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Critical Path Definition Using Multi‐Criteria Decision‐Making: The PROMETHEE Method

Jose Ramon San Cristobal

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000135

Posted ahead of print 15 May 2012

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Project managers are usually faced with decision environments where there are a number of incommensurable and often conflicting objectives such as minimizing the total project costs, meeting a certain contracted date, conflicting expenses to a fixed budget, ensuring that certain activities achieve certain quality levels, etc. Furthermore, in some real world situations, it may be difficult to get precise information about activity durations or its cost. In these complex and uncertain environments where numerous factors need to be considered, the ability to make sound decisions is very important to the success of a project. Multi‐criteria decision‐making methods are a class of Operations Research models which deal with the process of making decision in the presence of multiple objectives. In this paper, we propose the use of the PROMETHEE method under fuzzy environments in order to determine the critical path of a network, considering not only time but also cost, quality, and safety criteria.

Fund Allocation for Civil Infrastructure Security Upgrade

Nikos D. Lagaros, Ph.D., M. ASCE, Konstantinos Kepaptsoglou, Ph.D., M. ASCE, and Matthew G. Karlaftis, Ph.D., M. ASCE

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000133

Posted ahead of print 3 May 2012

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Security of transportation infrastructure is of primary importance in recent years as a result of various breaches worldwide. Increased security concerns leads transportation authorities to improve, upgrade and enhance surveillance, prevention and response equipment in facilities, frequently under tight budget and operational constraints. In this context, we propose a generic selection and resource allocation (S&RA) model for security upgrade of civil infrastructure, along with a novel technique for efficiently solving the model for real‐world instances. An application of the model is offered for the case of the Athens, Greece, metro system and results are discussed.

Ranked Critical Factors in PPP Briefing

LiYaning Tang, Qiping Shen, Martin Skitmore, and Eddie W. L. Cheng

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000131

Posted ahead of print 27 April 2012

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Public Private Partnerships (PPP) are increasingly used for procuring Australian infrastructure projects. As with all construction projects, the early briefing stages are often the most crucial in determining a successful outcome. This is, however, a lack of systematic research on the type and nature of the critical factors affecting the effectiveness and efficiency of PPP during this period. A literature review is presented of PPP usage in Australia, in which four main categories of factors (procurement, stakeholder, risk, and finance) are identified, each with several sub‐factors. A questionnaire survey is also described involving state government stakeholders and a mathematical model is developed which ranks the factor involved. This is followed by an examination of the potential of the factors to help improve the PPP briefing stage for both public and private sectors.

Quantification of Delay Factors by Using Relative Importance Index (RII) Method for Construction Projects in Turkey

Murat Gündüz, Ph.D., A. M. ASCE, Yasemin Nielsen, Ph.D., and Mustafa Özdemir

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000129

Posted ahead of print 11 April 2012

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The aim of this paper is to identify delay factors on construction projects and analyze these factors with relative importance index method. For this purpose, eighty three (83) different delay factors were identified, categorized into nine (9) major groups and visualized by the Ishikawa (Fish Bone) diagram through detailed literature review and interviews with experts from construction industry. The relative importances of these delay factors were quantified by the RII (Relative Importance Index) method. The ranking of the factors and groups were demonstrated according to their importance level on delay. According to the case study results, the most contributing factors and groups (those need attention) to delays were discussed and some recommendations were made in order to minimize and control delays in construction projects.

Risk Assessment for the Housing Market in Mexico

Marcela Fernandez‐Dengo, Nader Naderpajouh, and Makarand Hastak

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000128

Posted ahead of print 30 March 2012

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The lingering experience of the US housing market crisis has underlined importance of seeking new markets for the companies involved in housing construction. However, expansion to new markets requires deliberate strategic plan to efficiently adjust to new business environment. Identifying potential opportunities and threats may help to devise plans and spot areas where knowledge transfer of the foreign market is essential. Mexico enjoys a growing economy and an accelerated growth of its population which increases the needs in the housing market. It is therefore an attractive market for the US housing industry considering the existing channels of trade between the two countries. Therefore, a study was conducted with the focus on US construction firms and their challenges upon entering Mexican housing market. The study was defined based on International Construction Risk Assessment Model‐1 (ICRAM‐1) that was developed for assessment of potential risks involved in expansion into new construction market at the international arena. In order to facilitate decision‐making, the study identifies high risk indicators for the US firms as well as mitigation strategies that may assist those firms to minimize risks involved in the Mexican Housing Market. Finally, high risk indicators suggested by the model such as land planning, societal conflicts, or laws versus practices have been discussed under their related topic to illustrate knowledge areas critical for this specific market expansion.

