This study assesses the effect of performance bonding on the valuation of a build-operate-transfer (BOT) project by extending the classical Black-Scholes-Merton (BSM) call option model. As common features in BOT contracts, a performance bond is a penalty imposed on concessionaires who exercise contractual rights to terminate participation in a project. In the real-option context, termination rights grant concessionaires the flexibility in managing market uncertainties that can increase the valuation of an infrastructure project, but the penalty impairs this flexibility and reduces valuations. A case study numerically illustrates the BSM model and indicates that performance bonding can destroy the flexibility and project valuations inherent in termination rights even when the penalty is moderate. Balancing performance bonds and termination rights is necessary because both are important in establishing and maintaining long-term contractual relationships in privatized BOT infrastructure projects.
Because construction operations depend on labor activity, absenteeism on a job site can damage project performance in many ways. Traditionally, construction managers have viewed absenteeism as a problem of individuals and have not paid much attention to absenteeism as a group-level phenomenon. As a result, individually focused formal rule enforcement (e.g., issuing a penalty) has been used to reduce absenteeism in construction projects, but this approach often results in the insufficient encouragement of attendance motivation. To better manage workers’ attendance on job sites, another aspect in absenteeism that has recently received attention is behavioral control of workers, including how workers perceive formal and social rules for absence, build attitudes toward these rules, and control their absence behavior accordingly. With this background, the objective of this paper is to investigate the relationship between workers’ perceptions/attitudes toward formal/social rules and their absence behavior by using real-world data. To fulfill this objective, a survey questionnaire was developed, data were collected from three different job sites, and statistical analyses were performed using logistic regression models. The results of the analyses show that construction workers who perceive salient social norms in their team are less likely to be absent from the job site, which implies that worker absence behavior is under the influence of social controls. It is also found that the primary mechanism by which social controls on workers’ behavior take place in construction is self-categorization. The results of this research extend the current knowledge of the mechanism and the role of social controls in shaping construction workers’ absence behavior. From the results, it is inferred that even a modest investment in promoting social cohesion and creating a positive prototype in teams can be an effective means of maintaining low absenteeism on a job site.
Construction cost overrun and time overrun are significant problems in infrastructure projects. This study provides a comparative analysis of the incidence of project overruns in Public Private Partnership (PPP) and non-PPP road projects. Data from national road projects in India was used as the study sample. Means analysis, both using an unmatched sample and matched pair analysis indicated significant overruns between PPP and non-PPP projects. While cost overruns were higher in PPP projects, time overruns were higher in non-PPP projects. These trends persisted in OLS regression estimates. A three stage least squares regression estimated to address the simultaneity bias also showed that use of PPP increased cost overrun, though it did not affect time overrun. Results obtained in this study are contrary to the findings of the previous studies, which have been based on PPP projects in developed economies. The findings emphasize the need for developing countries like India to strengthen their capabilities in PPP models to take advantage of private sector efficiencies.
Construction project performance is significantly reliant on the effective communication of the project’s design to the end construction worker. Spatial design is frequently represented in two-dimensional (2D) drawings of various views. These views must be combined and decoded by the end user to effectively understand all orientations of a building element and can lead to errors. Advances in three-dimensional computer-aided design (3D CAD) and 3D printing have provided promising advancements in the presentation of spatial engineering information. This research investigates cognitive-workload demands of each information format. Cognitive workload is the amount of mental resources required to complete a task from the total available mental resources. Asking subjects to complete a reconstructing task of a simple structure using 2D drawings, a 3D CAD interface, and a 3D printed model introduces the individuals to alternative forms of information presentation. After completing the task, the subjects were surveyed on their perceptions of mental workload in six main factors using the NASA Task Load Index (TLX). Through a statistical analysis, there was no difference in mental workload between the three types of information presentation, indicating that the cognitive demands of the mediums are similar. However, there were statistically significant differences in workload factors due to demographic influences, such as occupation and CAD experience levels. In addition, mental workload affected the subject’s productivity in task completion. The primary contribution to the overall body of knowledge is the investigation of mental workload as a factor in spatial understanding, and more specifically, identifying cognitive demands of individuals when presented with spatial engineering information in various formats.
The process of planning and scheduling industrial construction fabrication (ICF) jobs is difficult because the sequence of operations varies considerably from one product to another due to the unique design and configuration of products. Traditional critical path method (CPM)–related approaches are not effective due to CPM’s limitation or inability to model the repetition of operations, interactions between resources, and what-if scenarios. Discrete event simulation (DES) is often used to model processes that are repetitive in nature; however, DES has limitations in modeling ICF shops due to considerable differences between operation sequences, which means a model can only be used once per project. This paper proposes a new simulation-model-structuring methodology, which directly addresses product uniqueness and complex routing issues in ICF shops and significantly simplifies the simulation-model development. This methodology fully supports shop scheduling and schedule updating essential for ICF shops that operate under highly dynamic project environments.
