract including its governing law provisions) [17], in
practise since the arbitrators need not explain their
decision it is very difficult to establish this ground as
a basis for vacating the award. This attitude appears to
enjoy considerable support in the courts. In one case
[18], a dispute developed between the employer on a town
home development and the design-build contractor who had
constructed the project. Approximately $250,000 worth of
repairs were needed. Instead of awarding the employer
damages for the cost of repairs, the arbitrators ordered
the contractor to purchase the entire development from the
employer at a cost of several million dollars -an
equitable form of relief which not only far exceeded the
scope of the arbitrators' authority, but also ran afoul
of the Statute of Frauds. Notwithstanding, the Minnesota
Supreme Court refused to vacate the award "merely because
the court may believe the arbitrators have erred." [19]
Cases such as this one have led many in the US
construction industry to reevaluate arbitration as a
dispute resolution mechanism. In the author's own
situation, even though he is a member of the American
Arbitration Association's (AAA) panel of construction
arbitrators, and although there is some suggestion in .
the research that design professionals tend to fare
reasonably well in arbitration [20], the risk of an
illegal or extra-contractual decision is viewed as being so
great that he has written arbitration altogether out of
the contracts utilised by his firm. Even the AAA's general
counsel now seems to view arbitration mostly "as a useful
backstop when attempts at nonbinding processes fail." [21]
What is taking arbitration's place? In the US over the
last several years, a potpourri of "alternative dispute
resolution" or "ADR" options have developed, including:
"partnering", a sort of bonding process whereby the
project participants meet periodically throughout the
project -usually facilitated by an outside consultant -to
discuss common goals and difficulties and to attempt to
resolve disputes at the lowest possible level [22];
"mediation", a non-binding but structured settlement
discussion through which a third-party neutral endeavours
to guide, cajole, and sometimes browbeat the disputatants
to a mutually-acceptable settlement [23]; and "dispute
resolution boards", consisting of pre-selected industry
experts called in as needed during the project to settle
disputes concerning variations and the like as soon as
they arise [24]. This is an "innovation" which in some
respects recalls the grand assizes established by Henry II
in 418 King the Twelfth Century [25]. Another option is
the "mini-trial", whereby an abridged version of the
parties' case is presented to a neutral evaluator.
Sometimes, ADR options are mixed and matched in a manner
limited only by the diabolical creativity of the lawyers.
For example, on one major stadium project in the US, the
contract provides for "first effort" and "second effort"
negotiations at the project manager and CEO levels,
respectively; then, if no agreement is reached, a "Neutral
Evaluation Process" by a preselected expert neutral; then
binding arbitration by arbitrators taken from a
preselected pool, with a written decision required in any
matter exceeding $200,000; and finally, appeal to the
local courts if the award is in excess of $200,000 [26].
In the Report, Sir Michael has recommended an adjudication
process in which an adjudicator / expert is selected in
advance, and disputes arising during the project are
referred to him or her for more or less immediate decision
and implementation, with appeals to court or arbitration
taking place only after practical completion [27]. In his
view, the critical issue is keeping the cash flowing during
the Project. He states that this view represents the
"wishes of the industry" [28], although one wonders if
this statement is somewhat naive. Nonetheless, Sir
Michael's recommendation for adjudication seems fairly
close to the practise of utilising dispute resolution
boards in the US, although in contrast to what seems to be
happening in the US, Sir Michael seems to entertain a
continued role in some form for the design professional as
an impartial, first-line adjudicator. In the US, although
under the standard contracts the design professional is
nominally given this role [29], in the author's experience
this clause is either written out of the contract (often
to the relief of the design professional, who rarely gets
paid for performing this noble service!); or, if it stays
in, is essentially ignored by the employer and contractor.
Although the author has never had the privilege of being
involved in a dispute involving any of his company's
projects in the UK, his own experience combined with the
overall thrust of the Report suggests that the US
construction industry may be a few years ahead of the UK
in seeking out and implementing ADR mechanisms. For
example, in negotiating the contract for a major project in
Dublin last year, when the author suggested
contractually-required mediation to his
counterpart, an experienced English solicitor, the

solicitor averred that he had
never heard of mediation. Such a response in the US, where

we are weekly
bombarded with the brochures of new mediation firms having

sprung up and retired
judges are finding new life as mediators at several

thousand dollars a day, would
today be unthinkable. If indeed the US construction

industry is slightly ahead of the UK in developing "new
and improved" dispute resolution mechanisms, then perhaps a
few
suggestions, based upon admittedly personal experience in

the US, are in order as
the UK industry seeks to implement Sir Michael's

recommendations. First, despite
all the new "partnering" methods available, behaviour has

really not changed that
much. As Sir Michael points out, "it is not easy to create

teamwork in construction A US review of the Latham Report
419 when everyone is struggling to avoid losses"[30]. Sir
Michael also mentions that a real problem with his
recommended adjudication process is the possibility that a
party will refuse to abide by the result [31]. Even worse,
in the US, the author has seen projects where one of the
parties simply refuses to participate in
contractuallymandated ADR, or grudgingly goes through the
motions. Second, both based upon the statistics mentioned
at the beginning of this paper [supra, notes 3-5] and
based upon the author's own personal experience, there has
in the US been a perceptible decline in the absolute
number of construction lawsuits and arbitration claims. In
the author's opinion, a substantial contributing factor to
this decline, as well as to the current interest in ADR, is
the increasingly ruinous cost of prosecuting or defending
a .construction case, regardless of the outcome. In the
US, of course, each side bears its own attorneys' and
experts' fees, win or lose. In implementing ADR reforms,
this significant difference from the UK's "loser pays"
system should be evaluated before importing any features
from US-style ADR methods. Indeed, one of the most
distressing pieces of news to cross the Atlantic in recent
months has to be the new legislation allowing contingent
lawyers' fees in certain cases [32]. Finally, in
comparing approaches to dispute resolution in the US with
the UK, and considering whether to transplant US-style
ADR concepts, one must not forget the inherent
litigiousness of American society. As de Tocqueville
noted, "{a}n American does not know how to converse, but
he argues; he does not talk, but expatiates" [33].
Although the British are not necessarily less argumentative
than the Americans, perhaps a greater social consensus
which favours resolution over conflict will lead to better
success for certain US-style ADR approaches, such as
partnering, which have not fared especially well here. 2.3
Chapter 3: Project Organisation and Strategies Chapter 3
of the Report, "Project Organisation and Strategies",
attempts to review the common factors involved in the
early planning stages of a construction project in an
effort to determine the key elements needed to properly
structure a project for success. Ultimately, it can be
argued that a proper approach to project organisation
will minimise disputes. In his introduction to the Report,
Sir Michael pointed out that "Clients are at the core of
the process" in construction, but their "interests are
dispersed and vary greatly" [34]. In Chapter 3, after
discussing some of the problems with so-called
"traditional" construction, Sir Michael focusses upon the
allocation of risk as the key to determining what type of
project organisation might work best for various types of
employers. For example, if a particular employer is most
concerned about early completion, single-source
responsibility, and avoiding risk to itself, Sir Michael
suggests that it might want to consider the use of design
and build construction. Conversely, if the employer's
main concerns are price certainty, minimising variations,
and quality, he suggests the use of so-called
"traditional" construction as reflect in the JCT 80 form
[35]. Interestingly, as is the case with arbitration, the
situation in the US seems to be a mirror-image of that
in the UK. Whereas in the UK "traditional" construction
420 King usually means line-item tenders based upon a bill
of quantities, in the US the "traditional" method usually
involves a lump-sum, fixed price bid for the entire job
(although line item bids are relatively common on civil
works) with the contractor performing his own quantity
takeoff in preparation for bidding. Although on the
surface the contractor seems to accept more risk in a
US-style lump sum contract, in fact disputes frequently
arise concerning the scope of the works, and change
orders and delays often result [36]. In the US, the risk
analysis has been employed in a fashion similar to the
analysis in Sir Michael's Report, but the conclusion which
seems to be building in the US is in favour of
"guaranteed maximum price" (GMP) contracts utilising the
design and build method of construction. On a GMP project,
the contractor bases its bid on partially-complete
documents and, extrapolating from them, warrants to the
Owner that the price will not exceed a certain sum. The
work is then paid for at the contractor's actual cost plus
a fee, until the GMP is reached. After that, the
contractor "eats" the overage. If the actual cost of the
work is less than the GMP, the owner keeps the savings (or
sometimes agrees to share a portion of them with the
contractor as an incentive). As one commentator has noted,
in a GMP project the employer (owner) gets the best of
all worlds: "Basically, with a lump-sum, the contractor
gets all the savings and takes all the risk. With time
and materials, the owner gets the savings and takes the
risk. And with guaranteed-maximum-price, the owner gets
all the savings, the builder takes the risk" [37]. On a
design and build project, as its name suggests, a single
entity controls both the design and construction services,
and accepts the financial risks associated with the works
by utilising a GMP contract approach. In the US, the data
are beginning to suggest that a design-build GMP
arrangement may meet not only the employer's cost
concerns, but his programme and quality worries as well.
For example, a 1990 study by the Hennepin County,
Minnesota Regional Railroad Authority studied three
turnkey design-build projects with respect to programme
(schedule), cost control, and qUality. The study "found
that the turnkey projects were completed more quickly than
traditional projects -40 to 43 months versus 67 to 73
months after completion of preliminary engineering." [38]
Similarly, another study has suggested that when public
agencies in the US have utilised design-build, "projects
have come in 15 to 20 percent below the engineers'

estimate" [39]. Finally,
although statistics are hard to come by, anecdotal

evidence and the author's own
experience strongly suggest that the quality of

design-build projects, if properly
structured, is at least equal to "traditional" projects and

-judging by the
demonstrably lower rate of claims -perhaps better.

Ultimately, on both sides of the Atlantic there is
agreement that employers need
to spend more time briefing the project and thinking about

organisational issues
earlier rather than later. As Sir Michael points out,

"adequate time must be
allowed" for these tasks, and if the brief is inadequate
due to lack of time, "the
27. Latham, supra, note 1, p.9l.
28. Id.
29. See, e.g., AlA Document A201, supra, note 12, " 4.2,
4.3.
30. Latham, supra, note 1, p. 9
31. Id., at p. 91.
32. Goddard, S. (1995) "U.K. Law on Legal Fees Will Spur

Injury Suits", Business Insurance, 14 August 1995, p.35.
33. de Tocqueville, A. (1848) Democracy In America (l2th

ed.), Lawrence, G., trans!., New York, Anchor Books, 1969,
p.243.
34. Latham, supra., note 1, p. 3.
35. Id., at pp. 16-17.
36. Macomber, J. (1989) "You Can Manage Construction Risk",

Harvard Business Review, March-April 1989, pp. 155, 161.
37. Id., at p. 164. Emphasis in original.
38. See, Capital Alternatives, et al (1990) LR&T

Implementation Alternatives Study and Case Studies,
Minneapolis, November 1990; quoted language is from
Hoffman, "Turnkey Procurement -Back To The Future In Mass
A US review of the Latham Report 423 Transit", Contract
Management, April, 1993, pp. 24-26. 39. Myers, et aI.
(1995) "Report on Design-Build As An Alternative
Construction Delivery Method for Public Owners",
Georgetown, MD, Building Futures Council, 1995, p. 4.
40. Latham, supra note 1, p. 19 THE PRICING OF CONTRACT
PRELIMINARIES: QUANTITY SURVEYORS AND CONTRACTORS
COMPARED P.A. Bowen Department of Building and Surveying,
Glasgow Caledonian University, Glasgow, UK K.A. Hall
Department of Construction Economics and Management,
University of Cape Town, Cape Town, South Africa P.J.
Edwards Department of Building and Construction Economics,
Royal Melbourne Institute of Technology, Melbourne,
Australia Abstract This paper documents the results of
an empirical study into the methods adopted by quantity
surveyors and contractors for estimating the preliminaries
component of project tenders. The pricing procedures of
twenty-seven quantity surveying firms and twenty-five
contracting organisations were studied through an opinion
survey, using a structured questionnaire supplemented by
formal interviews. Differences found between the two groups
are discussed. Keywords: Contractors, preliminaries,
pricing, quantity surveyors. Sommaire Ce document d6crit
les r6sultats d'une 6tude empirique des m6thods adopt6es
par les m6treurs et les entrepreneurs pour estimer les
616ments preliminaires des 6tats de quantit6. Les m6thodes
d'estimation de 27 entreprises de m6trage et de 25
entreprises de construction ont 6t6 analys6es 11 I'aide
d'un sondage, par I'utilisation d'un questionnaire et par
des entretiens formels. Des diff6rences d'6valuation des
coats ont 6t6 identifi6s entre les 2 groupes observ6s. 1
Introduction The preliminaries costs of construction
projects can be defined as those items that are not
directly related to the individual items of measured work.
Where tender bills of quantities 'Professor Paul Bowen is
currently on sabbatical leave from the Department of
Construction Economics and Management, University of Cape
Town, and is Visiting Professor to the Department of
Building and Surveying, Glasgow Caledonian University,
Glasgow, Scotland.


& FN Spon. ISBN 0 419 22240 5. The pricing of
preliminaries 425 are prepared, these items are usually
grouped together in a 'preliminaries' section. Examples
of preliminaries costs include plant, accommodation,
temporary services, scaffolding, and insurances. The
preliminaries can be grouped into items that relate to the
contractor's general overheads, and items relating to the
client's requirements. Examples of the latter include
insurances, penalties for non-completion and general site
restrictions. The preliminaries items can be seen as
falling into two categories, namely, time-related costs
and fixed costs. Fixed costs can be further divided into
costs that are value-related (e.g., insurances),
method-related (e.g., temporary works and plant), and
quantity-related (e.g., hoardings and scaffolding).
Time-related costs relate to those items of the
preliminaries directly affected by the time they are
required on site e.g., the cost of supervision and site
accommodation. Most preliminaries items possess both a
fixedand a time-related component in their overall cost
build-up. This can be illustrated if one considers the
cost components of an equipment item, such as a tower
crane. The tower crane has fixed costs for the
transportation of the crane to and from the site and for
the erection and dismantling of the
crane. In addition, time-related costs apply to the

duration for which the crane is present on site either in
the form of hire charges or in the form of opportunity and
depreciation
costs if the crane is owned by the contracting

organisation. Moreover, the method of
construction and the quantity and type of materials to be

placed per week may impact on
the positioning of the crane and the number of cranes

required. Studies conducted by Gray [1] [2] on the
pricing of preliminaries by contractors
concluded that 90% of the value of the preliminaries can

be found in only six items, namely,
the costs of site staff, plant, scaffolding, site

accommodation, electricity and cleaning. He
also found that contractors generally only price sixteen

items in the preliminaries section of
a tender bills of quantities. Bennett et al. [3] reached

similar conclusions. The 'Preliminaries' document
published by the A.S.A.Q.S. [4] for use with the Joint
Building Contracts Committee (J.B.C.C.) 'Principal

Building Agreement' [5] makes
provision for items contained in the preliminaries section

to be priced by the contractor as
either 'fixed', 'variable with value' or 'variable with

time', or a combination of these. This
breakdown is then used as the basis for the payment and

any subsequent adjustment of the
preliminaries. The purpose of this paper, then, is to

document the results of an empirical study into the
methods adopted by quantity surveyors and contractors in

estimating and pricing the
preliminaries component of project tenders.
2 Theoretical discussion of the pricing function
The functional separation of design and construction has

been reflected in the development
of price forecasting/cost estimating techniques. For

quantity surveyors, the object is to
inform clients and architects about the price implications

of design decisions. For
contractors, the need is to be informed of the anticipated

cash flow implications should the
contract be acquired. Although the nature of the

competitive tendering process is such that
quantity surveyors and contractors are essentially

concerned with the same function
(forecasting the market price of the project), the

potential for contractors to access
production cost information is a determining factor in the

type of technique used [6]. The 426 Bowen, Hall and
Edwards generic form of quantity surveyors' traditional
price models are given below. These equations were
developed by Bowen [7] from the work of Skitmore and
Patchell [6]. P = [(PI + P2 + ... + Pn) + G].I n = [ ~
(ql) + G ].I j (i = 1, ... , n) i=l n k = [ ~ (qjrJI j
+ ~ (qlj).I j ] j=l j=l (i = 1, ... , n; j = 1, ... , k)
where: P = total price of the work p = the individual
product price of each item or work package qj = measure
(quantity) associated with the i th item or work package
rj = price per unit measure of the i th item or work
package qj = the measure associated with the jth
preliminaries item or work package rj = price per unit
measure of the jth preliminaries item or work package n =
the number of items or work packages k = the number of
preliminaries items or work packages G = the price of the
preliminaries I = a general price index for time
adjustment Ij = a price index for the time adjustment of
the i th item or work package (1) (2) (3) I j = a
price index for the time adjustment of the jth
preliminaries item or work package Consider the method
adopted by most quantity surveyors in the pricing of
preliminaries.
The basic form in which preliminaries items are represented

in bills of quantities is that of '~(ql/ (Eq. 3).
Throughout the early design stages when approximate price
forecasting
techniques are used, and often when pricing bills of

quantities as the final pre-tender price
forecast, quantity surveyors adopt the procedure of adding

on a percentage allowance to the
priced builders' work. This percentage allowance is usually

obtained from an analysis of
priced bills of quantities of a 'similar' nature, with an

intuitive adjustment allowing for the
differences between projects. This presupposes that there

is knowledge of the composition
of the preliminaries and the relevant items which should be

adjusted because of the varying
circumstances of the project. The pricing of the

preliminaries must be seen as a potential
source of considerable forecasting error given that this

section can account for some 15-20%
of the tender value [1] [2]. Contractors recognise the

dangers inherent in this approach,
preferring to adopt an individual assessment of each

project to calculate the work content
and cost of each preliminaries item '~(qll (Eq. 6 below)

[3] [8]. Research in the United Kingdom [9] [1] showed
that preliminaries costs, when expressed
as a percentage of contract value, display wide

variability. This variability is not
signiticantly affected by the size of the project, its

type of construction or complexity.
There is also no significant correlation between the

preliminaries percentage and the value
of the project. The relationship between the preliminaries
and the overall duration of the
project reflects a higher correlation, which improves

further in projects of a more complex
nature. However, the standard data sources and methods of

price forecasting used by The pricing of preliminaries 427
quantity surveyors do not consider this relationship at

all. The percentage addition approach,
determined in relation to the value of the project, is

highly subjective and unrelated to the
process of construction. Little published data exist in

South Africa regarding the percentage
contribution made by preliminaries to tender price for

various types of projects. The pricing function employed
by contractors in tender bidding may be represented by:
B=Cm = [( c 1 + c 2 + ... + Cn) + G'].m n k = [ L
(ql') + L (qlj)].m ;=1 j=l (i = 1, ... , n; j = 1, ... ,
k)
where:
B = the value of the market price bid made by the contractor
C = the estimated costs of production
m = a 'mark-up' value to be determined by the bidder
c = the product cost of each item or work package
G' = the cost of the preliminaries
q; = measure (quantity) associated with the i th item or

work package
r;' = cost per unit measure of the i th item or work

package
qj = the measure associated with the jth preliminaries item

or work package
r j ' = cost per unit measure of the jth preliminaries item

or work package
n = the number of items or work packages

k = the number of preliminaries items or work packages (4)
(5) (6) The emphasis in tender bidding is the
determination of a suitable value for 'm' which
will provide the best trade off between the probability of

winning the contract and the
anticipated profit should the bid be successful. Component

'C' of the model is essentially
similar to the basic price forecast model for 'P' (Eq. 2).
Costs are usually current with little
use being made of price indices. If the same items are

used (a basic assumption inherent
in Eq. 6) in providing both design and construction price

forecasts (e.g., pricing the bills of
quantities as the basis for the bid), Eq. 6 may be

simplified to n n B = L (q;r'J,m = L (q;r) = P (i = 1,
... , n) (7) i=l i=l
as 'B' and 'P' are essentially forecasts of the same value,

namely, the market price of the
contract [6]. Given this underlying theoretical framework

to the pricing of the preliminaries component
of project tenders, how do quantity surveyors and

contractors differ in their practical
approaches to this task? 428 Bowen, Hall and Edwards 3

Opinion survey 3.1 Survey design and administration An
opinion survey, using interviews and incorporating a
structured questionnaire, was conducted in the Western
Cape region of South Africa, to establish the methods used
by quantity surveyors and contractors for the pricing of
preliminaries items. Telephone contact was made with
twenty-seven quantity surveying practices and twenty-five
contracting organisations and their participation sought.
The quantity surveyors were selected using the directory
of registered (regional) practices of the Association of
South African Quantity Surveyors. Contracting
organisations were drawn from the membership directory of
the local Master Builders' Association. In ail instances
interviews were arranged with a quantity surveying partner
or chief estimator/contracts manager. The survey
interviews addressed a number of issues relating to
quantity surveying and construction management processes.
The questionnaire for quantity surveyors amounted to
fifteen A4 pages; while that for contractors contained
forty-seven pages. The interviews were thus quite lengthy.
However, participants were sent a copy of the relevant
questionnaire beforehand, thus enabling them to offer more
informed and more considered opinions. The interviewer
does not think: that any of the question responses was
affected by survey fatigue. The section of the
questionnaire dealing with the pricing of contract
preliminaries was similar in content and format for both
sets of participants. After a number of questions
relating to company demographics and workload statistics,
the questionnaires dealt specifically with the relative
proportion of various preliminaries cost items to the
total preliminaries value; participants' methods of
calculating the cost of the preliminaries; the use of
standard formats and checklists; detailed pricing of
preliminaries items; factors influencing the cost of
preliminaries items; and factors influencing the accuracy
of preliminaries estimates. 3.2 Survey results The survey
results are discussed question by question and compare the
participating quantity surveyors' and contractors'
opinions about each issue. Question J: On average, what
proportion of the total contract value does the
preliminaries
section represent?
Various authors have pointed to the cost significance of

the contract preliminaries expressed
as a percentage of total contract value [9] [l] [10]. None

have compared the assessments
of quantity surveyors and contractors, and the question

sought to explore this gap. Table 1
summarises the opinions of the survey participants about

this question. Most respondents believe that contract
preliminaries, expressed as a proportion of total
contract value, lie in the range 4% 10%. Some contractors;

however, believe that
preliminaries may, on average, amount to more than 20% of

contract value; suggesting that,
in some instances at least, the proportion may be much

greater than 20%. While quantity surveyors and contractors
participating in the survey hold broadly similar
opinions about this question, there is an underlying

difference between them. So, although
the modal response in each case was that preliminaries

account for 7% 8% of total contract
value, most quantity surveyor respondents believed that

preliminaries account for between The pricing of
preliminaries 429
7% and 10% of contract value; whereas the large majority of

contractors opted for a wider
range: 4% 10%. Clearly contractors expect a greater

variability in preliminaries costs.
Table 1 Contribution of the preliminaries to total contract

value Percentage contribution 0-1% 2-3% 4 6% 7 8% 9
-10% 11 -12% 13 -15% 15 20%
Exceeding 20% Assessment of quantity surveyors and

contractors Quantity surveyors Contractors [n = 27] [n =
25] % % 0 0 0 0 9 33 48 38 39 19 4 5 0 0 0 0
0 5
Question 2 (to quantity surveyors): 2(a) In undertaking

(the preparation of) an approximate
cost estimate. which of the following methods do you use

to determine the (total) value of
the preliminaries? And 2(b): In pricing bills of

quantities. which of the following methods
do you use to determine the (total) value of preliminaries?
Question 3 (to contractors): Please indicate which of the

following methods you use to
determine the (total) value of the preliminaries for tender

purposes.
These questions were intended to explore how quantity

surveyors and contractors might
differ in their overall approach to determining the total

value of the contract preliminaries
for a project. Participants were given a choice of three
alternative methods, plus 'other'; and a choice
of five frequencies ranging from 'always' to 'never'.

Quantity surveyors were asked two
questions to reflect situations where more project

information is available to them when
producing a final estimate by pricing the tender bills of

quantities. By far the most common method chosen by
quantity surveyors, when preparing
approximate cost estimates, was that of making a

percentage addition to the estimated net
project cost (96% of respondents reckoned that they

'always' or 'frequently' use this
method; with a third of these indicating that they 'always'

use it). Making a lump sum
addition to the net estimated cost was a less popular

method. Only a quarter of the quantity
surveyors 'frequently' use this approach; while

three-quarters use it 'occasionally', 'seldom'
or 'never'. Less than ten per-cent of quantity surveyors

'frequently' calculate the cost of
each preliminaries item when preparing approximate cost

estimates. 430 Bowen, Hall and Edwards Similarly, 93% of
quantity surveyors 'always' or 'frequently' use the
percentage addition method to value preliminaries when
pricing bills of quantities. Even with the greater level
of infonnation now available, more than 80% of quantity
surveyors only 'occasionally', 'seldom' or 'never' price
each individual bill item of preliminaries. Indeed, a
somewhat surprising 40% of them 'frequently' or
'occasionally' resort to making a lump sum addition for
preliminaries when pricing the bills of quantities.
Clearly, the percentage addition method is the approach
most favoured by quantity surveyors at any stage in the
estimating process, notwithstanding the proven lack of
significant correlation between preliminaries percentage
and project price [9] [1] [10]. The adoption of this
technique also ignores the influence of project duration on
preliminaries costs [7]. In contrast to the quantity
surveyors, most of the contractors interviewed do not
favour making tender allowances for the cost of the
preliminaries by applying a percentage addition based on
the net contract value. Three-quarters of them 'seldom' or
'never' use this method. A similar number do not favour a
lump sum addition approach to pricing preliminaries. More
than half of the contractors interviewed 'always' calculate
the cost of each individual preliminaries item. Question
4: Where the cost of each preliminaries item is calculated,
is a standard format (i.e., method of calculation) used?
Fewer than fifteen per-cent of quantity surveyors answered
'yes' to this question. Where standard fonnats are used,
they may incorporate assessments relating to the fixed
cost, time, or value-related components of preliminaries
items. Just over half of the contractors interviewed do
use standard fonnats for assessing the cost of
preliminaries items. They also include fixed cost, timeand
value-related methods of assessment. Question 5: Is a
formal checklist used to minimise errors/omissions in the
pricing of preliminaries?
Just over a third of the quantity surveyors reckoned to use

a standard checklist of items when pricing preliminaries,
compared with two-thirds of the contractors. At the
bill-pricing stage, of course, the preliminaries bill
itself fonns the checklist for
quantity surveyors. Some contractors still use their own

standard checklist at this point to
ensure that sufficient detail has been incorporated in the

preliminaries section of the tender
bills of quantities.
Question 6: Please indicate the extent to which each of

the fol/owing factors influences the
total value of the preliminaries.
The purpose of this question was to see to what extent

quantity surveyors and contractors
were in agreement about causal influences on preliminaries

costs. Survey participants were offered a list of eleven
different factors, plus 'other'. Against
each factor, five possible response choices ranged from 'no

influence' to 'strong influence'.
The survey results are shown in Table 2. No additional

factors were specified by either
group of respondents. The pricing of preliminaries 431
Table 2 Influence of project factors on pricing of

preliminaries Degree of influence of factors None Little
Moderate Significant Strong Factor Q.S. Cont. Q.S. Cont.
Q.S. Cont. Q.S. Cont. Q.S. Cont. (%) (%) (%) (%) (%)
(%) (%) (%) (%) (%) Project type 0 0 11 17 11 8 37 46
41 29
Project value 0 8 0 29 33 29 48 21 19 13
Project size 0 4 0 21 11 17 63 42 26 17
Contract duration 0 4 0 0 11 17 37 29 52 50
Location 0 4 12 4 35 38 35 38 19 17
Expected number 15 33 35 21 39 25 8 17 4 4
of bidders
State of market 0 17 23 25 15 33 27 17 35 8
Quality of tender 0 13 23 33 46 21 31 17 0 17
information
Project timing 0 9 19 9 31 44 31 26 15 13
Project complexity 0 0 4 13 27 21 46 54 23 13
Client organisation 8 8 39 33 54 17 0 29 0 13
Project type was considered to be a 'significant' to

'strong' influencing factor on the total
value of preliminaries by most quantity surveyors (78%)

and most contractors (75%). Project value attracted less
support, particularly among the contractors. Over half of
them (58%) thought that project value had 'little' to

'moderate' influence on preliminaries
costs, and nearly ten per-cent thought it had 'no'

influence. No quantity surveyors thought
that project value had 'little' or 'no' influence, but one

third thought it had only 'moderate'
influence. Two thirds of the quantity surveyors; however,
still thought of project value as
having a 'significant' to 'strong' influence on

preliminaries costs (compared with only 44%
of contractors). Opinions on the influence of project size

varied more sharply. Nearly ninety per-cent of
the quantity surveyors thought it had a 'significant' to

'strong' influence on preliminaries
costs, compared with less than 60% of contractors. No

quantity surveyors thought that
project size exerted anything less than a 'moderate'

influence; whereas nearly 25% of the
contractors thought the influence of project size would be

'little' or even non-existent. Contract duration was
considered to be a 'significant' to 'strong' influence on
preliminaries costs by both quantity surveyors (89%) and

contractors (79%). Project location was seen as less
influential, with just over half of quantity surveyors, and
half of the contractors, believing it to be a

'significant' to 'strong' influence. Competitiveness (the
expected number of bidders) seems to be even less
influential. Half
of the quantity surveyors, and a little over half of the

contractors, thought this factor had
'little' or 'no' influence on preliminaries costs. There

was some intra-group disagreement; 432 Bowen, Hall and
Edwards however, as over ten per-cent of quantity
surveyors thought it might be a 'significant' to 'strong'
factor; as did 21 % of contractors. The state of the
market was less favoured by contractors than by quantity
surveyors. Three-quarters of the contractors considered
it to have 'moderate', 'little' or 'no' influence on the
total cost of preliminaries; compared with 38% of quantity
surveyors who thought its influence was 'moderate' or
'little'. Less than a quarter of the contractors suggested
that its influence was 'significant' or 'strong'; while
just over half the quantity surveyors believed this was
the case. Rather surprisingly, the quality of tender
information did not rate highly with either group as an
influential factor in the total cost of preliminaries. Only
about a third of each group considered it to be a
'significant' to 'strong' influence. Project timing
attracted a little more favour. Nearly half of the quantity
surveyors, and almost 40% of the contractors, thought
this was a 'significant' to 'strong' influence on the
total cost of preliminaries. Project complexity was
generally thought to exert a 'significant' to 'strong'
influence on the total cost of preliminaries; with 69% of
quantity surveyors and 67% of contractors opting for this
view. No quantity surveyors rated the client organisation
above a 'moderate' influence on the total cost of
preliminaries. However, more than 40% of the contractors
thought it would have a 'significant' to 'strong'
influence. Question 7: Please indicate the extent to which
the following cost centres contribute to the total cost
of the preliminaries of an "average" project undertaken
over the past three years
(express cost centre value as a percentage of total

preliminaries value).
This question was intended to find out to what extent

quantity surveyors and contractors
were in agreement about the cost significance of

individual preliminaries items. Interestingly, many of
the quantity surveyor respondent group (44%) declined to
answer
this question, claiming that they 'did not know'. The

results are shown in Table 3 with
those for quantity surveyors reflecting the views of the

reduced group size. The displayed
statistics represent the means of the values expressed by

participants. It might be argued
that the modal values would be a better indicator of group

opinions in this instance, and
future extended analysis will explore this. Compared with

the contractors, the quantity surveyors appear to
over-value the costs of
site personnel and providing temporary site accommodation,

mechanical plant, and site
security. On the other hand quantity surveyors may tend to

under-value preliminaries costs
for scaffolding, hoardings and name boards, and site

transport, when compared to contractor
assessments of these items. The pricing of preliminaries

433
Table 3 Contractors' and quantity surveyors' opinions

regarding the significance of individual
preliminaries cost centres Mean group values for

percentage contribution of preliminaries cost centres
Preliminaries cost centres Contractors Quantity surveyors
[n = 15] [n = 25] (mean response values %) (mean response
values %)
Head office personnel 10-15 10-15
Site personnel 30 35-40
Temporary 0-5 5-10
accommodation
Telephones 0-5 0-5
Temporary power and 0-5 0-5
lighting
Plant (mechanical) 5-10 15-20
Plant (non-mechanical) 0-5 0-5
Protective clothing 0-5 0-5
Setting out 0-5 0-5
Scaffolding 5-10 5
Water supply 0-5 0-5
Hoardings and name 5-10 0-5
boards
Security 0-5 5-10
Temporary roads 0-5 0-5

Temporary works (e.g., 0-5 0-5
storage facilities)
Drying out 0-5 0-5
Rates. notices and fees 0-5 0-5
Insurances 5-10 5-10
Contract conditions 0-5 0-5
Cleaning 5 0-5
Transport 10-15 0-5
Abnormal overtime 0-5 0-5
Attendance on nominated 0-5 0-5
sub-contractors 434 Bowen, Hall and Edwards Question 8:

How important do you consider the following factors to be
in the calculation of an "accurate" preliminaries value
for a project? Quantity surveyors and contractors need to
have confidence in the accuracy of their pricing, but this
can be affected by a number of factors. For example, the
heavy reliance by quantity surveyors on the percentage
addition technique (as a means of determining a total
preliminaries value) implies that the forecaster's
judgement, project details and feedback from previous
projects are all important in the selection of an
appropriate percentage. The question sought to ascertain
how participants viewed the importance of such factors.
Survey participants were offered a choice of seven factors,
> with three levels of importance for each. The results
are shown in Table 4. Table 4 Quantity surveyors' and
contractors' opinions regarding the importance of factors
influencing the accuracy of the preliminaries estimate
Importance attached to factor Unimportant Important Very
important Factor Quantity Contractors Quantity
Contractors Quantity Contractors Surveyors Surveyors
Surveyors (%) (%) (%) (%) (%) (%) Detailed knowledge of
4 0 50 35 46 65 project Experience in estimating 4 0 60
46 36 54 Extensive knowledge of 11 0 58 54 31 46
construction techniques Feedback from previous 8 8 60 71
32 21 projects Extensive data base 25 35 50 52 25 13
Time spent in estimating 42 44 54 39 4 17 Quality of
tender 8 4 64 58 28 38 information Detailed knowledge of
the project is considered to be an 'important' or 'very
important' factor by virtually all respondents, with
contractors tending to ascribe slightly more importance to
this than quantity surveyors. However, it was not clear
from the survey whether the type of detailed knowledge so
highly valued by contractors is different to that
enjoyed by quantity surveyors. Respondents were almost

unanimously agreed that estimating experience is
'important' to 'very important' for accurate pricing of
preliminaries. Contractors tended to rate the importance
of extensive knowledge of construction
techniques more highly for the accurate pricing of

preliminaries than did quantity surveyors.
This suggests that contractors may have a better

understanding than quantity surveyors of
the resource implications of these technologies. The

pricing of preliminaries 435 It might have been
anticipated that both groups would overwhelmingly have
rated factors
such as feedback from previous projects, the availability

of an extensive database, the time
spent in estimating, and the quality of tender

information, as 'very important' in influencing
the accuracy of preliminaries pricing. In fact, these were

generally regarded more as
'important' rather than 'very important'. The availability

of an extensive database was
actually thought to be an unimportant influence on the

accuracy of preliminaries pricing by
a quarter of the quantity surveyors and by over one third

of the contractors; which suggests
that they thought such a resource to be an unnecessary

luxury. More surprisingly, over two
fifths of each group believed that spending more time in

estimating would not be an
important factor in influencing the accuracy of

preliminaries pricing.
Question 9: As a standard procedure, do you use feedback
from previous projects to check
on the accuracy of your preliminaries pricing?
More than 80% of quantity surveyors confirmed that they do

use historical feedback as a
standard procedure for checking the accuracy of their

preliminaries pricing. Only 60% of
contractors reckoned to do this, however. This suggests

that contractors may be more
prepared to take a 'fresh' view of each new project.
Conclusions
Several important findings arise from the survey. Firstly,

quantity surveyors may take an
overly narrow view of the proportional contribution of

preliminaries costs to total project
tender value. Secondly, despite its recognised

shortcomings, quantity surveyors rely strongly
on the percentage addition method of calculating an

overall value for contract preliminaries.
Thirdly, quantity surveyors may over-rate the influence of

project value and project size on
preliminaries costs. Fourthly, quantity surveyors may

under-rate the influence that the nature
of the client organisation exerts on the minds of tendering

contractors. Fifthly, when
estimating, quantity surveyors may under-rate the impact

of scaffolding, site hoardings and
site inspection items on preliminaries costs. In

conclusion, it is evident that quantity surveyors are
unlikely to improve their methods
of pricing preliminaries without becoming more involved in,

and aware of, the implications
of the construction programme and its relationship with

building design.
1. Gray, C. (1981) Analysis of the Preliminary Element of

Building Production Costs. Unpublished M.Phil.
Dissertation, Department of Construction Management,
University of Reading, Reading.
2. Gray, C. (1983) Estimating preliminaries. Building

Technology and Management, Parts 1-7, Chartered Institute
of Building, Englemere, Ascot.
3. Bennett, 1., Morrison, N.A.D. and Stevens, S.D. (1980)

Construction Cost Data Bases. Second Annual Report
prepared by the Department of Construction Management,
University of Reading, for the Property Services Agency,
Department of the Environment.
436 Bowen, Hall and Edwards 4. Association of South

African Quantity Surveyors (A.S.A.Q.S.) (1991)
Preliminaries. June 1991 Edition, A.S.A.Q.S. 5. Joint
Building Contracts Committee (J.B.c.c.) (1991) Principal
Building Agreement. 1991 Edition, J.B.c.c. 6. Skitmore,
R.M. and Patchell, B. (1990) Developments in contract price
forecasting and bidding techniques, in Quantity Surveying
Techniques: New Directions (Ed. P.S. Brandon), Blackwell
Scientific Publications, Oxford, pp.75-120. 7. Bowen, P.A.
(1993) A Communication-based Examination of Price Modelling
and Price Forecasting in the Design Phase of the
Traditional Building Procurement Process in South Africa.
Unpublished Ph.D. Thesis, University of Port Elizabeth. 8.
Chartered Institute of Building (C.LO.B.) (1983) Code of
Estimating Practice. Fifth Edition, C.I.O.B, October. 9.
Flanagan, R. (1980) Tender Price and Time Prediction for
Construction Work. Unpublished Ph.D. Thesis, University of
Aston in Birmingham, Birmingham.
10. Pearl, R.G. (1992) Factors Affecting the Accuracy of

Quantity Surveyors' Pre-Tender Price Forecasts in South
Africa. Unpublished M.Sc. Dissertation, University of Cape
Town. CLIENT-PROFESSIONAL COMMUNICATION DURING THE EARLY
STAGES OF PROJECT DEVELOPMENT R.N. Gameson Department of
Building Engineering, University of Manchester Institute
of Science and Technology, Manchester, UK Abstract There
are now a proliferation of alternative methods by which
clients may procure their buildings. The move to the use
of different procurement systems has been, to a great
extent, client driven where large business organisations
and their representatives have introduced their own
systems of procuring property. The construction industry
has responded to the demands of its clients by extending
the services which it has historically offered. This has
led to construction professionals from a number of
disciplines such as: architecture, quantity surveying,
consulting engineering and contracting offering their
services, in an overall advisor / management capacity,
directly to clients. The inception stage where clients
communicate their perceived requirements to construction
professionals, and receive analysis and advice in return,
is arguably one of the most critical stages in any
project's life cycle. This paper will investigate the
services offered by professionals, from the four
disciplines outlined above, to clients during the
inception stage of a project's development. It will
examine the interaction process between clients, of
varying levels of construction experience, and construction
professionals from the four disciplines. The analysis will
focus on the first meeting between clients and potential
professional advisers to discuss a possible building
requirement. Results will be presented from the analysis
of a series of meetings between clients and construction
professionals held to discuss clients' perceived building
requirements. Keywords: Clients, construction
professionals, interaction, project inception. Sommaire
11 Y a aujourd'hui une proliferation de methodes
alternatives selon lesquelles les clients peuvent se
procurer des batiments. Le changement vers l'utilisation de