Quantitative SWOT Analysis of Public Housing Delivery by Public‐Private Partnerships in China Based on the Perspective of Public Sectors

Jingfeng Yuan, Ming Guang, Xiaoxiao Wang, Qiming Li, and Miroslaw J. Skibniewski

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000100

Posted ahead of print 19 March 2012

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Facing the challenges of Global Financial Crisis, Chinese government planned to build far more public housing than that can be provided by the government alone. Meanwhile the capability of Chinese governments to provide quality public housing on their own is being questioned and reassessed at various levels and in different forms. Accordingly, the introduction of private sectors into the development of public housing should be promoted by Chinese public sectors by adopting Public Private Partnership model. In order to help Chinese government formulate appropriate strategy to develop PPP housing in a complex political, financial, legal and regulatory environment, 16 SWOT (strength, weakness, opportunity, and threat) factors are identified based on extensive literature review. A structured questionnaire survey from the perspective of public sectors is conducted to analyze and integrate their perceptions of the SWOT factors. On the basis of survey on SWOT factors, the methodology of quantitative SWOT analysis composed of AHP is proposed to analyze strategy for Chinese government to develop public housing by PPPs. The results indicate that strongest facilitating factors are “Solving the problem of public sector budget restraint” and “Huge needs for public housing”, and the strongest hindering factors are “Low profits for private sectors to participate in PPP housing” and “Inadequate legal framework and unclear responsibility for both of public and private sectors”. The public strategic direction and intensity are consequently determined according to the results of proposed method. Furthermore, an aggressive and active strategy formulation is carried out to help government facilitate the construction of public housing. The proposed suggestions to public sector would be viewed as guidelines for public sectors to adopt PPPs in public housing appropriately and also can be used to encourage private to participate in public housing development.

Carbon Neutral Commercial Building Development — A Case Study

Jian Zuo, Ben Read, Stephen Pullen, and Qian Shi

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000127

Posted ahead of print 21 February 2012

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It is well recognized that the construction industry is one of the largest contributors to global greenhouse gas emissions. This research investigates achieving carbon neutrality in commercial developments. A case study approach was adopted in order to gain an in‐depth analysis of the first commercial building claimed to be carbon neutral in Australia. Key participants were interviewed and this was followed by a review of the project specification. The analysis focuses on practices to achieve carbon neutrality in commercial developments such as: standard setting, measurement, material selection, construction techniques and knowledge. Results showed that a carbon neutral commercial building can be achieved even though there are a number of challenges such as lack of maturity in working definitions and subsequent standards to measure carbon neutrality. The selection of appropriate materials and relevant knowledge are critical in achieving carbon neutrality in commercial building developments. This study provides a useful reference for future carbon neutral commercial developments.

When Do Mid‐Project Reviews (MPRs) Deliver the Greatest Project Benefits? A Comparative Analysis of Australian Review Outcomes

Ming Xu, Ph.D., A. M. ASCE, Colin Duffield, Ph.D., Nick Pelham, and Marc Bradley

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000126

Posted ahead of print 21 February 2012

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Increasing infrastructure investment necessitates the application of Reference Class Forecasting approaches to reduce bias involved in decisions so as to achieve better outcomes. Widely adopted internationally, Mid‐Project Reviews (MPRs) have recently gained popularity in Australia. This paper, for the first known time, uses a unique set of Australian data to determine where in a project's lifecycle the most benefits are achieved by undertaking MPRs. Comparative analysis of Gateway review outcomes at various Gates (decision points) is conducted by the evaluation of eigenvalues formulated from Gateway results and recommendations. Differences between benefits computed for specific Gates are cross‐checked for statistical significance. It is concluded that the business case stage, leading to project approval, is where the most potential benefits are obtained from MPRs. Outcomes of this research also provide management guidelines on the most efficient timing to undertake MPRs.

PCIM: A Project Control and Inhibiting‐Factors Management Model

Yakubu Olawale and Ming Sun

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000125

Posted ahead of print 21 February 2012

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In construction projects, the aim of project control is to ensure projects finish on time, within budget and achieve other project objectives. During the last few decades, numerous project control methods have been developed and adopted by project managers in practice. However, many of the existing methods focus on describing what the processes and tasks of project control are; not on how these tasks should be carried out. There is also a potential gap between principles that underlies these methods and project control practice. As a result, time and cost overruns are still common in construction projects partly due to deficiencies of the existing project control methods and difficulties in implementing them. This paper describes a new project cost and time control model, developed through a study involving extensive interaction with construction practitioners in the UK, which better reflects the real needs of project managers. A set of good practice checklist is also developed to facilitate the implementation of the model.

Consideration of the Environmental Cost in Construction Contracting for Public Works: A+C and A+B+C Bidding Methods

Changbum Ahn, Feniosky Peña‐Mora, SangHyun Lee, and Carlos A. Arboleda

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000124

Posted ahead of print 21 February 2012

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Growing concerns about sustainable development have brought about an urgent need to develop global efforts to mitigate environmental impact. Although construction projects and their related activities consume much energy and generate a significant amount of GHG and other diesel emissions, the efforts to mitigate these emissions remain at an early stage. To address this issue, this paper explores opportunities to consider contractors’ green capabilities during the bid evaluation phase. Based on reviews of the success story of the A+B bidding method, this paper suggests a modified bidding system wherein contractors bid on the cost (part A) and environmental cost (part C), or on the cost (part A), time (part B), and environmental cost (part C), for public projects. An application of the proposed bidding methods is described using a bid for a highway reconstruction project; this case study reveals the potential impact of environmental cost criteria on the selection of a winning bid. The result of this case study indicates that the proposed bidding methods can offer bidding incentives to create sustainability initiatives for public works contractors.