The inadequate of compaction of backfills near abutments, approach areas of culverts, and smaller widened portions of roads result in settlement of layers and premature failure of pavement. Compaction in these constrained areas is difficult because of the difficulty in maneuvering of compacting equipment such as heavy rollers. Various types of light compacting equipment like rammers, vibratory plate compactors, single-drum walk-behind rollers, and double-drum walk-behind rollers are being used for compaction of the materials in constrained areas. Locally available loamy soil was compacted to different layer thicknesses of 50, 100, 150, and 200 mm using selected plate compactors, single-drum walk-behind rollers, and double-drum walk-behind rollers. Field moisture–density relationships for this equipment are established. The studies indicate that the roller optimum moisture content (ROMC) is higher than the optimum moisture content (OMC) of Proctor compaction even after 10 passes for all the light compacting equipment used. The regression equations developed for predicting field density as a function of compacting moisture content in the field, number of passes, and thickness of layer for all the light compacting equipment can be used during construction.
In the construction industry, one of the most important concerns of organizations is how to achieve a balance between the desired level of quality and the expenses associated with it. The evaluating of the cost of quality (COQ) can help achieve this balance. This study surveys quality-related activities and costs in mass-housing projects in Iran by conducting 77 structured interviews on 60 mass-housing projects. The survey uses the prevention-appraisal-failure (P-A-F) model, which is the most widely used model for determining and classifying COQ, as the main framework. This research first specifies the most common quality-related activities and components of quality costs. It also develops a model for evaluating the total COQ of the studied projects by fitting third-order polynomial trend lines to the compiled data. Then, the research evaluates potential cost savings as a possible result of quality-management approach to the optimum level of COQ on the basis of the developed model. This study contributes to the project’s quality management by introducing a new model for evaluating the COQ and its optimum level in mass-housing projects. The model evaluates the potential savings in quality costs as a result of achieving the optimum level of COQ.
The purpose of this study is to utilize the feasibility of lightweight aggregate (LWA) produced from waste and its application in lightweight concrete (LWC). LWA was produced from wet sewage sludge as a principal material and reservoir sediment as an additive material using sintering temperatures of 1,050–1,250°C in order to improve their physical properties. The selected LWA was used as coarse aggregate in the manufacturing of high-flowing LWC. Results showed that a proper amount of reservoir sediment addition improved the aggregate size expansion, decreased bulk density, and also increased strength of aggregate. As a general overview, all aggregates produced in this study had a bulk density less than 2.0 g/cm3. In addition, under proper sintering temperatures the water absorption of aggregate having reservoir sediment addition could be significantly reduced as low as 1.9%. A very good workable LWC was obtained with 28-day age compressive strength of 31.25 MPa. The surface resistivity and ultrasonic pulse velocity results proved that the LWC can be considered as a good-quality concrete.
Collaborative infrastructure projects use hybrid formal and informal governance structures to manage transactions. Based on previous desktop research, the authors identified the key mechanisms underlying project governance, and posited the performance implications of the governance. The current paper extends that qualitative research by testing the veracity of those findings using data from 320 Australian construction organizations. The results provide, for the first time, reliable and valid scales to measure governance and performance of collaborative projects, and the relationship between them. The results confirm seven of seven hypothesized governance mechanisms, 30 of 43 hypothesized underlying actions, eight of eight hypothesised key performance indicators, and the dual importance of formal and informal governance. A startling finding of the study was that the implementation intensity of informal mechanisms (noncontractual conditions) is a greater predictor of project performance variance than that of formal mechanisms (contractual conditions). Further, contractual conditions do not directly impact project performance; instead their impact is mediated by the noncontractual features of a project. Obligations established under the contract are not sufficient to optimize project performance.
Automation of space-use analysis consists of two parts: automated generation of activity-space pairs and automated computation of space utilization based on the pairs. However, existing user presence models require architects to manually generate activity-space pairs because space-use types and their impact on the generation have not been formalized in a single method. This paper presents a formalized method that enables a computer to map activities onto spaces to generate such pairs by choosing spatial requirements of an activity, finding appropriate spaces, and mapping the activity onto found spaces. Validation tests show that activity-space pairs generated by this method conform to the pairs generated by expert architects, and the method is acceptable from the architects’ perspectives. Automated space-use analysis powered by this method significantly enhances speed and consistency of utilization prediction. This paper contributes to virtual design and construction by providing a means to connect activities with spaces automatically.