& FN Spon. ISBN 0419222405. 438 Gameson differents
systemes d'obtention a ete, dans une large me sure ,
commande par les clients dans la me sure ou d'importantes
entreprises et leurs representants ont introduit leurs
propres systemes d'accession a la propriete. L'industrie
de la construction a reagi a la demande de ses clients en
elargissant la gamme de services qu'elle avait offerts par
Ie passe. Cela a conduit les professionnels de la
construction d'un certain nombre de disciplines tels que:
les architectes, les metreurs, les ingenieurs conseil et
les entrepreneurs a offrir leurs services, generalement a
titre de conseiller / gestionnaire, directement a la
clientele. L'etape de mise en route ou les clients
communiquent leurs exigences precom;ues aux professionnels
de la construction et, en retour, re<;:oivent des analyses
et des conseils, est certainement une des etapes les plus
critiques du cycle de vie de n'importe quel projet. Cet
expose s'attachera a examiner les services offerts par les
professionnels des quatre disciplines mentionnees
ci-dessus, aux clients lors de l'etape de mise en route du
developpement d'un projet. Nous examinerons egalement Ie
processus d' interaction entre les clients dont les niveaux
d' experience en matiere de construction sont varies, et
les professionnels de la construction des quatre
disciplines. L'analyse se concentrera sur la premiere
rencontre entre les clients et les conseillers
professionnels potentiels discutant de possibles exigences
de construction. Les resultats seront presentes a partir
de l'analyse d'une serie de rencontres entre clients et
professionnels de la construction tenues afin de discuter
des exigences de construction precon<;:ues par les
clients. Mots cles : Clients, professionnels de la
construction, interaction, mise en route de projet. 1
Introduction The construction industry is a service
industry offering its services to customers for an
appropriate remuneration. One party who is involved in
every construction project is some form of client.
Historically the architect has been the first point of
contact for clients considering building. However, today
professionals from wide range of construction disciplines
are offering their services directly to clients in a
principal adviser capacity [1], including project managers
who are increasingly being used by clients [2]. The aim
of this paper is to investigate the interaction between
clients, considering building new premises, and
construction professionals, offering advice to such
clients, at the project inception stage. The discussion is
based upon the premise that previous client experience of
construction is a key variable at this stage. 2
Construction clients
A client is an essential ingredient to any construction

project; they are the project initiators, and without them
there would be no projects. However, the role which
such clients play in their projects, and the relationships

which they develop with
external consultants, can vary considerably. Bresnen and

Haslam [3] suggest that the
choice of a management organisation for a project is

heavily influenced by client
attributes rather than by project variables. Therefore,

irrespective of whatever precise Client-professional
communication 439 organisational structures are
established, clients become part of their own construction
projects' organisation, defined by Cherns and Bryant [4]
as a "Temporary MultiOrganisation (TMO) " . Once the
client has reached a decision that a building will satisfy
their future needs they then need to seek advice and/or
procure the services of external organisations to assist
them in the development of their projects. The key
variable regarding clients, and the relationship which they
establish with the construction industry, is their
previous experience of involvement in construction
projects [5]. Abbott [6] defines this situation as
"differentiation" stating that differences in clients
themselves affects their relationships with professional
advisors. Because construction industry clients are so
diverse it is very difficult to produce an all
encompassing definition which describes them. Blackmore
[7] has possibly got closest to such a definition when
quoting John Brandenburger, of Ove Arup and Partners, "
... clients are simply an assorted collection of men and
women seeking advice from a member of one or more of the
professions. II In the United Kingdom construction
industry the client sector has undoubtedly been changing
in recent years. Green [8] suggests that the 1990's has
seen a change in the demand/supply equation placing
clients in the ascendancy. In both the private and public
sectors out-sourcing of professional skills has grown
dramatically, in some cases as a result of a deliberate
strategy, in others it has been driven by circumstance
[9]. Examples of this can be seen following the
privatisation of large, previously publicly owned, utility
companies (eg. water, gas and electricity). Therefore many
client organisations, who previously dealt with many of
the facets of their construction projects in-house are now
seeking greater assistance from external organisations.
This mirrors the principles of "markets and hierarchies"
as defined by Williamson [10]; rather than conducting
transactions within their own organisational
hierarchy such clients are increasingly approaching the

construction marketplace to
procure professional services.
2.1 Client types
A number of authors have suggested systems which can be

utilised to distinguish
particular types of client. For example, Newman et al [11]

proposed a four type
system: once in a lifetime / inexperienced, regular /

repeat, expert and special. Other
authors suggest two factor systems: sophisticated and naive
[12] and primary and
secondary [13]. Having analysed established

classifications of client types Gameson [5] has defined
a system for classifying clients based upon the following

two characteristics, firstly,
whether they are primary or secondary constructors and,

secondly, their level of
construction experience. Definitions of constructors are:

1. Secondary: "Clients for whom expenditure on constructing
buildings is a small percentage of their total turnover,
and for whom buildings are necessary in order to undertake
a specific business activity, such as manufacturing."
2. Primary: "Clients, such as property developers, whose

main business and primary income derive from constructing
buildings."
Levels of construction experience are defined as: 440

Gameson 1. Inexperienced: "No recent and relevant
experience of constructing buildings, with no established
access to construction expertise." 2. Experienced: "Recent
and relevant experience of constructing certain types of
buildings, with established access to construction
expertise either in-house or externally. " Considering
these two characteristics together four alternative client
types are produced: Secondary Inexperienced, Secondary
Experienced, Primary Inexperienced and Primary
Experienced. For the purposes of this research one of the
alternative client types shown above, primary
inexperienced, has been excluded from further discussion.
When considering the definitions stated, for primary and
inexperienced, it is clear that it would be most unlikely
to find a client organisation which exhibits such
characteristics. 2.1.1 Secondary inexperienced clients A
number of authors have highlighted the difficulties
encountered by inexperienced clients when approaching the
construction industry for advice [11] [14]. Having
observed the interactions between inexperienced clients and
construction experts Glaser [15] suggests that lay clients
will follow the advice of such experts giving them power
over their working relationship. Because such clients
possess limited or no construction expertise within their
own organisations they have no alternative but to approach
the construction market to obtain the services of
construction professionals [10] . 2.1.2 Secondary
experienced clients Most business organisations require
some form of premises within which they perform their
business function. Therefore their prime business function
is not solely related to constructing buildings. It is in
this category of clients where perhaps the greatest
client diversity lies. Such clients build up an in-house
expertise which is likely to be related to the
construction of a particular type of building. They may
also engage external professionals on a long-term basis to
work on projects with
them, in addition to having in-house construction experts

[16]. Therefore much of
the development of their projects, particularly in the

early stages, is conducted within
their own organisations. Because of their previous

experience they are not as
dependent on the construction market as inexperienced

clients [10]. Such clients are
able to "preprofessionalize" their own problems before

approaching external
professionals [6]. However, secondary experienced clients

need to understand the limitations of their
own construction expertise. When faced with building a type

of building outside of
their previous experience they may need to consider

employing different professionals
and using different procedures. Bresnen and Haslam [3]

suggest that such clients may
adopt a process which they describe as "habituation",

where they use historically
developed systems in preference to the uncertainty and

disturbance likely to be caused
by changing their normal practices.
2.1.3 Primary experienced clients
Growth in institutional investment in property has led to

large organisations, such as Client-professional
communication 441 pension funds and insurance companies,
investing large capital sums in property. This situation
perhaps reached its zenith in the 1980's when, as Green
[8] states, successful developers possessed a very clear
understanding of what they required in terms of their
buildings, and were able to provide detailed specifications
to their construction professionals. Such clients will
also employ construction professionals to represent them,
looking after their interests in a project [17]. Therefore
this type of client, having access to construction
expertise and previous construction experience, is in a
strong position to clearly communicate their requirements
to construction professionals. 3 Construction
professionals There are now a proliferation of alternative
methods by which construction industry clients may procure
their buildings [1]. This is exemplified by the various
"procurement systems" now being offered by construction
professionals from varying disciplines. The main
difference in the procurement systems used relates to the
organisational and contractual relationships between the
parties involved. However, whatever procurement system is
adopted the same professional skills will be required,
primarily: a designer (architect), a financial manager
(quantity surveyor), a structural advisor (consulting
engineer) and a building constructor (construction
manager). It is important to acknowledge at this point
that other professionals may be involved, for example:
building services engineers, building surveyors and, most
recently, project managers [2]. However, the research
described in this paper concentrates on the four primary
disciplines: architecture, quantity surveying, consulting
engineering and contracting. Support for this contention
is given by the R.I.B.A. "Plan of Work" [18], which
defines the functions and responsibilities of these four
disciplines thus confirming the prominence of their role
in a construction project. In any interaction process with
their clients, professionals will adopt a procedure which
begins with diagnosis and ends with treatment [6]. During
this process a factor suggested by Glaser [15], which
contributes to the client-professional relationship, is
"power symmetry". This relates to the distribution of power
between client and
professional in their working relationship, which Glaser

suggests usually favours the
professional.
4 Research methodology
Having looked the characteristics of both clients and
construction professionals the
next stage of the research was to investigate the nature

of the interaction process
which takes place between these parties when discussing a

potential construction
project. The literature review suggested that the

interaction process would be affected
by a number of factors. The results presented in this

paper concentrate on one of the
factors, namely level of previous client experience.

Therefore the following sections
outline the research approach employed. 442 Gameson 4.1

Research method The research method adopted involved the
collection of data from a series of interviews between
clients, with different levels of construction experience
who perceived a need for a new building, and construction
professional from four disciplines. From this 11 detailed
client case studies were produced. 4.2 Research
participants Client organisations taking part in the
research interviews can be classified into two of the
client types previously identified: secondary inexperienced
(5 No.) and secondary experienced (6 No.). The types of
client organisations ranged from a small one-man business
to a multi-national computer company. The professionals
taking part came from the four primary disciplines
identified previously: architects (3 No.), quantity
surveyors (3 No.), consulting engineers (3 No.) and
construction managers (3 No.). 4.3 Data collection The
primary source of data was the recording of interviews
between the clients and the professionals. Each client was
interviewed, individually, by a representative from each
of the four professional disciplines. The order in which
the professionals interviewed clients was varied, using a
latin squares method [19], to reduce the element of bias
towards a particular profession. Interviews were conducted
in a "laboratory" setting in an attempt to impose certain
constraints upon the situation and to enable valid
comparisons to be made between both individual interviews
and different clients. However, although the setting may
be considered to be un-natural a crucial part of the
interviews was that the nature of the discussion should
remain as open and natural as possible [20]. Secondary
data was collected in the form of post-interview
questionnaires and the completion by each participant of
a brief written personality test. 4.4 Data analysis The
research interviews produced primary data in the form of 33
hours of audio recordings of 44 interviews between the
various clients and professionals. The next critical stage
was to process the collected data to provide measures
relating to the interaction between the parties involved.
Krippendorff [21] estimates that the analysis of such
unstructured data may take between 10 and 100 times the
time covered by the tapes. Therefore implications of
timescale and resources available to conduct this process
need to be considered. Taking this point into
consideration, the techniques adopted combined processing
of data with the early stages of the analysis, namely the
coding procedure, using a "Content Analysis" approach [22].

The key to the success of any analysis of human
interaction is the categorisation or
coding of data; any content analysis is only as good as

its coding system [21]. A number of alternative coding
systems were investigated, and a system called "Bales'
Interaction Process Analysis (IPA)" [23] was selected to

be used. Bales' system
consists of the 12 categories, into which face-to-face

interactions can be assigned, as
shown in Table 1. Client-professional communication 443

Table 1. Bales' interaction process analysis (IPA)
categories Category 1 2 3 4 5 6 7 8 9 10 11 12
Description SHOWS SOLIDARITY raises others status, gives
help, reward. SHOWS TENSION RELEASE jokes, laughs, shows
satisfaction. AGREES shows passive acceptance,
understands, concurs. GIVES SUGGESTIONS direction,
implying, autonomy for others. GIVES OPINION evaluation,
analysis, express feeling, wish. GIVES ORIENTATION
information, repeats, clarifies, confirms. ASKS FOR
ORIENTATION information, repetition, confirmation. ASKS
FOR OPINION evaluation, analysis, expression of feeling.
ASKS FOR SUGGESTION direction, possible ways of action.
DISAGREES shows passive rejection, formality, withholds
help. SHOWS TENSION asks for help, withdraws out of field.
SHOWS ANTAGONISM deflates others status, defends self.
Recordings of interviews were transcribed and coded with
each sentence being assigned to a Bales category. These
coded files were then entered into a computer software
package called the "Oxford Concordance Program (OCP)"
which produces output of frequencies of occurrence of
words and user specified codes [24]. The database of
interview transcripts consists of approximately 215,000
words with 14,000 IPA codes assigned to sentences. For
each interview a profile showing the
percentage of each IP A category, in terms of the whole

interview, for each interview
participant (client and professional) was produced. In

addition a profile for each
client case study, averaging the IPA scores per category

for a set of 4 interviews was also produced.
4.5 Results
To illustrate the results obtained from the data analysis

average interaction profiles
for two typical client case studies will now be presented.

In the first case study the
client is an auto centre supply company providing services

such as new tyres and
exhausts. It had existing premises in numerous locations

throughout the UK and was
involved in an expansion programme. Therefore this client

was classified as "secondary experienced". The client
representative interviewed was the company's
regional property manager with 1 0 years experience of

working in the construction
industry. The second case study's client is a small

company manufacturing analytical
equipment for the chemical industry. The company's existing

premises were too
small, and therefore they were looking to move into larger

premises. This client had
no previous experience of building, and was therefore

classified as a "secondary
inexperienced". The company's owner, who knew nothing about

construction, took
part in the interviews. Average interaction profiles for a
set of four interviews between the client's
representative and four construction professionals, one

from each discipline, are used
to illustrate the interaction process for each case study

in Figs. 1 and 2. The vertical 444 Gameson scale of these
twinned bar charts shows the 12 Bales' IPA categories, BALl
to BALl2, with the final bar, labelled SUM, giving a total
percentage for all of the bars shown above. Horizontal
bars to the left and right of zero show the average client
and professionals contributions respectively. BAL1 BAL2
.Client _ Professionals 8AL3 15 0.3 BAL4 0.8 BAL5
23.4 18.9 BAL6 375 6.4 BAL7 13 89 BAL8 02 0.8 BAL9
BAL10 BAL11 BAL 12 SUM 63.9 36.1 100 80 60 40 20 o 20
40 60 80 100 Overall Percentage Scores Fig. 1. Auto
centre supply company, average IPA interview profile 4.5.1
Auto centre supply company The average interaction
profile, shown in Fig. 1, demonstrates that this client
takes the lead in the interviews, primarily as
information provider and analyser. The
professionals' role is that of analysers, questioners and

information providers. In this case an experienced client
representative with specific building requirements, and
established building procurement procedures, leads the

interviews. The professionals,
acknowledging the client's experience take on the role of

opinion providers. This is
supported by the following comment made by one of the

professionals in his post
interview questionnaire, "We learn from them and not vice

versa".
4.5.2 Small manufacturing company
Fig. 2 shows the average interaction profile for this

client. The profiles show that
the professionals take the lead in the interviews

concentrating primarily on analysis
and information provision. The client responds to the

professionals taking the role
of information provider and analyser. In the post-interview
questionnaire one of the
professionals made the following comment about the client,

" ... no experience of
dealing with people in the building industry ... needs

guidance through the various
processes ... " . This case illustrates a client, with

no experience of construction, putting forward
his outline ideas to the professionals, seeking

clarification and advice in return. Client-professional
communication 445 BAL1 BAL2 BAL3 BAL4 BAL5 BAL6 BAL7
BALS BAL9 BAL10 BAL11 BAL 12 SUM _ Client _
Professionals 2 21 2.7 6.S 36.3 9.5 31 4.7 3.1 09 07
0.2 24.1 100 SO 60 40 20 o 20 40 60 Overall
Percentage Scores Fig. 2. Small manufacturing company,
average IPA interview profile 5 Conclusions 759 SO 100
The two case studies presented in this paper show
significant disparities in the interaction process between
the different client types and construction professionals.
Statistical t-tests conducted on the data from all 11 case
studies supports this
contention, showing results at the 1 % level of

significance. The results of the
research show that the interaction process between clients

and construction
professionals is heavily influenced by the clients'

previous construction experience. Secondary experienced
clients have the benefit of in-house construction experts
and
established methods and procedures to procure their

buildings. Such clients "preprofessionalize" their own
problems and are therefore in a position to clearly
communicate their requirements to external professionals

based upon their previous
experience of constructing buildings. Glaser [15] suggests

that this type of client
adopts the role of "knowledgeable layman". Conversely

secondary inexperienced clients, with no in-house
construction expertise
and no established procedures, are not in a position to

clearly communicate their
requirements. Such clients adopt what Glaser [15]

describes as the "traditional" role
in the client-professional relationship. The entire

construction process, from inception to completion,
involves significant
interaction between the parties involved. At the inception

stage dialogue commences
between the parties and patterns of communication are

established. Therefore it is
crucial that the parties involved understand their roles in

it. The ultimate aim must
be for the professionals to provide a service which

satisfies their clients. However,
as has been demonstrated in this paper, clients are

different and, therefore,
construction professionals must be able to respond to

their characteristics and needs
21. Krippendorff,K. (1980) Content Analysis: An

Introduction To Its Methodology, Sage Publications.
22. Berelson,B. (1971) Content Analysis. Hafner.
23. Bales,R.F. (1951) Interaction Process Analysis.

Addison-Wesley.
24. Hockey,S. (1988) Micro OCP User Manual. Oxford

University Press. CONSTRUCTION DISPUTE MINIMISATION M.M.
Kumaraswamy Department of Civil and Structural
Engineering, University of Hong Kong, Hong Kong Summary
Disagreements can develop into debilitating disputes that

lead to 'lose-lose' scenarios on
construction projects. This paper focuses on disputes

arising from disagreements on construction
claims. Recent trends towards 'partnerlng', 'dispute

review boards' and 'dispute resolution
advisers' demonstrate the industry recognition of the

superiority of 'dispute avoidance' and
'dispute minimisation', over 'dispute resolution'. It is

thus deemed useful to avoid or minimise
avoidable disputes; and also to minimise the frequency and

impact of unavoidable disputes. In
order to achieve this, it appears necessary to identify the

common causes of construction claims
and consequential disputes so as to control their root

sources. This paper presents the interim
results of research in Hong Kong into such common causes

of construction claims and disputes;
and the perceived effectiveness of different dispute

minimisation strategies. Certain categories
and causes of claims and disputes therefrom, are seen to

be more significant in frequency and
magnitude and therefore merit more attention in dispute

minimisation strategies. While dispute
resolution through litigation and even arbitration are

generally seen as onerous, it appears that
even the widely available alternative strategies such as

mediation and adjudication are considered
less effective than direct negotiation.
Sommaire Certains desaccords dans des projets de

construction peuvent se
transformer en disputes debiles qui menent it des scenarios

de type "~ro
partout". Le present papier se penche plus precisement sur

les disputes nees
de desaccords concernant des reclamations. La tendance

recente vers Ie
partenariat, les conseils de revision de disputes et

autres conseillers en
resolution de disputes est la preuve que l'industrie

reconnait la superiorite de
I'evitement des disputes, voire leur minimalisation, sur la

resolution des
disputes. n semble ainsi utile d'eviter ou de minimaliser

les disputes que l'on
peut eviter, tout comme il semble bon de minimaliser Ia

frequence et I'impact
des disputes inevitables. Dans ce but, il apparait

necessaire d'identifier Ies
causes recurrentes des reclamations dans Ie secteur du

b4timent et Ies
disputes subsequentes, afin de pouvoir en contrOler Ia

source. Le present
papier rend compte tout d'abord des resultats

intermediaires de recherches
menees it Hong-Kong sur les causes les plus frequentes des

reclamations et
sur les disputes qui en resultent, sur l'efficacite,

ensuite, des differentes
strategies de minimalisation des disputes. Certaines

categories et causes de
reclamations et de disputes semblent E!tre plus frequentes,

d'une part, d'autre
part prendre des proportions demesurees; elles meritent en

consequence
qu'on leur accorde une attention toute particuliere en

termes de strategies de
minimalisation. Alors que la resolution des disputes par

litige ou arbitrage
est en general onereuse, i1 n'en reste pas moins que les

strategies alternatives,
largement accessibles, telles la mediation et
I'adjudication, sont considerees
comme etant moins efficaces que la negotiation directe.


E & FN Spon. ISBN 0 419 22240 5. 448 Kumaraswamy 1
Construction conflict, claims and disputes Conflicts on
construction projects can lead to claims for extra money
and! or time; and unresolved claims result in disputes.
However, all conflicts do not lead to claims; and all
claims do not result in disputes. Conflict has been said
to be 'inevitable in human relationships' [1] and its
positive and constructive components can be beneficially
harnessed [2]. To accomplish such synergy, it is useful
to isolate the root causes of conflicts [3]. Conflicts can
arise both within and between the multiple project
participants on construction projects; for example within
Joint Ventures or at contractor I sub-contractor
interfaces. Unhealthy or unmanaged conflict can lead to
debilitating disputes in general and even to unreasonable
claims for extra money and lor time. Reasonable claims may
also arise on the other hand, for example when extra work
is instructed. Such a claim is an 'assertion of a right to
money, property or a remedy' and can be made either under
the contract conditions themselves for breach of
contract; for breach of a duty in common law; or on a
quasi~contractual basis [4]. Some legitimate claims may be
accepted by the 'Engineer' or 'Architect' representing the
client in a construction contract, while others may be
disputed, along with any unreasonable claims. The reasons
for disputing even some legitimate claims, may be traced to
either unhealthy conflict or other disputes; or may also
arise from differences in perception of the legitimacy or
quantum of the claim. For example, the 'Engineer' may not
readily endorse claims for delays caused by incomplete or
delayed design information if (s)he is of the opinion that
the information at hand was adequate for the job to
proceed smoothly at that stage; or indeed if s(he) is
apprehensive of being blamed for any such lapse. Disputes
have been defined differently in the context of
construction. For example: according to
Clause 66(2) of the Sixth Edition of the Institution of

Civil Engineers (ICE) Conditions of
Contract: 'a dispute shall be deemed to arise when one

party serves on the engineer a notice in
writing stating the nature of the dispute'; whereas

according to Rule 1 of the ICE Arbitration
Procedure of 1983 'a dispute or difference shall be deemed

to arise when a claim or assertion
made by one party is rejected by the other party and that

rejection is not accepted'. The latter
broader perspective is preferred for the purposes of this

paper; which in fact also extends this
further to incorporate general disputes not arising from

claims. A similar approach is adopted in
Clause 86 of the General Conditions of Contract for Civil

Engineering Works in Hong Kong [6]. Construction dispute
minimisation 449
2 The need for dispute minimisation
Protracted disputes detract from the performance of all

participants involved, leading to 'lose
lose' scenarios whilst also generating ill will that

triggers destructive disputes in most future
interactions. The costs oflitigation and even arbitration

can be substantial in relation to the value
of the item(s) in dispute, and in comparison with even the

value of the project itself [7, 8]. The
1994 Latham Report looked at the growing popularity of

Alternative Dispute Resolution (ADR)
approaches but concluded that 'the best solution is to

avoid disputes' [9].
Latham also 'highlighted the need for a reversal of the

adversarial relationships and practices
that dominated the industry [10], leading to calls for

'teamworking', 'collaborative working' and
'partnership' between the multiple participants on a

construction project.
:3 Methodologies of dispute minimisation
'Partnering' strategies between project participants were

originally structured in the U.S. Army
Corps of Engineers from the 1980's, as a co-operative

approach to contract management and
problem solving; and have led to savings in project time

and cost [10]. Principles and good
practice in 'partnering' have been documented as a

'concept for success' by the Associated
General Contractors of America [11]; and have also been

used and advocated in Europe and
Australia [12, 13].
Dispute Review Boards which also originated in U.S.A.,

particularly in sub-surface works,
have also been successful in avoiding disputes, or in their

quick resolution [14]; and their very
presence on a job has been said to have resulted in lower

bids from some contractors who have
recognised such strengths. While Dispute Review Boards can

be set up at the start of a contract
with one or three members, they need to be customised for

each job. They may tend to ftmction as
job-site level dispute resolution panels at the worst; but

introduce elements of dispute avoidance
in the best examples.
This principle has been extended in establishing a high

powered Dispute Review Panel by the
Provisional Airport Authority in Hong Kong to deal with

disputes on the new Airport works. The
related Airport Core Programme (ACP) infrastructure

mega-projects have an elaborate dispute
resolution procedure, which incorporates 'mediation' and

'adjudication' stages before reference
needs to be made to arbitration. However there has been
some criticism of the virtual
encouragement to label any potential dispute as a 'dispute'

as soon as possible, so that it is
incorporated into the dispute resolution system. The

special requirements of cost and time
certainty on these critical mega-projects, perhaps dictated

this philosophy and the related
procedures. A relatively large number of claims are thus

being generated on the ACP projects,
but this was not unexpected because of the stringent time

bars that can disqualify late claims. 450 Kumaraswamy
Hong Kong has a mediation provision incorporated in the
standard civil engineering contract form [6] and a well
developed set of Mediation Rules which is expected to be
soon up-graded further on the strength of recent
experiences in mediation. However, anecdotal evidence
collected during the recent investigation together with
responses to questionnaires, indicate some misgivings as
to letting disputes proceed even to the extent of
mediation. One complaint was that mediators often tend to
actively encourage compromise settlements even where one
party is clearly 'in the right'; so that a party who is
convinced of his 'case' may be tempted to proceed direct
to arbitration on litigation to extract his full 'dues'.
Another common complaint is the reluctance of government
officers to agree to any compromise and their consequential
preference for a 'judgmental' settlement. Perhaps such
misgivings have encouraged the emergence of the 'Dispute
Resolution Adviser (DRA) system that has been used to
anticipate and minimise disputes at site level in some
recent government hospital and other building projects in
Hong Kong [15]. Thus the DRA system Dispute Review Boards,
and 'partnering' are all methodologies that can help
achieve the objective of minimising avoidable construction
disputes. They can also help settle some of the unavoidable
disputes before they crystallise to proportions that may
require sophisticated and costly dispute resolution
machinery to be mobilised. However, designing alternative
methodologies to deal with potential or developing disputes
is still equivalent to treating the 'symptoms'. Disputes
could be better minimised if the 'causes' were identified
and 'attacked' at their roots. 4. Common causes of
construction disputes 4.1 Common sources of claims and
disputes As discussed at the outset all construction
claims are not disputed; nor do all disputes lead to
claims. However, since most disputes arise from claims for
extra time or payments, this subsection will look at
common sources of both claims and disputes simultaneously,
in an attempt to identify some root-causes. Some previous
investigations that sought the sources of construction
claims and disputes have contributed the following
observations: Hewitt [16] identified predominant types of
claims as caused by: changes of scope; changed
conditions; delays; disruptions; acceleration; and

termination. Semple et al identified common
categories of claims, along with the corresponding common

contract clauses, based on a survey
in Western Canada [17]. They then narrowed down the common

causes to the following in
ascending order of frequency: acceleration; restricted

access; weather; increase in scope.
Heath et al classified and compared the main sources of

claims as: extension of time; variation in
quantities; variation in specifications; and drawing

changes; based on a survey of quantity
surveyors in the UK [18]. They also categorised and

compared the main sources of disputes as:
contract terms; payments; variations; time extensions;

nomination; re-nomination; and
availability of information. The 'knock on' effect of

competitive tendering has also been identified as a major
factor causing
disputes [19]. Anecdotal evidence of 'claims conscious' or

even 'greedy' contractors has also
been encountered, which of course evokes reminders about

'tight-fisted' clients and! or 'over
protective' consultants. Rhys Jones identified [1] the

following factors contributing to the
development of construction disputes; and also

interestingly differentiated the perceptions of
construction lawyers from others in the industry as to the
relative importance of their own
contribution: poor management; adversarial culture; poor

communication; inadequate design;
adverse economic environment; unrealistic tendering;

influence of lawyers; unrealistic client
expectations; inadequate contract drafting; and poor

workmanship. Construction dispute minimisation 451
4.2 The Hong Kong scenario
Being a favourite focus of international construction

organisation, the causes of claims and
disputes are not very different in Hong Kong. For example,

Lamont listed the common sources of
cost claims [20] as variations; the valuation of the

variations; and claims for loss and expenses.
However, Yogeswaran et al identified particular types of

disputes arising from ground conditions
risks in Hong Kong, consequent to the use of conditions of

contract that attempt to exclude
claims for unforeseen ground conditions [21). Such an

inability to claim directly for unforeseen
ground conditions, may for example lead to disputes as to

whether the bore-hole information
supplied by the employer was a 'misrepresentation'.
4.3 Hong Kong surveys: on the common categories of

construction claims
An ongoing investigation into the root causes of claims in

Hong Kong, commenced with the
collection of data on recently completed construction

projects, as to the frequency and magnitude
of claims. The latter were compared as a percentage of

original contract value in the case of cost
claims, or as a percentage of original contract period for
time claims. Figure I illustrates such relative magnitudes
of the average cost claims in the common
categories of claims encountered over the first 61

projects analysed. The standard deviations
therein indicate the degree of variability in the claims

in such categories. However, it must be
noted that since all projects did not necessarily have

claims in any given category, the averages
taken for each category, were based only on those projects

which actually had such claims. Table
I is therefore an useful supplement to compare the

relative frequencies of claims in any given
category. Furthermore, Table I also lists the 'success'

rate of the claims in terms of average paid!
claimed. This reflects the relative settlements of the

claims, or conversely of the residual
(unsettled) disputes therefrom. It may be noted that most

claims under the predominant claims
category of 'Engineer's instruction to change', were

eventually classified as variations, if granted.
The parallel and similar analysis of the time claims is

not presented herein due to lack of space.
The 61 projects analysed so far included building and

various type of civil engineering projects.
Similar data from another 32 projects has been collected.

The envisaged consolidation and re
analysis of the data will include a classification into

different types of projects, so as to identify
claims categories that are more typical of certain types

of works such as roadworks.
4.4 Questionnaire survey: on causes of construction claims;

and dispute resolution
A recent questionnaire issued to a group of civil engineers

in Hong Kong, elicited the perceptions
of 46 respondents, as to the main categories of claims as

in Table 2(a); the main causes of such
claims as in Table 2(b); and the relative effectiveness of

different approaches to dispute
resolution as in Table 2(c). Respondents rated the

significance of each factor litem on a scale
from I to 5; after which the combined (group or overall)

ratings were transformed to indices with
a range from I to 100. These were then ranked for ease of

comparison. The tables also highlight
the differences in perception between contractors, clients

and consultants.
Many possible factors were suggested in the questions

relating to both Tables 2 (a) and 2 (b);
and only the top ten were selected according to the

overall ranking. The overall indices have been
weighted to correct for the different numbers of

respondent from contractors (8), clients (21) and
consultants (17). While the results in Table 2 are based on

the subjective responses of the
respondents, it may be considered to be an useful

reflection of their experience on a series of
projects, unlike the previously reported ongoing surveys

which quantified data from specific
projects. A fair degree of consistency is noted between

the group perceptions [in Table 2 (a); and
also in Table 2 (c»). It must be noted that the perceived

'causes' and 'root causes' were listed
together in the question relating to Table 2 (b), which

may have contributed to some
inconsistencies in the significance assigned to each

factor therein. S T A N D A R D D E V I A T I O N 4 ( ) 2
0 0 1 . 6 2 C C I 0 . 5 1 C C 2 0 . 1 ) C C . 1 . 6 0 C C ,
C C B U 7 C C . 1 . 1 O C C I O c e l l c e l 2 1 . " 1 c c
" 0 . 0 5 C C W C C I 6 e e l 1 . 6 0 9 c m 3 3 . 6 0 L . .
' _ _ _ _ _ c e i S A . . . . C C I S B C C I 8 B + c e l s
e • . . , . d c c " A m b i g u i t y i n d o c u m e n t S
" I • • • C o n s t r u c t i o n m e t h o d C h a n g ~ d
u e 1 0 , . E n g i n e e r ' s c o m m e n t s , U n c o v
e r i n g o f w o r k s f o r e x a m / n a t t o n . . . .
. . . . . . D e l a y e d J s s e s s i o n o f s i l t ~ A
c c e l e r a t i o n o ( w o r k s . . . . . . . S u s p e
n s i o n o f w o r k s 1 0 . . . . . . . . . . . . . . . A
d d i l i o n a l w o r k s d u e 1 0 r e p a i r s I d d e
t : u I n l e m l o n c l a i m s d u c 1 0 l a i C t l U l
l t o n " 1 • • • • • • • • • • 0 ' r u p t i o n o f p r o
g r e s s b y E m p l o y e r o r , . E n g i n e e c r ~ E
m p l o y e r ' s b r e a c h o f c o n t r a c t ~ . . . .
. . . . . . . . . . O t h c r r e a s o n s A d d i t i o n
a l B u i l d i n g O r d i p r o c e d u r e s o r l a I C
c o n t D e l a y f r o m o b s t r u c t i o n 1 0 r o o a
l i o n s . . . . . . . . . . . . . . . . . . O c l a y d u
c t o v a r i a t i o n A V E R A G E ( % ) 1 5 O b l i g a
t i o n ( 0 o b t a i n m a r i n e l i c e n c e F i g . !
. A v e r a g e s a n d s t a n d a r d d e v i a t i o n s
o f c l a i m e d / o r i g i n a l c o n t r a c t v a l u
e s i n c o m m o n c o s t c l a i m c a t e g o r i e s 2
0 2 5 n g i n e t r ' s i n s l r u c l i o n 1 0 c h a n g
e Construction dispute minimisation 453 Table 1. Selected
'indicators' of cost claims and payments III common cost
claim categories No. of projects No. of projects Average
claimed Average paid Average
Cost Claim [ Claimed ITotal No of [ Paid/OCV ITotal No

of (Paid Category IOCV (%)] projects (%)] projects
IClaimcd) CCI 1.79 0.13 0.36 0.08 0.31 CC2 1.68 0.07
2.01 0.02 1.00 CC6 0.18 0.02 0.14 0.02 0.88 CC7 1.11
0.05 I.lI 0.05 1.00 CC8 1.39 0.02 0.49 0.02 0.35 CC9
3.68 0.18 1.28 0.15 0.34 CCIO 1.60 0.03 2.28 0.02 0.86
CCII 2.35 0.02 0.00 0.00 0.00 CCI2 5.58 0.02 3.72
0.02 0.67 CCI4 1.44 0.03 9.41 0.03 1.00 CCI5" 4.56
0.18 3.12 0.15 0.48 CCI6 1.30 0.02 1.20 0.02 0.93 CCI7
19.79 0.08 20.96 0.11 1.32 CCI8 5.80 0.13 3.54 0.10
0.53
CCI8A++ 1.86 0.02 0.74 0.02 0.40 CCI8B 4.65 0.02 0.00
0.00 0.00 CCI8B+ 1.49 0.02 1.12 0.02 0.75 CCI8C+ 6.98
0.02 0.00 0.00 0.00 CCI9 10.53 0.62 17.67 0.59 0.83 OCV
Original Contract Value 454 Kumaraswamy Table 2(a).
Perceived significance of common categories of construction
claims (as perceived by contractors, clients and
consultants; and listed in descending order of overall
perceived significance) Overall Contractors Clients
Consultants Rank Index Rank Index Rank Index Rank
Index Variations due to site conditions 58.2 1 67.5 2
48.6 4 58.6 Variations due to client changes 2 55.6 2
60.0 4 46.7 1 60.0 Variations due to design errors 3 54.4
3 47.5 1 57.1 3 58.6 Unforeseen ground conditions 4 49.0
4 42.0 5 45.0 2 41.9 Ambiguities in contract documents 5
43.0 6 30.0 3 47.6 9 51.4 Variations due to external
events 6 40.6 5 37.5 7 40.0 10 44.3 Interference with
utility lines 7 40.5 7e 30.0 6 40.0 8 51.4
Exceptional inclement weather 8 40.2 9 30.0 9 36.2 5
54.3 Delayed site possession 9 39.4 7e 30.0 10 35.2 6
52.9 Delayed design information 10 34.5 12 12.5 8 38.1 7
52.9 Table 2(b). Perceived significance of common causes
of claims (as perceived by contractors, clients and
consultants; and listed in descending order of overall
perceived significance) Cause Overall Contractors Clients
Consultants Rank Index Rank Index Rank Index Rank
Index Inaccurate design information 1 57.3 1 62.5 4 45.3
1 64.3 Inadequate design information 2 50.6 4 50.0 2
54.3 5 54.3 Inadequate site investigations 3 49.3 5
50.0 5 42.1 4 55.7 Slow client response (decisions) 4 46.9
3 50.0 11 37.9 6 52.9 Poor communications 5 45.7 10 40.0
12 35.8 2 61.4 Unrealistic time targets 6 45.0 2 52.5
7 41.1 12 41.4 Inadequate contract administration 7 44.6
15 30.0 3 45.3 3 58.6 Uncontrollable external events 8
44.1 12 35.0 1 51.6 10 45.7 Incomplete tender
information 9 41.9 6 42.5 13 34.7 8 48.6 Unclear risk
allocation 10 41.3 7e 40.0 6 41.1 11 42.9 Table 2(c).
Perceived effectiveness of dispute resolution methods (as
perceived by contractors,
clients and consultants; and listed in descending order of

overall perceived effectiveness) Category Overall
Contractors Clients Consultants Rank Index Rank Index
Rank Index Rank Index
Direct negotiation 1 80.1 1 76.7 1 86.2 1 77.5
Mediation! Conciliation 2 44.8 4 46.7 2 58.5 2 29.4
Arbitration 3 38.6 5 40.0 3 47.7 3 28.2
Adjudication 4 35.8 2e 50.0 4 33.8 4 23.5
Litigation 5 34.8 2e 50.0 5 30.8 5 23.5
Notes: (1) the 'Overall' indices are weighted to account

for different numbers in the three groups;
(2) 'e' signifies equal rank with another; in which case

the next rank is bypassed; (3) maximum
index value = 100 Construction dispute minimisation 455

5 Interim Conclusions Both the foregoing questionnaire
survey results and anecdotal evidence in the ongoing Hong
Kong survey indicate the perceived superiority of
negotiations as an effective method of resolving
construction disputes. While the most appropriate
resolution method may be chosen, depending on the project,
the participants and the nature of the dispute; such a need
should ideally only arise in the case of unavoidable
disputes. Avoidable disputes should on the other hand,
ideally be avoided by identifying and controlling the
potential root causes of claims and disputes. Figure 2
indicates the different hierarchical levels of potential
root (indirect) causes, direct causes and categories of
claims. Figure 2 gives examples of common causes of
claims whereas Figure I indicates examples of common
categories of claims in Hong Kong. Future analysis may
attempt to relate sets of root causes to causes and
categories, when more information is obtained from the
ongoing investigation, so that some form of hierarchy may
emerge. Two ongoing case-studies would help in this regard.
Current perceptions indicate however, that claims may arise
in each category from different direct causes and varying
root causes, although these may perhaps be grouped into
connected sets and sub-sets, after further study. Current
indications from the predominant cost claim categories in
Figure 1 (and Table 1) are
that variations and their consequences are a major source

of cost claims; whereas their principal
causes need to be investigated; as to for example, whether

a large proportion originate from
client-related, or consultant-related causes as in Figure

2. In the absence of ideal conditions even all avoidable
disputes will not be avoided, but their
incidence can still be minimised. The interim results of

the ongoing investigation as to the relative
magnitude of claims in different categories will guide

managers and those entrusted with dispute
avoidance, to focus their particular attention on the

potential high impact claim areas whether in
terms of cost and! or time impact so that the common

critical claims and consequential disputes
are pre-empted or at least minimised . Meanwhile, the

alternative dispute resolution strategies being developed,
as in Hong Kong, can
play an useful role in minimising the prolongation and

impact of unavoided and/or unavoidable
claims and disputes arising therefrom.
456 Kumaraswamy Unfair risk allocation Unclear risk

allocation Unrealistic time / cost / quality targets
Uncontollable external events Adverserial (industry)
culture Unrealistic tender pricing Inappropriate contract
type Lack of competence of project participants Lack of
professionalism of project participants Clients lack of
information or decisiveness ~ ROOT (INDIRECT) CAUSES I •
.. Inadequate brie Poor communications , Personality
clashes , Vested interests Changes by client Slow client
response Exaggerated claims , Estimating errors Other
(eg. work) errors Internal disputes (eg: in JVs)
Inadequate contract administration Inaccurate design
information r Incomplete tender information r Inadequate
design documentation Inappropriate contractor selection
Inappropriate payment modalities Inappropriate contract
form DIRECT CAUSES according to contractual requirements)
& DISPUTES FIG. 2. Common causes of construction claims
and disputes Construction dispute minimisation 457 6.
Government of Hong Kong (1993) General Conditions of
Contract for Civil Engineering Works, Government of Hong
Kong. 7. Hartman, F.J., (1995) Re-engineering, the
construction contract, First International Conference on
Project Management, January 1995, Singapore, pp. 47 57.
8. Bristow, DJ. and Vasilpoulos, R. (1995) The new CCDC 2:
Facilitating Dispute Resolution of Construction Projects,
Construction Law Journal, Vol. 11, No.2, pp. 95 117. 9.
Latham, M. (1994) Constructing the Team, HMSO, u.K. 10.
Pokora, 1. and Hastings, C. (1995) Building Partnerships,
Construction Papers, No. 54, Chartered Institute of
Building, Ascot, u.K. 11. The Associated General
Contractors (AGe) of America (1991) Partnering A conceptfor
success, Sep. 1991, AGe, USA 12. European Construction
Institute (ECI) (1992) Partnering, Publication EV411, ECI,
Loughborough, UK. 13. Quick, R.W. (1994) Partnering: The
Australian experience, Construction Conflict: Management
and Resolution, (ed. P. Fenn), Proceedings of the CIB TG 15
Conference at Kentucky, USA, Oct. 1994, CIB Publication
171, pp. 279 308. 14. Denning, 1., (1993) More than an
underground success, Civil Engineering, Dec. 1993, ASCE,
pp. 42 45. 15. Wall, C.J., (1994) The Dispute Resolution
Adviser system in practice, Construction Conflict:
Management and Resolution, (ed P. Fenn), Proceedings of
the CIB TG 15 Conference at Kentucky, USA, Oct. 1994, CIB
Publication 171, pp. 154 167 16. Hewitt, R. (1991)
Winning construction disputes strategic planningfor major
litigation, Ernst & Young. 17. Semple, C., Hartman, F.T
and Jergeas G. (1994) Construction claims and disputes:
causes and cost/time overruns, Journal of Construction
Engineering and Management, ASCE, Vol. 120, No.4, pp. 785
795. 18. Heath, B. C., Hills, B. and Berry, M., (1994) The
nature and origin of conflict within the construction
process, Construction Conflict: Management and Resolution,
(ed. P. Fenn), Proceedings of the CIB TG 15 Conference at
Kentucky, USA, Oct. 1994, CIB Publication 17l, pp. 35 48.
19. Brooker, P and Lavers, P. (1994) Perceptions of the
role of Alternative Dispute Resolution in the settlement
of construction disputes: lessons for the UK from the US
experience, Construction Conflict: Management and
Resolution, (ed. P. Fenn), Proceedings of the CIB TG 15
17l, pp. 49 69.
20. Lamont, AH. (1991) Heads of claim and use offormulae,

Seminar on Contractual aspects of Construction Works in
Hong Kong, Seminar F4, 19, Nov. 1991, Hong Kong
Institution of Engineers.
21. Yogeswaran, K., Miller, DRA and Kumaraswamy, M.M.