Analyzing the Impact of Negative Cash Flow on Construction Performance in the Dubai Area

Khalil I. Al‐Joburi, Raid Al‐Aomar, and Mohammed E. Bahri

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000123

Posted ahead of print 18 February 2012

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Cash flow impacts all aspects of the construction project implementation process. Cash shortage can lead to project failure and business bankruptcy. Researchers have studied cash flow in context of scheduling, project delay, business failure, and forecasting. However, negative cash flow trends and patterns themselves have not been closely examined. This paper investigates negative cash flow trends and patterns and their impact on construction performance. To this end, the study reviews financial and scheduling data for 40 ongoing projects in the Dubai area and selects 4 projects for in depth analysis. These projects represent the main categories of Dubai construction industry in terms of type, budget, and business. Three elements of the project cash flow are analyzed: (1) actual cash disbursements, (2) cash receipts, and (3) accumulated cash flow. Results of data analysis have shown that the negative cash flow existed in each of the selected subject projects, ranging from 30 to 70 % of their project durations. The high shortage values have ranged from two to four times the average monthly expenses. The study has also investigated how some contractors were able to reduce the extent and amount of negative cash flow on their projects and complete them as scheduled by rescheduling construction activities based on cash flow availability. The study shows that the amount, duration, and distribution of negative cash flow are critical factors in construction performance. Finally, study results underscore the essential need to plan for cash flow in all phases to ensure a successful and profitable project.

Identification of Risk Management System in Construction Industry in Pakistan

Rafiq M. Choudhry and Khurram Iqbal

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000122

Posted ahead of print 18 February 2012

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Risk management is a relatively new field in the construction industry of Pakistan, but it is gaining prominence gradually due to increased construction activity and competitiveness. This is an empirical survey‐based study of risk management in the construction industry of Pakistan. It reports the findings of the importance of risks, their current management techniques, the existing status of risk management systems of the organizations, and barriers to effective risk management from the perspective of key stakeholders. The analysis of the results reveals that: financial and economic factors followed by quality are the most important risks and the industry generally tries to avoid or transfers these risks. Results indicated that the risk management system and practices of most of the organizations are reactive, semi‐permanent, informal and unstructured with non‐existent and limited committed resources to deal with risks. Nonetheless, the results of interviews indicate that there is awareness about risk management and a desire to learn from past mistakes. The study concludes that the major barriers to effective risk management are the lack of a formal risk management system and the lack of a mechanism for joint risk management by the parties. Insights and discussions are given in the analysis, which are valuable to planners, project managers, supervisors and other stakeholders. Finally, this work can be used in exploring mechanisms for joint risk management by prospective stakeholders.

Relationships between Project Complexity and Communication

Reid Robert Senescu, Ph.D., P.E., Guillermo Aranda‐Mena, Ph.D., and John Riker Haymaker, Ph.D., AIA, LEED ap

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000121

Posted ahead of print 16 February 2012

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The Architecture Engineering Construction (AEC) industry delivers increasingly complex projects, but struggles to leverage information technology to facilitate communication on these projects. To begin to address this challenge, the AEC project information management research field needs methods to assess communication, complexity, and their relationships. First, the authors apply complexity and virtual design and construction research to contribute a method for assessing product, organization, and process (POP) complexity. Second, through project team interviews, the authors contribute a communication assessment method to assess collaboration within projects, sharing of information between projects, and understanding of information generated across the firm or industry. Applying the two assessment methods to case studies, the authors validate the applicability of the methods to the AEC industry and propose a trend between increased POP complexity and increased communication challenges. The two assessment methods provide the opportunity for teams to learn from and improve upon their communication strategies based on project complexity. By increasing the awareness of the relationship between complexity and communication, the paper aims to motivate and provide foundation for the development of more effective and efficient communication tools.

Analysis of Selection Criteria for Design‐Builders through the Analysis of Request for Proposals (RFPs)

Bo Xia, Albert Chan, Jian Zuo, and Keith Molenaar

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000119

Posted ahead of print 12 December 2011

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Selecting an appropriate design‐builder is critical to the success of DB projects. The objective of this study is to identify selection criteria for design‐builders and compare their relative importance by means of a robust content analysis of 94 Request For Proposals (RFPs) for public DB projects. These DB projects had an aggregate contract value of over US$3.5 billion and were advertised between 2000 and 2010. This study summarized twenty‐six selection criteria and classified into ten categories, i.e.: price, experience, technical approach, management approach, qualification, schedule, past performance, financial capability, responsiveness to the RFP, and legal status in descending order of their relative importance. The results showed that even though price still remains as the most important selection category, its relative importance declines significantly in the last decade. The categories of qualification, experience, past performance, by contrast, have been becoming more important to DB owners for selecting design‐builders. Finally, it is found that the importance weighting of price in large projects is significantly higher than that in small projects. This study provides a useful reference for owners in selecting their preferred design‐builders.

Venture Capital Opportunities in Green Building Technologies: A Strategic Analysis for Emerging Entrepreneurial Companies in South Florida and Latin America

Mehmet Emre Bayraktar, A. M. ASCE and Farrukh Arif, A. M. ASCE

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000118

Posted ahead of print 12 December 2011

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Venture capital is an investment intended to finance high‐risk companies, and particularly entrepreneurs such as those dedicated to the development of new and innovative technologies. Venture capitalists provide such investments since entrepreneurs may have difficulty obtaining loans from banks due to high interest rates, the risks involved in the technological arena, and the absence of a proven track record. The rate of success for venture capital investments has, however, been unconvincing. Given this poor success rate, there is a need for comprehensive research to assist entrepreneurs and investors in understanding the opportunities and difficulties of start‐up venture capital investments in green building technologies. This article not only analyzes the current trends of venture capital investments in green building and construction technologies, but also outlines a potential course of action. The findings of the study show that the future of venture capital investment opportunities is very bright. The Latin‐American countries are not only interested in using green construction materials or technologies by themselves, but also see the United States as a market to which they can export such materials and technologies. However, considerable effort is required, especially from regulatory organizations, to achieve this cooperation and raise awareness in both investors and entrepreneurs.

