Construction Management & Economics

doi: 10.1080/0144619052000344269pmid: N/A

Liu, S. L.; Wang, S. Y.; Lai, K. K.

doi: 10.1080/0144619042000190216pmid: N/A

In choosing a bidding strategy, the original multivariate approach cannot handle a more general and usual bidding situation when the mean value of the bid price for the strategic bidder is not zero. This problem is solved by extending the original approach, assuming that the cost estimate is normally distributed with a non‐zero mean value. The new obtained formula for the probability of winning and the expected profit for the generalized approach are proved to be not influenced by the contract datum parameters and are suitable for determining the optimal mark‐up strategy for a future construction contract. A supplementary model is proposed and combined with the original model to determine relevant parameters in the bid distribution and to justify the previously originally obtained estimation formula. Finally, the real data in the original approach is used to demonstrate the new multivariate analysis approach.

Couto, J. P.; Teixeira, J. C.

doi: 10.1080/01446190500040505pmid: N/A

The evolution of repetitive scheduling methods led to the introduction of the learning concept in construction planning. It is common knowledge that performing the same activity repeatedly, and in the same conditions, takes less and less time as the activity is repeated (Gates and Scarpa, 1972). This phenomenon is clear in many construction activities and is known as learning experience or learning effect. The increase in productivity is mainly due to the increasing knowledge acquired by work repetition. Graphic representation is through a learning curve that admits duration decreases as the activity is repeated, according to a predictable and constant learning rate. The Linear Model of logarithmic coordinates (log10Y  =  log10A – nlog10X) was applied to two repetitive construction processes, frequently used in Portuguese construction. The intent was to examine its applicability and efficiency in predicting future performances, and the interest in incorporating the model in new planning methodologies for repetitive construction. In both cases, learning processes were created.

Motiar Rahman, M.; Kumaraswamy, Mohan M.

doi: 10.1080/01446190500040083pmid: N/A

Exhaustive risk allocation cannot be achieved through contract conditions, because all risk items cannot be foreseen at the planning stage. Effective management of unforeseen risks/events at post‐contract stage needs the collective efforts of all major contracting parties. The attitude and motivation of project participants are critical to such collaborative arrangements. Project ‘partners’ need to be conditioned, starting with their selection processes, by incorporating appropriate ‘soft’ or relational qualities as important selection criteria. They would then need to work under suitable teambuilding protocols, with flexible contract conditions and appropriate adjustment mechanisms that would all be tailored to suit each specific project. The theoretical construct so developed is examined through a series of recent Hong Kong based studies on ‘joint risk management’. Results lead to the development of a framework for building a coalesced team that includes owners, consultants, contractors, subcontractors and suppliers.

Hassanein, Ahmed; Moselhi, Osama

doi: 10.1080/01446190410001673571pmid: N/A

Scheduling linear repetitive construction projects, such as highways and pipelines, poses unique challenges due to maintaining crew work continuity. An efficient method is presented, developed to accelerate the delivery of this class of projects so as to meet a specified deadline with least associated cost. The method is simple and ensures crew work continuity. An iterative approach is employed, where, in each iteration, the project schedule is analysed and an activity is identified as the controlling activity. A controlling activity is an activity that if accelerated, would reduce project duration at least additional cost. Upon its identification, the method selects an expediting strategy that would reduce project duration, and the project is rescheduled. Several expediting strategies are considered, including working overtime, double shifts and weekends. The method is implemented in a prototype software that operates in a Windows® environment, providing a user‐friendly graphical interface. It has an open architecture, enabling the user to actively participate in tailoring the generated schedule to suit the requirements of the project at hand. The proposed method accounts for incentives and liquidated damages to aid users in identifying the most cost‐efficient schedule. A relational database model is implemented in Microsoft Access® to store typical crews and their associated productivity, as well as their availability dates. A project, drawn from the literature, is analysed to demonstrate the basic features of the proposed method and highlight its capabilities.

Dainty, Andrew R. J.; Ison, Stephen G.; Briscoe, Geoffrey H.

doi: 10.1080/0144619042000326738pmid: N/A

Reports abound of the detrimental effect of the construction skills crisis on the performance and future development of the UK construction industry. The industry's continued growth in output, coupled with its unpopularity as a career choice, has led to extreme pressure on its labour market capacity. There remains, however, a paucity of empirical research into the nature of its highly complex labour market. In particular, very little attention has been paid to the impacts being felt by the smaller firms who account for the vast majority of the industry's economic output and employment. This paper reports on research that has explored the perspectives of smaller employers with respect to the skills crisis. Using an inductive methodology, this research canvassed the opinions of representatives of small‐ and medium‐sized (SME) firms in order to establish the impact of skills shortages on the operational efficiency of the industry. The paper reveals the complex interplay of factors which have combined to shape the industry's skills crisis in recent years and uncovers the practical implications for firms attempting to operate in increasingly tight labour market conditions.