Contractual agreements between public agencies and private companies in the form of public-private partnerships (PPPs) have proven to be beneficial to both the public and private sectors. However, PPPs expose the concessionaire to a number of potential risks over the long concession period and the concessionaire may not be able to recover the large initial investment and obtain a reasonable rate of return if significant difficulties occur in the concession period. Hosting governments normally allow concession renegotiations when certain serious risk scenarios occur. International PPP practices have shown conflicting results from renegotiations, and many renegotiations have raised serious questions about the viability of the PPP approach. To facilitate renegotiations between the public and private sectors, this research has developed a concession renegotiation framework and compensation models for three common compensation measures, namely, toll adjustment, contract extension, and annual subsidy or unitary payment adjustment. The key issue in developing a quantitative compensation model is to estimate future cash flows, in which future traffic demand and operation and maintenance costs are important stochastic variables. Time-series models have been used to forecast these stochastic variables.
In hot-mix asphalt (HMA) pavement construction, newly placed pavement must be sufficiently cooled before it can be opened to traffic. Estimation of the time required for pavement to reach a desired temperature level is necessary for highway agencies to make proper specifications and for contractors to plan for daily productions. In this study, energy exchange at the surface of newly laid HMA pavement was modeled as a function of time and weather conditions. Thermodynamics theory and finite-element method were used to model and simulate the cooling process. Field validation indicates that the modeling and simulation results match the observations reasonably well. The analysis procedure developed in this study can be used to predict HMA pavement cooling in different weather conditions. This paper contributes to the understanding of fundamental thermal exchanges in freshly placed HMA pavement, quantification of the influences of weather conditions and time on the thermal exchanges, and realistic estimation of pavement cooling time for better specification and production plans. It also facilitates future exploration of artificial cooling methods by reducing the number of site trials through computer simulations.
This paper presents a comprehensive cost comparative analysis for the impact of the new Green Building Code on residential project development from project management perspectives. As the demand for new residential housing is gradually increasing from the long recession, residential project management is vital for project owners making decisions concerning the investment of new green building features, such as energy-efficient appliances, equipment, and lighting. The analysis results show that the incorporation of such green systems causes the construction costs to increase by 10.77% more than the traditional building, whereas the amount of working days only increases by two days. The findings can be used as a guide for project owners to make decisions concerning their monetary initial investments while benefiting from energy cost savings over the life cycle of the building.
Although the conventional top-down construction method is widely used in deep excavation, it has the drawback of low efficiency attributable to the long hauling distance and the possibility of the occurrence of excessive excavation deformation and construction risk. This paper introduces a case of deep metro station excavation at West Shanghai Railway Station. The top-down construction method must be used because the excavation is located under a running high-speed railway, and an innovative excavation scheme is proposed to improve construction efficiency and to control excavation deformation. In this method, an operation channel for earth hauling is first excavated in the middle of the excavation. With the available operation channel, the soil on both sides of the channel is excavated simultaneously in a segment pattern, and the required strut systems are subsequently constructed. Both the excavated soil and the construction materials are transported through the channel. This channel-type construction method that resolves the conflict between soil excavation and substructure construction allows for continuous excavation and, thus, reduces construction time and decreases excavation deformation. The case study demonstrates that the presented channel-type excavation is very effective in shortening construction time and reducing both construction cost and excavation deformation.
Temporary construction facilities’ layout problems (TCFLPs) are crucial in large-scale construction projects. Well-designed TCFLPs can improve overall effectiveness and facilitate an efficient construction process. This technical note presents an innovative trilogy for positioning appropriate temporary construction facilities (TCFs) in ideal locations based on a qualitative-quantitative-qualitative methodology. In contrast to previous research, the trilogy integrates existing techniques with some qualitative analysis to facilitate operations so that the operability of TCFLPs in practical situations is improved. First, a qualitative-based analysis index is proposed to determine basic properties for the predetermined project. Following this, optimization models are established to obtain satisfactory solutions based on practical requirements and constraints in a quantitative way. Finally, an evaluation index is built to evaluate and adjust some of the TCFs obtained from the previous procedure to better meet the practical demands. The complete process is illustrated using a realistic layout problem from the Jinping-I hydropower station project in China, and the results show that the proposed combined methods can be applied to real-world TCFLPs.
The purpose of this study is to (1) verify whether the time performance of water and sewer projects is statistically different; and (2) develop time-cost relationship (TCR) models for sanitation projects in Chicago, Illinois. The analysis is performed on data from 180 projects completed in Chicago between 1994 and 2002. Because the time performance of a construction project is not entirely explained by the cost, a practical application is also suggested for using the TCR models confidence level intervals to quantify the qualitative risk level associated with the project time performance.
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