Why Our Project Fails: Inappropriate Construction Methods —The Million Dollar Lesson

Z. Ren, G. Q. Shen, and X. L. Xue

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000117

Posted ahead of print 12 December 2011

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Construction method selection, implementation and improvement (CMSII) is a crucial and difficult task for construction projects, especially for large and complex projects which often face constraints such as complex project environment, lack of information and uncertainties caused by new technologies. Despite of its importance, few research projects have been conducted in this field, especially those from both technical and management points of view. Although cases of project failure caused by inappropriate construction methods are reported from time to time, studies of the detailed causes and lessons learned are rare. This research developed a CMSII workflow model and discussed the CMSII process in a drainage project which suffered several million dollar losses due to problems associated with CMSII. By investigating the details of the CMSII, this study identifies the key technical and management issues to be considered in each CMSII stage, reveals the problems and, most importantly, summarises the lessons learned.

Lean Transformation in a Modular Building Company: A Case for Implementation

Haitao Yu, Mohamed Al‐Hussein, Saad Al‐Jibouri, and Avi Telyas

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000115

Posted ahead of print 12 December 2011

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Encouraged by the remarkable productivity improvements in the manufacturing sector, the construction industry has a long history of trying to garner the benefits of manufacturing technologies. While industrialized construction methods, such as modular and manufactured buildings, have evolved over decades, core techniques used in prefabrication plants vary only slightly from those employed in traditional site‐built construction. The objective of this research was to develop and implement a production system for the effective application of lean tools in building components prefabrication. To overcome the prevalent skepticism among middle management, the lean journey started with a pilot project involving one production line. Over a six‐month period, lean tools such as 5S, standardized work, takt time planning, variation management, and value stream mapping were implemented to a communication shelter production line. The implementation successfully won the support of the middle managers and established the foundation for expanding lean practices to other parts of the factory and applying relevant lean tools and techniques.

Delivering Sustainable, High Performance Buildings: Influence of Project Delivery Methods on Integration and Project Outcomes

Sinem Korkmaz, M. ASCE, Lipika Swarup, and David Riley

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000114

Posted ahead of print 12 December 2011

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The demand for sustainable buildings in the United States has risen due to accelerated depletion of natural resources rising energy costs and green house gas emissions, and increased awareness of indoor environmental quality. Recently this demand expanded from including only low energy strategies and products in buildings to prioritizing maximum energy conservation and occupant well being. All of these characteristics represent aspects of sustainable, high performance buildings. Project delivery methods (e.g., design‐build, design‐bid‐build) can affect the level of team integration, which has been reported by the industry to result in optimal project outcomes and better value to the owner. However, there is a gap in the literature to examine the relations among those. This research studied how project delivery methods influence an owner's ability to achieve its sustainability goals mediated through the level of integration achieved in the delivery process. The study conducted 12 in‐depth case studies. The results show that the level of integration in the delivery process affects final project outcomes, particularly sustainability goals. Although DB and CMR have better chances of facilitating integration, results show that DBB also has the potential to provide higher levels of integration if it informally involves the constructor in the earlier phases of the project. Design charrette, project team member's compatibility and commitment to project sustainability goals were also found to be crucial in achieving team integration and overall project success.

Civil Infrastructure Workers' Fatalities: A Guaranteed Death Variable Annuity Approach

Islam H. El‐adaway

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000105

Posted ahead of print 10 November 2011

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Many studies are concerned with monitoring, evaluating, expanding, repairing, replacing, financing, or otherwise sustaining the civil infrastructure. Only few studies though address the ongoing and evolving financial problems associated with the workers responsible for developing our civil infrastructure development. According to U.S. federal statistics, civil infrastructure activities are responsible for 22% of all work‐related fatalities; the highest among all industries. In 2008, 429,000 non‐fatal injuries and 1,005 fatal injuries were recorded on job sites. Regardless, civil infrastructure workers still have one of the weakest health and retirement coverage. It is crucial to have a strong system that protects workers and/or their families in cases of work related fatal and non‐fatal injuries. This paper developed a financial model incorporating a variable annuity embedded with guaranteed minimum death benefits. The model is based on the principles of insurance pricing, option theory, Monte Carlo simulation, and actuarial science. A sensitivity analysis was conducted to explore the benefits of the utilized technique to employees and employers. If purchased at the age of 18, which is a reasonable average age for workers to start their career in the industry, coverage of $50,000 or $1,000,000 requires only annual payments of $73.47 and $1,469.50, respectively. The model provides numerical assessment for civil infrastructure fatalities through determining the risk charge equating cost and benefits for the insured workers. Furthermore, the same technique might be extended towards hedging strategies that provide income guarantees for unemployed workers.