Ndekugri, Issaka; Russell, Victoria

doi: 10.1080/0144619042000326747pmid: N/A

The Housing Grants, Construction and Regeneration Act 1996 provides that a party to a construction contract has a right, at any time, to refer any dispute under the contract for adjudication. This resolution method requires a neutral third party, the adjudicator, to determine the dispute within 28 days after receipt of the referral regardless of the complexity of the issues in dispute. The decision is to be implemented even if it is palpably wrong in fact or law. A key assumption of this legislation is that any mistakes made by an adjudicator can be corrected by reference of the same to litigation or arbitration. It is a major concern that restoration of the parties to their correct positions may become impossible where, after implementation of an adjudicator's mistaken decision, the beneficiary of the decision becomes insolvent. This article is a critical review of all the cases in which the courts have dealt with the effect of insolvency on the right to adjudicate and the enforceability of adjudicators' decisions. Two main conclusions are derived from the review. First, the court may decline to enforce an adjudicator's payment decision where there is strong evidence that, on account of formal insolvency, the payee would be unable to make repayment if final resolution of the dispute necessitates it. Second, the only exception so far to the general right to refer to adjudication arises where the other party is in administration.

Min, Wu; Sui Pheng, Low

doi: 10.1080/01446190500041339pmid: N/A

The literature on the use of just‐in‐time (JIT) and economic order quantity (EOQ) purchasing has increasingly favoured JIT in recent years, especially when firms are purchasing to meet high and consistent levels of demand, and the JIT operation can take advantage of inventory physical plant space reduction. The theoretical advantages of JIT purchasing may have been overstated. Two new concepts are developed to underpin the idea that, even if the JIT approach can induce inventory physical plant space reduction, it is possible for EOQ to be more cost effective, as the inventory demand approaches the break‐even point between the function of the annual holding capacity of an inventory facility and the function of the EOQ–JIT cost indifference point. The survey and case study conducted in the ready‐mixed concrete industry in Singapore support this proposition.

Al‐Sobiei, Obaid Saad; Arditi, David; Polat, Gul

doi: 10.1080/01446190500041578pmid: N/A

The construction project is subject to several risks, one of the most important of which is contractor default because contractor default may increase the final project cost considerably. In the US construction industry, owners commonly shield themselves from the risk of contractor default by transferring this risk to the contractor, who in turn transfers this risk to a surety company. On the other hand, the General Directorate of Military Works (GDMW) of the Kingdom of Saudi Arabia retains the risk of contractor default rather than transferring it to a third party. An artificial neural network (ANN) and a genetic algorithm (GA) are used in this study to predict the risk of contractor default in construction projects undertaken for the Saudi armed forces. Based on this prediction, the Saudi GDMW can make a decision to engage or not to engage the services of a contractor. In case the models are not able to generate reliable predictions (or generate contradictory outcomes), the GDMW will have to augment its budget with contingency funds to be used in the event of contractor default. The outcome of this study is of particular relevance to construction owners because it proposes an approach that can allow them to replace an indiscriminate blanket policy by a policy that is rational, effective, prudent and economical.

Xenidis, Yiannis; Angelides, Demos

doi: 10.1080/01446190500041552pmid: N/A

The build–operate–transfer (BOT) approach for developing infrastructure projects is a technique that allows fast realization of public works in cases of a shortage of public funds. This process is full of risks, due mainly to the complexity and extend of the disciplines, public agencies and stakeholders involved. The identification, classification and presentation of a comprehensive list of this type of risks will provide BOT project practitioners with a useful tool in the effort of setting up successfully a BOT concession agreement. The approach presented provides a practical insight into 27 financial risks, which are associated with the BOT projects in their lifecycle. This is achieved through proper justification and description of the content of each risk. Furthermore, a categorization of the risks is presented, according to the stage at which they occur and the sources of their origin. The findings of this research would facilitate the risk analysis process that is being conducted by risk managers prior to bidding for a BOT project and during the negotiation period.