(1994) Allocation of risk in respect of ground conditions
in Hong Kong, Construction Conflict: Management and
Resolution, (ed P. Fenn), Proceedings of the CIB TG 15
171, pp. 141 153. THE CASE FOR THE INTEGRATION OF THE
PROJECT PARTICIPANTS' ACTIVITIES WITHIN A CONSTRUCTION
PROJECT ENVIRONMENT R.A.C. Luck and R. Newcombe
Department of Construction Management and Engineering,
Reading University, Reading, UK Abstract This paper
reviews the theoretical background which underpins the
Engineering and Physical Science Research Council (EPSRC)
funded research project, "The design of rapid team
integrating strdtegies for multi-organisation teams at
various project stages" currently being conducted at the
University of Reading. The research is founded on the
premise that the formation of a project team will have a
beneficial effect upon the performance of that team and
ultimately the success of the project. The research of
Cherus and Bryant (1984) underpins this study and suggests
that the endemic characteristics of construction projects
make the formation of a project team difficult.
Teambuilding is considered to be an ideal; the integration
of the project organisation is a more realistic aim. The
study investigates a subject which traverses many
disciplines and draws upon existing knowledge found in
disparate research areas and fields. A key section of the
paper is the review of relevant literature and its
application in a construction context, to present the case
that greater integration will enhance projcct performance.
Keywords: construction, eo-ordination, integration, project
organisation, teambuilding. ResumecS Ce dossier analyse
les fonde thcSriques qui cStayent Ie projet de recherches
fonde par I'EPSRC, lila conception de Strategies rapide
d'integration d'equipcs pour les cSquipes d'organisation
mUltiple a plusieurs stages du projet", couramment menepar
l'UniversitcS De Reading. La recherche est basee sur
l'id6e que la formation d'une equipe de projets aura un
effet avantageux sur la performance de cette equipe et, en
fin de compte, Ie succe du projet. Les recherches de
Cherus et Bryant, (1984) soutiennent cette etude et
suggerent que les carateristiques endemiques des projets
de construction rendent la formation d'une equipe de
projet difficile. La fomation d'equipe est considere com
me Ull ideal; I'integration de I'organisation du projet
et un dessein bien plus realiste. L'etude examine un sujct
qui traverse de Ilombreuses disciplines et entraine des
connaissancces existantes que I'on trouve dans des
superficies de recherches dispartes. Un des plus
importants secteurs de cette etude est la revue de
literature relatif, et son application dans un contexte
de construction, pour prcSsenter la condition qu'une
integration superieurc ren<:hCrira la perfomance du
projet. 1 Introduction
This paper substantiates the need for the integration of

people within a construction project through a review of
existing literature. The concept of teams and teambuilding


E & FN Spon. ISBN 0419222405. Integration of partcipants'
activities 459 is introduced discussing the performance
benefits to be gained through forming a team. Certain
characteristics of the construction industry which make
team building difficult are identified. The concept of
integration is introduced which also has a benefical
effect upon organisational performance. Integration is
offered as an attainable objective within a construction
project organisation. The mechanisms used to integrate and
coordinate the inputs of individuals and firms within a
project are discussed and placed in a theoretical
framework. 2 Groups and teams Social scientists have
devised research tools and terms which have allowed them to
develop frameworks for understanding the behaviour of
people in organisations. Schein (1980) is one such
psychologist who identified different types of group;
formal and informal are two major types. Formal groups are
specifically created to perform organisational tasks, work
groups (Kelly and Male, 1993) which can be either
permanent or temporary. The individual membership of a
formal permanent group may change but the group continues
to exist and is unlikely to be disbanded. In contrast the
members of temporary formal groups are conscious that some
time in the future the group will cease to exist. A
project team is an example of a temporary formal group. A
group is less formal than a team. It is dependent upon a
collection of people who interact perceiving themselves
to be a unit (Hunt, 1981). Handy (1976) also observed
that an individuals' perception of membership was
important but he identified other characteristics of
groups which are equally relevant; the group has common
objective/s, predetermined hierachies and defined
membership criteria. These characteristics are upheld
within formal groups, teams. A teambuilding body of
knowledge has become established which uses various
parameters to investigate the influences upon team
behaviour and effectiveness. Belbin (1981) identified eight
roles of team members, plant, shaper etc. which need to be
present within a fully effective team. Mayo observed that
informal inter-group relations influence group norms and
the performance expectations of a team. The task conducted
by the team will influence the type of team to be formed.
It was observed that a team passes through distinct phases;
forming, storming, norming, performing before it works at
its most effective. It is acknowledged that this process
takes time and that the increased effectiveness gained
through forming a team must be balanced against other
priorities. When all members of
the team have the same objective/s, super-ordinate goals,

the team will tend to be more
effective. The Ashridge team-working approach (Hastings et

aI., 1989) involved the
establishment of eight stages or concepts through which to

develop a team towards the
superteam vision. These studies of team building have

acknowledged some of the 460 Luck and Newcombe variables
which influence team performance. 2. 1 The benefits of
forming a team The benefits attributed to working within
successful teams include increased productivity,
efficiency and also the increased motivation of the
members of a team (Adair, 1986). The advantage of
integrating teams within a construction project is that
information can be processed and tasks can be completed
more efficiently. During the 1960's the successful
establishment of teams at the top (within organisations)
lead to the teambuilding from the top to the bottom,
vertical integration within an organisation. This was
considered highly beneficial for increasing goal attainment
and motivating individuals to utilise their energy in a
concerted direction (Likert, 1961). Group dynamics have
been shown to have a significant impact on construction
performance (Pantaleo and Rwelamila. 1994). More
specifically construction productivity has been shown to
improve along a learning curve, the second distinct phase
of which is the routine acquiring phase (United Nations,
1965). Improvements during this stage are
attributed to growing familiarity with the work and

refinements of the work method and
organisation. These observations acknowledge the importance

and benefits obtained
when individuals, or groups within a project are familiar

with those working around
them.
Measures have been used to grade performance in human and

commercial terms. The
human performance terms include; satisfaction, information

processing and perceptions
of the firm's effectiveness with which they manage change.

In commercial terms the
measures have included profitability, return on capital

employed and profit, turnover
ratios and the growth in sales turnover (Lansley, 1974).

This research project
considers team building to be desirable in both human and

financial terms. Having
described the benefits of forming a team the factors which
influence the formation of a
construction project team are discussed.
3 Barriers and constraints to team formation
There are many charactenstics of the construction industry

which make the formation of
teams difficult; two are described here. The first is the

project-based social construct
within which construction projects are procured. The second

is the role ambiguity
(Handy, 1976) experienced by members of a project

organisation.
3. 1 Project organisation
A project based organisation is one formed to perform a

specific task and is disbanded
upon completion of that task. This may be referred to as

temporary organisation.
Cherns and Bryant (1984) used the term temporary

multi-organisation (TMO) Integration of partcipants'
activities 461 specifically to describe the
socio-technical system of a construction project
organisation. This term uses the legal definition of an
organisation's boundary and acknowledges that a
construction project is composed of a multitude of
organisations. The structure of the construction project
organisation is considered to be complex. There are many
characteristics of construction projects which make them
complex. Bennett (1991) considered that the number of
different activities needed to complete a task determines
its complexity. Construction projects are realised through
the completion of many tasks during the pre-construction
and site assembly stages by numerous firms. Many firms are
needed because of the differentiation of tasks within a
project and the specialised skills and expertise within
each firm. The parameters of technology, territory and
time influence the separation of tasks amongst the firms
and the complexity of a project organisation. The
structure and composition of the project organisation
changes during the life span of the project in response to
the tasks to be completed. Firms are appointed to complete
specific tasks which do not last for the full duration of
the project. Previous studies of the Broadgate project
have shown the change in numbers and composition of the
project organisation during the construction phase of the
project; illustrating the complexity of construction
project organisations. 3. 1. 1 Deficiencies caused by the
temporary nature of projects Katz (1982) investigated the
effects of group longevity on project communication and
performance in R&D project groups. It was found that the
short term tenured appointment of project personnel had
an adverse affect upon project performance. The temporary
nature of R&D project groups is a characteristic in common
with
construction project organisations. Cherns and Bryant

(1984) observed that within
construction projects individuals or groups from several

"parent" organisations, each
with its own goals and values, were all drawn together in
the achievement of a task.
Once completed the organisation was disbanded and the

individuals or groups separated
to go their own way. The similar temporary nature of the

two types of project
organisation permits the transfer of the findings from one

industry to another. The
assumption is therefore made that the performance of

construction project organisations
could be improved if the temporary nature of construction

project organisations could
be changed.
The total break up of a project organisation can be

reduced when firms have long-term
relationships. This may involve entering partnering

arrangements. Partnering is an
American concept which has been applied and shown to have

2-10% cost benefits
when applied to a project and cost savings of up to 30%
when strategic partnering 462 Luck and Newcombe
arrangements are used (Bennett and Jayes, 1995). This
rationale has underpinned the recent trend for firms to
partner and to encourage repeat working amongst firms
within the construction industry. This is one method used
to overcome the impermanence of the construction project
organisation which has performance benefits but does not
result in the formation of a team, according to the
previous definitions. Because of the difficulty in forming
a team within the construction industry the research
project being conducted at the University of Reading is
currently investigating methods to rapidly integrate the
inputs of project participants. 3.2 Role ambiguity The
second characteristic of the industry which inhibits the
formation of teams is the absence of prescriptive roles
for members of the project organisation. This causes role
ambiguity and necessitates adjustment and the alignment of
roles within a project (Maier, Read & Hoover, 1959). This
is a consequence of the historic structure of the
construction industry which is composed of professionals,
trades and craftsmen. Roles attributable to particular
project participants emerged which have changed throughout
history. For example the Architect's Appointment Document
(1982) describes a presumptive role which rarely reflects
the architect's role today. The rate of change of these
roles has increased. Historically the title of a
participant within a construction project would describe
their role, which could be interpreted in terms of
services which that individual would supply. This is no
longer the case. Within construction projects it is
possible for a service to be provided by more than one
individual (Luck, 1993) therefore there is an opportunity,
within a free market situation, for the substitution of
an individual to supply a service. Because the role titles
do not describe the service to be provided there is
increasing dependence upon the appointment documentation
to specify which services will be provided and by whom.
The implication of this for the project team is that no

members of the team can approach
a new project with any certainty of their role or the

services they will supply. It has become necessary for
members of the team to adjust to their roles to suit the
rest of the
team. This adjustment and alignment takes time and reduces

the efficiency of the team
whilst this process is on going.
More recent management methods of procurement and

documents explaining the
philosophy behind these approaches (CSSC, 1991) have used

generic titles, e.g.
"designers", to describe the range of services which an

individual may provide on a
construction project. This approach acknowledges the

reality of working practices
within the industry. This creates an opportunity at the

project outset to design the
organisation most suited to complete the building. The

organisation structures are Integration of partcipants'
activities 463 tailored for a particular project and is a
factor which inhibits the formation of teams. This is
because there is an adaptation period during which
individuals and firms become acquainted with their
contribution to the project and their relationship to other
members of the project organisation. The objective of the
research project is to develop integration strategies to
speed-up this process. This is possible using the
theoretical concepts of integration and co-ordination. 4
Integration and Co-ordination Lawrence and Lorsch (1967)
established a correlation between integration and
performance. Good performance was found to lie in the
achievement of an adequate level of integration. Because
both teambuilding activities and integration have a
positive effect on organisational performance the concept
of integration is used to replace teambuilding within
construction project organisations. Child (1984) concludes
that effective integration can contribute substantially to
high organisational performance. There is an
inter-relationship between integration and co-ordination.
Integration and co-ordination are different entities which
apply in the same dimension. They differ in that
integration is of a higher order of magnitude than
co-ordination. Co-ordination is concerned with the inputs
of tasks and individuals meanwhile integration is concerned
with establishing common objectives for the organisation as
a whole. Integration applies at a strategic level whilst
co-ordination is concerned with the task. Both integration
and co-ordination are relevant to construction project
organisations. Co-ordination is pertinent at the task
level as the inputs of the individuals should be directed
towards achieving a common objective, the completion of the
project. Rwelamila (1994) considers that the over-all
effectiveness of a construction project depends on the
co-ordinated efforts of individuals working in groups.
Integration is necessary within the construction industry
because of the differentiated specialists involved in the
construction process (Winch, 1984), increasing
technological specialisation (Morris, 1973) and sentience
(Miller and Rice, 1967) to employers and professions
rather than the project organisation. It is important to
establish integration throughout the project, to create a
sense of project identity and culture.
4" 1 Defining Integr"ation Integration was defined by

Lansley (1974) as, "the extent to which the activities of
members of a management system are closely co-ordinated in

relation to overall
objectives". That study refined Bums and Stalker's (1961)

model of an organisation's
structure and its effect upon performance to include the

variables of control, integration 464 Luck and Newcombe
and environment. Integration is considered to be part of an
organisation's structural dimension. Other definitions of
integration include Lawrence and Lorsch's (1967)
description of integration as "the process of achieving
unity of effort among the various sub-systems in the
accomplishment of the organisation's task". Mouzellis
(1967) addresses the problem of integration in
organisation structures referring to it as the process
which ensures "an adequate level of solidarity and
cohesion between subsystems". Each of these definitions is
concerned with the integration of sub-systems within an
organisation, intra-organisational integration. This
research project is primarily concerned with inter-firm
integration (between organisations) as well a~ that
within a firm. The application of findings from previous
studies to this work is dependant upon the assumption that
observations of integration within organisations
(intra-organisation integration) can be applied to
integration between organisations (inter-organisational
integration). This is an issue associated with the unit
of analysis being investigated. 4.2 Defining the
organisation system: the unit of analysis. Lawrence and
Lorsch (1967) when investigating differentiation and
integration took a systems theory approach, the primary
unit of analysis being the organisational system. The
organisation is defined as a system of interrelated
behaviours of people who are performing a task that has
been differentiated into several distinct subsystems. The
task of the organisational system is a complete
input-transformationoutput cycle involving the design,
production and distribution of some goods and services.
Using these definitions the boundaries of organisations
will not always coincide with the legal boundaries of a
firm and may sometimes encompass a number of organisations.
The flexibility of a systems approach is useful when
applied in a construction context. It becomes possible to
consider the project to be an organisational system and to
look at the project organisation as the unit of analysis.
Taking this approach the project system crosses the legal
boundaries of firms, as individuals, rather than complete
firms are drawn together to form the project organisation
with the common objective of completing the project. The
project organisation exists for the duration of the project
and passes through distinct phases. A building's
procurement process passes from inception through to
completion before the cycle is complete. When the project
is considered to be the unit of analysis its boundaries
define the organisation system and the separate firms which
meet to form a temporary coalition can be considered to be
the sub-systems units to be
integrated within the whole. Winch (1989) considers that

integration in the
construction project is between firms not within them.

Integration of partcipants' activities 465 4.3 The
integration of tasks and the integration of people. The
concept of integration applies to both tasks and people
(Walker, 1984). It has been the intention of this study
to focus on the task orientation aspects of integration
rather than the human aspects. The research project is
concerned with the rapid formation of efficient groups and
acknowledges the imperfect conditions of a construction
environment in which time, amongst other constraints,
inhibit complete integration. It is considered that
emphasis on the integration of tasks will have pronounced
benefits in performance terms. Handy (1976) observes that
although satisfaction does not necessarily lead to
productivity, productivity can often lead to satisfaction.
The integration of tasks can only occur when the
individuals conducting the tasks understand the boundaries
of their tasks and the interfaces with other tasks. Because
tasks are conducted by individuals the integration of task
and people cannot be completely dissociated. The
integration of people is a welcome consequence of the
integration of tasks. Many organisational theorists have
observed that integration occurs within organisations and
have classified the mechanisms used to integrate the
inputs. The next section is a chronological review of some
of the most important theories of integration and
co-ordination. 4.4 Integration mechanisms. I t has been
suggested that the achievement of integration is the task
of top management (Rice, 1958). Other theorists have
observed that additional integration and coordination
devices complement conventional hierarchy. Litterer (1965)
suggested that there are three main ways of achieving
integration within organisations; hierarchy, through
administrative or control systems and through voluntary
activities. These were collectively called the integration
mechanisms. Lawrence and Lorsch (1967) in their study of
the comparative performance of organisations observed that
the integration devices as identified by Litterer (1965)
were in use. These were; hierarchies, administrative
control systems and voluntary activities. They augmented
these devices with two others. The members of an
integrative sub-system have the specific function of
integrating different sub-systems within an organisation.
Integration teams differ because they are composed of
representatives from each of the basic sub-systems and
integrative sub-systems. Integration within an
organisation was achieved using a combination of these
mechanisms.
Thompson (1967) observed that the field of organisational

theory was beginning to mature as it is possible to
compare and contrast different theorists' findings to
reinforce 466 Luck and Newcombe assumptions. He uses
March and Simon's model (1958) when describing coordiantion
within an organisation. Co-ordination within an
organisation was considered to occur using the following
three co-ordination methods; standardisation,
co-ordination by plan and mutual adjustment. He made no
comment on the effect which the organisation's structure
or hierarchy had upon the co-ordination of activities
within the organisation. Galbraith (1973) considered
organisations to be information-processing networks and
identified the following co-ordination devices within
organisations; rules, programmes and procedures was the
first device, hierarchy the second, targeting or goal
setting the third. He observed that the organisation's
design strategy could also affect its information
processing ability. The use of slack resource or the
creation of subprojects reduced the need for information
processing. Vertical information systems and the creation
of lateral relations increased an organisation's capacity
to process information. Mintzberg (1983) considered there
to be five co-ordination mechanisms. The mechanisms were,
direct supervision, when one person take responsibility for
the work of others, issuing instructions to them and
monitoring their actions. Mutual adjustment achieved the
co-ordination of work by the simple process of informal
co-ordination. Standardisation was sub-divided into three
categories; standardised work processes, used when the
contents of the work are specified or programmed,
standardised outputs act as a co-ordination mechanism when
the results of the work are specified, standardisation of
skills (and knowledge) occurred when the training required
to do the work is specified. Bennett (1991) re-visited
Galbraith's co-ordiantion devices and applied them in a
construction context. The basic set of co-ordiantion
devices were procedures,
management hierarchy, professionalisation and targets. In

common with Galbraith
Bennett observed that information systems and lateral

relations increased an
organisation's information processing capacity and that

self-contained sub-projects and
slack resource reduced the need for co-ordination. The

major difference between their
work is that Bennett introduced professionalisation as a

co-ordiantion device. This
device acknowledges that professionals have skills which

allow them to approach a
unique problem and apply general principles to resolve the

problem.
Morris (1973) and Walker (1984) both consider that project

management techniques
can provide the required linkage mechanisms to achieve

integration. Morris (1983)
considered that the matrix organisation structure is an

integrative mechanism. Integration of partcipants'
activities 467 The integration and co-ordination
mechanisms observed by the organisational theorists have
been summarised and are presented in Table 1.
Organisation structure formal mechanisms informal
mechanisms Litterer (1965) hierarchies control systems
VOIWltary acti vities Integration mechanislllS Lawrence
& hierarchies admin. control systems vohilltaryactivities
Lorsch integrative sub(1967) systems Integration devices
integrating teams Thompson (1967) standardisation mutual
adjustment Co-ordination methods co-ordiantion by plan
Galbraith (1973) hierarchies rules and programmes goal
setting lateral relations vertical info. systems self
-contained tasks slack resource Mintzberg (1983) direct
supervision standardisationmutual adjustment Co-ordination
of output mechanislllS processes (procedures) skill &
knowledge Bennett (1991) management hierarchy project
processes Co-ordination devices lateral relations targets
self-contained task infonnation systems slack resource
professionaiisation
Morris (1984) matrix structure
simplified hierarchy fonnal procedures infonnal adjustment
mechanisms
Table 1. Integration and Co-ordination mechanisms
It can be seen from Table 1 that there are similarities

between the co-ordination and
integration mechanisms identified by the various

organisational theorists. I t has been
possible to classify the mechanisms into three categories;

the organisation's structure, a
formal mechanism or an informal mechanism. Using this

structure the mechanisms can
be grouped and tenned; hierarchy, formal procedures and

informal adjustment. These
terms can be applied to describe the used mechanisms in a

simplified model of a
construction project.
The hierarchy and the structure of the project organisation

is established at the
appointment stage within the appointment documentation.

These documents will define 468 Luck and Newcombe the
responsibilities of each person or sub-organisation within
the project organisation. Although professionals may be
appointed with skills which are transferable between
projects the services required will be unique for each
project. The administration and control systems used are
the formal procedures which are established to co-ordinate
the inputs of the project participants. These will be
established at the project outset and will be influenced
by the project manager's preferred style of management and
any "best practice" procedures which that firm applies
when managing any project. These will also include any
procedures which are introduced to suit the characteristics
of a particular project. The informal adjustment
activities are those which are noncontractual or defined by
procedures which assist the integration of inputs within a
project. Individuals often mutual adjustment to suit their
preferred ways of working. The research being conducted
at the University of Reading collects information from
projects conducted using a construction management (eM)
procurement route. One advantage of this method is its
flexibility, which readily allows new procedures to be
introduced and used when managing a construction project. A
characteristic of the eM philosophy is that the
specialist and trade contractor contracts are held directly
with the client. This reduces the levels of contractual
hierarchy within the organisation and results in a flatter
structure than other forms of procurement. A consequence of
this may be that the integration strategies will place
increased emphasis upon the formal and informal mechanisms
rather than hierachical mechanisms, as the opportunity to
use this variable has been reduced. 5 Conclusions
This paper has discussed the reasons why the formation of

teams is impaired by
characteristics of the construction industry and introduced

integration as a plausible
alternative. It has summarised the inter-relationships

between the concepts of co
ordination mechanisms, devices and integration. These

mechanisms will be used to
develop integration strategies for construction project

organisations. The anticipated
benefits for the construction industry industry will be

increased productivity; as
learning curve effects will be reduced and the completion

of projects in a more efficient
manner. These characteristics will complement the
philosophy of the eM procurement
470 Luck and Newcombe Mouzelis, M. (1967)

OrgallisatiollandBureaucracy: An analysis of modern
theories. Routledge and Kegan: London. Pantaleo, W. D and
Rwelamila (1994) "Group dynamics and the construction
project manager"
Construction Mallagement and Economics,
RIBA (1982)Architect's Appointment. RIBA London.
Rwelamila, P. D. (1994) Group dynamics and cOIIStruction

project manager: Journal of Construction
Engineering and Management Vo1.l20, I, 3-10.
Rice, A. (1958) Productivity and social organisation.

Tavistock London.
Schein, E. H. (1980) Organisational psychology. Prentice

Hall London.
Thompson, J. D. (1967) Organisations in action. Mc

Graw-Hill. London:.
United Nations Committee on Housing (1965) Building and

Planning: effect of repetition on building
operatiollS and processes on site. United NationsNew York.
Walker, A. (1984) Project management in cOIIStrruction:

Collins London.
Winch, G. (1989) The cOIIStructiolljirm and the

cOIIStruction project: a trallSaction cost approach:
Construction Management and Economics, 7, 331-345.

SUBCONTRACTING THE SUBCONTRACTOR'S VIEW J.D. Matthews, A.
Tyler and T. Thorpe Civil and Building Engineering
Department, Loughborough University of Technology,
Loughborough, UK Summary In the modern construction
process an increasingly major role is played by
subcontractors. Despite the importance of subcontracting
very little has been written on the performance of main
contractors viewed by subcontractors, and how their
dealings with subcontractors can be improved. This paper
presents a survey which focused on these subjects with
particular emphasis on payment issues, communications,
feedback, selection, tendering, contracts management and
contract administration. The paper provides information on
how a particular UK building company's performance
compares to that of other main contractors. Earlier
involvement of subcontractors in the building process was
seen to cultivate mutual understanding and develop trust.
Main contractors feedback was seen as being only adequate,
whilst it was felt that tender feedback would help
subcontractors become more competitive. Inviting
subcontractors to tender was seen as an infrequent method
of obtaining subcontractor tenders. Keywords: Building
Sub-Contractor, Main Contractor, Performance, Relationships
Abbreviations used: (SC) = Subcontractor(s), (MC) = Main
Contractor, (PWP) = Pay when Paid, (PDM) = Project Design
Managers. Sommaire Le role des entreprises de sous
traitance dans Ie processus de construction moderne prend
de plus en plus d'importance. Malgre I'importance de la
sous traitance, il y'a tres peu d'information concernant
la performance des entreprises principales vues par les
entreprise de sous traitance. Cet article presente une
etude qui a ete focalisee dans ce domaine concentrant sur
les payements, communications, feed-back, selections,
soumissions, gestion des contrats et administration des
contrats. L'article demontre comment la performance d'une
societe de construction au Royaume Uni se compare aux
autres entreprises principales. Une participation plus
avancee des entreprises de sous traitance dans Ie
processus de construction peux ameliorer la comprehension
et creer une atr.losphere de confiance. Le feed-back des
entreprises principales est juste acceptable, alors qu'il
a ete demontre que Ie feed-back de la sou mission aide les
entreprises de sous traitance a etre 'plus competitifs.
Inviter les entreprises de sous traitance a soumissionner
a ete considere comme methode peu frequente pour obtenir
des sou missions de ses
entreprises.


E & FN Span. ISBN 0419222405. 472 Matthews, Tyler and
Thorpe 1 Introduction The efficient use of resources,
from tender through to construction and beyond, has become
an even more important issue to the construction industry
since the publication of Sir Michael Latham's review of
the construction industry, 'Constructing the Team'. Latham
puts forward 30 proposals with the aim of, "making
recommendations to Government, the construction industry
and its clients regarding reform to reduce conflict and
litigation and encourage the industry's productivity and
competitiveness[ 1]". It is recognised by both
practitioners and academics that as much as 90%[2] of a
main contractors turnover can be attributed to
subcontractors. It seems logical therefore that if main
contractors are to improve their performance and
productivity they should concentrate their efforts where
the majority of the work takes place, i.e. subcontracting.
This paper discusses some of the findings from research
undertaken by a top 30 (in terms of construction turnover)
UK main contractor referred to as BC. All the areas
discussed within this paper had been identified through
internal research as areas which have the greatest impact
on main contractor and subcontractor performance. It is
hoped that these areas will improve main contractor sub
contractor relationships. 2 Research methodology The aim
of the study was to identify how BC's performance compared
to other main
contractors with regard to SC relationships. This survey

was undertaken after previous studies were completed to
identify, "What a Main Contractors staff want from
subcontractors", and "What subcontractors want from main
contractors". The overall
objective of these studies was to identify ways to improve

the relationship between a
main contractor and its subcontractors.
2.1 Questionnaire
Data relating to the areas found to be important by the

previous studies was collected
from subcontractors by interview based on structured

questionnaires. The areas were:
• payment issues: timing, pay when paid clauses.
• communication: understanding, earlier involvement of SC's.
• feedback: amount, pre-contract, performance.
• selection issues: number of subcontractors, notification

of enquiry, preferential treatment.
• tendering: detrimental effects on.

• contracts management: performance of contract staff.
• contract administration.
Each subject area contained a series of open, closed and

tick box questions. During the development of the
questionnaire it was decided to underline keywords in
similar questions so that the questions were not confused

and that differences between
questions could be easily identified by the interviewee.

For ease of understanding these
words have been underlined within this paper.
2.2 Building subcontractors interviewed
17 interviews covering 13 specialities, based throughout

the UK, took place over a 4
week period. The types of subcontractor trades identified

for inclusion in this study
were: Suspended Ceiling (1), Steel Frame (2), Concrete

Frame (1), Cladding (2), Piling
(1), Ground Works (2), Landscaping (1), Scaffolding (1),

PlasterworklDry lining (1),
BrickIBlock (1), Roofing (2), Tiler (1), Partitioner (1).

Turnovers of these companies
ranged from £500k to £60m. 59% (10/17) of those

subcontractors interviewed offered
a design, manufacture, supply and fix service.

Subcontracting the subcontractor's view 473 These
subcontractors were chosen because many of them had been
previously interviewed; they were all seen by BC as
critical building subcontractors for the successful
execution of a project; they had differing needs in the
co-ordination of a project. 2.3 Method of analysis A
basic method of statistical analysis was used to analyse
ali the data obtained from closed and tick the box
questions. This provided an overall ;;.\erage which was
then correlated to a set list of ranks. Open-ended
questions were analysed by identifying the Gl0St prevalent
answers. Percentages (%) were given to show the
percentage of occurrence. 3. Results 3.1 Payment issues
Question 1, "From your dealings with BC, do you believe
that they are timely payers". 76% (13/17) stated that BC
were timely payers. The remaining -+ (24%) subcontractors
stated that they could not comment as it was greatly
dependent on the project, client and the form of
procurement in question. The following question asked,
"Are 'Pay when Paid' procecures more prevalent in
BC or in other main contractors?" Zero respondents stated

that PWP procedures were
more common in BC, whilst 14 (82%) thought they were more

common in "others" and
3 (18%) believed they were the same as each other. Many

subcontractors further stated that Pay when Paid clauses
were a fact of life in
construction and as long as the overall client was

reputable and "blue chip" they (SC)
did not have a problem with them. The final question of

the payment section, No.ll, was included to get an overall
perspective on whether BC or other main contractors paid

quicker. 41 % (7117) believed
that BC paid quicker whilst 47% (8117) believed that the

quickness of BC's and others
payment was the same.
3.2 Communication
Previous research within BC had identified that a

significant majority of subcontractors
believed that they should be involved earlier within the

building process than they are at
present. The main aims of this being to help develop

mutual understanding of the
project and to utilise the SC's expertise to every ones

benefit. Question 1 of the communication section
synthesised all these findings into a single
question to identify if this conclusion was correct and

could be used in Be. The
question asked, "Do you believe that BC subcontractors
should be involved earlier in the
building process to develop mutual understanding of the

project and to utilise your (SC)
experience". All 17 (100%) interviewees believed that SC

should be involved earlier. Question 2 asked "at what
time do you feel this earlier involvement should take
place?"
15 (88%) of the respondents believed it should be at "Pre

contract estimating". Other
results include, "Once contract has been won by BC" 2 (12%)

responses (12%), "Just
before subcontract works are to commence", "Once

construction has started" and
"other" did not receive any responses. The responses show

that pre contract estimating
was the highest. This was further expanded on by the

subcontractors stating that SC
involvement is more advantageous the earlier it happens.

474 Matthews, Tyler and Thorpe To set the preceding
question into perspective within the context of BC specific
performance, question 3 asked the subcontractors if they
are invited to become more involved in the project earlier
with other main contractors. 9 (53%) stated they were
involved earlier. This involvement was achieved by: • "MC
phoning us (SC) earlier to identify a desire or ability to
tender". • "Earlier use of our (SC) knowledge in design
details and specifications". • "Assist MC in identifying
alternative specifications. (Primarily on Design and
Construct projects)". The same 9 SC's were then asked what
advantages they saw in doing this. The most prevalent
answers were found to be: "Improves knowledge and
understanding (SC & MC) of the project which is of benefit
to all involved" and "We can share each others specialist
knowledge". These findings support those results from
question 1 of the communication section. The next issue
to be dealt with was that of improving communication
between SC and BC to improve relationships. Question 6
asked, "Do you believe that by improving
communication, BC could improve their relationships with

subcontractors?" The
interviewees were almost unanimous with 94% (17/18)

believing that relationships
could be improved this way.
3.3 Feedback
Within this section the subcontractor were firstly asked

if they thought that they got
adequate feedback from Be. 35% (6/17) of the

subcontractors believed that they were
getting adequate feedback. The remaining 11 (65%) were

then asked: (a) "What type of
feedback do you require?" (b) "When do you require it?" and

(c) "How often would you
want it?" The following are the most prevalent points

made:
a) Post contract feedback was required the most with a 45%

(5/11) prevalence.
b) Tender feedback helps the SC know where they stand and

enables them, in certain instances, to be more competitive
on future tenders. 55% (6/11) prevalence.
The next question asked the SC's to rate the feedback that
they received on their tenders,
both for BC and other Me. Responses were as follows: No.

of Responses
Score Rank BC Others
(1) Excellent [0] = 0 [0] = 0
(2) Good [7] = 14 [3] = 6
(3) Adequate [4] = 12 [11] = 33
(4) Poor [3] = 12 [2] = 8
(5) Very Poor [2] = 10 [1] = 5 16/48 17/52
Overall Score/Rank 3.00 = Adequate 3.27 = Adequate

By employing the method of analysis outlined in the
methodology it was concluded the
BC's tender feedback was 'Adequate', whilst other MC's was

just below 'Adequate'. Continuing with the feedback
subject, interviewees were asked if they believed they
got more feedback at precontract stage. 29% (5/17) stated

that they did, whilst the
remaining 12 (71 %) said they did not. Subcontractors were

subsequently asked, "If BC
were to give you more feedback at precontract stage, how

would this affect; tender
price, accuracy of estimate and overall performance. 38%

of the respondents said that Subcontracting the
subcontractor's view 475 feedback would make their tender
price more accurate, whilst 46% said accuracy would
improve with increased feedback. Overall performance would
not be improved. The ensuing question was asked, "How do
you rate the performance feedback you get from Be and
from other MC's". No. of Responses Score Rank Be
Others (1) Excellent [0] = 0 [0] = 0 (2) Good [8] = 16
[4] = 8 (3) Adequate [4] = 12 [9] = 27 (4) Poor [3] = 12
[4] = 16 (5) Very Poor [0] = 0 [0] = 0 15/40 17/51
Overall ScorelRank 2.66 = Adequate 3.00 = Adequate The
aim of this question was to establish if BC's performance
feedback was better or worse than their competitors.
Previous study's had shown that BC's performance feedback
was perceived as, "very minimal in terms of amount and
substance". Be scored 2.66 which amounts to between an
'adequate' and 'good' rank. Whilst other main contractors
feedback scored 3.00 which this also equates to an
'adequate' rank but with a difference of 0.34 between
scores. To conclude the feedback section of questions and
to sum-up holistically how Be compares to other MC's the
subcontractors were asked to rate 'overall' feedback. No.
of Responses Score Rank Be Other (1) Excellent [0] = 0
[0] = 0 (2) Good [4] = 8 [1] = 2 (3) Adequate [8] =
24 [11] = 33 (4) Not adequate! [3] = 12 [2] = 8
Acceptable (5) Very poor [1] = 5 [3] = 15 16/49 17/58
Overall ScoreIRank 3.06 = Adequate 3.41 = Adequate Be
scored 3.06 whilst others scored 3.41. Although both scores
equate to an 'adequate and acceptable' rank, Be did score
lower making them slightly better than the others. 3.4
Selection During previous studies it was noted that
preferential treatment from subcontractors would take the
form of returning main contractors tenders priced. Also,
many SC's stated that because of main contractors
requesting tenders which they would not use, SC's would
not quote until a Me had been awarded a contract. The
first question within the selection section asked, "Do you
frequently get enquiries
from MC's who you do not wish to work for?" 76% (13117) of
the respondents stated that they did get enquiries from
MC's who they did not want to work for. Question 2 asked
the interviewees whether they were invited to tender for
Be or did the enquiry simply arrive unannounced. 53% (9)
of the respondents believed that
enquiries did arrive unannounced whilst 1 (6%) respondent

said they were invited. 53%
(9117) of the SC's believed that other main contractors

sent enquiries unannounced
whilst 41 % (7117) believed that enquiries were both

announced and unannounced. 476 Matthews, Tyler and Thorpe
Previous studies had also shown that there was a genuine
belief by subcontractors that benefits would be obtained
by MC consulting SC before enquiries were sent out. 76%
(13/17) of the subcontractors interviewed within this study
believed that benefits could be gained from this which
would confirm the previous findings. Such benefits were
seen to be: • "Suitability of project to that work
normally undertaken by the us (SC)". • "Ability to do the
job. (Make resources available that would be otherwise tied
up)". • "Assist in defining specifications and design
details". Leading on from this question the next asked if
a bid would be more competitive if only 1 subcontractor
was used in tendering. 71 % believed that their bid would
be more competitive. However, 2 respondents did state that
their price would be higher. 29% stated that they always
gave the market rate anyway. Previous research had shown
that SC's became very irritated when they were
tendering against companies who were not offering a

comparable service. "Do you find that you (SC) are being
asked to tender on BC projects against non
comparable companies", was asked to identify how prevalent

non-comparable tendering
was in Be. 70% (12117) stated that they were asked to

tender against non comparable
companies either "always" or "sometimes". Only 2 (18%) of
the SC's interviewed said
that this "never" happens. However, when asked if this was

more prevalent with other
MC's 47% (8117) said it was, whilst 41 % (7/17) said BC and

other MC's were the
same.
Tendering
The first two questions of the tendering section were set

to identify if BC received any
preferential treatment from SC's at the tendering stage.