Developing Key Performance Indicators for Public‐Private Partnership Projects: Questionnaire Survey and Analysis

Jingfeng Yuan, Chao Wang, Mirosław J. Skibniewski, and Qiming Li

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000113

Posted ahead of print 3 November 2011

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Public—private partnerships (PPPs) are increasing in popularity. Major challenges in the development of PPPs have appeared due to the global financial crisis. However, in regard to the value for money, PPPs are still attractive for public sector projects. Performance management and measurement is viewed as an effective method to help PPPs deliver value for money, in which Key Performance Indicators (KPIs) are the core elements. A KPI conceptual model composed of 5 performance packages and 48 indicators developed by authors' prior studies is further presented. A structured questionnaire survey has been conducted to investigate the perceptions of PPP stakeholders on 48 project performance indicators (PIs) in order to identify actual KPIs for performance management and measurement in PPPs. Although the survey results show that all PIs are important, the contributions to the project performance from different performance packages are different. A confirmatory factor analysis is used to test whether proposed conceptual model fits the observed set of collected data in a predicted way, and to further simplify the size of the KPIs. An improved KPI model is explored by using 41 PIs, which indicate that the improvement of performance for PPP projects is strongly influenced by reasonable procurement, design and planning by the public sector, effective process control by the private sector, and satisfaction for both of public and private sectors. The identification of 41 KPIs can be used to identify the strengths and weaknesses of PPP projects to strengthen effective performance management and measurement in PPPs.

Stochastic Forecast of Construction Cost Index Using a Cointegrated Vector Auto‐Regression Model

Jiang‐wei Xu, S. M. ASCE and Sungwoo Moon, M. ASCE

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000112

Posted ahead of print 3 November 2011

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The construction cost index (CCI) has been widely used to measure the cost trend in the construction industry. The index is used as an important input when estimating construction budgets and assessing risks in resource planning and cost management. To ensure accurate measurement, the properties of cost indices should be investigated in their long‐run and short‐run interactions with other variables such as the consumer price index (CPI). This paper presents a cointegrated vector auto‐regression (VAR) model for forecasting the construction cost trend. This model has several advantages in terms of flexibility and dynamic interaction, and comparison with existing methods demonstrates that the cointegrated VAR model can provide more accurate forecasts of the CCI. Practitioners can implement the cointegrated VAR forecasting technique using their own historical data. The index forecasts can not only provide more accurate estimation of construction budgets but also evaluate the risk and uncertainty of cost escalation.

Design of Public Projects: Outsource or In‐House?

F. H. (Bud) Griffis, F. ASCE and Hyunchul Choi

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000110

Posted ahead of print 3 November 2011

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This study analyzes the relative cost in New York to have the public sector perform design work in‐house or to contract out the work to private engineering consulting companies. It is important to note that the percentage of work performed in‐house versus that which is contracted out varies among NY State Agencies and Authorities. Many agencies target a design work load of 25% in‐house and 75% contracted out to accomplish their programs and in‐house training goals. New York State Department of Transportation (NYSDOT) has reported that they perform 50% or more of their work with in‐house forces, although in some Regions the in‐house design percentage is as high as approximately 80%. As we believe this to be a very high percentage of in‐house work when compared to other NYS Agencies and Authorities, we have chosen to focus this cost effective comparison on transportation projects and the NYSDOT. While a few studies have been conducted in the past, these studies were primarily based on subjective analysis using extremely limited data, if any. While one may anticipate that the cost of a design engineer would generally be comparable whether he or she is in the public or private sector, this study found that because of the generous benefits package provided by the State of New York, the large amount of paid time off, and most likely, a lower utilization factor for an in‐house design engineer, his or her actual expected cost to the tax payer exceeds the cost of a private design engineer by approximately 15%. These calculations are based on what we consider conservative assumptions and the actual difference considerably exceeds this value in all probability. The total cost of a career NYSDOT employee to the taxpayer is in excess of $6.4 million over his or her lifetime. With the consideration of forecasting pension cost, the career employee cost to about $6.5 million.

Case Study of Knowledge Management Implementation in a Medium‐Sized Construction Sector Firm

Hai Chen Tan, Patricia M. Carrillo, and Chimay J. Anumba

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000109

Posted ahead of print 3 November 2011

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The transient nature of project teams and the competitive environment in which construction organizations operate require an effective mechanism to manage and reuse the knowledge created in the projects without straining its resources. A methodology for ‘live’ capture and reuse of project knowledge was developed for the purpose and encapsulated into a software tool called Capri.net. A study was conducted of a medium‐sized UK‐based construction sector firm to investigate the use of Capri.net as the central strand of its KM framework. Capri.net was subsequently designed to integrate with a staff profile system and an e‐forum. The new Capri.net‐based system was intended to bridge the communication gap between the company's geographically dispersed offices by connecting the people together and hence facilitating the timely sharing of both tacit and explicit knowledge. Top management's commitment was found vital in the successful implementation of knowledge management and the nurturing of the desired supportive knowledge sharing culture. To get the most through the implementation of knowledge management, the various knowledge management practices and relevant information systems of a construction organization need to be strategically integrated to improve the location, capture and sharing of critical knowledge.