Of those 10 SC's who stated that they gave preferential
treatment, all 10 said BC
benefited in this way. Previous research had identified

certain issues which were
frequently mentioned as having a detrimental effect on a SC

tendering/estimating
service. These issues were: (a) Slow payment by MC on

previous contracts, (b) Unfair
contracts, Cc) Pay when paid clauses and Cd) MC

re-tendering once contract had been
won. In this survey the subcontractors were asked to rank

the previously mentioned issues
from 1 being most frequent to 4 being least frequent.

Subcontracting the subcontractor's view 477 Table 6,
Question 3. Section: Tendering. "The following
characteristics of a main contractor have been identified
as having a detrimental effects on (SC) tendering and
estimating service. Which if any occur most freuently?"
4 .---------------------------------------------~ 3.5 3
2.5 2 1.5 0.5 3.46 3. 15 1.85 lOBe IillOthersl Most
frequent = (I). Least Frequent = (5)S 2.92 2.28 2.21
From the above it can be seen that 'MC re-tendering once
contract has been won' was
most frequent in BC than in other MC's. Least frequent

effect for BC was 'slow
payment' and for others 'PWP clauses' . Most frequent for
others was 'unfair
contracts' .
3.5 Contracts management
It had been concluded from previous in-house BC research

that there was a perception
by SC's that whilst MC's were good at managing their own

direct labour, they are not
so adept at managing SC's. When asked to comment on the

above statement all bar 3
respondents thought that it was true. However, 38% (6/16)

believed that BC were
better than most and (7/16) thought BC were about the same
as the rest. None of the
SC's thought BC were worse. The next question was used

with the aim being to identify the perceived performance
of contract stage disciplines both within BC and other MC's.
Discipline BC Position Others Position Diff
Site Managers [2.13] 3rd= [3 .20] 5th 1.07
Contracts Managers [2.13] 3rd= [2.93] 4th 0.80
Projects Managers [1. 93] 1 st [2.46] 1st 0.53
Project QS [2.33] 5th [2.80] 3rd 0.47
Site Engineer [2.12] 2nd [2.57] 2nd 0.45
Average 2.12 (Good) 2.79 (Adequate) 478 Matthews, Tyler

and Thorpe Highest rank obtained by BC was for 'Project
Managers' with a 'Good' rank. This was followed by 'Site
Engineers' with a score of 1.12 (Good). Highest score for
others MC's was also for 'Project Managers' with a score
of 2.46. Site managers received the lowest score of 3. IO
(Adequate). BC staff consistently scored higher than the
other MC's with an overall average of2.12 (Good) compared
to 2.79 (Adequate). 3.6 Contract administration Previous
studies had shown that attitude, fairness of payment, trust
and fair dealing were the most important characteristics
to have when dealing with MC's and SC's. Question I, Table
8, Section: Contract Administration. "How would you rate
the following in the context ofBC and the industry norm?"
4 3.5 3.23 3 2.5 2 1.5 0.5 3.05 I DBC ~Others I
ExceUent = (I), Good = (2), Adequate = (3), Poor = (4),
Very Poor = (5).
The first question within this section asked the SC's to

rank from 1 (Excellent) to 5
(Very Poor) these characteristics in terms of BC and the

industry norm. BC scored a
rank of 'good' for all the characteristics with 'trust'

having the highest individual score
and fairness of payment having the lowest score of 2.29.

BC's scores more comparable
in value, with only 0.24 separating the highest from the

lowest values. This would lead
the researcher to conclude that BS have a balanced approach

when dealing with SC's.
By contracts, the industry norm consistently scored higher

than BC with 'fair dealing'
having the highest individual score of 3.23.

Subcontracting the subcontractor's view 479 SC's were
asked to rate the performance of pre-contract based staff.
Again SC's had to score each discipline, for both BC and
other MC's, from 1 (Excellent) to 5 (Very Poor).
Discipline BC Position Others Position Diff Estimators
[2.33] 2nd [2.76] 1st 0.43 Buyers [2.25] 1st [3.08]
2nd 0.83 PDM's [2.80] 3rd [3.20] 3rd 0.40 Average
2.46 (Good) 3.01 (Adequate) BC scored consistently higher
than 'others' with Buyers obtaining the highest score of
2.25 (Good). Estimators also obtained a 'good' grade but
with a score of 2.33. PDM's obtained the lowest grade
(adequate) but this may not be a correct representation due
to the fact that only 5 responses were obtained who knew
what a PDM was. Architects and Design Engineers did not
receive any results as SC's did not have any dealings with
them. Other MC's received all adequate grades with PDM's
receiving the lowest score. The final question in the
Contract administration section asked, "Do you believe
there would be any benefit in BC developing a non
contractual agreement which would promote fairness and
ruse between BC and its SC's". 71 % (12117) believed that
there would be a benefit in BC developing a non
contractual agreement. This was substantiated by the SC's
by saying that it would "promote trust" in order to
"reduce adversarial relationships" and it would be
construed as a "positive step in the right
direction". However, 5 SC's (29%) believed that there would

be no benefit in
developing an agreement as all it would be is 'lip service'.
4.0 Conclusions
It was apparent from this study that there are many areas
in which BC and main
contractors in general could improve their performance and

in turn improve their
relationship. It can be concluded that by involving

subcontractors earlier in the building process,
understanding of the project can be increased helping the

overall relationship. It should
also help to promote trust and team working between the

parties. Both BC and other main contractors tender
feedback was seen as 'adequate'. The
subcontractors stated that they would like more tender

feedback which would in turn
help them become more competitive. By adopting this

approach, BC and other main
contracting organisations will become more competitive

within the market place. It was identified that the
majority of subcontractors were not 'invited' to tender,
tenders simply arrived unannounced. This increases the

probability of confusion and
mis-understanding which inevitably leads towards conflict.

It was evident from this study that subcontractors do give
preferential treatment to
main contractors when tendering. In order to receive this

preference main contractors
should only be seen to use subcontractors who are of

similar size and who can offer a
comparable service. Slow payment was not seen to be a

problem in BC as it was within other main
contractors. This prompt payment helps BC obtain a high

score/grade for trust. Trust between BC and subcontractors
was seen to be 'good' but for other main
contractors this was seen to be 'adequate'. BC's lowest

score/grade was for 'fairness of
payment', however this still received a 'good' grade. Other

main contractors highest
score/grade was for 'fairness of payment' but this only

received an 'adequate' grade. Previous in-house BC
research had shown that SC's gave preferential treatment
during tender stage to MC's. SC's stated that slow payment,

unfair contracts, pay when
paid clauses and MC retendering once contract had been won

would all detrimentally
effect the service a SC gave during tendering/estimating.
480 Matthews, Tyler and Thorpe Benefit was seen in having

non-contractual agreements between BC and SC's. The
main benefits were identified as; promoting trust; a

positive step in the right direction;
help to reduce adversarial relationships. However, some

SC's were not in favour of a
non contractual agreement as all it would mean is that MC

would be paying 'lip service'
to better relationships.
2 Ndekugri, I.E. (1988), Sub-contractor control, the key to

successful construction. CIOB Technical Information
Service. THE WORLD ACCORDING TO SUBCONTRACTORS z. Sazen
and M.A. Kuguk Faculty of Architecture, Istanbul Technical
University, Istanbul, Turkey Abstract The present paper
attempts to look at problems of continuity and uncertainty
from a subcontractor's perspective. Evidence for the usage
of coping mechanisms was found in a sample of 33 Turkish
subcontractors. The [mdings of the study reveal that
subcontractors establish long term commitments with main
contractors and sublet work to secondary subcontractors
under pressure. Keywords: Subcontracting, boundaries,
construction firms, uncertainty. Sommaire La presente
communication traite Ie probleme de continuite et
l'incertitude pour soustraitants. Dne etude a ete
entreprise pour examiner les habitudes de sous-traitants
turcs. La conclusion la plus important est que les
sous-traitants etaslissent relations de longue duree avec
les entrepreneurs de constructions et employent
sous-traitants secondaires sous l'urgence des affaires. 1
Introduction Problems of continuity, uncertainty and
unclear boundaries seem to be beyond the scope of a single
organization to solve. Such problems require the pooling of
resources and expertise among stakeholders with different
goals, values and unequal power. Subcontractors operating
in the construction sector, just like main contractors, are
faced with uncertainty in securing contracts. It is
reasonable to argue that they should resort to
collaborative mechanisms to cope with this problem. While
presenting a simple picture of collaboration seems to be a
valid aim, collaboration alternatives are highly complex.
Complexity is due to power differences and also to the
existence of embryonic forms of organization in the
construction sector, namely sub-subcontractors. Thus while
there are collaborative relations between main and
subcontractors, there are also collaborative relations
between sub and sub-subcontractors. Consequently,
collaboration, from the subcontractors' perspective, has a
double profile: collaborations on the two levels are not
identical. As mentioned above, the factors contributing to
the differences are precisely the levels at which the
collaborative actions take place, multiple goals, power
differences. and differing organizational cultures.


E & FN Spon. ISBN 0419222405. 482 80zen and Kuyuk 2
Subcontractors' responses to uncertainty Subcontractors in
the construction industry operate within a highly
unpredictable and competitive environment. The
unpredictability results mainly from two factors: a)
securing contracts on a long term basis b) changing
technology. For these organizations continuity of
professional life depends on the performance shown in
securing contracts and successful completion of the task.
Variations in performance in securing contracts leads to
fluctuations in business volume and problems of
personnel/machinery/equipment planning. On the other hand,
technological complexity of building subsystems (e.g. floor
heating, heating, insulation, security, mechanical systems,
etc.) has increased beyond the capacity of anyone firm or
organization to easily maintain control over the
design/manufacture/construction of a subsystem. The
present paper will argue that subcontractors attempt to
combat ambiguity by means of two mechanisms: (1)
Establishing stable relations with main contractors (2)
Subcontracting work sublet to them by main contractors.
Due to environmental uncertainty, subcontractors are forced
to establish long-term relationships with general
contractors. The relative length of the main
contractofsubcontractor relationship relieves some of the
burdens associated with the securing of contracts. Yet
under time and economic pressures, subcontractors tend to
bid for more work than their capacity and specialization
would allow. If they are successful in securing work,
they may sublet parts of the project to secondary
subcontractors. This practice allows them to • handle an
overload of work • transfer manpower and equipment
planning problems to secondary subcontract • minimize
manpower and equipment costs • handle a job beyond their
technological expertise and capacity (especially when the
specialized assets are critical) • earn a commission
without doing the job themselves (by bargaining with the
secondary subcontractors) Embryonic organizations like the
secondary subcontractors are likely to offer very
low prices in exchange for an opportunity to work and to

establish a relationship.
3 Method
3.1 The unit of analysis
The subcontractor organization is the unit of analysis in

this research, as an intermediate
level between the secondary-subcontractor and the main

contractor. World according to subcontractors 483
3.2 Data collection and analysis
The research was undertaken between February 1993 and

August 1994 in Istanbul,
Turkey (1)(2). The data is based on a questionnaire

directed to 33 subcontractors operating in
Istanbul. Due to difficulties in fmding a file of
sub-contractors, we worked with a
convenience sample. The questionnaire was made up of 2

sets of questions: the first set pertaining to
subcontractor-main contractor relationships and the second

set to subcontractor-secondary
subcontractor relationships. Descriptive statistics and

correlation analyses were used in the interpretation of
data collected. Due to space restrictions, only descriptive

statistics will be reported within
the scope of this paper.
4 Results
4.1 Variations by trade
Subcontractors making up the sample were found to engage in

the following activities: • Design • Earth moving work •
Formwork • Steel structures • Concrete work • Masonry
• Roofmg and related work • Plastering and stucco •
Window and door framing • Painting and fmishes • Glass
• Interior decoration • Building chemistry •
Mechanical installations • Electrical installations •
General contracting 484 50zen and K{j~{jk Activity focus
range is significant. The distribution of firms undertaking
one or more of these activities is as follows. Table 1.
Distribution of activities Number of activities 4.2 Size
1-3 4-6 7-10 11-17 Table 2 presents the distribution
of personnel size. Table 2. Size Number of workers
employed 4.3 Age ::;10 11-25 >25 Number of firms 12
11 4 6 Total: 33 Number of firms 13 10 10 Total: 33
The subcontractor organizations showed the following age
distribution. Table 3. Age Age (yrs) ::;10 11-20 >20
Number of firms 16 12 5 Total: 33 It is interesting to
note that the majority of subcontractors have been at most
10 years in business. There ore only 5 subcontractors
older than 20 years, which shows that the subcontractors
in the sample are rather young. World according to
subcontractors 485
4.4 Subcontractor-main contractor relationships
The group of questions belonging to this category

demonstrate the existence of stable
relationships between subcontractors and main contractors.
As expected, all of the subcontractors in the sample had at
least worked on 5
projects with a main contractor. The distribution of

responses for the maximum number
of jobs completed for a main contractor is summarized by

Table 4. (2 subcontractors did
not reply, reducing the number of valid observations to 31)
Table 4. Maximum number of jobs with a main contractor

Number of jobs I 5 10 20 On a continuous basis
Number of subcontractors (f) o II 8 5 7 Total: 31
Subcontractors were further asked to indicate the extent to
which they would
provide support for their main contractors in case the main

contractor had a conflict with
the client. As shown in Table 5, the cumulative percent for

"Always, generally,
sometimes" responses is 97.
Table 5. Support provided for main contractors Response

category Always Generally Sometimes Rarely Never
Number of subcontractors (f) 8 12 12 o Total: 33 It
may be reasonable to argue that solidarity in
subcontractor-main contractor
relations is an important factor in maintaining an enduring

collaboration. One other
prerequisite of maintaining a stable relationship is

providing free consultancy services to
the main contractor at some stage of the job. Most of the

subcontractors have replied that
they "always" provide free consultancy services to the

main contractor when asked to do
so (Table 6). 486 S6zen and Kil9ilk Table 6. Free

consultancy services provided for main contractors
Response category Always Generally Sometimes Rarely
Never Number of subcontractors (f) 13 7 11 Total: 33
The distribution of responses to this category shows that
subcontractors do not regard time spent for consultancy
services as a cost, but rather as an investment for
settling established relationships. A further advantage
might be access to information on technical and
administrative details, as well as costs and conditions of
the job undertaken. 4.5 Subcontractor-secondary
subcontractor relationships The second group of questions
aimed to collect data on further subcontracting practices
of subcontractors. Subcontractors were asked to indicate
the frequency of subletting work to secondary
subcontractors. Table 7 shows the distribution of
responses to this question, which was formulated as
follows: "Would you sublet work to secondary
subcontractors in case you are overloaded with work or are
under time pressure?" Table 7. Work sublet to secondary
subcontractors Response category Always Generally
Sometimes Rarely Never Number of subcontractors (f) 9
7 7 8 2 Total: 33 It is interesting to note that only
2 of the subcontractors replied that they would not sublet
work under any circumstances. The remaining 31 are willing
to subcontract work under pressure. Another question
designed to provide evidence for the existence of this
practice was as follows: "Would you sublet work to a
secondary subcontractor offering a price lower than the
price you offered to the main contractor for commercial
purposes?" (Table 8). The number of subcontractors who
replied "never" was 7, showing that the remaining 26 might
think of subletting with commercial considerations. World
according to subcontractors 487
Table 8. Commercial considerations in subletting work

Response category Always Generally Sometimes Rarely
Never Number of subcontractors (f) 3 7 8 8 7 Total:
33 Further evidence or the existence of the practice was
provided by asking
subcontractors to indicate the extent of difficulties

encountered in controlling quality,
duration and cost of work performed by a secondary

subcontractor. The findings showed
that all respondents did sublet work in contradiction with

the findings reported by Table
7. (2 of the subcontractors had replied that they never

sublet work further down)
Table 9. Difficulties encountered in the control of

secondary subcontractors Response category
5 Conclusions Always Generally Sometimes Rarely Never
Number of subcontractors (f) 6 7 14 3 3. Total: 33
The research provides evidence that subcontractors lay

emphasis on the maintenance of
enduring relationships with main contractors and they do

sublet work under pressure. Subcontractors value
solidarity as a means of sustaining relationships with the
main contractor and consequently, provide some free

services in return for the continuity
of the relationship. On the other hand, pressures (time,

overload and commercial considerations) play
an important role in the further subcontracting of work.

Subcontractors' preference is that
main contractors do not learn about the practice. One of

the reasons for this is the
commercial side of further subletting. Another might be

the risk of losing future jobs to
secondary subcontractors because of their very competitive

prices. And finally, subcontractors do seem to accept the
fact that there are problems of
control with work subcontracted.
488 S6zen and Kuyuk The fmdings of the research provide

evidence for the existence of an additional
ring in the production chain. This additional ring might be

causing mainly two types of
problems: • extra costs incurred by the main contractor •

organizational and managerial problems caused by a group of
workers not directly supervised by the main contractor's
control team. The study calls for new avenues of
additional research. To begin with, a
complementary study on a larger sample of subcontractors

would add a supplementary
perspective. Furthermore, a differential analysis of

trades would be beneficial to see
whether these practices are adopted by all trades. Another

suggested research direction
refers to the quantification of the extra cost brought by

the practice of subletting work to
secondary subcontractors. Further research in different

countries, would be able to
illustrate whether the pattern is universal and if it is,

which variables contribute to it.
1. Kiiyiik, M.A. (1995), j~aat Sektoriinde Alt Yiiklenici

Davram#arz, unpublished M.Arch dissertation, Faculty of
Architecture, Istanbul Technical University.
2. Sozen, Z., and M.A. Kiiyiik (1995), Siireklilik ve

Baglmlzhk, jn!jaat Sektoriinde Alt Yiiklenici Davram#arz,
5th National Management Congress, Istanbul.
Value management
1. Gray, C., Hughes, W. and Bennett, J. (1994) The

successful management of design. University of Reading,
UK.
2. Gray, C. and Flanagan, R. (1989) The changing role of

specialist and trade contractors. Chartered Institute of
Building, Ascot, UK.
3. Gibb, A.G.F. and Brand, P.R. (1996) Vintners Place:

Procurement, design development and construction of a
complex building facade with a traditional architectural
appearance. Proceedings of the Institution of Civil
Engineers (Structures and Buildings), London, UK.
(Awaiting publication)
4. Gibb, A.G.F. (1994) Prefabricated modules in

construction contrasting approaches
to prefabrication. Chartered Institute of Building, Ascot,

UK, Construction Paper No.
38, pp. 1-8.
DESIGN QUALITY CONCEPT TO
IMPROVE BUILDING QUALITY
S.B. Melhado and V. Agopyan
Civil Construction Engineering Department,
University of Sao Paulo, Sao Paulo, Brazil
Abstract
Despite the fact that there is a common sense in several

published research about the
importance of the design's contribution to quality

improvement, the design concept itself
has not been properly analyzed by many authors. Almost all

these works present many
factors related only to the building characteristics as a

product, not as a complex process. This work discusses
the potential contribution of design to quality and how it
could be
more effective, or rather how building design procedure
must be organized and considered
as a part of the project plan to achieve the best quality

results. For this purpose, a case
study is presented as a referential portrait. The clients

satisfaction factors, involving mainly the needs of
customers, construction
companies and investors, are analyzed under a contemporary

and systematic point of view.
On the basis of this analysis, a proposal of guidelines

will be briefly described in order to
approximate the production and the design objectives, which

will consequently change the
design team arrangement and the design co-ordination and

control methods.
Keywords: Building design, building technology, building

quality, quality management.
Resume
Malgre Ie reconnaissance pour la majorite des recherches

pub lies sur Ie sujet de
l'importance de la contribution de la conception du projet

pour l'amelioration de la
qualite, Ie concept il n'a pas ete analise par beaucoup de

ces travaux. Ce travail discute la contribution potentiel
pour la qualite et comment il pourrait etre
plus efficient, c'est a dire, comment Ie processus du

projet doit etre organise comme partie
de l' entreprise pour atteindre les meilleurs resultats.

Dans ce concept, un etude de cas sera
presente comme un cadre de renseignements. Les facteurs de

contentement des clients du projet, enveloppant les
necessites des
usagers, des entreprises de construction et des

entreprenants sont analises de fa90n
sistematique de la contemporaineite. Base dans cet analise,
ce sont propose des lignes
directrices pour rapprocher les objectives du projet et de

la production, en consequant
alternant la composition de l' equipe des projetistes, da

coordination et les methodes de
controle.


E & FN Spon. ISBN 0419222405. Designing for building
quality 503
1 Design quality
According to Giuffre [1], there is a conceptual distance

between "qualitative architecture"
and "quality of architecture". The first is concerned about

the result in the use of a
product, while the second one is essentially related to

the process elements that generates
that product.
This paper deals with the second definition above

mentioned, which emphasizes the
industrial character of design, as part of a production

cycle.
A research about materials wasted in the construction

industry reach a conclusion that
design parts integration and its buildabilities are

significant factors of this wasting process
[2]. Otherwise, it is possible to say that, under

appropriate conditions, design quality will
be just a result of the companies' quality systems, or

rather a result of the projects' quality
plan. If there are non-solved quality problems, design
will show them.
Although building costs are very difficult to be estimated

without design detailing, the
main question is to reduce them through a rationalization

analysis, which is possible to be
made even in the very early stages. Marketing strategies,

in general, need a very fast
response from the architect, concerning the preliminary

design solutions. The accuracy of
these solutions is not satisfactory in many cases, being of

paramount importance to create
a new integrated design methodology to change this

situation. For the same reason,
technological innovation requires a new design methodology

to be successfully
implemented.
If building quality is an objective, the main

characteristics of design must include the
following [3]:
• Design is a part of the comprehensive production cycle:

it cannot be understood as
a process itself, since designers take part in the whole

project process, as do suppliers,
builders, sub-contractors, quality supervisors, etc.;
• Design is a preview of building: it needs to contain

information about technological
specifications, constructive methods, production

organisation and quality control, in
order to solve the main questions of on-site building

activities, and to conciliate
product (the building) and production (to build) needs;

• Design is more than a drawing and describing process: it
is an important activity
that improves the building process quality and generates

more than drawings and
documents; it is also a service which must last until site

work ends and client accepts
the building;
• Design is not only an architectural or engineering

problem, but a multidisciplinary
work, which involves marketing analysis, cost analysis,

technological choices,
production process study, etc.;
• Design should work as a mean of communication of

technological innovation; the
necessary changes to improve competitiveness are much more

effective when they can
be implemented during design development and not after it

has been completed.
To many people, the main emphasis seemed to be on how to

control design documents
and quantify a numerical index that should express the

quality of resultant solutions.
However, the critical point seems to be how to avoid

typical problems that can affect
design quality.
504 Melhado and Agopyan According to other author [4],

design quality can be defined as a combination of "design
solution quality" (the product concept quality), "product

description" and "design process
quality". However, the last component will always be the

one that generates the others. Another important factor
involves the design detailing and how much it aims at
production activities. The traditional role of Architects

in detailing the design is changing
[5], so that other design specialists are also performing

it (e.g. masonry detailing). The importance of those
ideas explained above will be clearer as more expectation
about
evolutional changes is considered. Thus, when a company is

trying to manage its quality
problems through a technological improvement, design needs

to be focused as described.
This last affirmation can be demonstrated by a case-study

analysis, which is following
presented.
2 A case-study describing design practices inside a company
This case study refers to a work involving a Brazilian

private building company, which is
carrying out during a 12-month cooperative research program

among University of Sao
Paulo and this company. The conclusions described here are

a partial result of this
program. It is a company that executes externally

contracted building works or its own projects.
As it expresses an expectation on a well oriented income

growth, specially based on the
second mentioned group of projects, the company carried

out an extensive quality
program. The main objective related to design quality

subject was to develop a
methodology in order to establish an integrated performing

of design and production
processes. The first activity of the research program

consisted of a diagnosis focusing the company
internal relations and the performance of its main

departments, concerning their influence
over design quality. It was essential to provide basic
comprehension about: ordinary
procedures; responsibilities division; non-satisfied

expectations; and other related features. The diagnosis
permitted the identification of several factors that were
affecting design
quality and aimed at the proposal of methodological

changes in the usual procedures.
These factors are explained below:
• As different performing areas, real estate developing and

building were separated but undefined and incoherent
activities, without a common acting philosophy; this
separation among fundamental activities did not aim to
implement essential procedure changes;
• Reflecting the quality problem, there were non-specified

subjects in the designers contracts; they were only
informally oriented by very busy co-ordinators;
• The real estate developer "culture" included

low-expensive design; associated to this minimum expense,
there was a practice of minimizing the design solutions
detailing, reducing its accuracy and utility, specially
in terms of build ability;
• The emphasis on the product itself, like an exclusively

marketing problem, was very predominant during the first
stage of the project; as a result, almost all
technological questions were not discussed, so they could
not influence the designed characteristics;
• The design co-ordination process was too informal that it

generated a nondocumented and poor integration of design
parts; as a result, design documents were full of wrong
or missing information and they had a poor reputation among
site personnel; Designing for building quality 505
• There were no systematic criteria for decision making to

orient design work,
concerning buildability needs; during the design detailing

stage, site operations
efficiency was not properly considered;
• The analysis of design quality was not possible, since

detailed information was
available only at the end of design process;
• The practice of maintaining some finishing material

specifications undefined, until
someone asks for them, was a important quality improvement

barrier; this situation
remained until suppliers or site personnel needed the

specification to buy the materials
or contract the services;
• Most of the constructive details were not useful, since

they were presented to
describe only the product final appearance or specific

characteristics, but the details did
not show how the product had to be built; and,

furthermore, presented incoherent
dimensional data and missing information.
During this research program about design quality problems

in that private building
company, involving the production of buildings, it was

possible to develop a group of
guidelines to a new design methodology, considering the

special needs of this kind of
design.
3 Proposed design methodology
Searching for a new methodology that would consider the

difficulties above mentioned
and would include the necessary changes to achieve quality

improvement objectives, some
guidelines will be proposed to design co-ordination

process. Those methodological
guidelines, that will involve either internal or external

relationship, since both of them
influence design quality, are described below:
• Product and production process must be equally

considered, since the very early
beginning of design process -it means a significant

buildability improvement;
• The post-occupancy systematic evaluation must be

implemented as a part of a feedback
information system that aims at designers and prevent some

possible repetition of
technological errors;
• Building design, as a multidisciplinary activity, needs a

multidisciplinary team of several
specialized designers and consultants working together

since the very early stage of
design process;
• Design co-ordination needs pre-established parameters and

criteria in order to orient,
analyze and criticize design solutions properly;
• Design quality involves not only design review

procedures, which are related to the real
estate developing and the construction companies, but also

a well supervised quality
control procedure inside the contracted design firm;
• Supply, work training, technological development, design

and production processes
must be oriented by the same statements of a quality

program that a company is
implementing.
As many problems were spotted when analysing the above

mentioned company, we
proposed the described guidelines in order to feel how they

would work. The
implementation of the new design methodology is now in the

process of conduction
through an experimental way, adopting a project to a

preliminary introduction of the new
506 Melhado and Agopyan
procedure. Although people involved were convinced that the

adoption of this proposed
methodology would enable the company to get best quality

results, there are some
potential difficulties. The first difficulty of a series

appeared in the early beginning, when it was necessary to
create the multidisciplinary team and choose its

co-ordinator. The discussion about rights
and responsibilities division, as a whole, became

non-consensual. The real estate
developing company wanted to get all things under control

till the legal presentation has
been done. On the other hand, the construction company

could not agree with it, since on
that way it will not be possible to use both buildability

and marketing principles, side by
side, influencing design solutions. At the end, the

directors of the holding company, which comprisses the
building and the
real estate developing companies, forced all the

executives to a compulsory change of
their positions and the design team had to be co-ordinated

by the real estate develop
company or the construction company leaders, depending on

the specificity of each
subject, what were previously defined. Another difficulty

that created a significant barrier involved the designers'
contracts,
which were postponed until the limit, trying to save some
money in the first stage of this
project. The new metr..odology anticipates the usual

payments to designers and creates
also new ones, what seems to the real estate developer a

not so useful thing, considering
just only his own objectives; to improve design quality,

design stages have to incorporate
all specialists sooner. See figures I and 2 to make it

clearer. When the design process started, some designers
reacted friendly to those new demands,
while others did not understand the asking of different

information and presentation of it
to their design parts. It was demonstrated, again, how

motivation is an essential part of
any quality improvement program. After this "stormy"

phase, this design process has been more accepted and the
project
activities are now expected to continue in a more

appropriate rhythm.
4 Conclusion
The results of the design procedure conceptual changes are

undoubtedly significant to
improve production efficiency, in terms of build ability

and production costs control, which
are essentially concerned about competitiveness of the

project. A product like a two-bedroom flat to be sold by
around US 55,000, that is very often
determined by marketing studies, cannot be competitive if

there is not a quality effort
involved, because of waste of materials, manpower,

re-building and other similar
components. Technological innovation and its design

integration are naturally associated
with quality implementation. The practice seems to show
that there is not any profit barrier; on the contrary,
there is a
great potentiality of associating cost saving to quality

improvement. For instance, floor
levering had a cost reduction of about 75%.
I. Giuffre, R. (1994) A quality of architecture, or a

qualitative architecture? in Eureka Conference: Quality
Management in Building and Construction, (ed. O.Sj0holt),
Norwegian Building Research Institute, Lilleharnmer, June
1994. pp. 163-7. Designing for building quality 507
2. Franchi, C.C., Soibelman, L. and Formoso, c.T. (1993) As

perdas de materiais na industria da constru~ao civil, in
Proceedings of the 2nd Seminario Qualidade na Construfiio
Civil, NORIE-UFGRS, Porto Alegre, June 1993. pp. 133-98.
3. Melhado, S.B. and Agopyan, V. (1995) 0 Conceito de

Projeto na Constru~ao de Edificios: Diretrizes para sua
Elabora~ao e Controle. Boletim Tecnico. EPUSP, Sao Paulo.
(BTIPCC No. 139)
4. CTE-Centro de Tecnologia de Edifica~oes. (1994) Sistema

de gestiio da qualidade para empresas construtoras,
SindusCon-SP, Sao Paulo.
5. Hughes, T.B. and Williams, T. (1994) Quality problems

with Quality Systems arising from the motivation of
organisations and their methods of implementation, in
Eureka Conference: Quality Management in Building and
Construction, (ed. O.Sj0holt), Norwegian Building Research
Institute, Lillehammer, June 1994. pp. 254-9. I I
L:'i':G_I I ARCHIT,.ECTURAl I I ~RELIMINARV LPESIGN
--r= ENGINEERING I ~-m -CONSULTANTS [ SCHEME [
(INFORMAL) DESIGN LEGAL :~~~g!'0F mm---'-m------l '
STRUCTURAL ARCHITECTURAL HI BUILDING SERVICES I[ DEFIN/T,E
DEFINrrE DEFINITE DESIGN DESIGN DESIGN I I I I I I
PRODUCTION ,II ~(ONSITE) ~ Fig. 1. The usual design
procedure.
508 Melhado and Agopyan BRIEFING ARCHITECTURAL ~ i

PRELIMINARY I i DESIGN J ENGINEERING AND TECHNOLOGICAL
CONSULTANTS (FORMAL) IAJ ,MULnDfflC~LINARr-____ ~ I
SCHEME DESIGN -~I I I I I I I , .. I BUILDING
SERVICES DESIGN ARCHITECTURAL DESIGN STRUCTURAL DESIGN
PRODUCTION PROCESS DESIGN I ~ I I ! SUPPLIERS
QUALITY SUPERVISORS A~$~~AL -----.-.------i DEFINITE
DE;;;;;-Ii II 1 II PRODUCT II PRODUCTION I I II
(Bui/ding) II PROCESS I i ~-:----~:J~-==~ '---.~
---------1 I PRODUCTION I FEEDBACK I (ON SITE) I I~
_____ ------: Fig. 2_ The proposed design procedure
considering the guidelines for quality improvement
A DESIGN TOOL FOR INCORPORATING
CONSTRUCTION KNOWLEDGE DURING
DESIGN
Bob G. McCuliouch
School of Civil Engineering, Purdue University, West

Lafayette,
Indiana, USA
ABSTRACT
The United States has traditionally used the DesignLow

Bid-Construct process.
This arrangement consists of a separate Designer and

Constructclr on a project.
The designer is chosen and employed by the owner of the

desired facility. The
contractor selection is based on low bid. This scenario is

well knclwn and
understood. One of the major inherent deficiencies with

this systE!m is the lack
of construction knowledge incorporated into the design

document:;. This is
commonly called "constructability." Because each

responsibility is separated
this integration is hard to achieve.
Constructability has been defined as the integration of

construction knowledge
and experience during all phases of the facility

development procl!ss. The
primary objectives of constructability are to improve
construction, as well as the
overall performance of the facility. The input of

construction knowledge during
the design phase is especially important to achieve these

goals. To accomplish
this, the design team requires either direct field

experience, or at least
immediate access to experts in construction issues.

Unfortunately, most
designers do not possess sufficient construction

experience. Furthermore, there
are few construction professionals who have sufficient

design expertise to
function effectively as constructability experts for the

design team This creates
a serious obstacle to achieving constructability in a

project.
Th,is paper describes how this obstacle can be overcome

with a cI)mputerized
constructability support system. The system organizes and

presents
construction knowledge as both concepts and lessons

learned. Specifically, the
paper describes a computer tool that captures, records, and

stores
constructability concepts and lessons learned, while

providing deHign
profeSSionals with easy access and graphical retrieval of

concepts and lessons
to deepen their understanding of constructability issues.

The syst.!m uses a
"windows" environment, an open navigation architecture for

the user, and full


E & FN Spon. ISBN 0419 22240 5.
510 McCullouch
range of multimedia displays to represent constructability

knowleclge.
The multimedia feature significantly improves user

comprehension. Text,
graphics, images, video and sound are used to represent

constru(;tion
knowledge more completely. The richness of graphic

retrieval ancl multimedia
representation combine to enable a designer to more

effectively assimilate
constructability knowledge into his or her own existing

knowledge of design.
The approach used in this system provides many advantages

over existing
systems. Not only can the integration of construction

knowledge and
experience at the earliest stages of project planning now

be possible, but also,
constructability knowledge base now can be rendered

economical:ly feasible to
create, update and use.
Sommaire
Dans ce memoire il est decrit un outil a ordinateur

multimedia pour I'aptitude de
construction. L' aptitude de construction est

I/integration de la science
de construction et de I'experience dans la conception afin
d'ameliorer la
methode de construction et la performance de

I~nfrastructure UnEl fois complete.
La multimedia nous donne une sarie de d1information

complete, qui permet de
capter cette connaissance. A travers des outils imperatifs

, on arrive a une
application robuste qui est facile a I'usage et qui est

tres representative de cette
domaine d'information. Les organisations de construction et

du dessain,
peuvent utiliser cet outil pour creer leurs propres

"lessons appris" afin de capter
liexperience et de la mettre disponible pour utilisation

prochaine. L' outil se
presente en CD-ROM et fonctionne dans un milieu Windows

sur ordinateur
individuel.
Introduction
A primary factor, contributing to lack of productivity

gains in the U. S. construction
industry is the failure on the part of design and

construction teamn to effectively
record, for future use, so called,

'constructability-Iessons-Iearned.' This is not a
new problem. For many years experienced construction

personnEll have
provided input into construction projects in order to

enhance constructability and
consequently improve a contractor's performance. Zyhaljo

[1] advised that
structural engineers are still not usually trained or

educated in construction
methods and are therefore unaware of the impact of

construction ,:;onstraints on
design. Fisher [2] claimed that due to the fragmentation

in the construction
industry, structural engineers rarely use explicit

constructability knowledge when Design tool for
incorporating construction knowledge 511
making decisions about the layout and dimensioning of

structural elements.
Construction systems tend to be islands of automation in

speciali2:ed firms.
Integration of design and construction is still at the

level of face-to-face review
meetings and post construction design reviews ([3],[4]).
Constructability has been defined as the integration of

construction knowledge
and experience during program development, conceptual

plannin!~, engineering
design, and construction operations; to achieve project

efficiency. Since
developing a clear understanding of a project's objectives

and priorities is the
first responsibility of the owner's team, it necessarily

includes construction cost,
and its related schedules, quality and safety

considerations. Projl!ct value
engineering analysis can and should include additional

consideration for
aesthetics, reliability, leasability, public image,

operability and maintainability,
etc. [5]
Construction experience is knowledge based on methods to

perform
construction field operations, gathered primarily from the

results of prior projects.
This knowledge provides technical, operational,

contractual, or administrative
guidance for subsequent projects. [6] The primary objective

of constructability is
the enhancement of project performance. This may be

accomplisl1ed by using
construction knowledge or lessons learned especially

during the planning,
conceptual and schematic design phases. Doing this at the

early stages will
Significantly reduce construction labor and equipment cost,

decrease the amount
of change orders, help prevent cost overruns, lessen scope

growth, and most
likely minimize claims, time extensions, and litigation.
The advantages of constructability programs are well

documented. In the mid
1970's Proctor and Gamble developed a manual on

constructability, based on
13 in-house case studies documenting the benefits of a

concertecl effort [7].
Ardery [8] found they will payoff 10-20 times the cost of
the progr.am. The
Construction Industry Institute (CII) reported that

specific projects have realized
a 6-23% savings and project schedule savings of up to

fourteen months, by the
addition of a constructability program [9]. Fisher [2]

determined that through
such programs engineers can be trained more quickly, and

better decision
support data and knowledge will be available. According to

Jaselskis [10], the
probability of successful project schedule performance

increases ·From 2% to
33% with a constructability program. Indeed,

implementation of a
constructability program seems to have a significant impact

on achieving overall
project success as well as better schedule performance

especially on
fixed-price contracts ([11], [8]).
512 McCullouch
Computer Tool Development
Bringing construction knowledge into the design environment

can significantly
impact project performance as described in the previous

section. With current
computer technologies tools can be developed that allow

the capturing of
construction experience or "lessons learned" and store

this information in a
format that can be retrieved into the design. Construction

knowle,dge is not
easily represented and explained by traditional computer

alphanumeric
characters. Other media forms such as pictures, details,

drawings, sounds, and
video can represent a much broader field of construction

knowledge. These
media forms are commonly called "multimedia." Since

multimedia is able to
represent and explain these "lessons" more effectively, a
constru(:tability tool
that utilizes multimedia was developed. The next section

describes this tool.
Tool Description
Early in development objectives were established and

followed in creating the
tool. One it had to be easy for the user to navigate and

find an individual lesson.
Secondly, it had to have maintenance features for updating

the information
base(which contains the lessons) and adding, deleting, and

channing individual
icons representing lessons. Thirdly, the information base

where the lessons are
grouped and described had to have hyperlinking capability

to a full range of
multimedia files as well as query capabilities.
To achieve these objectives a careful evaluation of

software options was
performed. For the navigation interface, it was decided to

use icons for
representing constructability categories, groupings, and

individuc:11 lessons.
Also the navigation process can be performed on one screen

so tile user can
see the path while the other possibilities are still

present. Another important
feature is all actions are initiated by the user with the

clicking of a mouse. NO
commands are required so the user does not have to interact

with the keyboard.
To accomplish this Microsoft Visual Basic was chosen. The

below two figures
show a sample screen where the user has navigated to a

particular lesson and
how the navigation process works. Design tool for

incorporating construction knowledge 513 Figure 1 User
Navigation Screen O.~iled. Litvel ···· Di~p!ay . Figure
2Navigation Process Lesson Learned Background Display
514 McCullouch
The above two figures illustrate the navigation process and

the graphical
environment. The user navigates with the mouse by choosing

and clicking
icons. The complete search process is described on one

screen. This facilitates
a better understanding of where particular lessons are

located and how the
lessons are categorized.
The fourth window contains a picture or figure

representation of the lesson.
Double clicking anywhere inside this fourth window

initiates a search for the
lesson that is retrieved and displayed on the screen.