The Impact of the Economic Recession on Toll Highway Concessions in Spain

José Manuel Vassallo, Alejandro Ortega, and María de los Ángeles Baeza

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000108

Posted ahead of print 3 November 2011

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After joining the European Union in 1986, Spain experienced steady economic growth that enabled the country to grow at a higher pace than other European countries. During this period, the government of Spain opted for major investments in public infrastructure by taking advantage both of the funding provided by the European Union, and of several types of Public‐Private‐Partnership (PPP) approaches. Within this framework, the government of Spain between 1996 and 2004 procured a series of toll highway concessions. These concessions entered in operation a few years before the global economic recession made itself felt in Spain. The concession contracts signed between the government and some private consortia allocated most of the risks (expropriation, construction and traffic) to the private sector. In this paper we assess the impact that the economic recession has had on the business performance of the concessionaires, and we analyze the effectiveness of the measures adopted by the government to help the concessionaire to avoid bankruptcy. We found that some of the guarantees offered by the legal framework to the concessionaires in case of bankruptcy are prompting an outcome that could negatively affect the users. In addition to that we provide some suggestions as to how to better allocate risk in toll highway concessions in the future.

Construction Business Cycle Analysis Using the Regime Switching Model

JaeHyun Park, Seungchul Ham, and TaeHoon Hong, A. M. ASCE

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000107

Posted ahead of print 3 November 2011

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The construction industry is a key industry in many countries, usually taking up to 5–10% of the overall Gross Domestic Product (GDP). It is closely related to the financial and labor markets, depending on the characteristics of businesses in a given country. For example, the moratorium in Russia in 1998 and the subprime mortgage crisis in the U.S. in 2007 greatly influenced the financial markets of many countries, which consequently affected the construction market. The impact of such crises on the construction industry differs, however, depending on the size of the business cycle and the foundation of the financial market. Thus, this study analyzed the construction business cycle of three countries: the United States, the United Kingdom, and South Korea. The economies of these three countries have different characteristics. This study, which used the three‐state Markov switching model, also used construction industry data for categorizing GDP by economic activity. Although the validation results of the U.S. construction industry were unsatisfactory due to the unprecedented long‐term recession, results of the analysis showed that the proposed model could be used to determine the construction business cycle, while the forecasting performance test also showed that the proposed model could be used to predict over one‐quarter in advance, which was the interval in identifying the business cycle. Accordingly, it is believed that the proposed methodology can be used to determine and cope with each country's business cycle.

Towards the Procurement of Sustainable Noise Reducing Devices — State‐Of‐The‐Art Review from EU Project QUIESST

Crina Oltean‐Dumbrava, Greg Watts, and Abdul Miah

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000106

Posted ahead of print 3 November 2011

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There is a pressing need to consider the sustainability of noise reducing devices for transport systems (NRDs) by procurement agencies, policy makers, and industry professionals/designers in order to be in line with a growing sustainable agenda for surface transport systems including the supporting infrastructure. This need has been recognised by the European Union (EU) and an appropriate research project has recently been commissioned. Quietening the Environment for a Sustainable Surface Transport (QUIESST) is a three year project funded by the EU that began late in 2009. It is a multi‐disciplinary project undertaken by 13 EU partners from 8 countries. Within the project, the University of Bradford is the specialist research team tasked with assessing the sustainability of noise reducing devices (NRDs). These devices are designed to control noise from surface transport (both road and rail) and include noise barriers and absorptive claddings. For the purpose of this research sustainability was defined as: the optimal consideration of technical, environmental, economical and social factors during the design, construction, maintenance and repair, and removal/demolition stages of NRD projects. A comprehensive literature review has been carried out of the relevant European standards, design guides used around the world by road and rail authorities, and existing research on NRDs conducted by academics and leading practitioners to identify sustainable practices and gaps in the knowledge base. It became evident that sustainability factors are not being fully considered across the whole life cycle of NRDs. At the present time and based on the available data it is not possible to quantify and rank NRDs in terms of sustainability for a given site, project or case study. Clearly this has major implications for the management of the procurement process. Further data collection and analysis are required to provide guidance that can be considered useful for all stakeholders. This is the aim of the further stages of this Work Package within the QUIESST project. This paper presents an overview of the current state of the art for the sustainability of NRDs, and describes some of the major deficiencies while highlighting knowledge gaps and the further research that is needed.

Interrelationships among Critical Success Factors of Construction Projects Based on Structural Equation Model

Yong Qiang Chen, Yang Bing Zhang, Jun Ying Liu, and Peng Mo

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000104

Posted ahead of print 3 November 2011

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The clear identification of the critical success factors (CSFs) of construction projects and a good understanding of the interrelationships among CSFs will help project managers focus on the control of key factors and allow them to make reasonable resource allocation. Aimed at exploring the interrelationships among CSFs, this research established a CSFs system at the beginning, via firstly identifying 62 CSFs of construction projects through a literature review, and then refining them to produce 46 CSFs by expert discussions. Based on the CSFs system, which consisted of three categories and ten sub‐categories, this study applied structural equation model (SEM) to explore the interrelationships among CSFs. 124 project data collected from a questionnaire survey were used to figure out the hypothetical model, and then a detailed evaluation and modification was carried out to revise the model. Finally, on the basis of the revised model, which was verified through the goodness of fit (GOF) indices evaluation, this paper made a thorough discussion about the interrelationships among the CSFs. Interrelationships identified and verified in the model reveals the influence mechanism among these CSFs, such as that ⌈riot, revolution and war⌋ negatively influences the ⌈price fluctuation of labor⌋, while ⌈price fluctuation of labor⌋ negatively influences ⌈time expectation⌋, thus ⌈riot, revolution and war⌋ can positively influence ⌈time expectation⌋. It means if the owner's time expectation is a determinant of the time performance of an emergency project, maintaining a stable political environment would be a critical control point for the accomplishment of the project. Thus, the interrelationships discovered in this paper will make it easier to take better control over the CSFs and contribute to project success.

Improving Mega‐Site Management Performance through Incentives: Lessons Learned from the Shanghai Expo Construction

Yi Hu, Albert P. C. Chan, Yun Le, Wei‐ping Jiang, Lin‐Lin Xie, and Carol H. K. Hon

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000102

Posted ahead of print 20 October 2011

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As the biggest Expo site in history, the construction of the Shanghai Expo site faced a lot of challenges. For example, involvement of lots of investors, mega construction scale, concurrent construction mode, involvement of more than 40,000 migrant workers, and the extremely tight completion deadlines, among others. Consequently they imposed great obstacles on accomplishing the safety, quality and environmental goals. Through a case study of the Shanghai Expo Construction, this paper reports the design and implementation of multi‐criteria incentives in mega‐projects to accomplish the safety, quality and environmental goals. Both quantitative and qualitative findings were triangulated to demonstrate the outcome of the incentives. Six Critical Success Factors (CSFs) for the incentives, rule design, process orientation, top management support, training and promotion, communication in process, as well as process learning and improvement, are identified and validated through case data and content analysis. It is believed that findings of this paper can enhance the understanding of multi‐criteria incentive schemes in general and provide insights in implementing these incentive schemes in future mega‐projects, particularly in the People's Republic of China (PRC).

Country Portfolio Solutions for Global Market Uncertainties

Wooyong Jung, Seung H. Han, and Kang‐Wook Lee

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000099

Posted ahead of print 19 September 2011

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Global market uncertainties such as unpredicted recession and recovery arise simultaneously in the unit of country or wider than country. These uncertainties weaken traditional project‐based risk management to control contractor' revenue and return. In order to overcome this limitation, this study suggests a country portfolio model for managing these market uncertainties. This model presents the quantitative diversification strategy that optimizes country portfolio solutions through considering four critical objectives at the country level: 1) market growth rate; 2) market growth volatility; 3) market profit rate; and 4) market profit uncertainty. This study applies Markowitz portfolio theory to this country portfolio solution and uses multi‐objective genetic analysis through examining 1,014 international projects executed by Korean contractors across 21 countries. This study suggests three useful applications: 1) analysis of the ideal country portfolio; 2) evaluation of the firm's current portfolio associated with global market condition like boom and recession; and 3) suggestion of a more informed portfolio decision for entering new country market. This model supports multi‐national contractors to better manage country portfolio under fluctuating global construction market.

Time, Cost and Environmental Impact Analysis on Construction Operation Optimization Using Genetic Algorithms

Gulbin Ozcan‐Deniz, Yimin Zhu, and Victor Ceron

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000098

Posted ahead of print 19 September 2011

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Environmentally conscious construction has become a subject of research during the last decades. Even though construction literature involves plenty of studies that emphasize the importance of environmental impact during the construction phase, most of the previous studies failed to combine environmental analysis with other project performance criteria in construction. In order to achieve environmentally conscious construction and successfully manage complex construction environment, multiple project objectives and their relationships need to be considered. In this study, the authors propose a framework based on the concept of control accounts to determine optimal construction operations when project time, cost and environment impact (TCEI) are considered as project objectives during project planning. The framework also supports decision‐making by using sensitivity analysis. Life cycle assessment is applied to the evaluation of environmental impact in terms of global warming potential (GWP). The nondominated sorting genetic algorithm II, or NSGA II, is selected for implementation in Matlab to determine optimal construction operations. A case study is used to illustrate the application of the framework. It is shown by the case study that the application of the genetic algorithm to search problems, such as the case study, is promising in terms of determining optimal solutions, but computation speed can be an issue, if it involves a large set of data. In addition, data collection and processing is a major challenge, especially the processing of environmental impact data. Tools are needed to facilitate data collection and processing. Currently, the proposed framework includes a critical path method, based on fixed logical relationships among activities, to determine the duration of a project. The impact of resource and other constraints on such logical relationships, and potentially the duration of a project, is not addressed in this study.

Benefits of Onsite Design to Project Performance Measures

David Grau, W. Edward Back, M. ASCE, and J. Regan Prince

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000097

Posted ahead of print 19 September 2011

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The timely and effective transfer of knowledge and information among project disciplines is of paramount importance for project success. As such, strategies aiming at the incorporation of construction expertise in the design process can significantly improve the likelihood of successful project endeavors. To this date, though, the impact of onsite design —the translocation of design activities to the project site— on project performance is not yet understood. This research has identified 29 project performance measures and 50 design activities across project phases to assess the influence of onsite design on project performance. Based on the statistical analysis of 115 capital projects data representative of $9.2 billion in total installed costs, this study reveals that projects with intensive onsite design strategies not only surpass projects with moderate or null onsite design strategies for a majority of the project performance measures, but also exhibit similar levels of accomplishment for the rest of them. To complement these results, this study also characterizes and details the utilization of onsite design.