Figure 3 is an example of
a lesson that is displayed to the screen.
Each lesson is described with the follOwing format:

guideline, qualifiers and
exceptions, benefits, reasons, examples with graphics or

other supporting media
data. The guideline is a concise description of the

constructability example. It
is usually stated in one sentence. Qualifiers are those

conditions where a
lesson applies and exceptions where a lesson doesn't.

Benefits quantifies the
savings that could be generated by applying the

constructability principle.
Reasons describe why this lesson should be applied.

Examples are specific
lesson cases that have occurred on a project and the

originator of the lesson.
Graphics are media examples(picture, fiQure, video, etc.)

of the lesson. :: . Guideline: If extending an existing
bridge, the designer should check existing bridge foundat
ions to determine if seals were used. If seals were used,
then they should be specified again. Qualifiers : I .
Check soils report information and recommendations.
B.""llts: This is a safety issue at the job site. Reasons:
The use of a concreto seal at the bottom of a coffer
dam.avoids boUom blowoul The workman's lives can be tost
if this rather sudden quick. condition occurs when they are
in the hole. It is caused by a combination ofhigh
hydraulic head and susceptible .oils. A .ealis cosUy, and
the engineer should consult old field records to see if the
existing bridge foundations required them during
construction. SolU'Ce: Weddlo Bros. Construction
Proceduns for bostallby: a seal I . Remove tho soil inside
tho cofferdam (through clamming or some other technique) to
the olevation of tho .eal bottom. (Cofferdam is not
dewaterod) 2. Install the foundation piles to desired tip
elevations or bearing capacities . 3. Place seal concrete
usir!8 the tremie method. (See DetailofTreWlie _tltMl For
the concrete pump option, the dis charge hose is submerged
in the water as far as possible but does not come in
contact with the bottom. This procedure help" eliminate
any separation of the mix. (SeerPifUrtl 4. A vibrator is
used fre limit the amount of voids
Figure 3 Lesson Learned Design tool for incorporating

construction knowledge 515
One very important development objective was to use a full

range of media
forms to help explain and enhance the textual description.

The software chosen
with this capability was Folio Views. Folio Views is an

electronic information
manager that has the capability to embed graphics inside
the text or hyperlink to
other media files that can be displayed or played on the

screen. Figure 4 shows
a lesson learned with a hyperlinked media file displayed

on top of the lesson.
These media files can be pictures, figures, sound clips,

and media clips. : , :.,: ".:.: : The worl<man'.live.
can be lost ifthi. rather sudden quick.conclition OCcut.
when they are in the hole. It is c.used by. combin.tion of
high hydraulic he.d and susceptible soils. A • • oJ i.
cosUy, and the engineer should consult old field records to
see if the existing bridge . . 6. Random mea.urement
ofth. seoJ . Ievation during tho pour is .ccomplished by
submerging. me.suring tape in the water until it rest on
the top of the poured concrete and m ••• ur. to the top
of a coff.rdam fram •. (See !!lCM~ 7. Once the seoJ has
been J' ... . ~,! .. d and cured, dew.urthe cofferdam and
cut the pipe pil •• off at grade . (See~
Figure 4 Byperlinked Media Files .: :
When the user completes the review of a lesson then to

return to the user
interface screen a click on the minimize button located in

the upper right part of
the screen is required. From this screen the user can

search for additional
lessons or exit the application.
This tool can also provide other types of information to

the designer besides
construction knowledge or experiences. Hyperlinks to

design manuals,
standards, or details can provide this type of information

electronically and
516 McCullouch
quickly. Also specifications, design tables for structural

members or system
components, design memorandums can all be accessed through
this tool. A
comprehensive designer performance support tool can be

developed and
provided that can significantly enhance the performance of

an ennineer.
Tool Distribution
The tool will come in two versions. One is a user version

that will be distributed
on a CD-ROM disk. Currently the application is

approximately 510
MB(megabites) in size which can fit on a CD. The reason for

the large size is
that the 19 video files on the CD require approximately

450MB of storage. The
CD version is now ready and available for distribution. It

was developed for
Windows 3.x but it also runs under Windows 95. It has been
tested on a 486
33 Mhz with 4MB of RAM up to a Pentium running at 100 Mhz

with 16 MB of
RAM. The PC needs a sound card and speakers for hearing

the Bound files and
movie audio clips. The application requires 1.5 MB of hard

disk storage space
for creating a directory to copy some application run

files into. At the conference
a complete demonstration can be performed from the CD-ROM.
The second version is for a developer to modify and update

the information base
with. Screens with forms for this type of application

maintenance were
developed. Because of space limitations these screens can

not be displayed
and explained within this paper.
Final Summary
What has been briefly explained in this paper is a

constructability tool for
transportation organizations and design consultants. It

helps to bridge the
information gap between the design environment and the

construction jobsite.
Multimedia can be used to capture and represent a broader

field of construction
knowledge which can be recorded in electronic form and

brought into the
designer environment.
This type of technology application can also be used by

civil engineering
organizations to record and store their own "lessons

learned." Historical
examples can be saved, experience knowledge can be recorded

and not lost
through retirement or leaving for other employment. So this

type of "experience
knowledge" can be accessed and passed on to younger and

less experienced
employees. And in the times of corporate downsizing and

lean staffs this type of
information is crucial for the success of any

organization. A company that can
effectively use this type of technology in managing

information will have
competitive advantages through providing their employees

with information to
improve their job performance. Design tool for
incorporating construction knowledge 517
1. Zyhaljo, E.; "Construction, Design and Feasibility of

High Rise Buildings," ProceedingsFirst National Structural
Engineering Conference, Melbourne, August 26-27, 1987.
2. Fisher, Martin; "Design Construction Integration Through

Constructibility Design Rules for the Preliminary Design
of Reinforced Concrete Structures," Ph. D Thesis, Stanford
University, 1991.
3. O'Connor, James T., Rusch, Stephen E., and Schulz,

Martin J.; "Constructibility Concepts for Engineering and
Procurement," Journal of Construction Engineering and
Management, ASCE, Vol 113, No.2, June 1987, pp 235-248.
4. Tatum, C. B.; "The Project Manager's Role in Integrating

Design and Construction," Project Management Journal,
Volume XVIII, No. 2. June, 1987a, 96-107.
5. Tatum, C. B., Vanegas, J. A., and Williams, J. M.;

"Constructibility Improvement During Conceptual Planning,"
Technical Report No. 290, Department of Civil Engineering,
Stanford University, November, 1985.
6. Reuss, Mark C., and Tatum, C.B.; "Requirements and Tools

for Transferring Construction Experience Between
Projects," Technical Report of the Center for Integrated
Facility Engineering, Stanford University, Jan. 1993.
7. "Constructability-It Works," Procter & Gamble, Inc.,

Cincinnati, Ohio, 1977, unpublished.
8. Ardery, Edward R., Editor & Committee on Construction

Mcmagement, ASCE; "Constructability and constructability
programs," White paper, Journal of Construction
Engineering and Management, v 1 '17, 1 Mar 1991, pp 67-89.
9. "Constructability, A Primer," Publication 3-3,

Construction Industry Institute, University of Texas at
Austin, Austin, TX. 1987.
10. Jaselskis, Edward J.; "Achieving construction project

success through predictive discrete choice models," Ph.D
Dissertation, University of Texas
518 McCullouch at Austin, 1988.
11. Jaselskis, Edward J., Ashley, David B.; "Optimal

allocation of project management resources for achieving
success," Journal of Construction Engineering and
Management, v117, 2 Jun 1991, pp 321-340.
THE COST OF DEFECTS IN
CONSTRUCTION
P-E. Josephson and Y. Hammarlund
Department of Building Economics and Construction
Management, Chalmers University of Technology, Gothenburg,
Sweden
Abstract
To perform rational defect prevention, it is necessary to

have knowledge about defects,
their causes and associated costs. The purpose of the

study presented here is to
stimulate improvements by indicating where preventive

measures are most effective,
and by indicating how to perform these measures. A study

of defects in construction was performed 1986-90. A new and
deeper study
is now being performed by the same research group. Seven

building projects are being
monitored during a 6 month-period each. Observers spend 8

hours a day at the site
analysing and describing defects occurring. A total of

approximately 3000 defects will
be collected and fully described, including their root

causes. Formal interviews with
approximately 100 key actors are being made. The

data-collection is still ongoing, and
thus the results presented here are preliminary.
Keywords: Building project, causes of defects,

consequences of defects, defect, defect
costs, origin of defects, quality.
Sommaire
Pour effectuer une prevention appropriee des defauts de

construction, il est necessaire
d'en avoir la connaissance ainsi que la connaissance de

leurs causes et des frais
provoques par ces defauts. Le but de l'etude ci-presentee,

c'est de stimuler les
ameliorations en indiquant les mesures de preventions les

plus efficaces et d'indiquer
comment prendre les mesures preventives. Une etude des

defauts de construction a ete realisee en 1986-90. Une
nouvelle
etude plus profonde est en trliine d'etre realisee par Ie

meme groupe de recherche.
Chaqu'un des sept projets de construction est surveille par

des moniteurs pendant une
periode de six mois. Les observateurs passent 8 heures par

jour sur place en anlysant
et en faisant une description des defauts qui se

produisent. Un total d'environ 3000
defauts sera collectionne et completement decrit aussi

bien que les circonstances qui
provoquent ces defauts. Des interviews minutieux avec 100

personnes, qui a ce sujet
sont tres importantes, sont en train d'etre realises.
Mots cles: projet de construction, cause des defauts, les

consequences des defauts,
defauts, frais de defaut, l'origine des defauts, qualite


E & FN Spon. ISBN 0 419 22240 5.
520 Josephson and Hammarlund
1 Introduction
The conditions for construction are always changing. To

succeed, companies must
develop and improve continuously. Changes must be based on

knowledge of both the
environment and one's own work. In this situation knowledge

of the nature of defects
that have occurred is important. With such knowledge,

effective actions can be taken
to improve the process. In this paper, a study made in

seven construction companies is presented. The
nature of defects detected during production is discussed.

The study is performed in co-operation between the
Department of Building
Economics and Construction Management at Chalmers

University of Technology and
"R&D-West"; a group of construction companies in Sweden.

The study is a
continuation and deepening of a study carried out in

1986-90 by the same R&D-group.
1.1 Defect studies
There are a large number of studies of defect costs

occurring in the production and
maintenance phases. There are only a limited number of

studies about the briefing and
design phases. The cost of defects occurring during

production is stated to be 2-6% of the cost of
production [1] [2] [3] [4]. In our first study, the defect
cost in one building project was
approximately 6% of the production cost. The cost of

defects occurring during the
maintenance phase is stated to be 3-5% of the production
cost [5] [6] [7] [8]. The origin of defects occurring
during production is principally in production, but
also in design [4] [9] [10] [11] [12]. In our first study,
54% of the defect cost could be
ascribed to production; 34% to site management and 20% to

workmanship [4]. The
origin of defects occurring during maintenance is

principally in design, but also in
production [5] [6] [8] [13] [14]. A summary of a number of

defect studies is presented
in table 1. Organisations consist of individuals who

co-operate with a specific aim. Therefore,
it is natural for the defects to be ascribed to individuals

[4] [15] [16] [17]. It is
generally believed that defects are caused by lack of

knowledge, lack of information or
lack of motivation. Carelessness is stated to be the most

common cause [4] [11] [15]
[18]. Lack of knowledge is often mentioned as the second

most common cause of
defects, but information is also often mentioned. Although

defects are ascribed to
individuals, the basic cause can be found in organisational

phenomena.
2 Frame of reference
2.1 The roles
Building project organisations are temporary. When the

project is completed, the
organisation breaks up. Most actors only take part for a

limited time. Therefore, the
organisation is continuously changing during the process.

This study was performed to
find potentials for improvements in these organisations.
Some of the most important roles in a building project
organisation are played by
the client, designer, contractor, sub-contractor, material

supplier, machine supplier, and Cost of defects in
construction 521
Table 1. The origin of defects in a number of studies (% of

total defect cost)
Client
Design
Production
Material
Maintenance
Other During production During maintenance "R&D-West"

Summary of Summary of 1986-90 [4] several studies several
studies 3 5-15 0 20 15-30 40-55 54 35-55 20-45 20
5-20 5-15 o 0 5-10 3 0-15 0-10
the user. It is through the co-ordinated actions of these

actors that the building is
actually built. In similar ways, defects in the product or

in the process can be ascribed
either to the actors or to the co-ordination amongst them.
2.2 Defect a chain of events
All defects can be considered as a chain of events

including cause, erroneous action,
manifest defect, consequence and corrective measure, Fig. 1

[19]. This model of a
defect constitutes the basis for our study.
2.2.1 Cause
We define cause, in accordance with [20], as a proven

reason for the existence of a
defect. Often there are several causes of the same
erroneous action. There may be
either combined causes, or a chain of causes. For that

reason, the term "root cause" is
sometimes used to describe the most basic reason for an

undesirable condition. If the
root cause is eliminated or corrected, this will prevent

the reoccurrence of the defect
[21] [22]. The direct causes of defects can primarily be

attributed to individuals. However,
every action by an individual is influenced by conditions.

If individuals are to find it
worthwhile to act at all, motivation, expectations and

commitment are necessary [23].
Motivation is people's desire to contribute, through their

own actions, to the resultant
organisational action. Expectations imply that individuals

believe that their actions
will result in an organisational action. Commitment means

that in order to achieve
something together, people must have some "control" over

one another, i.e. they must
be able to rely on certain types of behaviour and certain

attitudes in the rest of the
team. This control is secured by the creation of mutual

commitment. Henceforth, we
use "motivation" to describe the sum of these three

conditions. Motivation alone is not enough. If an
individual is to act correctly, on the basis of
his/her own prerequisites, from their quality, the

individual must also have the
necessary knowledge and the necessary information for the

specific task. Knowledge
is information and understanding about a subject which a

person has in his or her mind
or which is shared by all human beings [24]. Knowledge

includes skill and experience.
Skill is the knowledge and ability that enables you to do

something such as ajob,
game, or sport very well [24]. Experience is knowledge or

skill of a particular job that
you have gained because you have worked at the job for a
long time [24]. Information
522 Josephson and Hammarlund Fig. 1. Principal model of a

defect
about the operation is received in communication between

individuals or between
organisations. Motivation, knowledge and information are

mutually dependent [19]. For instance,
insufficient information involves lower motivation. The

concepts of risk and stress are also used in the analysis
of causes. Calculated
risk is part of all actions, and thus it is difficult to

entirely avoid defects. The term
"risk" implies that there is a probability of a defect.

"Calculated risk" means a
conscious probability of defects. Higher calculated risk

means that a higher
probability of defects is accepted. Stress seems

characteristic for temporary organisations. Stress is the
general
reaction of an organism, which moves in to function when

the individual is threatened
[25].
2.2.2 Erroneous action and manifest defect
We distinguish between erroneous action and manifest

defect, i.e. the result of an
erroneous action. The manifest defect is a non-desired
condition in the product or
process. We start from [26], which defines defect as 'the

non-fulfilment of intended
usage requirements'. Some requirements are given by law

and in regulations, building standards, etc.,
and in contract documents, site meeting records and other

project documentation. But
all requirements cannot be specified. Every individual also

has non-expressed basic
needs. There are also many details which are difficult to

specify. These demands are
referred to as "usage" requirements. Sometimes the

specified requirements are wrong.
In such cases we rely on opinions from the actual

organisation. Non-fulfilment of
these opinions gives rise to defects. The changes which

are made because of new or changed needs during production
or
use phase are not seen as defects.
2.2.3 Consequences and corrective measures
By "consequence", we mean all consequences of a manifest

defect, including
consequences for both the product and the process. By

"corrective measure", we mean
all actions performed with a view to completely or partly

remedying manifest defects,
and their consequences. The extent of consequences and

corrective measures taken
constitutes the defect cost.
3 The method
The method used is based on our study performed in

1986-1990 [4]. The method has
been modified to a minor extent. The organisation of the
study, i.e. the group of
companies and the research group, are the same as in the

first study. Cost of defects in construction 523
3.1 The building projects
In this study, six projects are being followed up during a

six-month period each, one
project is followed up for four months. The seven projects

are being performed by
different companies. The projects has been chosen with the

intention of acquiring
knowledge about different types of projects. Some

characteristics are presented in
table 2.
• Project A is a conversion of an older museum, and a

technically complicated new construction of an entrance.
It has a complicated client organisation, including
several authorities to consult, severe saving demands,
small spaces. For reasons of financing, the time of
production was cut down from 17 to 12 months.
• Project B mainly concerns a new construction of an upper

secondary school. For part of the building, the framework
of an old fire station is used. The school personnel was
not employed when the construction work started. There was
specific demands for an allergy-free school. This is a
complex building because of the many different methods
and materials used.
• Project C is a new construction of university building.

The building is of high technical standard, especially the
ventilation. The time of production was shortened from
20 to 16 months at a very late stage. The project
organisation consists of companies and individuals who
have worked together before.
• Project D concerns a new construction of two similar

multi-dwelling blocks, which are similar to two 5-year old
blocks in the same area. The total price has been forced
down because the contract is part of a larger contract.
The production work is strongly influenced by a large
development program in the company. The site is exposed to
hard winds.
• Project E is conversion of an industry, with a very short

production time. A lot of work activities are ongoing at
the same time. Periodically, there are lot of workers in
small spaces. The building includes a lot of
installations. Except for these characteristics, it is
quite a simple construction.
• Project F concerns a new construction of a fire station.

Part of the building includes a lot of installations. For
this, the authorities have high security requirements.
Major user influence during production.
• Project G is a conversion of several shops in a large

shopping center. Quite a divided site with a lot to be
taken into consideration because the shops are open during
production.
Table 2. The building projects
Project Type New constr. Type of Production cost Time

or conversion contract (SEKM) (months)
A Museum New/Conv. General c. 30 12
B School New General c. 130 l3
C University New Turnkey c. 100 16
D Housing New Turnkey c. 21 14
E Industry Conversion General c. 15 4
F Fire station New Turnkey c. 55 15
G Shopping centre Conversion General c. 30 l3
3.2 Data collection
One starting-point is to register and analyse all defects

occurring in the building
projects during a six-month period. One observer is placed

at each site. The observer
has no other task than to register, follow-up and describe

defects occurring. By making rounds on site, the observer
has daily contact with all the personnel,
both the building contractor's personnel as well as the

sub-contractor's. When
necessary, the observer contacts the client, designers,

material manufacturers, etc. He
takes part in meetings and reads all documentation. Each

observer has been educated in the method and introduced at
the site. During
the study the observer and the researchers have continuous

contact. At special
meetings, the observers compare notes. The observers are

engineers or civil engineers. They have between 0 and 30
years
of experience from construction. Our first study showed

that young people with only a
little experience of construction are the most successful

in the data collection. People
with more experience tend to perceive some situations as

normal and for that reason
fail to describe them as defects. The data collection

consists of three main parts:
• Defect descriptions. Each defect is described on a

special form. Approximately 20 questions are coded. They
are supplemented with detailed descriptions of causes,
erroneous action, manifest defect, consequences and
corrective measures. The defect cost is estimated.
Sketches, drawings and photographs are appended. A total
of approximately 3000 defects are registered. Some of them
consists of several similar defects.
• Project description. To enable analyse, each building

project is fully described. Among other things, the
project organisation and the site organisation changes
during the process, systems for leading, planning methods,
policies regarding choice of sub-contractors, etc.,
activities included and their dependence, are described.
Schedules, drawings, site meeting records and diary are
appended. Costs and times for the whole project and for
separate physical elements, activities and materials are
stated.
• Interviews. In each project, the research group

interviews 10-15 key actors. Each interview is
approximately 1 hour. The interviews are tape-recorded and
transcribed in full afterwards. During the interviews,
mainly the characteristics of the building project are
discussed.
4 Results
The study will be completed in June 1996. The data

collection is still ongoing, why
the following results are preliminary.
4.1 Number of defects and defect cost
The number of defect descriptions varies between 283 and

450 per project. Some
descriptions contains several similar defects, so that the

real number of defects is
higher. The defect costs varies between 2.2 and 9.0 % of

the production cost, arising
during the time of the study, see table 3. Cost of

defects in construction 525
Table 3. Number of defects and defect cost (as of August

1995)
Project Number of defects Defect cost (number) (SEK) (%

of prod. cost) A 450 750000 4.6 B 422 980000 3.1 C 360
560 000 2.2 D 300 1 800000 9.0 E 283 820 000 5.9 F 373
470000 G 475 710000
Among noteworthy conditions, the following can be mentioned:
• In project A, the time for a complex blasting was gravely

underestimated, so the whole project was delayed. Severe
savings demands involved several changes in the production
method. The complicated organisation involved a lot of
last-minute instructions from the client.
• In project B, the contractor received extra orders for

SEK 4 M. One reason was that no school personnel was
employed when the production started. Only a few of these
extra orders have been registered as defects.
• Project C was successful according to several actors. The
largest defect was a part of the ventilation pipes, which
fell down.
• In project D, the total price was overdrawn. Many extra

tasks were imposed on both the site managers and the
worker, and the situation was stressful. The project was
exposed to a lot of disturbances because of the weather,
however these have not been registered as defects. There
were also problems with deliveries of prefabricated
concrete elements.
• In project E, a lot of problems arose because the project

was an intensive one, with a lot of workers in small
spaces. Several workers described the project as 'messy'.
The main defect was a delayed elevator contract.
• In project F, there have been some late changes because

of the user's influence during production. The design
process was described as faulty. The inexperienced
manager of the design process felt that he should have
directed the process more firmly.
• Project G was described as 'messy' because of the

fragmented site and the adaptations of the production
work to the opened shops. A lot of customers to the shops
had to cross the site. The contractor received a lot of
extra orders from the shops, which involved delays in the
contract.
4.2 The origin of defects
The preliminary analysis indicates that on the average 32%

of the defect costs
originated in the early phases, i.e. in relation to the

client and the design.
Approximately 50% of the defect cost originated on the

site, i.e. in relation to the site
management, the workers and the sub-contractors.

Approximately 15% of the defect
cost originated in materials or machines, see table 4. In

four projects, defects attributed to sub-contractors were
largest. Design defects
dominate in two projects. In project D, material defects

are the main defects. In this
Table 4. The origin of defects (% of defect cost, as of

August 1995)
Project Client Design Site maWorkSub-conMateMachiOther

nagem. manship tractors rials nes A 10 14 23 7 32 9 5
1 B 5 49 6 11 14 14 1 0 C 10 32 5 6 38 9 0 D 4
18 24 18 7 25 2 1 E 8 11 2 2 66 4 6 F 1 48 12 15
6 4 10 5 G 4 12 14 6 36 6 5 16
Average 6 26 12 9 28 10 4 4
project there are large problems with prefabricated

concrete elements. Project E is
dominated by the delayed elevator contract.
4.3 The causes of defects
The causes were often difficult to identify, which means

that our results should be
extrapolated from with caution. In most situations, we

found that the individual who
gave rise to a defect had the necessary knowledge and right

information for the specific
task, but that the cause was lack of motivation. An

average of 40% of the defect cost
could be ascribed to this category, see table 5. A deeper

analysis indicates that most
'motivation defects' are forgetfulness or carelessness.

Only a few of the 'motivation
defects' were intentional. 32% of the defect cost was

caused by lack of knowledge,
while a small part was ascribed to lack of communication,

stress and risk.
4.4 Causes per actor
An analysis of causes for each actor has been made. Table 6

presents the average for
projects A-E. For design defects, 30-35% Qf the defect
cost was found to be caused
by lack of knowledge, information and motivation,

respectively. For defects in site
management, the picture is more fragmented. Stress and risk

have also been identified
as causes. For defects in workmanship motivation dominated,

but risk is also
identified as a cause. For the sub-contractors, 40% of the

defect cost was found to be
caused by knowledge and motivation, respectively.
Table 5. The causes of defects (% of the defect cost, as

of August 1995)
Project KnowInformaMotivaStress Risk ledge tion tion A

47 11 32 0 9 B 5 25 44 7 19 C 40 26 31 0 3 D 50 5
39 3 3 E 20 29 33 14 4 F 43 6 44 5 G 17 10 66 1 6
Average 32 16 41 4 7 Cost of defects in construction 527
Table 6. Causes of defects for each category of actors, %

of defect cost per actor
respectively (as of August 1995)
Actor Know
Design
Site management
Workmanship
Subcontractors
5 Conclusions ledge 37 27 5 38 Information 27 23 4

13 Motivation 32 31 59 36 Stress 3 10 5 1 Risk
1 9 27 13
The aim of the study is, through increasing the knowledge

of defect causes, to find
motivation for improvement of the building process. We

have only pointed out some
objective results in this paper. However, in the full

study, we intend to obtain a deeper
understanding by making comparisons with our first study,

and by analysing the
defects. The method for the study has been chosen with the
intention of collecting a variety
of information about defects occurring, with a view to

producing improvements. Such
improvements can be made using one of three strategies: (1)

elimination of defect
causes by preventive actions, (2) confining defect

consequences by early detection
through inspection, and (3) avoidance of repetition of the

defects by learning from
defects that have already occurred [19]. These strategies

must be borne in mind in
further analyses.
7. STATT, Rationellt byggande metoder, hjiilpmedel och

maskiner, "Utlandsrapport" from the Swedish Attache of
Technology, STATT 8906,1989.
8. Pinter, J., Quality and regulation by the analysis of

building failures and it's costs, Working paper W86/5/9
of crn W86, Oct. 1989.
528 Josephson and Hammarlund 9. Herbert, A, Martvall, K.,

and Wirdenius, H., Byggarbetsledning och
produktionsstiirningar, The Swedish Council for Building
Research, Report 36: 1969, Stockholm, 1969.
10. Kullstedt, M., and Wirdenius, H., Arbetsledning pl1

bygget 341 platschefers mOte med storningar i
produktionen, Report R2: 1976, The Swedish Council for
Building Research, Stockholm, 1976.
11. Bonshor, RB., and Harrison, H.W., Quality in

traditional housing, Vol 1 : an Investigation into faults
and their avoidance, Department of the Environment,
Building Research Establishment, London, 1982.
12. ByggnadsinspektOrerna, Sunda hus och kommunal tillsyn,
Sammanstallning av enkatsvar fdm ca 100
byggnadsinspektOrer, Internal survey, 1990.
13. CSTC (Reygaerts, J., Gasper, M., and Dufordoir, C.),

1200 problemes, CSTC Revue nr 3, 1976.
14. Matousek, M., Outcomings of a Survey on 800

Construction Failures, IABSE Colloquium on Inspection and
Quality Control, Cambridge, England, July 1977.
15. Matousek, M., A System for a Detailed Analysis of

Structural Failures, in Yao, J.T.P., Corotis, R, Brown,
C.B. and Moses, P. (ed.), Structural Safety Studies,
Proceedings, 3rd International Conference on Structural
Safety and Reliability, American Society of Civil
Engineers, Denver, Colorado, 1985.
16. Nowak, AS., Human Errors in Structures, Offshore

Mechanics and Arctic Engineer, 11th international
conference, Vol. II, s 335-341, Calgary, Canada, June
1992.
17. CIB, Building Pathology A State-of-the-Art Report, CIB

Report, Publication 155,1993.
18. NEDO (National Economic Development Office), Achieving

Quality on Building Sites, Building Economic Development
Committee, London, 1987.
19. Josephson, P.-E., Orsaker tillfel i byggandet en studie

omfelorsaker, felkonsekvenser, samt hinder for inliirning i
byggprojekt, Dissertation, Report 40, Department of
Building Economics and Construction Management, Chalmers
University of Technology, Gothenburg, 1994.
20. Gryna, P.M., Quality Improvement, in Juran, J.M., and

Gryna, P.M., luran's Quality Control Handbook, 4th
edition, McGraw-Hill, 1988.
21. Dew, J.R, In Search of the Root Cause, Quality

Progress, March 1991.
22. Wilson, P.F., Dell, L.D., and Anderson, G.P., Root

Cause Analysis: A Toolfor Total Quality Management, ASQC
Quality Press, ASQC, Milwaukee, Wisconsin, USA, 1993.
23. Brunsson, N., The Irrational Organisation, John Wiley

& Sons, Chichester, 1985.
24. Collins Cobuild English Language Dictionary,
HarperCollins Publishers, London, 1987.
25. SOderberg, S., Psykologi och arbetsorganisation,

LiberLaromedel, Malmo, 1979.
26. SS-ISO Svensk Standard, SS 020104, Kvalitet

Terrninologi, SIS Standardiseringskommissionen i Sverige,
1987.
GROUP DECISION SUPPORT FOR
VALUE MANAGEMENT
S.D. Green and S.J. Simister
Department of Construction Management and Engineering,
University of Reading, Reading, UK
Abstract
This paper outlines a revised theoretical framework for

value management based on
the principles of group decision support (GDS). In contrast

to the currently dominant
paradigm of value management, the concept of GDS is based

on an underlying
ontological position of social constructivism. It is

contended that the existing
positivist paradigm is only applicable to well-defined

technical problems which can
be specified in advance. GDS differs in that it recognises

that the problems which
characterise the early stages of building design often

defy any attempt at pre
definition. The articulation of the GDS paradigm is seen

to have important
implications for the discipline of building economics. It

is asserted that building
economists have traditionally failed to provide clients
with effective group decision
support as a result of their reluctance to leave the

sanctuary of the rational high
ground. The paper identifies three GDS methodologies which

are currently untested
for the purposes of value management within the context of

building design. An
ongoing research project is described which seeks to

propagate the use of GDS
methodologies in practice. The research is not concerned

with revealing 'objective
truths', but with establishing the GDS paradigm by means

of a dialectic debate with
practitioners. The validity of the adopted methodology must

therefore be judged in
accordance with the principles of naturalistic inquiry.

Preliminary results are
encouraging in that the research has already achieved

changes in the way that value
management is implemented in the UK construction industry.
Keywords: Group decision support, value management,

briefing, building economics,
methodology.


E & FN Spon. ISBN 0 419 22240 5.
530 Green and Simister
Sommaire
Cet article expose brievement une structure theorique

revisee pour Ie management de
la valeur, basee sur les principes du soutien d'un groupe
de decision (ODS).
Contrastant avec Ie paradigme dominent actuellement du

mangement de la valeur, Ie
concept du ODS est base sur une position ontologique

sous-jacente de constructivisme
social. II est clair que Ie paradigme positiviste existant

est seulement applicable a des
problemes techniques bien definis, qui puissant etre

prealablement specifies. ODS
difrere en ce qu'il reconnait que les problemes qui

caracterisent les premiers stades
de la construction defient sou vent toute tentative de

pre-definition. L'articulation du
paradigme ODS est consideree pour avoir d'importantes

implications dans la discipline
des aspects economiques du b1l.timent il est certain que

les economistes du b1l.timent
ont traditionnellment echoue a fournir aux clients Ie

soutien d'un groupe de decision
efficace, en consequence de leur reticence a quitter Ie

refuge de la position surelevee
rationnelle. L'article identifie tres methodologies ODS,

qui sont actuellement non
verifiees dans l' optique du management de la valeur, dans

Ie contexte de la conception
du b1l.timent. Un project continuel de recherche est decrit

qui vise a propager l'usage
des methodologies ODS dans la practique. La recherche ne

vise pas a reveler des
"verites objectives" mais a etablir Ie paradigme ODs au

moyen d'un debat dialectique
avec les praticiens. La validite de la methodologie adoptee

doit, par consequent, etre
jugee selon les principes de la "naturalistic inquiry". Les
resultats preliminaires sont
encouageants en ce que la recherche a deja produit des

changements dans la maniere
dont Ie management de la valeur est applique dans

l'industrie de la construction.
1 Introduction
The concept of value management is attracting an increasing

amount of interest from
construction clients. The sustained level of demand for

value management suggests
that it does indeed constitute a service which is distinct

from the more traditional
approaches to achieving value-for-money. Despite this wide

extent of interest, the
underlying theory of value management remains strangely

underdeveloped. Many
academics continue to perceive value management to be

something of a 'black art'.
The paper draws from an ongoing research project which

seeks to develop a valid
theoretical framework for value management. The research

differs from previous
work in the field of value management in that the guiding

theory is derived from the
concept of group decision support (ODS), as recently

developed within the emerging
paradigm of soft operational research. The theoretical

justification for ODS is initially
established and contrasted with the assumptions which

underpin the dominant
paradigm of building economics. The adopted research

methodology is then described
for establishing the alternative ODS paradigm within value
management practice.
Finally, a summary overview of the research results to

date is presented.
2 Group decision support
Whilst many definitions of ODS have been offered, the

following is the most pertinent
for the purposes of this paper: Group decision support for

value management 531 , .... any designed process that
supports a group of people seeking individually to make
sense of, and collectively act in a situation in which
they have power' [1]. The key element of the above
definition is the explicit recognition that individuals
will make sense of situations in different ways, and yet
invariably need to act in a collective manner. The
tendency of individuals to interpret problems in different
ways is central to Rittel and Webber's [2]
long-established concept of 'wicked' problems. By
definition, a wicked problem is multi-perspective in nature
and defies any attempt at pre-definition. In contrast,
previous approaches to value management [3]-[6] accord
with the unitary paradigm of hard operational research.

These approaches invariably
assume that problems are 'tame' in that they can be

specified in advance of any
analysis and that they then remain unchanged throughout the

analysis. The same
assumptions also underlie the techniques of building

economics [7]. It is taken for
granted that the decision-maker's objectives can be

pre-determined and effective
decision support can be provided by the single-criterion

decision models of investment
appraisal. Where multiple objectives are recognised, it is

assumed that they can be
collapsed into a single 'utility' rating. The ontological

position which lies behind such
approaches is one of naive positivism. It is presumed that
the best answer exists 'out
there' and is waiting to be identified. Whilst the

impossibility of identifying , optimal
solutions' is generally recognised within the building

economics community, the
alternative concept of bounded rationality [8] is still

reflective of an underlying
POSItIvIsm. To recognise that rational humans must act in

accordance with the
limitations of their processing capacity does not in

itself deny the theoretical existence
of an optimal solution. The concept of GDS, as developed

within the pluralistic paradigm of soft
operational research, reflects an underlying ontological

position of social
constructivism. In contrast to the paradigm of hard

operational research it is no longer
assumed that problems can be modelled in isolation from the

problem owners [9].
'Reality' is now seen to be a social construct which is

continually renegotiated, rather
than an underlying truth which exists 'out there'. GDS

therefore makes no pretence
at revealing an underlying 'right' answer, the emphasis

lies in building a shared
understanding and common commitment amongst the

problem-owners. The
interpretation of value management as a designed process

for achieving GDS also
requires a reinterpretation of 'value-for-money'. Within

the guiding paradigm of
GDS, value-for-money is no longer seen to lie in the

content of the decision, but in
the means by which the decision is reached. In comparison

to the unitary paradigm
of decision-support, GDS therefore places less emphasis on

substantive data and more
emphasis on consensus building and the decision-making

process. The constructivist
equivalent to 'objectivity' is inter-subjective agreement

[10, 11]. As a caveat to the preceding argument it is
necessary to emphasise that the
ontological position of social constructivism does not

deny the existence of' objective'
data, it merely differentiates between data and the

meanings which different
individuals ascribe to that data. There is therefore an

important difference between
inter-subjective agreement on the basis of carefully

collected data, and inter-subjective
agreement on the basis of supposition. The acceptance of

an ontological position of
social constructivism does not therefore rule out the use

of positivist research methods
where deemed appropriate. However, GDS also recognises that

problems can rarely
be represented in terms of facts and logic alone. Of equal

importance will be the
myths and meanings by means a/which human beings make sense

a/their world [12].
Further justification for the adopted theoretical position,

together with a more extended
critique of established approaches to value management,

can be found in Green [13]
[15] and Green and Simister [16].
3 Decision-making groups
GDS methodologies are ideally suited for situations where

groups of individuals make
decisions. The notion of a decision-making group implies

that the individuals within
the group have a considerable degree of autonomy in their

own actions. If a group is
characterised by subordinate-superordinate relationships

then it would not qualify as
a decision-making group. Decisions made by an individual

in consultation with others
does not constitute group decision making. Genuine

decision-making groups comprise
individuals who have their own interests and perspectives,

which lead them to pursue
different objectives and to identify different factors as

relevant. Such groups possess
a high potential for conflict and also face high levels of

uncertainty. In these
conditions, problems which can be pre-defined and which

remain static over time will
be few and far between. There is therefore a confusion

between cause and effect
when considering decision-making groups and wicked

problems. Many 'wicked'
problems become relatively tame when perceived by a single

executive decision
maker. The extent to which problems can be perceived to be

wicked or tame
therefore depends, at least in part, on the distribution

of power amongst the
stakeholders. The nature of the relationships amongst a

group of decision-makers has
important implications for the appropriateness of different

decision-support paradigms.
The following characterisations, derived from Flood and

Jackson [17], are useful in
developing the argument:
• Unitary: stakeholders share common interests and

objectives.
• Pluralistic: stakeholders possess different

interpretations of the problem and in consequence,
different objectives. Nevertheless they are prepared to
come to an accommodation due to a basic compatibility of
interest.
• Coercive: stakeholders do not agree upon objectives and

genuine compromise is not possible. Influence is brought
to bear by the more powerful in order to coerce others to
accept decisions.
The traditional paradigm of hard operational research

assumes that all problem
situations are unitary. In contrast, the soft methodologies

of GDS assume a pluralistic
context together with an underlying willingness to come to

an accommodation. The
absence of any such underlying willingness constitutes a

coercive context, thereby
rendering many ODS methodologies inappropriate. When faced

with coercive
contexts any methodology for decision support will

inevitably be manipulated in
support of the dominant power group. It is therefore

apparent that the applicability
of GDS methodologies is dependent upon the extent to which

the decision context is
pluralistic. Group decision support for value management

533
4 Relevance of group decision support to client briefing
The tendency of many building clients to be pluralistic is

well recognised in the
briefing literature. Cherns and Bryant [18] contend that

clients are often multi-faceted
in nature, comprising several different interest groups

whose objectives differ, and
may well be in conflict. Becker [19], Goodacre et al [20]

and Murray et al [21] have
all questioned the assumption that a client's objectives

can be pre-determined. The
processes of briefing and designing are seen to be

iterative and interdependent,
whereby an understanding of the client's requirements

emerges as a result of a
dialectic debate which takes place over a period of time.

The process is one by which
a group of, often disparate, individuals come together to

formulate a single, coherent
statement of requirements. Within the context of the

preceding discussion of GDS the
following quote is especially illuminating: '{bJuilding

design is a problem solving process which cannot always be
stated comprehensively at the outset because of the many
different interests which have to be satisfied. In many
cases each problem is 'owned' by a group of people, each
with varying requirements and ambitions for its solution'
[22].
Further evidence that the early stages of building design

are characterised by 'wicked'
problems is provided by Powell [23], Lawson [24] and Rowe

[25]. There is therefore
a considerable body of opinion which suggests that the

problem context which occurs
during the briefing stage is often pluralistic. In these
situations the 'hard' paradigm
of traditional value engineering, as underpinned by an

ontological position of
positivism, is clearly invalid. Any attempt to model the

'real problem' in isolation of
the interpretations of the project stakeholders would be

doomed to failure. Of course,
the early stages of building projects are not always

pluralistic. In those situations
where the client acts as a single decision-maker and the

objectives can be pre
determined, the unitary paradigm of decision-support is

directly relevant. This is well
evidenced by the successful application of value

engineering by the speculative
developer clients of the 1980s [26]. Within this context

alternative design solutions
could be generated and appraised in accordance with their

impact on (i) construction
cost, (ii) construction time, (iii) investment value. In

the final analysis all of these
could be accounted for in financial terms. The 'alternative

designs solutions' often
comprised the use of innovative technology which reduced

the cost of construction.
The underlying ontological position of positivism was

justified in that the alternative
technical solutions did indeed exist' out there', but had

not been previously identified.
Nevertheless, unitary contexts of this nature are the

exception rather than the general
rule. This is especially the case in the 1990s when

building clients tend to be owner
occupiers rather than speculative developers. Buildings are
therefore increasingly
designed to cater for the needs of bespoke multi-faceted

clients, rather than for
standardised institutional requirements. Within this

context, it would be meaningless
to suppose that value-for-money could be modelled in

isolation from the differing
aspirations of the client's key stakeholders. 534 Green

and Simister 5 Group decision support in the 'swamp' In
the light of the preceding discussion it is enlightening to
consider the extent to which building economics has
offered effective decision-support to pluralistic clients.
It is initially worthwhile building on the previously
described distinction between problem types by quoting
SchOn [27], who has graphically contrasted the 'rational
high ground' with the 'swamp': '{i]n the swampy lowland,
messy, confusing problems defy technical solution. The
irony of this situation is that the problems of the high
ground tend to be relatively unimportant to individuals or
society at large, however great their technical interest
may be, while in the swamp lie the problems of greatest
human concern. The practitioner must choose. Shall he
remain on the high ground where he can solve relatively
unimportant problems according to prevailing standards of
rigor, or shall he descend to the swamp of important
problems and non-rigorous inquiry?'.
Whilst the authors would take issue with the 'non-rigorous

inquiry', the above
quotation depicts the dilemma for those who wish to

provide building clients with
decision support. The tendency of building economists to

keep out of the swamp is
well illustrated by Ruegg and Marshall [7]:

'{oJptimisation is sometimes used to describe the process
of determining the most desired choice where noneconomic
and sometimes nonquantifiable benefits and costs are
included in the objective function ...... We focus in this
book on the more narrow definition of the term, and all
our examples involve benefits and costs that are
measurable in monetary terms'.
There would therefore appear to be little danger of Ruegg
and Marshall descending
from their rational high ground to help clients with the

messy problems of the swamp.
Their refusal to consider 'nonquantifiable benefits' could

hardly be more stark. A
similar position is also adopted by Ferry and Brandon [28]:

'[iJt is not usually the economist's responsibility to
actually provide "value" as this must be the province of
the team as a whole, of which, however, he should be a
contributing member'.
Whilst Ferry and Brandon clearly recognise that the

building economist cannot provide
'value' by working alone on the rational high ground, they

fail to offer clients any real
guidance, other than the comment that: '{ijn theory, the

team will pool their combined knowledge for the benefit of
the client, whose representative should wherever possible
be a member of the team and play his own part in the
corporate decision-making process.'
The reference to the client's 'representative' in the

singular is in itself indicative of
a naive understanding of building clients. It is further

notable that those economists Group decision support for
value management 535 [29]-[32] who have attempted to
address the issue of value in its wider sense have done so
from within the paradigm of hard operational research.
Needless to say, they have never really progressed beyond
Simon's [8] position of satisficing. It should also be
recognised that there have been a few dissenting voices
from within the building economics community. Specific
examples include Canak et al [33], Eastman and Penz [34],
Tucker [35] and more recently, Gray and Tippett [36].
Nevertheless, as notable as these dissenting contributions
are, they have not as yet constituted a serious challenge
to the still dominant paradigm of rational-positivism.
6 Potentially suitable GDS methodologies
An extensive review of the existing literature on GDS has

identified several
methodologies as being potentially useful for the purposes
of value management. The
following three have been singled out for particular

consideration:
• Soft Systems Methodology [37]
• Strategic Choice [38]
• Strategic Options Development and Analysis [39]
The above approaches have all been developed within the

paradigm of soft operational
research and are considered to be particularly suitable for

the purposes of structuring
problem situations which are distinguished by complexity,

uncertainty and conflict [9].
They would therefore appear to be directly applicable to

the early stages of building
design. For comparison purposes, the decision conferencing

strategy of SMART value
management will also be considered [13]. Within the

constraints of this paper, it is
not feasible to describe the identified methodologies in

any detail. A full appreciation
of their richness can only be achieved by reference to the

source literature.
Nevertheless, it is worthwhile offering a brief comment on

the intellectual origins of
these approaches. Soft systems methodology (SSM) has

evolved from 'hard' systems
engineering as a result of a 20-year programme of action

research at Lancaster
University [40]. Strategic choice is rooted in the

socio-technical approach pioneered
by the Tavistock Institute in the 1970s [41]. Given the

dominance of the rational
positivist paradigm within building economics, it is

interesting to note that some of
this early work was directed towards improving

communication in the building
industry [42]. The origins of strategic options

development and analysis (SODA) lie
within cognitive psychology and the early political models

of organisations [39].
Despite their disparate origins, all three methodologies

share an explicit epistemology
of social constructivism, thereby accepting the

multi-perspective nature of reality.
They also all recognise the importance of a skilled

facilitator and the interdependence
between decision content and decision process. In contrast

to hard operational
research, the various models upon which the methodologies

are based are seen to be
facilitative devices rather than representations of

'reality'. 536 Green and Simister 7 Research methodology
In the light of the researchers' previous success in the
development and application of SMART value management [13,
43] through action research, it was decided to adopt a
similar approach for the current research project. However,
past experience has demonstrated that there are a number
of practical and methodological problems with an action
research approach which relies solely on exploratory case
studies in real situations. One of the major difficulties
lies in securing consultancy commissions which correspond
to the timescale of the research project. Even if such
commissions
are forthcoming, there can be no guarantee that the

situations presented would be
suitable for the above methodologies. A further limitation

relates to the extent to
which the results achieved by the research team could be

replicated by other
practitioners. It was therefore decided to adopt a

methodology based upon exploratory
case studies carried out in a 'laboratory setting'. This

has been achieved by inviting
a range of experienced clients and value management

practitioners to participate in a
series of six simulated exercises using data based on past

construction projects. It is,
of course, impossible to simulate the richness of a real

project in a laboratory setting.
However, this does allow for a greater emphasis to be

given to the methodologies
themselves, rather than being distracted by issues of

content. Given the objective to
improve the practice of value management, it is also

arguably more valuable to
ascertain the credibility of the methodologies to a

selected group of influential
practitioners, in the hope that they would go on to apply

them in real situations. The
collection of long-term feedback from the participants

therefore constitutes an
important part of the research [44]. Given the purpose of

ascertaining whether or not GDS methodologies are
considered to be credible and usable by practitioners,

together with the
epistemological basis of GDS, it would clearly have been

inconsistent to have adopted
a positivist research methodology. The validity of the

adopted methodology, and of
the results obtained to date, must therefore be judged in

accordance with the principles
of naturalistic inquiry [10, 11, 45]. In addition to
ascertaining the extent to which the three GDS
methodologies are
seen to be credible and usable, it has also been necessary

to expose the research
participants to the underlying theory. In particular,

feedback was invited on the
critique of the established approach to value management

and the contention that its
success is dependent upon the problem context being

unitary. Participants were also
asked to comment on how useful they considered it to be to

distinguish between
unitary, pluralistic and coercive situations. Further

qualitative data was realised by
asking them to discuss six case study scenarios with

reference to the three identified
decision contexts.
8 Research results
At the time of writing three one-day expert seminars have

been conducted to ascertain
the credibility and perceived usefulness of the proposed

methodologies. Two of the
seminars involved twenty-two value management practItIOners

and client
representatives, and the other involved ten. The first

seminar focused on the extent Group decision support for
value management 537 to which the principles of ODS are
appropriate to value management studies. The second and
third seminars emphasised the potential use of Checkland's
soft systems methodology (SSM). Further seminars
addressing the remaining ODS methodologies are planned
to take place during 1996. The research has also included
an ongoing dialogue with the practitioners in between the
seminars. A full exposition of the qualitative results
obtained to date would require detailed descriptions of
the simulated case studies together with an analysis of the
observed process issues. It is also considered
inappropriate to present quantitative results in
isolation from the context from which they were derived. A

grounded description of
the results obtained to date must therefore be left for a

future publication.
Nevertheless, it is reasonable to present some summary

observations relating to issues
which have become apparent. It has become clear that there

is some recognition within the value management
community of the need for new ideas together with more

theoretically coherent
methodologies. This is evidenced by their willingness to

participate in the research
seminars. It is also notable that the proposal to match

different methodologies to
different problem situations finds an intuitive acceptance

amongst practitioners.
However, they display a stubborn resistance to the notion

that 'problem situations' can
ever be classified in any prescriptive way, thus

reinforcing the theoretical argument
that any such attempt would be epistemologically

inconsistent. The expected
resistance to the terminology of SSM has been confirmed,

as has the tendency of
practitioners to collect different 'techniques' rather than

to 'buy in' at the methodology
level. Nevertheless, their initial exposure to SSM has

stimulated a demand for further
training, thereby demonstrating that the methodology is

indeed seen to be a potentially
useful aid to client briefing. The one technique of SSM

which has gained a ready
acceptance is that of drawing 'rich pictures' in order to
make sense of complex
problem situations. Indeed, three of the participating

practitioners have already used
the rich picture approach in real situations on the basis

of their participation in the
first seminar. The acceptance of this technique is

underpinned by a recognition of the
limitations of existing value management techniques for

the purposes of 'sense
making'. Whilst the above discussion of the research

results has by necessity been somewhat
superficial, there is one observation which positivist

critics cannot dismiss lightly: the
research project has already had a direct impact on the

practice of value
management. Several influential practitioners now perceive

value management in a
different way than they did previously. The process of

debate between the researchers
and selected practitioners has also established the

credibility of ODS as a guiding
framework for the continued development of value

management. Future research will
monitor the extent to which these selected practitioners

will act as agents of change
in propagating further the guiding principles of the ODS

paradigm.
9 Conclusion
This paper has developed a theoretical framework for value

management based on the
concept of group decision support (ODS). ODS differs from

the existing theoretical
basis of value management in that it is grounded on an
ontological position of social
constructivism. The nature of decision-making groups has

been considered and a
distinction has been made between unitary, pluralistic and

coercive situations. The
concept of GDS has been seen to be especially appropriate

for the pluralistic decision
contexts which often dominate during the early stages of

design. It has been further argued that the concept of GDS
enables value management to
leave the 'rational high ground' in order to provide

decision support in the 'swamp'.
It has been the continued reluctance of building economists

to deal with the intangible
aspects of value which has caused the increasingly large

demand for value
management. A range of GDS methodologies has been

identified which enables value
management practitioners to match different approaches to

different situations. Whilst the research described in
this paper is by no means complete, it has already
had an impact on the practice of value management in the

UK construction industry.
The research is also much more ambitious than the majority

of positivist approaches
in that it seeks to change the dominant paradigm of value

management practice. It
is contended that the continued propagation of the GDS

paradigm will have a
significant effect on the future development of value

management and the way in
which the industry perceives value-for-money.
10 Acknowledgement
This paper is derived from an ongoing research project

entitled 'Group Decision
Support for Value Management'. The project is funded by the

UK Engineering and
Physical Sciences Research Council (EPSRC) whose support

is gratefully
acknowledged.
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INTERNATIONAL COMPARISON OF
VALUE MANAGEMENT PRACTICE

Albert P.C. Chan and Betty P.V. Ho
School of Building and Planning, University of South

Australia,
Adelaide, Australia
C.M. Tam
Department of Building and Construction,
City University of Hong Kong, Hong Kong
Abstract
Value management is defined by the Society of American

Value Engineers (SAVE) as
the systematic application of recognised techniques which

identifY the function of a
product or service, establish a monetary value for that

function, and provide the
necessary function reliability at the lowest overall cost.

The philosophy of value
management is based on the premise that a certain amount

of unnecessary cost is
inevitable in building design due to the inherent

complexity of the process and that
significant cost savings can therefore be achieved by the

identification and subsequent
elimination of this unnecessary cost. Value management has

worked successfully in
the US under the name of value engineering or value

analysis. However it is still a
relatively new cost engineering concept in Australia. The

main theme of this paper is
to examine the application of value management in the

Australian construction
industry. The Australian practice was then compared

critically with the established
practice in the US. Two cases of value management
application on Australian
construction projects were studied. The information was

collected from the
questionnaire surveys on the participants and structured

interview with the pertinent
project managers. The results of the case studies showed

that the Australian practice
deviated markedly from the US practice. Very limited

application of the techniques
advocated in the US were practised in Australia.
Keywords: Value management, Australian practice, US

practice.
Sommaire
La gestion de la Valeur Appliquee est definie par la

Society of American Value
Engineers (SAVE) comme l'application systematique de

techniques reconnues qui
identifient la fonction d'un produit ou d'un service,

etablissent une valeur monetaire a
chaque fonction, el permettent d'etablir, avec fiabilite,

chaque fonction pour Ie colit Ie
plus bas possible. La philosophie est fondee sur Ie

principe que dans un projet de


& FN Spon. ISBN 0 419 22240 5.
542 Chan, Ho and Tam construction une partie des couts

n'est pas necessaire, mais est inevitable au depart, car
Ie processus est d'une complexite inherente. Des economies
peuvent alors etre
faites en identifiant, puis en eliminant ces couts

inutiles. La gestion de la Valeur
Appliquee a connu du succes aux Etats-Unis sous les termes

d'ingenierie de la Valeur appliquee ou Analyse de la
Valeur. Cependant, ce concept d'ingenierie des couts est
encore nouveau en Australie. Le theme principal de cette

communication est I'examen
de I'application de la gestion de la Valceur Appliquee

dans I'industrie du batiment en
Australie. La pratique australienne est alors comparee it

la pratique americaine.
L'application de la gestion de la Valeur Appliquee est

etudiee dans deux projets de
construction en Australie. L'information a ete recueillie

par questionnaires pour les
participants et par des entrevues structurees avec les

responsables de projets. Les
resultats de ces etudes de cas montrent que la pratique

australienne est visiblement
differente de la pratique aux Etats-Unis. Seule une tres

petite proportion des
techniques pronees aux Etats-Unis est appliquee en

Australie.
Mots-c1es: Valeur Appliquee, Pratique australienne,

Pratique americaine.
1 Introduction
Construction industry is important to the Australian

economy. Its output amounts to 6
to 7% of the GDP in the past few years [1], its input

represents 60% of all new
investments [2], and its product is the input capital to

all other economic activity.
Efficiency of the construction industry is crucial to the

success of investment in new
resource and manufacturing projects. However, as identified
in the proceedings of the
Launch of the National Construction Industry Reform

Strategy in late 1991, the
industry is suffering from an average cost disadvantage of

up to 20% higher than it
needs to be. This extra 20% contributes neither to quality

nor to extra performance of
the end product. The low value of construction money

degrades the international competitiveness
of the industry, discourages the level of investment in

construction and presents an
additional cost to projects which must be born by all

Australians; either as consumers
or tax payers. In the current economic climate, it is

imperative to identify initiatives
that will eliminate the extra cost of construction for the

future viability of the industry
itself and of the overall economy. Adams [3] asserts that

all engineers and architects experience mental roadblocks
of single solution fixation whilst undertaking design

activities. The shortcomings of
individual decision making are magnified by the

characteristics of the construction
industry: multiple dimensions in technologies and

knowledge required, ,sensitivity to
environmental changes, and the diversity of the parties

involved. To eliminate the extra cost elements caused by
this aspect of inefficiency, a cost
reduction system must target improving the quality of the

decisions made throughout
the life cycle of construction projects. One such cost

reduction system with the
principle of rationalising decisions made at various

levels is "Value Management" or
"Value Engineering" as termed in the US where it originated

[4]. The main theme of this paper is to examine the
application of value management in
the Australian construction industry. The Australian

practice was then compared
critically with the established practice in the US. Two

cases of value management
application on Australian construction projects were

studied. The information was International comparison of
value management 543
collected from the questionnaire surveys on the

participants and structured interview
with the pertinent project managers.
2 Concepts of Value Management
Several authors have described "Value

EngineeringlManagement" in different ways.
From the very definition given by Miles [5], "created for

one specific purpose
identification of unnecessary costs through a common sense

approach, ... born largely
through the rearrangement of known concepts, plus the

addition of a few new ones",
to Dell' Isola's definition: "A creative, organised

approach whose objective is to
optimise cost and or performance ofa facility or system"

[6]. The official definition of Value Engineering offered
by the SAVE is: "The
systematic application of recognised techniques which

identify the function of a
product or service, establish a monetary value for that

function, and provide the
necessary function reliability at the lowest overall cost"

[7]. In Australia, Barton [8] defined Value Management as
"An analytical process
which aims to maximise value within a system. The objective

is to ensure that cost and
worth correspond".
3 Previous Research in the Australian Construction Industry
A number of studies have been carried out in the context of

Australian construction
industry regarding this discipline: value engineering or

value management as used in
the Australian context. The focal points of discussion on

value management have been
its principles and its relationship with quantity

surveying. There are also limited
reviews on personal experience with value management in

the Australian construction
industry. Shaw and Chan [9] conclude that:
1. Value management will improve the competitiveness of the

2. The Australian public sector is introducing value

management into their area of expertise. Due to
accelerating construction cost, value management will be
required by large leading institutions.
3. Large corporations or public bodies will impose a value

management exercIse upon their subsidiaries as a formal
project control review procedures. Value management has
been undertaken by Barton [8] for a wide range of
Australian projects. From his experience, a glimpse on

Australian practices can be
obtained:
1. The range of projects undertaken included commercial

office buildings, hospitals, prisons, shopping malls,
international hotels, convention centre, railway systems
and waste water treatment plants. Most of them had major
cost savings.
2. The team approach was used and all disciplines involved
with the project concerned might participate, including
the client and building users.
3. Value management studies are an ideal forum for the

project participants to meet which is not available
otherwise.
544 Chan, Ho and Tam
4. The use of function analysis formed the foundation for

the whole process which was phased into several basic
steps: collection of information, analysis of the
functions, generation of alternatives, evaluation of
alternatives, and development of selected alternatives.
5. In most projects, at least two hundred ideas were

generated.
6. Most of the studies undertaken lasted for three to four

days.
7. The objectives of the studies included cost reduction,

validation of current design proposals, resolution of
other project problems such as time constraint and
communication, and establishment, clarification and
prioritising project objectives.
8. The most effective approach seemed to be the short

preliminary study at early project development followed
by a major study at final sketch plan stage.
4 Research Methodology of the Study
This study can be broadly divided into three parts:
1 . Review of literature.
2. Pilot study of the local practices.
3. In depth case studies of selected Value Management

Workshops.
4.1 Literature Review
An extensive literature review was conducted in the early

stage of the research so as to
form a knowledge base for further research. This included

computer searches of
library materials plus information obtained from
professional journals, published
proceedings and text books. Most of the literature reviewed

related to value
engineering being practised in the us. However, only

limited publications on this
topic were released from the Australian context and were

reviewed in this study.
4.2 Pilot Study
With the small amount ofiiterature regarding the local

practices on value management,
a pilot study was undertaken. The purpose of the pilot

study was two fold. Firstly, it
was used to identifY further sources of information and to

get a feel of the local scene.
Secondly, it served as a source of information to fulfil

the objectives stated, i.e.
develop a general picture to answer the questions of "why",

"when", "for what
purpose" and "for whom" value management has been carried

out in Australia.
4.3 Case Studies
The main focus of the case studies is to explore the

methodology currently adopted in
value management studies in the Australian construction

industry. Being an
exploratory study, the target was to collect a set of the

critical features of conducting
value management workshops. Two cases in Adelaide were

chosen for in-depth
examination. The sources of information for the cases were

identified during the first
phase of the pilot study. International comparison of
value management 545 5 Results of the Case Studies Two
cases namely, Salisbury Campus of Elizabeth ofTAFE, and
Waite Campus of the University of Adelaide, were studied.
Table 1 summarises the details of the two cases studied.
T bl 1 S a e f h C Stud' ummaryo t e ase les
I······ .................... ••••••••••••••••••••••••• ••

CaseN('j:l . ................................ CaseNo.2 ..
.... Project Salisbury Campus of Elizabeth Waite Campus
of the College of T AFE University of Adelaide Client
DETAFEofSA University of Adelaide, CSIRO Dept of
Agrionture of SA Allocated Construction Cost $9.4M $70M
(the portion studied worth $50M~ Procurement Method
Traditional lump sum contract Traditionallum~ sum contract
Purposes of the Study As a trial to testifY the As an
independent review of efficiency & effectiveness of the
requirements of the project VM and as a trial to VM
Project Stage of Applying VM Early design development

Design 100% completed and documentation 30% completed
Duration I full day, 2 half days 4 full days
(Lay Daysl) (3 days) (l day)
Facilitator Internal staff External VM consultant The

study of these cases was to facilitate the following: 1.
Find out the nature of the projects to which value
management studies had been applied.
2. Identity the purposes of applying value management.
3. Review current value management methodologies adopted

III the Australian construction context in the aspects
of: • the make up of a value team • the services offered
by a value management facilitator • the duration, the
process, the ways of conducting and the techniques applied
in a value management study
5.1 Case No.1: Salisbury Campus ofDETAFE
The project involved the redevelopment of the Salisbury

Campus of the Elizabeth
College of T AFE. The site was located in the centre of

the Salisbury business and
commercial district. The objectives of the project were to:

1. provide a multi-purpose workshop for technical and other
studies,
2. provide better and more functional accommodation for

existing courses as well as new programs, and
3. enhance the education and training services in the

Salisbury area.
I Lay days are the free days allowed between the workshop
meetings for in-depth investigation and refinement of
ideas generated or discussed during the workshops.
546 Chan, Ho and Tam The proposal of the project was

initiated in late 1987 and the feasibility study was
completed in April 1991. In total the gross floor area to

be constructed was roughly
13,500m 2 , and 355 car parks. The project was totally

funded by the Commonwealth
through specific purpose grants. The recurrent costs for

operation and maintenance
would be met by State budget. The estimated budget was

$9,425,000 (at October
1993 cost level). The client was the Development of

Employment and Technical and
Further Education of South Australia (DET AFE). The

end-users were those who
were disadvantaged by location, social and economic

background or ethnicity; mainly
the residents in northern Adelaide. The project manager

was the South Australia
Department of Housing and Construction (SACON), on behalf

of the DET AFE. The value study was undertaken at the
early stage of the design development and
documentation phase of the project; upon completion of the

sketch design in mid
December 1991. The study lasted for one full day and two
half days with two lay days
in between. It was the client's initiative to have a value
management study for this
project. According to the project manager, the client had

shown great interest in value
management, by that time, as a new tool in cost

management. This study was one of
the first trials by the client to test its efficiency in

cost saving. The study had three
major purposes:
1. to identifY the factors that forced the cost upward,
2. to clarifY the project's functional objectives, and
3. to identifY the areas of risk and uncertainty. The

study team was composed of one value facilitator and
thirteen team members.
The value facilitator was appointed internally the program

manager of SACON. He
was an architect by profession and had attended two short

courses in value
management. This was the first study he had facilitated. He

was not a member of the
project team. There were 52 ideas generated in the first

day. Brainstorming was the major
technique used in generating ideas. Out of the 52 ideas,

26 of them, which were
ranked "excellent" or "very good", were refined. Not all

of these ideas were
successfully developed into proposals. As explained by the

project manager, this was
due to the lack of time, and the relatively low savings

potential perceived. In the final
report, thirteen proposals were made. Eight of them were

developed from the
"excellent" ideas and five from "very good" ideas. Out of

these proposals eleven were
implemented.
5.2 Case No.2: Waite Campus of the University of Adelaide
The Waite Campus is one of the four campuses of the

University of Adelaide located
15 minutes drive from the North Terrace. The current value

was $100 million (1990
cost level), with some additional buildings utilised by

Commonwealth Scientific and
Industrial Research Organisation (CSIRO), and the State

Department of Agriculture.
The redevelopment of the campus was managed through a joint

venture comprising of
these three users. In 1989, these three agencies were

planning the restructuring of their
organisations. Their main focus was the rationalisation of

their assets with Strategic
Assets Planning. According to the original brief, the whole

project included the
development of eight main building blocks and refurbishment

of one old building. The
total gross floor area was approximately 30,000m 2

comprising 30 discrete subInternational comparison of value
management 547
projects. The allocated budget for the project was

approximately $70 million at 1991
cost level; roughly $2,500/m 2 . The fund for the project

was shared among the three
. agencies: $8M by the University, $5M by CSIRO and the

balance by the Department
of Agriculture with the public funds controlled by the

Treasury. The University of Adelaide was responsible for
the overall site coordination as it
owned the property for the development. The other partners
would be lessees of the
campus property. Due to the multi-client situation, the

management of the project was
quite disparate with separate project managers and

consultants for individual portions.
Most of the contracts were awarded as traditional

contracts. Being publicly funded, the projects needed to
be reviewed regularly and at certain
stages of development. Value management had been initiated

as part of the review
process at early design stage. However the study was not

carried out until the
completion of the design when the Treasury insisted on

having a value management
study. The reasons for introducing the study were two

fold. Firstly, the client wished
to justify the concept, brief, design and cost of the

project. Secondly, the client used it
as a trial to review the process and efficiency of value

management and thus to
evaluate its application as a routine project review

process for government projects.
The latter reason for applying value management concepts

reinforces the findings of
Shaw and Chan [9]. The study was undertaken when the
design was 100% completed and
documentation 30% completed. It was organised by the

construction planning
consultant as part of the planning review process on the

whole project. Since the
Treasury was interested in reviewing the sub-projects

funded by the public money, the
study concentrated on the Department's sub-projects which

in fact encompassed the
greatest portion of the whole project; around $50M worth of

the construction cost. The facilitator in this case was
an external consultant. The facilitator's pre-study
work included involvement in the preparation of the

agenda, and limited advice on
selection of the participants. During the study, the

facilitator led and chaired the
workshop by:
1. organising the participants,
2. maintaining the climate of the study and executing the

rules to allow open forum discussion, stimulating the
participants' lateral thinking by questioning, challenging
and giving relevant examples,
3. giving guidelines in evaluations and assessments of

various ideas,
4. facilitating communication and decision making among the

parties,
5. resolving conflicts raised,
6. consolidating and recording all the outcomes of the

group's discussion,
7. keeping an overview on the whole process to ensure that

the main themes were followed and the critical issues were
addressed, and,
8. monitoring the progress of the discussion. The team was

selected by the Department, the Treasury and the organiser
the
construction planning consultant. The workshop lasted for

four days with one lay day
in between. The first two days of study were devoted to

corporate issues and the team
was made up of mainly the senior management of the

agencies. The design consultants
were included in the last two days of the workshop for

technical input. The value team
included the project teams of the three partner agencies.

No sophisticated value
management techniques such as FAST diagram, cost/energy

model, or graphical 548 Chan, Ho and Tam functional
analysis were applied in this workshop. Instead of
concentrating on how to organise the problems with charts
and graphs, more effort had been paid to organising the
group to make evaluations, assessments and final
decisions. In total there were 50 ideas generated for
improving the project. Eight of them were discarded,
thirty six were examined further, and six of them were put
to action plan. Of the 36 ideas classified as "examine
further", twenty of them were further developed into
action plan, making the total of twenty six proposals
which proposed the actions and possible savings for each
building and site infrastructure. However, only eight
proposals were implemented. 6 Comparing the Value
Management Practice Based on the information obtained from
the two case studies of value management workshops in
Australia, an attempt was made to compare the Australian
practice with American practice. The comparison is
highlighted in Table 2. The characteristics and features
of the US practice are derived from the previous research
works by Palmer [10], Dell' Isola [6] and Norton [11].
From Table 2, it can be observed that the methodologies
adopted in the cases examined have little similarity to
the US practice in terms of duration and the nature of
the value team. On the other hand, the form of value
management consultancy offered in Australia can both be an
integrated part of other consultancy or an one-off.
Although FAST is advocated as the most popular US
technique for value management, it was not applied in all
two cases under scrutiny. The job plans adopted in the case
studies are less rigid and the techniques are more on
managing the human side of the exercise. Table 2
Characteristics of the US, UK Value Management Workshops
and the 2 Workshou Studied . Feafures ••••••••••• ••••
US ..•. ••• ••••••• ••••• ••• Casel •. • ••• ease 2
Duration Standard 40 hrs 5 days 1 full day, 2 half days 4
full days with 1 lay workshop. Completed with 2 lay days
in day in between. in 1 wk w/o lay days. between. Nature
of the team A qualified value All members of project
Project team plus engineer leading a 2nd team including
the external agencies led design team of relevant
client led by a staff of by an external professionals.
the project mgt. facilitator. agency. Site for workshop
Neutral site. Client's conference Organiser's conference
room. room. Form of VM One-off services Integrated
services of One-Off services consultancy offered at 35%
sketch PM. offered by value design by value specialist.
specialist. Major Techniques used Brainstorming, FAST
Brainstorming. Brainstorming Size of Team 6-8 13 8 (day
1 & 2) 11 (day 3 &4) The duration of the workshops are
shorter than the five day workshops advocated in the US.
One of the workshops studied lasted for four days and one
lasted for two days only. The range of workshop duration
in the two cases are in line with the work International
comparison of value management 549 of the Australian
practitioners [8], [12]. Contrasting the project sizes in
terms of construction cost with the duration of the
studies (Table 1), no meaningful relationship can be
observed from them. Thus, it may be fair to suggest that
the duration of the workshop is determined more by the
availability of resources than by the scope of work to be
studied. Lay days, however, were allowed between the
workshop meetings for in-depth investigation and
refinement of ideas generated or discussed during the
workshops This can be beneficial in the sense that the
consultants' investigations are better supported with
information and expertise in their own offices. Table 3
indicates that there are more feasible proposals made in
Case 1 which allowed more lay days between the workshop
meetings. T bl 3 RIo h O b a e e atIOns Ip b fl d d
etween num er 0 ay ays an proposa s t d genera e -CasH
Case 2 Lay Days 2 1 Proposals: Ideas generated 13:52
(13o/~ 2650 (52%) Implementation: Proposals 11:13
(84.6%) 826 (30.8%) There is also a reverse relationship
observable between the number of lay days allowed and the
percentage of proposals made to the ideas generated. This
can be
explained by, perhaps the fact that the ideas generated

have undergone more severe
investigation during the lay days and consequently, less

feasible ideas are discarded
before the proposal phase. The feasibility of each

proposals is thus enhanced and the
percentage of proposals being implemented is increased. In

the two cases, no FAST, cost/energy models, or
one-verb-one-noun approach
were used. The techniques used were more to do with

managing the human side: how
to process group discussion, how to stimulate creativity
and how to make group
decisions in various situations. There was very limited

consideration on life cycle cost
and the workshop was concerned mainly with operation and

maintenance: costs of the
building system and using current cost levels. There was no

discussion of other
categories of life cycle costs: costs of ownership, cost

impact to end-users, etc. as
advocated by Dell' Isola [6].
7 Conclusion
Value management is a structured, systematic, flexible,

team oriented approach for
assessing the relationship between function, cost and

worth. The philosophy of value
management is based on the premise that a certain amount of

unnecessary cost is
inevitable in building design due to the inherent

complexity of the process and that
significant cost savings can therefore be achieved by the

identification and subsequent
elimination of this unnecessary cost. Value management has

worked successfully in
the United States and Europe under the name of value

engineering or value analysis
However it is still a relatively new cost engineering

concept in Australia. The main
theme of this paper is to examine the application of value

management in the
Australian construction industry. Two cases of value

management application on
construction projects were studied. The information was

collected from the
questionnaire surveys on the participants and structured

interviews with the pertinent
project managers. The results of the case studies showed

that the Australian practices
550 Chan, Ho and Tam
have little commonality with the US practices in terms of

duration, nature of value
team and the flexibility of the job plan. Very limited

application of the techniques
advocated in the US were found in the case studies. On the

other hand, the emphasis
was on how to evaluate the subjects of workshop discussion

and how to reach
agreement in the group. Nonetheless, brainstorming was

still the major tool used.
1. Ireland V (1986) An investigation of us building

performance, Sydney, NSW Institute of Technology.
2. Construction Industry Development Agency (1992)

Construction Industry Reform Strategy, Australia.
3. Adams JL (1980) Conceptual blockbusting: a guide to

better ideas, 2nd Edition, Norton, New York.
4. Chan A (1993) Value management and its application in

the construction industry, CIB W-55, W-95 Symposium 1993,
Lisbon, September, 11-20.
5. Miles LD (1961) Techniques of value analysis and

engineering, New York, McGraw Hill.
6. Dell' Isola AJ (1982) Value engineering in the

construction industry, Third Edition, New York, Van
Nostrand Reinhold.
7. Green SD and Popper PA (1990) Value engineering: the

search for unnecessary cost, Occasional Paper No. 39, The
Chartered Institute of Building.
8. Barton R (1989) Value management, The Building

Economist, September, 8-10.
9. Shaw M and Chan A (1992) Value management: a gateway to

a more competitive construction industry, The Building
Economist, Vo1.31, No.1, June, 7-11.
10. Palmer A (1990) A critique of value management, The

Chartered Institute of Building, Technical Information
Service, No.124.
11. Norton B (1992) Value engineering: a value engineering

case study, Chartered Surveyor, September.
12. Dawson B (1988) An outline of value management in the

construction industry, Project Managers Forum Seminar,
Canberra, April.
PROFESSIONAL INTEGRATION IN THE
BUILDING DESIGN TEAM
A. Whyte and H.M. Edge
School of Surveying, Robert Gordon University, Aberdeen, UK
Abstract Whilst the designer is charged with the initial

creative art of invention, it is the design
team which should, theoretically, be responsible for an

innovative design. Design team
members interact; their relationships with one another

figure greatly in the process and
production of specific briefs. Organisational and group

participation, in the fulfilment of a
specific brief by the individuals who make-up the design

team, can affect performance, the
innovative process, and the efficiency of a specific

product. In a more universal sense,
participation levels in the achievement of a common

objective in a technologically complex
process can determine, to a large extent, the efficiency

of industry. If affective participation is sought to
improve efficiency levels in the organisation,
motivational mechanisms (such as ego involvement;
increased identification with colleagues
and the organisation; trust and overarching goal

acceptance) which are inseparable from
group mentality, require to be addressed. Specialist

building knowledge must compliment
recognition that fulfilment of professional potential is to

be found in combining particular
skills in a participative design team. This paper presents

findings from a recent attitude scale
of the construction professions and seeks to assess the

process of organisational participation
in the construction design team, through an appraisal of

the values, expectations and attitudes
of organisational members.
Keywords: Attitude scale, design team, integration.
Sommaire On confie au dessinateur Ie premier acte createur

mais c'est Ie role de l'equipe de
recherche d'assumer la responsabilite du projet de

conception. L'echange d'idees entre les
membres de l'equipe et les rapports entre eux contribuent

en grande mesure au processus et a
la production asssocies a un projet de recherche. Le

travail en groupe et la facon dont cette
participation s'organise pour mener a bien un projet,

peuvent influencer Ie bon
fonctionnement, Ie processus innovateur et l'efficacite du

produit. Quand il s'agit d'un
processus technologique complexe, Ie niveau de

participation dans fa realisation d'un objectif
commun peut en grande mesure decider de l'efficacite de

l'industrie. Si on vise une participation active pour
ameliorer la performance, if faut mettre en
place des mechanismes de motivation etroitement lies a la
mentalite du groupe. On peut
realiser Ie potentiel professionnel des membres de

l'equipe en faisant appef a leurs
competences diverses. eet article presente les resultats

d'un sondage mesurant les attitudes
dans Ie secteur de construction et cherche a evaluer Ie

processus de participation au niveau


E & FN Spon. ISBN 0 419 22240 5.
552 Whyte and Edge 1 Introducing the links between

participation, innovation, attitude and education
The following discussion explores factors which influence

partIcIpation within an
organisation. Participation is presented as a way by which

knowledgeable individuals
contribute to a decision, address conflicting points of

view, or gain new sources of
expertise and experience. Discussion then explores how to

understand better the
processes of participation of the construction design

team, in terms of an assessment of
psychological, organisational, and environmental

contingencies. The potential for
improvements in the participative process is discussed in

terms of an ability to enhance
interpersonal specialist contact, the performance of the

participants, and consequently
improve output.
Contextual, structural and individual variables of the

innovative process are highlighted,
and discussion explores arguments l that organisation
member attitudes playa critical
role in predicting innovation. Important links, between

attitude and behaviour, and a
related significant relationship between education and

attitude, are introduced at this
stage. Research findings are presented which argue that

adherence to traditional
vocational courses influence attitudes held towards

professional peers.
2 Organisational participation and the processes of

innovation in the building industry
The disposition of the building design team may vary but it

is basically a grouping of
individuals, each with a different skill, who combine to

create and maintain the built
environment. Design team members interact; their

relationships with one another figure
greatly in the process and production of specific briefs.

Participation, in the fulfilment of
a specific brief by the individuals who make-up the design

team, can affect performance,
the innovative process, and the efficiency of a specific

product. In a more universal
sense, participation levels, in the achievement of a

common objective in a
technologically complex process, can determine, to a large

extent, the efficiency of
industry. Indeed many researchers suggest that the

individual specialist interaction
occurring in the team can be said to represent industry in

microcosm. Bion 2 argued that
'the development of individuals, through group endeavour,

to achieve smooth co
operative activity' can be used to examine the workings and
efficiency of any complex
organisation. Landsley and Riddick 3 also argue that

observation of small group
interaction is a means of understanding issues in the

wider, more complex organisational
environment. They further argue that interpersonal

relationships occur as a result of the
enactment of activities and that an assessment of group

mentality can be used as a gauge
for the wider efficiency levels of organisational

communication.
The link between group mentality and participation is

discussed further by Locke,
Schweiger & Lathan 4 • They suggest that if effective

participation is sought to improve
efficiency levels of organisational communication, the

'motivational' and 'cognitive'
mechanisms, which are inseparable from group mentality,

require assessment. The
motivation mechanism includes factors such as trust, ego

involvement, increased
identification with the organisation, increased overall

goal acceptance, and greater Professional integration in
the design team 553
control of working tasks. Whilst cognitive mechanisms

include: a better understanding
of the overall rationale underlying the decision making

process, and the better utilisation
of all available information. Lathans 5 research

concentrates on cognitive mechanisms as
a basis for improving the participative process. He found

that individuals instilled with
an ability to marry their own objectives to the rationale
underlying the decision making
process of the group, lead to improvements in the

utilisation of skill and knowledge of
the collective members. He stresses that such improvements

in the utilisation of skill and
knowledge will only occur as long as participants have

sufficient task knowledge to
make a useful contribution. Kanter 6 also argues that

participation should be used to
allow knowledgeable individuals to contribute to a

decision, to address conflicting
approaches of view, or to gain new sources of expertise

and experience.
Specialist knowledge must be held, if participation between

individuals is to prove
effective. Once confidence in a specialist area is

attained, individuals must then seek to
combine these skills in the participative team.