Delay Causes in Road Construction Projects

Ibrahim Mahamid, Amund Bruland, and Nabil Dmaidi

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000096

Posted ahead of print 27 August 2011

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The construction industry is one of the main sectors that provide important ingredients for the development of an economy. However, many projects experience extensive delays and thereby exceed initial time and cost estimates. Construction delay is considered to be one of the most recurring problems in the construction industry and it has an adverse impact on project success in terms of time, cost, quality and safety. This study is conducted to investigate the time performance of road construction projects in the West Bank in Palestine in order to identify the causes of delay and their severity according to contractors and consultants through a questionnaire survey. The field survey included 34 contractors and 30 consultants. 52 causes of delay were identified during the research. The survey concluded that the top five severe delay causes are: political situation, segmentation of the West Bank and limited movement between areas, award project to lowest bid price, progress payments delay by owner, and shortage in equipments.

Evaluation of Design‐Builder Qualifications through the Analysis of Requests for Qualifications (RFQs)

Bo Xia, Martin Skitmore, and Jian Zuo

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000095

Posted ahead of print 25 August 2011

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The two‐phase best‐value process has been widely used by public agencies for Design and Build (DB) procurement, with a key issue in the first phase of pre‐qualification being the determination of evaluation criteria. This study identified a set of general qualification criteria for design‐builders and compares their relative importance by a thorough content analysis of 97 Requests for Qualification (RFQ) for public DB projects advertised between 2000 and 2011 in various regions of the USA. The thirty‐nine qualification criteria found are summarized and classified into eight categories comprising: experience; project understanding and approach; organizational structure and capacity; past performance record; professional qualifications; responsiveness to RFQs, office location and familiarity with local environment; and legal status in descending order of their relative importance. A comparative analysis of different types of projects shows that the relative weightings of the qualification criteria vary according to different characteristics of the DB projects involved.

Which Strategies Are More Effective for International Contractors during Boom and Recession Periods?

Wooyong Jung, Seung H. Han, Bonsang Koo, and Woosik Jang

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000087

Posted ahead of print 22 November 2011

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With the global financial crisis and other plummeting market conditions in 2008, the international construction market moved from boom to recession. Although this recession is expected to be over soon, many international contractors still have difficulty in deciding which strategies are more effective in volatile market conditions. Korean contractors have already experienced one recession in recent times, instigated by the Asian financial crisis in 1997, and two boom economies before and after this recession. To investigate more effective strategies used in the overseas construction market, this study evaluates 31 Korean contractors' international performance over the different periods (boom, recession, and re‐boom). It analyses the effects of diversification, localization, strategic alliance, resources cost allocation, and financial soundness by using 14 key variables. The results showed that regional diversification had a profound impact on overcoming the recession periods. Localization was also strongly positive, specifically during the re‐boom period. Particularly, the out‐performing contractors were found to increase the level of localization and proportion of joint ventures with the third countries' contractors across the different time periods. These findings are expected to assist international contractors to develop more effective strategies given the fluctuating global economic conditions.

Public‐Private Partnership Risk Factors in Emerging Countries: A BOOT Illustrative Case Study

Karim S. Rebeiz, Ph.D.

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000079

Posted ahead of print 29 June 2011

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A public‐private partnership (PPP) is an agreement between a host government and a private entity in which the private sector supplies infrastructure assets and services that are traditionally provided by the government. The popularity of PPP projects has been steadily on the rise over the past few years. This upward trend is in large part driven by governmental fiscal austerity, particularly in the aftermath of a prolonged global economic recession. The perceived attractiveness of PPP projects is particularly acute in emerging countries due to population growth and increased urbanization. PPP projects are usually highly complex in nature. They require large capital expenditure, they have long durations, and they usually utilize sophisticated technology. For a construction firm willing to expand its services internationally, a PPP project represents a unique opportunity to leverage its core competency and achieve competitive advantage in both domestic and foreign markets. Risk, however, increases with foreign penetration due to unfamiliarity with the geography, the supply chain, the local codes and the business practices. Using an illustrative case study of a build‐own‐operate‐transfer (BOOT) thermal power plant project, this paper addresses the salient risk factors facing the construction firm undertaking a PPP in an emerging country.

Recession Effects in the United States Public Sector Construction Contracting: Focus on American Recovery and Reinvestment Act of 2009

Kenneth Honek, Elie Azar, S. M. ASCE, and Carol C. Menassa, Ph.D., A. M. ASCE

Journal of Management in Engineering doi:http://dx.doi.org/10.1061/(ASCE)ME.1943-5479.0000075

Posted ahead of print 9 June 2011

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The 2009 American Recovery and Reinvestment Act (ARRA) was enacted to support the economy in response to the 2008–2009 global recession. The injection of construction funds into the public sector put pressure on public agencies to award contracts as quickly as possible in an effort to immediately stimulate the economy and help reconstruct the deteriorating infrastructure. This enabled contractors to move from private sector work into the public sector to stay afloat financially. This dynamic caused an increase in competition for public project awards combined with projects awarded at a fast rate. The main objective of this paper is to investigate evidence of the level of contractor competition, and the degree to which public agencies are expediting the award process during the bidding phase on ARRA construction projects. Both positive and negative impacts caused by this dynamic are examined. To achieve this objective, the research looked into the bidding phase of ARRA construction projects from a public agency standpoint via a survey administered to three federal contracting agencies. It analyzes data in the areas of bidding timelines, level of competition, cost savings, and contractor performance to support the main objective and provide any evidence of both positive and negative results from the existing awarding situation of increased bid competition and expedited awarding. The paper also provides recommendations on alternative bidding strategies to public agencies for the potential reduction of negative impacts associated with the expedited and competitive awarding situation caused by the recession.
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