Motivational mechanisms, such as trust
and ego involvement, in conjunction with cognitive

mechanisms, to allow individuals
better to understand the overarching rationale of the

decision making process, require
to be addressed, if an improvement in the efficiency level

of organisational
communication is sought.
Shaskin7 argues that participation properly implemented by

those involved, is effective in
improving performance, productivity and employee

satisfaction. He suggests that in
any valid method for analysing the effects of participation

(and participative
management), three types of contingencies must be
examined: psychological,
organisational, and environmental. Applicability of these

contingencies extends towards
most complex organisations. To allow a greater

understanding of the process of
participation of the construction design team, assessment

must seek to acknowledge: the
values, expectations and attitudes of organisation members

(categorised as
psychological contingencies); the degree to which members

are interdependent at
different stages of the project (organisational

contingencies); and, the changes in
technology, contractual procedure and competition of the

industry (environmental
contingencies).
A participative (psychological) contingencl, is emphasised

by the existance of
perceived hierarchical structures which exist within an

organisational climate. If one
member of the design team is seen as autocratic (possibly

the traditional leader) then it
is unlikely that participative efforts will succeed 9 •

Lickert suggests that by 'slowly but
meaningfully changing the individuals expectations, the

organisational climate will also
change and become more suited to a group participation

method'. In the relatively
constant environment provided by the majority of

industrial and business organisations,
such an initiative might easily be acted upon 'in-house'.

However in a constantly
changing design team, fed by somewhat reactionary
professional consultancies, a
process which requires a slow but meaningful change in

individual expectations is
difficult to achieve. This suggests a need to address the

formative period of a building
professionals development
554 Whyte and Edge
Notwithstanding the importance of improvements to the

perfonnance and the
productivity of integrating professionals by an increased

awareness of participation,
studies by Katz & Kahn 10 also suggest that interpersonal

contact in the context of work
activities is a basic human work need. Indeed Shashkin"

cites various works which
argue that interpersonal contact and participation in the

working environment is a
fundamental human necessity. Freud is cited as suggesting

that interpersonal contact is
extremely significant in working environments, since it is

'through work that one makes
basic contact with the physical and social world around

us'. Shashkin continues by
suggesting that the interpersonal need for social contact

in the workplace can be traced
back to the work of Karl Marx on 'Autonomy and Control' and

Elton Mayo on 'Social
Isolation and Meaninglessness'.
The link between participation; interpersonal contact as a

basic human need; and the
perfonnance of the participants, is highlighted by French &

Caplan '2 • Their study of
NASA engineers and managers revealed that those who had
increased opportunity to
participate in the overall decision making process were

found to have: low psychological
strain; a higher use of skills; increased feelings of

responsibility; better work
relations; more positive attitudes toward work; and higher

output, than those employees
not afforded the choice of participation. Low levels of

participation found in other
technologically complex design industries, might also be

expected to exhibit the
obstacles to process and product described among NASA

engineers. Indeed Cook '3
suggests that a cultural development of traditionally

procured building design team
relationships affords little opportunity for

multidisciplinary participation. The traditional
UK building design team is more of a hierarchical

infonnation transfer system which
exhibits relatively little prospect for participation in

the overall rationale underlying the
decision making process.
Becker '4 differentiates between on the one hand, a 'relay

race' model of communication
in the design process, in which infonnation generated by

one group or discipline is
handed off to another group in a sequential process and a

'rugby' model of the product
development process on the other. In his rugby model,

different disciplines interact in a
dynamic constantly fluctuating fashion. Leadership shifts

as the nature of the project
evolves. The hallmark is that all 'players' are involved
from the beginning. Traditional
project procurement lS and working practice is very much a

'relay race' of infonnation
transfer. Whilst no legislative restrictions exist which

limit participation to this lineal
infonnation transfer, the development of relationships

between the professions are
largely confined by tradition, making this restrictive,

'cultural container' of social
interaction difficult to avoid '6 • This traditional system

is used in the vast majority of UK
projects l7 , and by implication, the low levels of

participation result in (what French and
Caplan have found to be) an undesirable and detrimental

affect on the efficiency of the
process and the effectiveness of the output of industry.
The argument for a participative process to exist within

the organisation, centres on the
premise that interpersonal specialist contact enhances the

perfonnance of the
participants and consequently improves the output. However

many designers adhere to
an alternative assumption 18: that a design, if it is to be

innovative, results from a single
minded, egotistic belief in what constitutes an aesthetic

and functionally successful Professional integration in
the design team 555
proposal 19. Discussion of participation then, must address

innovation: both in the
organisation and in building design.
3 Innovation in the organisation and in building design

If a design is to be called innovative, it must go beyond
inception and the creative art of
invention. A building which is aesthetically and

functionally successful extends the
creative art of invention. It is only the first or early

employment of an idea which allows
invention to become an innovative design. Whilst the

designer is charged with the initial
creative art of invention, it is the design team which

should, theoretically, be responsible
for an innovative design. Indeed Carro1l 20 sees

innovation as a 'social process of
organisational adoption in contrast to independent

discovery'. Pierce & Delb ecq 21 argue
that innovation is 'the initiation, adoption and

implementation of new ideas or activities
within an organisational setting' and they argue that the

process of innovation depends
little on the individual, rather it is argued to be

dependant upon the communication
processes of the organisation. Becker & Whisle?2 also

focus on innovation as an
organisational or social process. To them innovation is a

process that follows
'invention'. Kante?3 summarised the process of innovation

as: idea generation, coalition
building, idea realisation, and idea transfer. This

corresponds with Thompsons 24 earlier
work which classifies the process as: initiation (an idea

or proposal which when adopted
will lead to enactment within the organisation); adoption

(where organisational decision
makers provide a mandate and resources for progress); and

implementation.
Bastien & Hostaler 25 suggest that innovation within an
organisational environment
may be regarded as an influencing factor in the overall

communication process. They
state that the implementation, of the social task of

innovation, is critically reliant on an
overall collective knowledge of cultural background,

dictating the individuals place
within an organisational. Innovation they suggest, is

dominated by informal codes and as
such a cultural background, which in tum directly affects

interpersonal communication.
This parallels, to a large extent, dissatisfaction with the

communicative processes in the
building industry26. The evolution of formal and informal

hierarchies in construction
have frustrated the idea of the design team as an

innovative entity, so much so that
contemporary communication between design team members can

be said to reflect
simply an unsatisfactory lineal pecking order of

contribution to the initial brief.
4 Three variables which influence innovation
If the design team is to attain its theoretical status as

organisational innovator 27 , the
innovation process must be addressed, by breaking it down

into its constituent parts.
Kante?8 reviews several studies which suggest that the

variables which have greatest
influence over the innovation process of an organisation

are: (i)contextual variables (ii)
structural variables and (iii) individual member variables.

Kanter argues that the
factors which make up the contextual issues influencing
innovation in the organisation,
are associated with: business environment,

inter-organisational interdependency,
economic climate, Governmental policy, and the formation

and termination of the
innovative team by organisational senior managment. However

whilst change in anyone
of these Contextual variables may be enough to hinder the

innovative processes within
556 Whyte and Edge
the organisation in general, the building design team is

perhaps less susceptible to
contextual issues; since in the construction industry

contextual variables (which include:
environmental uncertainty; design team project duration;

and inter-organisational
interdependencies) are continually in a state of flux. The

construction industry is forever
peaking and troughing in economic terms. Government policy

and markets at home and
abroad are never certain. The formation and termination of

disparate traditional design
team organisations are a constant feature, and the

professional consultancies which fed
these design teams invariably compete for larger slices of

the market. The construction
industry can be said to differ from more theoretical

innovatory processes in that, it
continually endures these contextual changes. Whilst an

ability to perform in the light of
constant contextual fluctuation does not necessarily show

that the industry has suitably
addressed the contextual challenges to the innovationary
process, it does imply that they
hold little surprise for the building design team, and as a

result influence little, design
innovation.
The second variable of the innovative process, the

Structural variable is argued by
Kanter to include: differentiation, participation,

formalisation, and stratification.
Kanter argues that an absence of a single professional

ideology (Differentiation of
occupational types) will promote a cross-fertilisation of

ideas. She then suggests that
during the participation stage a greater number of sources

of information and a freer
information flow in the decentralised network will generate

a 'greater ego-involvement
and commitment to facilitate the implementation stage of

innovation,29. However in the
multi-disciplinary design team, an evolutionary process of

lineal information transfer and
professional relationships might be argued to restrict

professionals from realising the
theoretical variables of differentiation and

participation. Indeed the formalisation of the
building design team can be said to restrict co-operative

participation. This is worthy of
note since Pierce and Dellbeq argue that 'predetermined

modes of behaviour which have
become rigidified cause a restrictive culture within a

grouping which is detrimental to
relaxed information exchanges'.

The Structural variable of the process of innovation is
also argued above to include
stratification (status mobility). Thompson 30 citing

Maslows work on 'motivation &
personality' and Mayos work on 'the meaning of anxiety'

states that 'stratification leads
to personal insecurity' and that 'status striving behaviour

is incompatible with creative
thinking.' Henderson 31 echoes the concern over perceived

hierarchies and has shown that
similar formal or informal aspects of control,

significantly influence the extent to which
people clearly perceive, and enact their roles in a

communicative relationship. Mongue,
Edwards & Kirste 32 found that organisational equals,

either perceived by the individual
or represented in the structural hierarchy of the group,

are more likely to discuss
problems or proposed changes to improve output, than are

individuals who see
themselves as differing in status. This variable once more

links innovation with aspects
of design team participation discussed in previous

sections; chiefly without professional
equity, participative efforts and innovative design can be

expected to occur only in an
indeterminate fashion.
The third variable of the innovative process, the

Individual variable is argued by Kanter
to include: the attitudes which organisation members hold.

Pierce and Delbeq33 argue Professional integration in the
design team 557
that attitudes playa critical role in predicting

innovation. Cyert & March 34 concur and
state that 'innovative behaviour differs, depending on
whether or not the members of the
organisation perceive (themselves and their colleagues in)

the organisation to be
successful or unsuccessful'. Rage and Aitken 35 also found

attitudes relating to self and
peers to be important in the innovative process of an

organisation. They found that
professionals of (a perceived) equal stratification, who

were satisfied with their
relationships with others, were more likely to search for

ways to improve interaction,
output and product. Pierce and Delbeq cite research by:

Trumbo; Kirton & Mulligan;
and Kaplan 36 when they argue that there is a positive

relationship between education,
and attitude toward change and innovation; where

facilitating an acknowledgement of
the possible potential of change, precedes the wish for an

organisation or team to seek
innovative solutions. Pierce and Delbeq further suggest

that values held by
organisational decision makers, favourable to an

appreciation of the requirement for
change and evolution of (member relationships within) the

organisation, will be
positively related to innovation.
Clearly then, links can be said to exist between attitude

and behaviour (which seeks
innovative and participative solutions). Apparent also, is

a significant relationship
between education and attitude. Discussion of these

important relationships, in terms of
thesis methodology, are developed in subsequent sections.
5 The link between problems in communication and

professional disparity
There appears to be a growing international trend to

fractionalise professional input. As
a result, uncertainty has arisen on how best to prepare

future design team specialists to
succeed in changing legislative and economic environments

3 ? Government and industry
are currently appealing for an improvement in communication

across disparate
professional interfaces, as the way towards a more

efficient and effective construction
industry. These appeals represent an impressive body of

opinion, which believes that the
construction process in the UK has yet to achieve an

optimum level ofproduction 38 •
One of the strongest reported barriers to project team

performance is professional
power struggles and inter-professional conflice 9 • The

need to address the perceptions
and cognitions of each participating specialist towards

their peers, to reduce conflict in
the multi-disciplinary design process, is clear 40 • It is

more the building professions and
their disparate value systems, and less an adherence to

organisational procedure, which
influences the occurrence of conflictual exchange in the

building design team 41 •
The findings which follow represent part of an on-going

research project by the School
of Surveying, Robert Gordon University, Aberdeen. The

results presented find that
attitudes held towards professional peers, potentially
detrimental to the communication
process of the building design team, are a function of

differences between disciplines.
The findings show that pursuing a particular specialist

course of study during the
vocational educational process influences significantly

attitude towards design team
colleagues.
558 Whyte and Edge
6 Disparate professional disciplines: the major influence

in the contribution to group differences in attitude scale
scoring
To assess the extent to which adherence to a specialist

discipline is able to predict
attitude, a discriminant function analysis was carried out

on a data set of 534 attitude
scale questionnaire responses. Discriminant analysis of the

scores obtained from
application of the attitude scale questionnaire was

carried out, by examining the
independent characteristics of the students who took part

in the study. This allowed an
analysis of whether it was possible to isolate groups (of

students from different courses)
on the basis of available independent variables.
The goal of discriminant analysis is to classify cases

into one of several mutually
exclusive groups, on the basis of an observed set of

characteristics. This allows
educators to adapt integrative techniques to best suit an

identifiable group.
The attitude scale questionnaire required each student to
provide additional independent
variables. These independent variables were coded and input

into the data set. The
following independent variables were examined as potential

predictors of attitude scale
scoring: age; construction industry experience; course

undertaken; curriculum
structure; domicile; parent/guardian occupation; sex;

university attended; stage of
study; and subject of questionnaire submitted.
The number of functions used in the discriminant analysis

represented the eleven
independent variables identified above. Variables were

ordered by size of correlation
within the function. The variables of: course of study and

university attended were
found to have the largest absolute correlation with the

first and second discriminant
function stages. In other words course and university are

identified as contributing
substantially to differences in group scores. Although

group membership (in terms of
one variable) was not predicted, the results indicate that

the variables of course and to a
lesser extent university are important in predicting the

attitude scale scoring of the
sample.
The two variables of course and university identified by

discriminate analysis as key
contributors to attitude scale scoring, were further

investigated. Conventional Mann
Whitney and Kruscal-Wallis tests were used to determine

significant differences in the
mean scores between the subgroups of course, and then

independently of university.
Further analysis of university, found this independent

variable to be of no significance in
attitude scale scoring. No significant differences were

recorded for the non-paramentric
Kruscal Wallis I-Way Anova test concerning overall attitude

scale scoring by university
at the three Universities used in the sample (Robert

Gordon, Aberdeen; Strathclyde,
Glasgow; and, UCE, Birmingham). Similarly, no significant

differences were recorded
for the non-parametric Mann Whitney U Wilcoxon Rank Sum W

test concerning
overall attitude scale scoring by university, in an

analysis of the two Universities which
made up the majority of the sample (Robert Gordon,

Aberdeen, and UCE, Birmingham).
Based on these tests the variable of university is not seen

to be a significant indicator of
attitude score. Professional integration in the design

team 559
Examination of the variable of course on the other hand,

produced results indicating that
this independent variable was indeed responsible for

significant differences in attitude
scale scoring. A non-paramentric Kruscal Wallis I-Way Anova

test of mean rank
student attitude scale scores for the eight disciplines of

Architecture, Quantity
Surveying, Building Surveying, Landscape Architecture,

Estate Management,
Environmental Planning, Interior Design and Building Design
Engineering, records a
highly significant difference between the eight different

disciplines. Further examination
of this test allows inference that the mean ranks displayed

by the disciplines of
Architecture, Building Surveying and Quantity Surveying are

considerably lower than
the other five disciplines used in the study. In other

words Architecture, Building
Surveying and Quantity Surveying students have less

favourable attitudes towards
colleagues than the other five disciplines.
Mann Whitney U Wilcoxon Rank Sum W tests further explored

this grouping of the
disciplines of Architecture, Building Surveying, and

Quantity Surveying. Significant
differences were found to exist in the scores of

respective pairings of these three
courses. Notably however no significant difference was

found between the attitude
scores of respondents from Architecture and Quantity

Surveying. The results show close
similarities in attitude score towards colleagues

discplayed by these two disciplines.
Interestingly this similarity is based on a shared

unfavourable attitude, displayed by both
Architecture and Quantity Surveying, towards their

professional peers.
7 Summary
In summary then, the results above highlight the variable

course as influential in the
contribution to group differences in attitude scale

scoring. Findings also reflect the need
to address, in education, the traditionally accepted

truism of suspicion that exists
between the design element, and the building management

element of the traditional
UK building design team. Adherence to traditional

vocational courses influence attitudes
held towards professional peers; these in tum can be said

to influence the potentially
detrimental communication processes of the building design

team.
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1517, Palmer House, Chicago;
CLIENT MANAGEMENT OF THE DESIGN
PROCESS FOR BUILDINGS
Graham Miller
School of Construction and Building Sciences,
University of Western Sydney (Hawkesbury), Australia
Abstract
This paper presents the findings from a research project,

which examined current
practice in the area of client management of the design

process for some recent award
winning and/or architecturally significant buildings in the

Perth region of Western
Australia.
Keywords: client management of design process; design

briefing; managing building
design.
Sommaire
Le present papier rend compte des resultats d'un projet de

recherche qui se
proposait d'examiner les pratiques actuelles dans Ie

domaine de la gestion
client en phase conception pour des edifices de la region

de Perth, dans
l'ouest australien, qui ont recemment ete primes etj ou

possedent un interet
architectural certain.
1 Introduction
Client management of the design process can take many
forms, from total
involvement including physically constructing the building

and designing
simultaneously. to minimal involvement allowing the

architect total control of the
outcome of the final product, even to the extent of site

selection and purchasing
negotiations. The course of arriving at a design solution

and then a completed building that
satisfies the client's requirements is often fraught with

difficulties. Achieving a result
that is also good architecture must to many clients and

architects alike seem almost
impossible when they first start out on the journey of

analysis and synthesis. This paper presents findings from
a research project carried out by the author in
connection with a thesis for a MSc degree through

Loughborough University of
Technology, Department of Civil Engineering, England,

which examined current
practice in the area of client management of the design

process for some recent award
winning and/or architecturally significant buildings in

the Perth region of Western
Australia.


E & FN Spon. ISBN 0 419 22240 5. Client management of the
design process 563 1.1 Types of clients and buildings
The following types of clients and buildings were studied:
Specialist corporate client hospital

Expert corporate client speculative office building
Novice corporate client crematorium and chapels
Expert individual client residence
Novice individual client large extension to residence
Community client aquaticlleisure centre
Community housing client community housing.
Five of the projects studied have won recognition by way of

awards for the quality of
their design from the architectural profession, the

construction industry or civic
bodies. Two of the projects (the Community projects) have

been included because of
their relatively unusual design process stage. It is

accepted that the awards gained
may not necessarily reflect client or user satisfaction

with the buildings, however
results of studies show that in all cases the clients have

expressed a high level of
satisfaction with the general design of their buildings. No

attempt was made to
measure user satisfaction.
2 Summary of Findings
Client management of the design process is influenced by a

number of factors namely;
• the type of client e.g. corporate, individual, community

etc
• the level of knowledge, expertise and confidence of the

client with regard to design
• the natural management style of the client
• the expertise of the various consultants, in particular

the architect
• the type of project e.g. speculative office building in

central business district or an extension of a residence.
However despite the numerous and sometimes disparate

factors and the complex nature
of the design process, the research carried out for this

study indicates that the clients
choice of management strategy, or approach, can be

classified as follows:
a) Hand over control to a consultant (normally an

architect).
b) Maintain overall cohtrol with regard to major design

decisions, e.g. relationship of
rooms, and major cost expenditure, with appointed

consultant controlling the design
process generally.
c) Maintain overall control with regard to major design

decision e.g. relationship of
rooms and major cost expenditure, with separate specialist

consultants 1) An architect/consultant for the feasibility
study and detailed analysis of clients requirements, and
compilation of the brief. 2) A different
architect/consultant to prepare detailed designs (from
brief developed by 1st consultant) through to completion
of the building
564 Miller 2a)A variation of this approach is when a third

architect/consultant is employed to carry out production
information requirements to job completion. It is normal
for this third consultant to work in association with the
briefing and design stage consultants.
d) Client manages all stages of the design process. This

is common with large
construction companies for example, where they have

architects etc. employed within
the company. The company may employ 'outside' consultants

for specific stages,
commonly a particular architect for sketch designs.
e) Client manages feasibility to outline proposal or scheme

design stage, using 'in
house' architects/consultants and then employs outside

architects/consultants for
remainder of the work, but using in-house consultants as

supervisors/liaison.
f) Client may manage all stages of the design process using

'in-house' expertise, and
employ outside consultants for specific tasks, e.g.

interior design. This approach is
common among Local Authorities that have no architect or

building management or
similar departments.
Techniques of 'Information Analysis' and 'Design Process

Management', and/or any of
the methods listed below (Techniques for client managing of

the design process) may of
course be used for client management of the design process.

Findings from the study of
current practice in the Perth region of W.A. however,

indicate that certain techniques
or methods of approach may be more appropriate in certain

circumstances. The limited study of current practice
reveals certain commonality of approach of
client management for small, less complicated projects. But

for large complex projects,
techniques used at certain stages of the design process

vary greatly. It is likely that the areas of commonality
approach, that of round the table discussion
between client and architect, with a reliance on sketches

for illustrating, planning etc.
for small, less complicated projects is a result of

tradition, 'the normal way of running a
project', which is traditionally taught to undergraduate

architects and which most
clients seem to understand. This is not say that this is

the best approach for small
projects, but the fact that the projects studied are

considered worthy of awards and that
the clients have unanimously recorded their general

satisfaction with the process,
suggests that it at least works. Further research is

necessary to ascertain the extent of
use of this approach and if alternative approaches are used

which yield as good, or
better results. With large projects of a complex nature,

techniques used vary considerably. This
may be attributed to a number of things, including type of

client (expert, novice etc);
the architects expertise and experience; the nature of the

problem etc. Again further
research is necessary to ascertain the different techniques

used over a range of
successful projects as well as research into the

suitability of, as yet, untried techniques. Findings from
this study indicate that certain techniques coupled with
suitable client
management techniques may be more appropriate under certain

circumstances and/or at
certain stages of the design process. Client management

of the design process 565 Although Gamble[ I] points out
that "It is important to recognise that all attitudes
and consequently decisions are subjective ... this area of

client designer decision making
which relies for its success on the experience of the

people involved may be amenable
to the application of computers". Computer based 'Expert
Systems' in the area of
client briefing and management of the design process are

still in their relatively early
stages of development, and are not yet viable alternative

to specialist advice from
appropriate consultants. However, research work throughout

the world is beginning to
show the potential of computers as a powerful tool in this

area.
2.1 Techniques for client management of the design process
The following is a selection of some of the techniques

available to clients and their
architects for analysing design requirements [2]:
Collective decision methods which include: Brainstorming

Buzz sessions Group discussions Role play Synectics
Comparison methods which include: Paired comparisons

Ranking and weighting Preference matrix Evaluation matrix
Trade-off games
Rating methods which include: Rating scale Guttman scale

User rating scale Building performance test Spatial
performance test
Visual preference methods which include: Visual preference

Spatial preference Attribute
Check lists which include: Code and zoning check list

Activities check list
Descriptive and Evaluation methods which include:

Behavioural mapping Social mapping (sociogram) Activity
Log
566 Miller Design method which include: Activity analysis

Pattern language Performance method Morphological method
Systems method.
2.2 Techniques Used in W.A.
The study has revealed, as was expected, that the

techniques used for managing the
design process varies depending on:
a) type and expertise of client
b) the architect
c) nature of the project.
2.2.1 Inception stage
In a few of the stages of the design process, which could

be considered as
fundamental, the techniques used were identical or very

similar. Perhaps the most
crucial of these stages is at inception where all of the

clients except the community
clients made the decision that it was necessary to build

rather than, for example,
modify the existing facilities, relocate to another

building or invest elsewhere, without
seeking advice from an architect or other consultant. This

is surprising when one
considers that this is the stage when a single decision

establishes perhaps the entire
budget for the project. Whereas further along in the

decision process, many hours
may be spent by both client and consultants on decisions

affecting only a small
percentage of the contract.
2.2.2 Selecting an architect
All of the clients selected their architect either because

they had previously worked
with them (and liked them) or because of the architects'

reputation. Only one of the
clients appointed their architect at the Feasibility

Stage. Some clients left the
appointment of the design architects until after Outline

Proposal Stage.
2.2.3 The brief
Only one client (Specialist Corporate) employed the

services of a specialist consultant,
an architect, to assist specifically with the preparation

of the brief. Detail design,
documentation and contract supervision being handled by

another architect. The other
clients used their architect to develop the brief and also

design the building. With all but one client, certain
aspects of the brief were changed or the brief
amended up to and in some cases beyond the Production

Drawing stage. Only the
'Expert Individual' client confirmed that the brief was not

changed after the 'Outline
Proposal' stage. The fluidity of the brief suggest that

briefing is part and parcel of the
design process requiring constant re-evaluation and

re-appraisal.
2.2.4 Drawings and models
The other key area of commonality was the method used by

architects to convey
design ideas to their clients. The principal and normally

sole technique used by nearly
all of the architects was two and three dimensional

drawings. Only one used mockClient management of the design
process 567
ups (for the 'Specialist Corporate client'). Techniques

such as photomontage,
computer simulations, or even models were not used by the

groups studied. This is
not to say however that these and other techniques are not
used by these architects on
other projects or by other architects in W A. Perhaps it

was because of the paucity of
techniques used by the architects, that nearly all of the

'clients' found it necessary to
visit similar buildings and/or use photographs of existing

buildings to gain an
understanding of how 'their' building might look. This was

particularly the case for
interior spaces and colour and texture of materials.
2.2.5 Basic building requirements
Only two of the clients (,Expert Corporate Individuals',

and 'Novice Individual')
chose to consult an architect regarding the basic

requirements for their building i.e.
number and type of rooms. However all of the clients used a

consultant (architect or
engineer) to help them appraise the suitability of their

site.
2.2.6 Tender action/procurement
All but one of the clients (the 'Expert Corporate') acted

upon their architect's advice
regarding tender action/procurement methods. The smaller

contracts were 'fixed fee +
costs' without bills of quantities. The larger contracts

were 'fluctuating price' with
approx. bills of quantities and re-measured. The clients

with a government involvement (Specialist Corporate and
Community)
advertised for an expression of interest from potential

tenderers and then drew up a
short list based on advice from their architects. The other

clients relied upon their
architect to advise them of suitable tenderers. Usually 3

or 4 contractors were asked
to tender.
2.2.7 Construction planning and site operations
Two of the clients 'Expert Corporate' and 'Community

Housing', had considerable
involvement at this stage, approving construction

techniques, phasing, location of
contractors' storage areas. All clients were interested in

the quality control of their
projects. The clients with government involvement and the

'Expert Corporate' client
(a contracting company) used in-house operations managers

to inspect/supervise the
works with their architect merely inspecting the works. The

other clients relied on
their architect to supervise and inspect the construction

and report regularly. Despite employing an architect,
some clients-'Specialist Corporate', 'Expert
,Corporate', 'Novice Individual', took it upon themselves

to instruct contractors
directly. This caused some problems ego contractors'

claims for extension of time,
and extra costs.
2.2.8 Costs
Once an overall budget for the project had been established

only one of the clients
(Expert Corporate) required constant (weekly) monitoring of

costs. The other clients
relied on the architect to advise them of major

variations. Even during the design
stage these clients relied on the architect to be prudent
in the choice of materials etc.
so as to ensure the cost of the final design would not

exceed the clients budgets. It 568 Miller seems that an
unstated understanding develops between client and
architect regarding aspects of cost as well as style,
image etc. In all cases payment of the contractor was by
the client, upon certification by the architect. 2.2.9
Completion stage All clients or their representatives were
present when the architect carried out the 'final
inspection' of the building, before and after the issue of
the certificate of practical completion. 2.2.10 Feedback
All clients received as-built record drawings. Two
clients'Specialist Corporate' and 'Novice Corporate'
carried out a formal Post Occupancy Evaluation of their
building. The 'Expert Corporate' client prepared an in
depth report/appraisal for in-house use on the project
overall, including design and method of procurement,
construction, structure, services and performance of
consultants and contractors. The other clients provided
feedback informally to the architect on the overall
performance of their buildings and the construction, ie.
when something went wrong, or at dinner parties
etc.
2.3 Time
The amount of time spent by clients on the various stages

varied depending on the
complexity of the project and the clients desire to be

involved. Figures 1 and 2,
illustrate the percentage of time spent by clients.
Inception(28.7%)
Feasibility(13.5%) Outline(7.6%)
Scheme Oes(7.7%) Detail Oes(8%} Prod Info{3.8%)

80IQ(0.4%)
Tender Acfn(2.1 %)
Proj Plan'g(1.3%) SiteOps(12.1%) 005 + , + , I ,

, t i I
CompleUon(4.6%) =Feedback(2.9%) AVERAGE % TIME SPENT ON

EACH STAGE 0.1 0.15 0.2 , I
Fig. 1 Average time spent by clients on each stage (all

clients). 0.25 0.3 Client management of the design
process NOVlCE INONIOlW.:.". TIME SPENT 00 EACH STAGE
0.00% 5.00% 10.00% 15.00% 20.00% 25.00"(" 30.00%
InelpliOn(27 .• %) -==::;==:;==;==;:===:-l
FUSltldily(27.... ~ Ol,lllinl(O,$%' ) Scheme 01 •.
(2..)"4) .~~.D~~~(.:~:~: ~. _____ ~_ 9.of 0.(0,.., I
Tlnde, Aern(O.I%) Proj. Pan'Q.(O.SY.) I c~:p~~:·~~~";~:
~~--i'--~--~--i--";Fledba.ck(o.""f.) )
NOVICECQnPO'V'oTE:'V. TIME SPCNT 00 EACH STi\GE 0.00%
10.00% 20.00"4 30.00"4 '0.00"1. 50.00% 60.00~.
~:::~li~I::~~:;~: : .•-----~-~--~--~ OulliOo(12.7.,...)
___ Schome 00.(6.3%):j Dotall 00'16.3"4) _ Prod Inlo(2.1
%oj i' I 801 a (0"4) Tende, "'c(n('.2%) _ , Proi
Plan'OlZ.! %) :I Sil. Ops(O%) j Com"~lion(O.l%J
F"db.ack(2.1%) ,. 0.00% 5.00% 10.00.... 15.00% 20.00%
25.00% Ine.,lIion(14.8-to) FUliOil i ly(7.'%) CUllin_,
11.1 '%oj Sd\emIOas(II.I"f.) 5 ~1-r--ella,1 Oes(l.1"4) __
Prod Inlo(O"f.) f 9010(0%) Tendlr Acfn(l.i'%) _ Pfoj
Plan·Q(l.7%) :_ Si'l Ops(22.2"Y.) :::::~:r::t--i-Com pi,
loon! 14.1"'4 F .. ~.cll!7.4"'.) 10.00 15.00 20.00 25.00
lO.OO l5.00 40.00 0.00% 5.00% % % % % % % %
Inclption{lS.5"!.} -::::;::;::-r-t-t-;--l
Fliisibilily(17.8%} :QuUin.,1.9%} :--..SeIl,me Ols.(·Ui"!.)
_ OltadOes.( •. S%} ,... Prod. In1o.{'.5%) _ B.ol
0.(2.2%) .. T,ndl' Acrn(2.2To.} )III Pfoi· Pbn·g(O.I"'4)
I SitIOps.(1.9"1.1 ___ Complllion(6.7"1.) ~
FlldbKk(7.4%) EXPERT 1N0M0\.JAl.: % TIME SPENT ON EIoCH
srAGE 10.00 12.00 1".00 16.00 0.00% 2.00"1. 4.00% 6.00%
'.00"1. % % Inclplion(14.9%1 :.' ...
--!'--'I'--i--i--i--:FIiIs>bilty(2.4%) ._ Oullinl{ •• 7%)
~~~§~~~=~=~=~-i Wlme OIS.(I •. 2%) . Ollall OIS.( 11.8"'4
, Plod. Inlo.(11.8%) B.ol O.{O%) I I I I I I Tender
Acfn(O.l"!.} .P,.j. P, .. · .. O." .. , .. Sill Op5.(2.1%)
.Compllllon(0.7%) r I F .. db~{O~'.J
Fig. 2 Bar charts showing the percentage time spent by

clients on each stage of the
project (expressed as a percentage of total time spent by

the client on the stages). 569
570 Miller
3 Conclusion
The study has shown that the fundamental decision, that of

deciding to build is often
made by the client without consulting an architect. Even
decisions about the basic
accommodation required in the new building is often made

without the architect's
help. Once these decisions are made by the client it seems

that their architects are
reluctant to question them or if they do have little

impact. Once the architect is
appointed however, with one exception, clients appear to be

prepared to leave the
management of the design process to their architect. The

one exception was the
'Expert Corporate' client, who presumably because of the

speculative nature of their
building project, involving many millions of dollars and

their high level of expertise,
preferred to have greater control and influence on the

management. Survey results show a high level of client
satisfaction with the stages of the design
process when their architect was involved but a

significantly lower level of
satisfaction with those stages where the architect wasn't

directly involved. (Fig 3).
Scheme 00.(92.9%)
Ootail Des(92.9%) Prod Inlo(92.9%) 6 of 0(100%)
Tender Ac1n(92.9%)
PIOj Plan'g(92.9%) Sile Ops(85.7%)
Complotion(65.7%)
Feodback(67.9%) 0.1 0.2 AVERAGE % SATISFACTION -All

CLIENTS 0.3 0.4 0.5 0.6 0.7 0.8 0.9
Fig. 3 Average level of satisfaction (all clients) with the

various stages of the design
process Client management of the design process 571
Apart from the 'Community Housing' client the techniques

used by the architects to
formulate a brief, develop designs and inform their clients

could be termed
'traditional' ie. round table discussions using 2D and 3D

sketches. The architect for
the Community Housing project, found it necessary to use

more novel techniques such
as group participatory games aimed at allowing the client

body 'to get in touch with
their emotions'; visual imagery to stimulate design

awareness; democratic means of
arriving at decisions etc. The nature of this particular

type of client; which included
the members of the different households, precluded the

'traditional approach'. The number of projects studied
(seven) was relatively small, the findings therefore
cannot be considered conclusive, and are merely an

indication of how the clients for
these particular schemes managed the process of design. The

results do suggest
however that clients are prepared to trust their

architect's judgement and management
of the design process generally.
3.1 Future Research
This study has shown that there are a number of aspects of

client management of the
design process which require further investigation with the

aim of improving the
process and ultimately the end result the buildings. The

main areas identified can be
categorised as follows:
Communication between client and designers particularly in

the area of design ideas at
the early stages of the process.
Selection and appointment techniques for the client in

connection with the design team.
Investment-feasibility decisions made at the beginning of

a project relating to whether
to build as well as where and what to build.
Building procurement methods, i.e. what kind of design,

tendering, management and
construction strategy should be adopted.
The decision making process generally.
1. Gamble, 1.(1986) Briefing Methods a review of current

research (Report No.
. 1.86), Building Research Centre, School of Building, The

University of New South Wales, p 5.
2. A detailed description of these techniques can be found

in Sanoff, H.(1977) 'Methods of Architectural
Programming', Bowden, Hutchinson-Ross Inc.
THE CONSTRUCTION PROJECT AS A
PROCESS OF INNOVATION
M.F. Dulaimi and A.T. Baxendale
Faculty of the Built Environment, University of the West of
England, Bristol, UK
D.A. Langford
Department of Civil Engineering, Strathclyde University,
Glasgow, UK
Abstract
Innovation is the new buzzword in the construction
industry. The importance of
innovation is unquestionable. There are calls for the

industry to be more
innovative by adopting models, technologies and

philosophies used by other
sectors. . This paper will argue that current trends and

future developments of
organisations and current management concepts used to

explain organisational
behaviour are similar to accepted models of the

construction project. Therefore,
perceived disadvantages of the construction project's set

up maybe seen as key
ingredients to a more innovative industry. The paper will

compare modem theories and concepts of management to those
of construction to examine the hypothesis that the

construction process is a process
of innovation. The main advantage will be the exploitation

of the potentials in the
multi-system organisation of the construction project to

create an environment
conducive to innovation and creativity.
Keywords: Innovation, Creativity, Construction

l\Ifanagement, Organisational
Behaviour.
Sommaire
Innovation est Ie nouveau mot de passe dans l'industrie du

bitiment et des
travaux publics. Son importance est indlmiable. Le secteur

est appele de
toutes parts a etre plus innovant en adoptant des modeles,

des technologies et
des politiques appliquees dans d'autres secteurs. Le
present papier soutient que les tendances actuelles, les
futurs
developpements des organisations et les concepts de

gestion utilises pour
expliquer les comportements organisationnels sont

similaires aux schemas
acceptes dans les travaux de construction. C'est pourquoi

il est possible de
voir dans les faiblesses de l'organisation des projets du

bitiment les
ingredients des vers une industrie plus innovante. n

compare ensuite les theories et concepts de gestion modemes
it ceux
en vigueur dans Ie bitiment afin d'examiner l'hypothese

selon laquelle Ie
processus de construction est un processus innovant

L'avantage majeur est
l'exploitation des potentiels de l'organisation

multi-systeme des projets de
construction pour creer un environnement propice it

l'innovation et la
creativite.


E & FN Spon. ISBN 0419222405. Construction innovation 573
1 Introduction
An increase in attention to innovation and R&D is evident

in all sectors of British
industry. The United Kingdom has registered an annual

growth in R&D spending
of 2.5 per cent, $21.6 billion in 1993, while the rest of

its industrial partners
registered a decline [1]. A strong and effective R&D base

is essential for a
successful innovation. The question for any organisation

striving to increase its
ability to innovate is how to create the environment and

establish the processes by
which new ideas are encouraged and flourish. It is argued

that new ideas are
being created daily in organisations. Whether those ideas

are turned into a
successful innovation i.e product, process or new technique

is another issue. This
issue requires to be addressed, as it is suggested that in

the UK between 65% and
80% of all new products introduced fail [2]. It is reasoned

that the decline in
British industry's ability to innovate does not stem from

any lack of performance in
the advanced areas of academic or fundamental research. It

is in the determined
and innovative application of science and technology that

British industry is
lagging today [3]. In many industries the development of

new higher quality products and services
has become vital to companies survival in today's market

environment. Market
pressures have turned companies attention also to not only

reducing the cost of
existing inadequate processes but also developing new

processes [4]. This has lead
then to the rethinking of the organisational set up

essential to increase innovation. The study will present
an analysis of the organisational set up in construction
and compare that with the current thinking and developments
in the understanding
of the necessary ingredients and contributors to the

establishment of a creative and
innovative organisation and culture.
2 1lte Comtmction set-up
The construction industry is one of the largest industries

in this country in terms of
the number of people it employs and its contribution to the

growth and
development of the whole economy. The nature of

construction work has been
described by Bresnen et al [5] "the product is immobile

and produced at the point
of consumption; work is prone to seasonal fluctuations;

demand can be em:dic; and
the production process continues to rely heavily upon the

use of traditional skills
.and crqfts'~ The construction project can be viewed as a

temporary system, set up. for a
specific purpose, with well-defmed tasks and time scale.

This definition points to
the main difference between construction organisations and

other settings where
there is a constant steady long term organisation. Those

organisations will then
develop an environment which can foster consistent patterns

of relationships within
the group. This is seen to provide other industries with an

advantage as they will
be dealing with organisations where groups have the time to

set-up and develop
standard norms and united interests and goals which the
management will regularly
and progressively bring together with the firms interest.

On the other hand the
construction project consists of different groups which

possess different goals
574 Dulaimi, Baxendale and Langford
which could be achieved by completing the project on time

at the right Cost and
quality [6]. The construction team, which includes

architects, engineers, tradesmen,
subcontractors, material and component suppliers, changes

from one job to
another. Every project then is seen to be unique and no

jobs are ever quite alike. The use of subcontractors by
contracting finns, faced with the fluctuating
environment of the construction industry and the high cost

of direct recruitment,
has added another variable to a more complex organisation.

The challenge to
management is to negotiate, compromise and accommodate the

different people
with different individual needs and style, possessing

different identities belonging
to different groups with different aims and objectives.

Management should aim to
achieve and build an alliance to meet the main objective

(the project).
3 The future shape of organisatiom
New challenges and opportunities are being created by new

developing .
technologies, globalization of markets, increase in

competition, emergence of new
markets and competitors. The emergence of a new breed of
customer which is
more sophisticated and informed has increased demand on

industries to deliver
better value, higher quality and innovative products and

services. Existing models
and concepts of management and organisations are not

capable of responding to
these challenges and opportunities. The new paradigm has

shifted to a new era where responding effectively to the
market and new demands are no longer enough to put the

organisation in a position
where it can lead and/or compete. "The old paradigm rules

of competition that
dictated success are being replaced by new rules that have

moved from total
quality, to learning to stay ahead of change, to

world-class continuous improvement
and innovation" [7]. Interestingly, one important

characteristic of the world class
organisation is that the customer is seen to be central to

its strategy and activities
where customer needs and expectations will be met or

exceeded.
3.1 The virtual organisation
The organisational set up essential to provide the

flexibility and the ability to
innovate and develop new ideas does not relate to the old
model of organisations.
The old model of organisation which is based on

hierarchical and departmental
integrated structure is giving way to the "virtual

organisation". The virtual
organisation, a term borrowed from computer programming,
is an alliance of
organisations comitig together and pooling skills,

expertise and knowledge to
respond to specific demand, opportunity, innovation or

challenge. "Virtual
companies can harness the power of market forces to

develop, manufacture,
market, distribute, and support their offerings in ways

that fully integrated
companies cannot duplicate" [8]. This is a mirror of the

organisational set-up
found in the procurement of construction projects. In

their analysis Chesbrough and Teece [8] have identified
several problems and
benefits of the virtual organisation which are comparable

to that experienced in
construction projects. The benefits of taping into the

resources, intellects, skills
and knowledge of outside parties, referred to as

outsourcing, are counterbalanced Construction innovation
575
with the need to maintain adequate coordination and

organisation between the
different tasks of the project. They also found the need

to maintain good and
friendly relationships between the different parties is

sometimes problematic.
3.2 The role of individuals
There is a new view of careers which is characterised with

inter-firm mobility
referred to as the boundaryless career. DefIllippi &

Arthur [9] argue that career
paths may involve sequences of job opporttmities that go

beyond the boundaries of
single employment setting. Professional careers are seen as

a platform for new
learning, and "in turn for continuing boundaryless career

activities. The
construction industry is a good example where such

opporttmities exist. Further
evidence is emerging in construction of the erosion of

professional barriers where
for example quantity surveyors are adapting to the new

trend toward project
management and management consultancies. Therefore, the

construction team model seems to be replicated by other
sectors
of the economy, where employees are fmding that they need

to adapt a new
approach to employment which is increasingly dominated by

short term contracts.
The disadvantage of lack of common objective, identity or

shared vision is being
replaced by the ability of employees to achieve

"psychological success". Mirvis
and Hall [10] equate psychological success with people's

abilities to make sense of
their constantly changing work agenda and to integrate

their work experiences into
a coherent self-picture. "This loosening of employees

identification is associated
with the emergence of organisational contexts, such as the

starburst and outsource
forms, which expect significant portions of their workforce

to embrace more
entrepreneurial and/or occupational values and work

identities" [9].
3.3 The role of management
The role of management in this new organisational set up is

becoming ever more
important in two respects. First, in this virtual

organisation strong leadership is
essential to provide the axis, direction and focus to the

innovation process.
Second, management needs to fulfIl its coordination role to

achieve a closely nit
alliance of the different parties to achieve the

objective. The advantage of the
virtual organisation is in achieving objectives beyond the

abilities of the individual
parties. However, it is also a disadvantage in losing the

control an integrated
organisation may enjoy. "As incentives become greater and

risk taking increases,
coordination among parties through the marketplace becomes

more and more
difficult, precisely because so much personal reward is at

stake" [8]. This is the
same problem from which the construction industry has

suffered. The unforseen
risks or problems that might face any of the parties to the

will create challenges and opporttmities that may work as

an advantage to some,
but it may well be a disadvantage to others. One way or the

other the alliance
may turn to be an unfriendly one and therefore the

alignment or coordination will
be lost. This leads to dispute and inevitably to the

stalling of the cooperation and
development process. It is essential for management in
construction to recognise the innovative nature
of the procurement process and the potentials of the

organisational set up in
providing the environment conducive for developing more

creative and innovative
576 Dulaimi, Baxendale and Langford
solutions. The adoption of management techniques and

approaches as well as the
establishment of R&D base is required for the innovative

solution to be
appreciated. This will also ensure these new ideas are

turned into successful
processes, designs and products. An attempt by management

to reduce
uncertainties and risks by adopting "standard" solutions

to maximise production
and individual work output will only stifle innovations. It

would also discount the
possibility of developing new methods and products that

may reduce the cost of
production as well as provide higher quality products and

services. The standard
approach relies heavily on experience to create an

inefficient solution for similar
problems rather than identical problems.
Instead we need to reconstruct our experience to create a

new solution to a new
problem. Therefore, its the use of standard elements, after

modification or
adaptation of parameters or applications, that creates

innovative products and
services to satisfY the needs and expectations of the
market in providing improved
value and quality.
4 Discussion
The evidence suggests that the construction industry is at

an advantage. This
advantage stems from the construction project's inherited

organisational set up.
Together with the professional roles developed around this

set-up seems to reflect
the needs and characteristics of the future leading

organisations. World class
organisations are seen to be the ones that lead by

creating change by innovation
and development that will create new markets and customers.

The main
disadvantage for construction may well be that the

multi-system organisation has
evolved in a completely different environment, socially and

economically. This
system which has been also developed over the last 30 years
for completely
different reasons, has lead to the development of a very

strong culture. This
adversarial and non-cooperative culture is encouraged by

the professions and will
require a new approach and attitude by management. In

order for the advantages
to be reinforced and disadvantages to be minimised within

the context of the new
evolving management thinking change will be required.
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of the constraints on contractors' performance and
development programmes required in Nigeria. Habitat
International, Vol. 19, No.4, pp. 599-613.
28. Aniekwu, A.N. and Okpala, D.C. (1987).
29. Aniekwu, A.N and Okpala, D.C. (1988).
30. Edmonds, G.A. and Miles, D.W. (1984).
31. Olugbekan,o. 0. (1991).
32. Aniekwu, A.N. (1995).
33. Tait, E. (1990) Owner-managers' perceived management

education needs: An integrative framework. International
Small Business Journal, Vol. 8, No.4, pp. 33-48.
34. Mahmood, A (1992) Educational interests and needs of

owner-managers of small building firms. Unpublished Ph.D.
Heriot-Watt University, Edinburgh.
34. Schatz, S.P. (1977).
36. Adams, O.A. (1993).
37. FRN (1980).

THE POTENTIAL FOR EMPLOYEE INVOLVEMENT IN
CONSTRUCTION
10. Brannen, P., (1983); Authority and Participation in

Industry; Batsford, London
TASKS PERFORMED BY THE SITE MANAGER - A
REVIEW OF THE LITERATURE
23. Peters, T. (1987) Thriving on Chaos. Harper and Row.

New York.
24. Crosby, P. (1984) Quality without Tears. McGraw Hill.

London.
25. Langford, V. (1988) Stress Satisfaction and Managers

in the Construction Industry. Occupational Psychologist.
26. Sutherland, V. and Davidson, M.J. (1993). Using a

stress audit: The construction site manager experience in
the UK. Work and Stress, Vol. 3, Nr. 3. pp. 273-286.
PEOPLE AND PROJECTS - BUILDING SUCCESSFUL
COMBINATIONS
1. Porter, Elias H. (1976) "On the Development of

Relationship Awareness Theory: A Personal Note," Group
and Organization Studies, September, VI, N3, pp. 302-309.
2. Tolman, E.C. (1967) Purposive Behavior in Animals and

Men, (New York: Irvington Books).
3. FrolllIll, E. (1947) Manfor Himself, (New York: Holt,

Rinehart, and Winston).
4. Phillips, Steven R. (1994) Creating Effective

Relationships: A Basic Guide to Relationship Awareness
Theory, Pacific Palisades, CA: Personal Strengths
Publishing.
THE INFLUENCE OF PROJECT SIZE ON SITE
MANAGERS' EFFECTIVENESS
comparison of multiple models. Academic Press, San Diego.

19. Bass, B.M. (1990) Bass & Stogdill handbook of
leadership: Theory, research, and
managerial applications. Free Press, New York.
20. Badin, I.J. (1974) Some moderator influences on

relationships between consideration, initiation of
structure, and organisational criteria. Journal of Applied
Psychology, Vol 59, pp. 380-82. 692 Djebarni 21. Farris,

G.F. & Butterfield, DA (1972) Control theory in Brazilian
organisations. Administrative Science Quarterly. Vol 17,
pp. 574-85. 22. Sinha, lB.P. (1990) A model of effective
leadership styles in India. In Management in developing
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Routledge, London. 23. Maeda, RD. (1967) An Experimental
study ofleadership in India. Journal of Social
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D. (1980) Organisation, class and control Routledege &
Kegan, London.
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Graw Hill, New York. 26. Pugh, D.S. & Hickson, D.l (1976)
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structure as constraints on
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International projects
1. Dieter Ackernecht and Hugh But'gess, ProFessional

Education For Environmental Designers In Saudi arabia, CED
REVI EW, 1986.
2. Adel Shaheen A ldosary, Towards The Reduction Of

Foreign Workers In Saudi Arabia, U.M.I Inc., Ann Arbor,
1991.
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Development Plan, 1990.
4. Ministry of Finance and National Economy, Kingdom of

Saudi Arabia, Statistical Indicator, 1994.
to bring the work back on a schedule. These actions

constitute the monitor and
rescheduling phases of the job management system.
FeatUl'es of Time Control:
The main objective of project time control is to keep the

work activities on schedule,
and this can be accomplished by the following actions:
aReport and record job progress.
bCompare work actually accomplished with that planned.
cTake appropriate action to correct schedule slippage.
d. Update schedule of work yet to be done.
In order to maintain a job schedule, it must be possible to

detect quickly any
divergence through some system of feedback from the

project. The first step of time
control that of monitoring, requires that a system of

progress reporting be established
that makes prompt identification possible of schedule

deviations. This requires that
actual progress to compared with that planned. Project

monitoring, therefore,
involves progress reporting from the job and recording this
infOlmation in a fOlmat
convenient to its comparison with the progress planned.

Critical path method ( CPM)
activities constitute a good basis for progress reporting

and recording (6).
Criteria For Goo(IProject Control:
An effective control system, in addition to celtain general

characteristic, should
provide a means of accomplishing celtain objectives for

both work force and
management. The general characteristic of an effective

control system are flexibility,
coordination and difficulty of prediction ( 7).
The first and probably most impOltant characteristic of a

good control system is
flexibility. Flexibility is required by the very nature of

technical functions. It is also
required because the normal state of affairs in technical

organization is one of
change. In fact, it is a rare construction project that is

carried out from beginning to
end exactly as originally conceived and planned. Therefore,

the project manager
should recognize this constancy of change and provide the

necessary flexibility in the
control system to accommodate it.
A second general characteristic of a good control system is

that it should provide the
information and mechanism for the coordination of effort

within the organization.
Most engineering projects require support that crosses

organizational lines. In order
for all the organizational elements to plan for and

provide this support adequately,
they must be kept aware of what support is required, the

approximate magnitude of
this support, and when it will be required. 726 Enshassi

A third general characteristic that the control system
should recognize is the difficulty of predicting results
and the effort required for a project. In a wellmanaged
production operation of any type, an order for a certain
quantity, quality, and type of product can be placed and
the delivery time and cost can be accmately predicted,
plus or minus a few percent. This is, however, not the case
in construction projects. A realistic planing should be
thoroughly conducted, but the project manager must
recognize the limitations and probability of its accmacy
in the design of a control system. Construction Project
Monitoring and Progress Reporting: The project should be
monitored by resomces ( labor, material, equipment)
schedule and budgeting plans, and progress reports. The
level of monitoring, the information in, and the interval
between progress reports will be determined by the
contractual requirements and by the engineer's management
requirement (8). Good judgment would indicate that every
project should be monitored at a minimum on a general task
or area basis, with progress measmed by comparing actual
progress against planned progress. Total expenditmes
should also be tr·acked. The frequency of progress reports
will probably be established by the contract but should
usually be at least monthly. Depending upon contractual
requirements or special management requests and the degree
of computer usage available, this basic system can be
expanded to track progress of specific items, individual
drawings, monitor specific expenditmes such as manpower by
pay grade or employee name, or sort information to produce
reports in two or more accounting system. In addition the
system could make forecasts based on historic performance
to predict futme manpower requirements and expenditmes and
could identify potential bottlenecks and futme problem
areas. The progress reports may also contain narrative
descriptions of work progress, including discussions of
problems encountered or anticipated and measmes being taken
(9). The monitoring procedmes for conceptual and
preliminary engineering projects should be designed to
provide project control information at frequent intervals
and to control projects with small numbers of tasks in the
most cost-efficient manner possible. The project schedule
will usually be a bar -chart task schedule. Critical path
method ( in network analysis) may be established if
required by the client or the project manager or if the
project work contains critical task interrelationships. A
project monitor report showing progress and status should
be prepared. This report will contain the status of each
task including its estimated percentage of completion,
amount of budget used, scheduled percent complete, and
original budget. The information should be summarized in
appropriate groupings, and an overall project summary
should be prepared showing any variance from the original
project plan and Project control in Gaza Strip 727
budget. The cunent schedule will be included as required,

with a shOli nanative
concerning critical items. The project monitor report will

be reviewed and approved
by the project manager prior to submittal to the client

(10).
The purpose of planning, scheduling, and monitoring

procedure is to provide the
client, the engineers management, and the project manager

with an evaluation of the
cunent and projected status of the total engineering

effOli. This is accomplished
through the development of an engineering work plan and

schedule, and by the
maintenance of this schedule with cunent progress and cost

information which
provides the statistical data necessary for project control.
The planning engineers, using the information contained in

drawing and
specifications, and in consultation with the project

manager, may prepare a
computerized critical path method network for the

engineering effort. This schedule
will include all project milestone, associated studies,

drawing and specification
activities, procurement and construction schedule
interfaces, and all interdisciplinary
constraints between activities. Each activity in the

schedule should be identified with
the responsible engineering discipline and may contain the

associated manpower and
budget information. This schedule will then be reviewed and

approved by the project
manager and will serve as the basis for project monitoring.
An engineering progress chart based on the schedule and

budget should be prepared
for the project. This progress chaIi could be organized by

engineering discipline
within work areas and could reflect actual percentage of

completion, scheduled
percentage of completion and scheduled and actual manpower

for each reporting
area, discipline, and the total project could be included.
At the end of each monitoring period, the planning engineer

should collect all cost,
labor, and progress information for the project. Estimated

percentages of completion
for the preparation of each activity will be used to

update the engineering progress
chaIi. This information, together with the remaining cost

and progress data, will
provide the basis for updating critical path method

network. The progress monitor
report should be reviewed for completeness and accuracy.
During the initial portion of the final engineering design

stage, the equipment and
materials lists should be developed. The material engineer

should coordinate the
preparation of these lists and would assign the equipment

and material numbers. The
finalized list should then be submitted to the planning

engineer for the development
of the schedule.
Utilizing the equipment and material lists, the planning

engineers, purchasing agent,
expediter, and the project manager should determine the

procurement events and
assist in preparing the schedule. Critical items

identified as requiring long lead time,
as being necessary for critical construction stages will be

shown. After these critical
procurement cycle activities can then determined. These

activities will serve as the
basis for the complete procurement schedule (11). 728

Enshassi Designing an Effective Monitoring System: It is
general know that the first step in setting up any
monitoring system is to identify the key factors to
controlled. The project manager wants to monitor, cost, and
time, but he has to define precisely which specific
characteristics of performance, cost, and time should be
controlled and then establish exact boundaries within which
control should be maintained. There may also be other
factors of importance worth noting, at least at milestone
or review points in the life of the project, e.g. the
number of labor hours used and the number of extent of
engineering changes (I 2). The best source of items to be
monitored is the set of actions plans of a construction
project which describe what is being done, when, and the
planned level of resource usage for each task, work
package, and work unit in the project. The monitoring
system is a direct connection between planning and control.
If it does not collect and report information on some
significant element of the plan, control can be faulty or
missing. The action plan furnishes the key items that must
be measured and reported to the control system, but it is
not sufficient. For example, the project manager might
want to know about changes in the clients attitudes toward
the project. Information on the morale of project team
might be useful in preparing for organizational or
personnel changes on the project. These two items may be
quite important, but are not reflected in the project's
action plans (13). Unfortunately, it is common to focus
monitoring activities on data that are easily gathered,
rather than important, or to concentrate on objective
measures that are easily defended at the expense of
softer, more subjective data that may be more valuable for
control. Monitoring should also concentrate on measuring
various facets of output rather than intensity of
activity. It is crucial to remember that effective project
managers are not primarily interested in how hard their
project teams work, they are interested in achieving
results. Performance criteria, standards, and data
collection procedures must be established for each of the
factors to be measured. The criteria and data collection
procedures are usually set up for the life of the
project. However, the standards themselves may not be
constant over the projects life. they may changed as a
result of altered capabilities within the organization or
a technological breakthrough made by the project team. In
some cases, standards and the criteria change because of
factors that are not under the control of project
manager. The monitoring process is based on the criteria
and standards because they constrain the set of relevant
measures (14). The information to be collected must be
identified. This may consist of accounting data, operating
data, engineering test data, specification changes, and the
like. The fundamental problem is to determine precisely
which of all the available data should be collected. The
typical determinant for collecting data too oftens seems to
be simply the ease with which they can be gathered. Of
course the nature of the required data is dictated by the
project plan, the goals of the organization, the needs of
the Project control in Gaza Strip 729
client, and by the fact that it is desirable to improve the

process of managing projects
(15).
After the data collection has been completed, reports on

project progress should be
generated. These include project status reports, time /cost

repOlts, variance reports,
and others. Causes and effects should be identified and

trends noted. Plans, charts,
and tables should be updated on a timely basis. In creating
the monitoring system,
some care should be devoted to the issues of honesty and

bias. The former is dealt
with by setting in place an internal audit. The audit

serves the purpose of ensuring
that the information gathered is honest. No audit, however

can prevent bias (16).
The nature of the monitoring reports should be consistent

with the logic of the
planning, and scheduling systems. The primalY purpose is,

of course, to ensure
achievement of the project plan through contl·ol. There

are many benefits of detailed
reports delivered to the proper people on a timely basis,

aInong them are (17) :
Mutual understanding of the goals of the project.
AWal'eness of projects progress and of problems associated

with coordination
among a activities.
Eal'ly warning signals of potential problems and delays in

the project.
Faster management action in response to unacceptable or

inappropriate work.
Higher visibility to top management.
Keeping the client and donors up to date on project status.
Methodology:
The saInple consisted of 35 construction companies that are

implementing
infrastlucture projects in two main sectors, water and

sewerage, and Roads in the
Gaza Strip. The author has visited the projects and

obtained the information from
35 general managers of the construction firms and 70

project managers of all
sites. Table 1 illustrates the type and locations of

project. The estimated cost for
water and sewerage sector is US $27 Million and for road

sector is 33 US $ Million
(Table 2).
The infrastructure projects al'e funded by the world Bank

and co-financers and they
are managed by the Palestinian Economic Council for

Development and
Reconstructi on
( PECDAR) in coordination with municipalities and local

Village councils in the
Gaza Strip. The relationship between all paIties involved

in the infrastructure
projects are described in organizational chart I and 2.

730 Enshassi Table 1 : Locations Types of Projects.
Geographical Sector Number in the Percentage of Location
sample the sample Water & Sewerage 8 12 North Area
Roads 11 16 Water & Sewerage 10 14 Gaza City 1 Roads
9 27 Water & S. 4 5 Middle Area Roads 3 4 Water &
Sewerage 7 10 South Area Roads 8 12 Total 70 % 100
Table 2 : Estimated Cost ($M) For Each Projects Sector.
Sector Estimated Client Donors Implementing Cost ($M) A2
enc y PECDAR -IDA Municipalities Water & Sewage 27 SF
33 PECDAR -IDA Municipalities Roads SF
(Source: World Bank 1994) Project control in Gaza Strip

731 Occupied Territories Emergency Assistance Program &
Emergency Rehabilitation Project Organization Chart I
Overall Program Organization r--4------...... PECDAR
Gtoop 732 Enshassi
( Sou~ce: World Bank 1994 ) Occupied Territories

Emergency Assistance Program & Emergency Rehabilitation
Project Organization Chart II PEC;:DAR: General
Organization Project control in Gaza Strip 733
Results:
In Gaza Strip, there are a number of problems conceming the

implementation of
infrastructure projects. The problems are perceived through

inappropriate capital
projects which have been carried out and through slow

constmction and increased
costs. More efficient and rapid construction is only

possible if it is performed in an
organized way with full coordination and effective

communication of all parties
involved in the process of preparation, construction,

financing and delivery to users.
This study shows that the report system for top management
about construction
progress and costs are week and need to be improved.
It has been found that the majority of infrastructure

projects contractors in Gaza Strip
have no effective monitoring repOlts that should be

obtained by the regular monthly
updating of designers plans. All contractors ( 100 % of

observed firms) prepare
daily and weekly reports as required by the client.

However, they are not analyzing
the collected information and using it to improve the

construction process and take
the proper action if there is any deviation in certain

tasks. This is because of the lack
of experience and constructive training in controlling and

monitoring projects. In
addition, the unstable political environment in Gaza Strip

poses extra problems to the
contractors as they could not import building materials

easily from abroad.
This study shows that a large numbers of infrastmcture

projects ( 92% of the
sample) were found behind the schedule. The main reason

was, the lack of
controlling and monitoring the projects, other reasons were

found to be :
inappropriate planning, extreme difficulties in obtaining

construction materials, lack
of skilled professional engineers in project management and

disputes with the client.
Monitoring and controlling of projects is an essential

part of project management that
is, unfortunately, the least considered in observed

infrastmcture projects in Gaza
Strip. Special problem in these phase is concemed with

collecting of the information
on the construction site and its transfer to computer where

time and cost plans are
derived. Most companies do not have an appropriate,

permanent system for
collecting infOlmation and it is transfer to computer.

Such films still don't wish to
engage a specialized local consultant office to perform the

project management
completely, and keep them informed about the progress of

the projects in respect to
performance, time and costs. This might be traced to the

nature and culture of
general mangers, who are normally the owner of the firms,

in Gaza Strip as they feel
that they can practice the overall management themselves.
The study indicates that the client of all infrastructure

projects ( PECDAR) in Gaza
strip in cooperation with intemational donor ( The W orId

Bank) have engaged an
intemational management consulting firm to monitor and

control the projects
completely, and to keep both PECDAR and the World Bank

informed permanently
about the progress of the works in respect to the time and

costs. This intemational
consulting finn should also transfer the know-how to the

PECDAR Palestinian
engineers who supervise the infrastructure projects jointly

with Gaza Strip 734 Enshassi municipalities engineers
who belongs to the local govemment authority. It has been
observed that the intemational consulting firm does not
transfer the know-how to Palestinian engineers. This will
not enable them to cany out a modem an effective
monitoring and controlling system in the future. Therefore,
it is strongly recommended that an immediate action
should be taken to overcome this problem. It has been
found also that there is a weak communication channels and
coordination system between all patties involved in the
project. Future studies in this issue is recommended.
Conclusion and Recommendations: Project management
technique is a versatile tool for planning, monitoring, and
CO!1trolling projects which are complex in nature and
involve large number of activities. These activities are
to be integrated for the achievement of the final goal of
project. These are often requiring more time to complete
with more investment of money. The planning ( budgeting
and scheduling) methods require a significantly greater
investment of time and energy early in the life of the
project, but they significantly reduce the extent and cost
of poor performance and time /cost overruns. Note that
this is no guarantee of a trouble -free project, merely an
improvement in the risk of failure. The purpose of the
monitoring system is to gather and report data. The purpose
of the control system is to act on the data. Monitoring
can serve to maintain high moral on the project team as
well as to alert team members to problems that will have
to be solved. The key issue is to create an information
system that gives project managers the information they
need to make informed, timely decisions that will keep
project performance as close as possible to the project
plan. The project manager has to have a smoothly operating
monitoring /control system to manage the project
effectively. In project control, managers should
concentrate on the achievement on the distributed
objectives by balancing time, resources and costs. Tools
of the project control are planning, monitoring and
information system. There is an urgent need for an
effective controVmonitor system to be used in construction
and rehabilitation projects in Gaza Strip. This system
should accomplish the objectives of organizational
management and the intemational donors. Among the benefits
of an effective control/monitor system are: The
control/monitor system should assure management that a
project is as well planned in advance as possible. This
will eliminate as much wasted effort and as many false
statts as possible. The control/monitor system should help
management to determine whether personnel of the
organization are working on projects that are within the
interests and mission of organization. Project control
in Gaza Strip 735 The control Imonitor system should
provide the information to allow management to detelmine
that the costs of a project are kept reasonable in light of
the importance of the project, and progress being made.
The control system should provide the infOlmation that will
allow the project manager to determine the current and
committed work load of organization, this information
will allow the determination of when new projects can be
undertaken.
The designed control monitor system for the management of

construction projects in
Gaza sbip must somehow provide for project initiation,

selection, evaluation
determination of resources allocation, and periodic

review. If the system is effective,
it should result in a smooth flow of well-chosen projects

whose status are updated
and reviewed periodically. The system should help to insure

that projects that
promise the best expected payoff to the construction

organization are identified and
selected for support.
It is recommended that data on the actual progress of

construction projects should be
regularly collected and analyzed to verify whether the

effort is progressing in
conformance with plans. With that data, the project manager

will attempt to detect
any deviations or variance that occur and develop a way to

compensate for or correct
such activity so as to meet the project completion date.

The project manager should
develop procedures for coordination and integrating the

activities of the project
participants, and he should establish effective

communication channels.
The major problem facing project management in Gaza Sbip

is that of obtaining and
retaining an organizations most critical source, that is

skilled and creative personnel.
The determination of technical program, organizational

structure, and procurement of
financial support and facilities are all meaningless if

there is no skilled and motivated
engineers. Only people can produce innovative results. If

the project manager have
good staff in the right jobs and they are properly

motivated, the construction
activities will take care of itself with just a little

guidance. If construction
organizations in Gaza strip are to be continuing success,

they must have well design
and well conducted oriented training courses in specific

fields, e.g. planning,
monitoring, and controlling. This is extremely important,

because an inadequate
qualified engineer will adversely impact an organizations
chance for success. It is
highly recommended that international management consulting

firms should transfer
the know -how to the Palestinian engineers in order to an

conduct effective valuable
1.0 Introduction
Massive changes are taking place in the Chinese

construction industry. The old system of state
control over prices for materials and finished construction

work is now beginning to be replaced
by a move toward competitive tendering, and the indications

are that this trend is likely to
continue as the Chinese economy continues to expand. China,

however, will continue to offer a
construction environment like none other in the world, in

that although some degree of market
forces are being allowed to operate, the industry as a

whole must still operate within the
constraints of a centrally planned economy. This will in

turn mean that Chinese construction
companies and their clients will need to become much more

interested in contractual issues,
competitive tendering strategies, profit and cost control.

Aside from journal articles covering
specific areas of China (e.g. Shanghai), comprehensive

published reviews of the Chinese
construction industry are few. Walker and Flanagan (1987)

examine the industry from the
perspective of construction joint ventures, and this is

complemented by Wilkins (1994). Walker
(1991) describes the organization of the Chinese

construction industry. However, the changes
which are presently taking place mean that whilst these
previous studies still have much to offer
from the point of view of background information, they are

now somewhat outdated in detail.
It is also known that Chinese construction companies are

seeking to expand their activities
internationally. At present, this is mainly done through

state controlled enterprises such as the
China State Construction Engineering Corporation, but as

the industry expands and firms
become more used to working in a competitive environment,

it is likely that more Chinese
organizations may begin to look to compete for work outside

China. Low wage costs within
China could seem to imply that the volume of work

undertaken outside China may mushroom in
the medium term.
All of these factors are presently giving rise to an

increase in demand, within the local Chinese
construction industry, for professionals skilled in the

provision of fmancial advice, procurement
advice, measurement and valuation of construction work,

construction tendering and bidding,
and construction contract law and administration. These

roles are those which, in other parts of
the world, have conventionally been taken by the

professional quantity surveyor. Whilst
quantity surveying is not well known in China by that name,

a number of quantity surveying
functions are regularly carried out within the domestic

Chinese construction industry, including
the measurement and estimating of construction work. The

unique structure of the Chinese
industry, however, means that these functions are rather
different from those practiced elsewhere.
The development of quantity surveying / cost engineering

disciplines which are specifically
tailored to the unique Chinese environment is essential to

the industry's successful development. 760 Ng Wing Fai
There seems to be considerable interest in the development
of the quantity surveying profession within China with a
view to producing graduates who will be recognized and
accepted for membership by the Surveying Institutions in
the rest of the world. There are, however, significant
problems to be overcome. The Chinese economy will still
continue to be centrally planned and the Chinese legal
system is unlike that established either in the western
world or in Hong Kong. In addition, the Chinese
educational system is different to that in the West, and
linguistic and cultural differences mean that the
translation of Western concepts and ideas may be
imprecise and improperly understood. It is also likely that
the Chinese construction environment will continue to be
very different from that pertaining in the West, perhaps
even unique, and Hong Kong quantity surveyor wishing to
practice there have already found that they need to change
their methods and ideas to cope with the local situation.
Quantity Surveyoring courses designed to produce
professionals aiming to operate in this market will need to
pay special regard to the problems of providing a
"professional" standard of education within this very
different srJcial and cultural context, and it is for this
reason that it is believed that traditional "western"
style courses, even those developed in Hong Kong, may not
easily be transported directly to the Chinese situation.
The special nature of the Chinese environment means that
special courses are required. Quantity Surveying as a
profession has been established in Hong Kong for many
years. Institutionally, Hong Kong has its own branch of
the Royal Institution of Chartered Surveyors. Hong Kong
Institute of Surveyors is rapidly growing in prominence
and authority. Quantity Surveying education is also well
represented and including the Hong Kong University, City
University of Hong Kong and Polytechnic University of Hong
Kong which are well to develop courses specifically for
the Chinese construction industry. Smith (1993,1994) has
shown that a small number of Chinese tertiary education
institutions are recognized as specialists in high-level
construction education. Those so far identified are Tongji
University in Shanghai, Qinghua University in Beijing,
Tianjin University, Harbin Architecture and Civil
Engineering Institute, Shanghai Institute of Urban
Construction and Xian University of Architectural and
Technology. Some of these institutions (e.g. Tongji
University and Tianjin University) do have "quantity
surveying type" courses, although they are generally called
by some other name. None of these courses are presently
accredited by any of the professional bodies. The only
professionally recognized course is the u.K. College of
Estate Management Diploma offered under franchise by the
Shanghai Institute of Urban Construction. Quantity
surveying in China 761
2.0 Curriculum
The curriculum for an in-service quantity surveying

training program in the Department of
International Construction Management at the SlUC is as

follows: YEAR: ONE Semester A Semester B Marxist Theroy
English for Building English for Building Contemporary
Chinese History Building Law Mathematics for Building
Mathematics for Building Site Surveying Construction
Management I Technical Communication II Computer
Application Construction Technology I YEAR: TWO Semester
A Semester B Works of Deng Xiao Ping Building Structure
English for Building Operational Research Mathematics for
Management English for Building Mechanics Urban Land
Economics Economics Construction Technology ill
Construction Technology II Measurement & Valuation I
Building Design 762 Ng Wing Fai YEAR: THREE Semester A
Semester B Oral English Oral English Construction
Economics II Development Apprasial Accounting
Construction Technology ill Civil Engineering Project
Programming Building Regulations Measurement & Valuation
ill Measurement & Valuation II Building Law Building Law
Building Economics Town Planning YEAR:FOUR Semester A
Semester B Oral English Dissertation Development &
Finance Project Management Project Cost Control
Measurement & Valuation IV Contract Administration
Quantity surveying in China 763
3.0 Attitudes of employers against in-service training
An attitude test, by questionnaires and follow-up telephone

calls, was conducted by the author in
1994. This survey intended to study the attitudes of

employers about allowing their employees
participating in the in-service programs, and it aimed to

collect information such that in future
the in-service training programs could be more reasonably

arranged and more efficient handling
ing problems. A total of 220 questionnaires were delivered

to the employers of the students
who enrolled in the International Construction Management

program in the SlUC. The return
rate of the questionnaires was 41.36% (91 in total

number). Generally, most of the employers
(or direct supervisors of the students) were not

enthusiastic about returning the questionnaire
except for those who had received a follow-up telephone

call from the author.
TABLE 1
Distribution of the surveyed samples (classified according

to the students' full-time employment)
Classification of Career No. of Questionnaires Returned

Percentage of Total
Education 33 36.26
Government Departments and 12 13.21
Public Sectors
Industries 18 19.77
Commerce 17 18.68
Consultants 4 4.39
Others 7 7.69
Total 91 100
As shown in Table 1, most of the surveyed employers (or

direct supervisors) were from
educational sectors (36.26%). For this population of

surveyed samples, 81.8% were aware of
and had provided encouragement for employees for
participating in the training programs.
They generally feel that open and continuous mode of

education extended the scope of
knowledge to their employees and the cost management

experiences were useful. Nevertheless,
those employers expressed a general worry in that their

employees might spend too much time in
committing to these programs. Most of them (>80%) had

assigned duties on cost management
to those who had studied the in-service program. 764 Ng

Wing Fai About l3% of the students were from government
departments and public sectors. They had day-time jobs in
the Electrical and Mechanical Services Bureau,
Environmental Protection Bureau, Bank of China, New Area
Management Authority. This population of students received
moderate (41.7%) recognition and encouragement from their
direct supervisors. Most of them were however
self-financed in pursuing the degree program and no
time-off was awarded for their study hours. Among this
group of student, 72% of their direct supervisors found
the students increased in cost awareness after attending
the courses and 33.3% of them were assigned special
duties in cost management due to their knowledge obtained
from the courses. As revealed by follow-up telephone
calls, all the supervisors are satisfied with the
students' performance in cost related task. The special
tasks that the supervisors assigned to students included:
cost planning, loan monitoring, procurement, etc. Most
disappointment was from the industrial and commercial
sectors. Only 5.71 % were aware of and had showed
encouragement to their employees' in-service training in
cost management. Most of the employers in the industrial
and commercial sectors showed very negative attitudes
toward in-service program. None of them agreeed in-service
program would be profitable. Nevertheless, the population
showed very positive attitudes toward their employees'
training programs, all of them agree the programs were
relevant to the business of their companies and 66.67% of
them had cost management duties to those employees who were
studying the inservice programs. All satisfied with the
students' performance in cost management and they found
the program could save time and cost in training
specialists. Most encouraging comments were received from
the private consultants. 75% of them favoured the
in-service and distance learning mode of studies. They
found this mode could save time and cost in training
professionals. Because of the non working hours in
consulting firms, all of them agreed that the distance
learning mode offered more flexibilities for students to
study in their own pace and own arrangement. 75% of the
employers found the program in the SIUC being useful in
correlating real cost problems with what students learn in
the teaching materials. All of them found their employer
being more efficient in taking cost management problems
after attending the training courses. Quantity surveying
in China 765
4.0 Students' Responses to the In-service Training Program
This survey is on the basis of a Course Evaluation Report

compiled by SIUC. Questionnaires
were sent to students, tutors and the course coordinator

of the International Construction
Management Program and the course scores of student were

assessed in respect of
students' attitudes in questionnaires. Opinions were

gathered on a Likert Scale with various
pedetermim!d aspects of the course being tested and

evaluated. The overall response rates were
49% and 100% for students and tutors respectively.
Results revealed that over 86% of students satisfied with

the course materials and most of them
found the materials from the SIUC relevant to and useful

for solving cost management problems.
Nevertheless, more than 88% of the students expressed

their interests for more local example,
more information on government policies. They also found

the field surveys and individual
projects very practical, mainly because of the local

relevance of these contents. While only
26% of the students got a "pass" or above in their overall

scores, more than 88% of them
intended to complete the program within 5 years by
part-time.
Negative feedbacks from students included: feeling isolated

in their self-Ieaming processes
(66.67%), lack of motivation or incentives from employers

(33.3%), requirement of a high level
of literacy (88%) for the self-Ieaming materials, and not

sufficient tuition support for the
individual projects (66.67%). These problematic areas in

the International Construction
Management program, however, are common to those studying

in an open and self-Ieaming
mode of continuous education.
5.0 Discussion
The present paper reviews the demands on professional and

technical trainings in the SIUC
program. It also evaluates the effectiveness and

insufficiencies of surveying education by a
continuous, self-Ieaming mode of study. In consideration

that Shanghai is a metropolis in
which quantity surveying is at its beginning, the

in-service training program might inject fresh
human resource in tackling the development problems arisen

by fast economic growth. Besides,
the experiences can be shared by other countries in the

rest of China where have a similar
HOW DO GOVERNMENT REGULATIONS IMPACT
RESIDENTIAL CONSTRUCTION ACTIVITY?
Research Center Dr. Joseph Bordogna; Dr. Ivan KingNational

Science Foundation Engineering
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The Organization and

Managing the Construction

International Symposium for

The Organization and

200 YEARS OF CALEDONIAN

@ Taylor & Francis

LONDON AND NEW YORK

Transferred to Digital Printing 2009

First edition 1996

Precast concrete box units - a case study

The use of conversion factors for the analysis of concrete

Development of an explanatory model for concrete formwork

Overmanning and the effects on labor efficiency

Steel framing crew performance and variation

Analysis of construction delays

Client benchmarking of contractor performance

Operative fatigue on the construction site

Determination of an efficient contractor by using the new

A new approach to productivity estimation

The application of value management to the development of

Linear programming for time and cost optimisation

A financial planning model based on risks for contracting firms

PART II PLANNING AND SCHEDULING 149

1 Project planning 151

Cash flow management and time/cost escalation

Effectiveness of short-term planning for interface management

Practical behaviour of managing time-overrun risks in

Time planning using the Zagreb method

A study on the control of the decision-making process

State space representation of linear projects

Raising the efficiency of studies by using the multicriteria

Cost growth in public sector buildings

2 Construction process planning 235

Just in time applied to repetitive renovation projects

Planning and progressing project variations - a building

Financial and organizational impacts of project management

The application of constructability principles in the

Operational problems facing a sample of construction firms

Integrating site-related activities into the planning and

Cash flow trends for infrastructural works in residential

PART III PROCUREMENT 303

1 Project procurement 305

Level and determinants of imports in Australian high rise

Procurement of a motorway - a case study

French building procurement approaches - input to theory

Total resource assessment based on extension of traditional

The relationship between construction procurement strategies

The provision of infrastructure services in developing countries

Alternative dispute resolution methods in construction -

Capital works procurement: owner's obligations under the

Long term co-operation between main contractor and its

'Constructing the team': a US perspective

The pricing of contract preliminaries: quantity surveyors and

Client-professional communication during the early stages of

Construction dispute minimisation

The case for the integration of the project participants'

Subcontracting - the subcontractor's view

The world according to subcontractors

PART IV PROCUREMENT VALUE MANAGEMENT 489

Value management 491

Management of specialist contractor design for mechanical

Design quality concept to improve building quality

A design tool for incorporating construction knowledge