Construction Management and Economics

Published by Taylor & Francis (Routledge)
Online ISSN: 1466-433X
Publications
Article
ISO 14000 is a series of standards defining a formal and structured approach to environmental management. It demonstrates, with assurance, that an organization which complies with current policy and legislation actively addresses environmental issues. Construction activities have a myriad of environmental implications. Hence, construction entities must manage their environmental performance. ISO 14000 represents a possible solution. This study considers the relevance of environmental management to construction organizations. After an overview of the environmental impacts of construction, ISO 14000 and its principles are explored. A field study is reported that was set up to assess the level of commitment of construction enterprises in Singapore to environmental management. Contractors in Singapore are aware of the merits of environmental management, but are not instituting systems towards achieving it. A framework for the development and implementation of an environmental management system (EMS) is proposed.
 
Article
As construction activity has a significant impact on the environment it is vital to consider how to improve the environmental performance of organizations in the construction industry. The ISO 14000 series of standards on environmental management provides construction enterprises with the tool to address in a structured manner the adverse impacts of their operations and to attain sustainable construction. In this study, a survey was conducted to ascertain the perceptions of construction enterprises in Singapore on the impact of the implementation of ISO 14000 on their operations. Major problems were identified, and recommendations are made for the future development of environmental management systems (EMS) in the Singapore construction industry.
 
Article
A remarkable disagreement/deviation between the rate of ISO 14001 registration and the rate of implementation of environmental impact assessment in the Chinese construction industry indicates that the contractors there might not have really applied environmental management (EM) in construction projects. This hypothesis has been tested in this paper by a mail questionnaire survey conducted to 72 main contractors in Shanghai, mainland China. The survey results indicate that there are five classes of factors influencing the acceptability of the ISO 14000 series of EM standards. Reasons why approximately 81% of contractors surveyed are indifferent to the ISO 14000 series are then analysed based on the critical classes. A linear discriminant model for decision-making for construction companies on whether to accept the ISO 14000 series is developed.
 
Article
United Kingdom construction output makes a vitally important contribution to the gross domestic product of the UK economy. Nevertheless, despite the obvious importance of UK construction, very little is known about the output behaviour of the industry. This paper endeavours to redress the imbalance by analysing the post-war time-series behaviour of annual and quarterly UK construction output. The primary technique of analysis is to estimate an autoregressive integrated moving-average (ARIMA) model of UK construction output. Such a model proxies the stochastic or random process that underlies UK construction output data. Also, a review is given of the methodology of estimation and diagnostic checking of ARIMA models in the context of UK construction output, together with ex-post and ex-ante forecasts of UK construction output using the estimated ARIMA models.
 
Article
Using two sets of input-output tables, this paper analyses the role of the construction sector in the North and South regions of Italy, from 1959 to 1992. As expected, the sector has had differing impacts on the two regional economies over the years. In the highly developed North its importance has been declining, similarly to the case of other highly developed countries. In the less developed South, instead, construction has a relatively higher propulsive role in the creation of goods and income. This role is significantly diminished since most of the construction inputs are imported. Some differences are reported in the sector's input and output profiles of the two regions. From the technological and organizational points of view, in the South construction projects appear to be less complex than those in the North.
 
Article
Using the seven input-output tables compiled in Japan to date, this paper extends earlier analysis by adding the analysis of 1985 and 1990 tables. This paper shows that the Japanese construction sector's share in GNP has declined since 1980; the GNP share of manufacturing is continuing to decline and that of services is continuing to grow; the economy-wise effect of construction activity is continuing to decline; and the construction inputs from manufacturing are continuing to decline whereas the sector's inputs from services are continuing to grow. All these are signs of a growing 'maturity' of the Japanese economy, which in this regard appears to follow the path of other advanced industrial countries.
 
Article
Using 12 input-output tables compiled in Taiwan between 1964 and 1999, the role of the construction sector in the development of the Taiwanese economy is examined and analysed in relationship to other economic sectors. Analytical results reveal a two-stage inverted U-shaped relationship between the share of construction in GNP versus GNP per capita. The 'pull effect' of the Taiwanese construction sector is approximately equal to that of the Japanese construction sector over time, demonstrating that construction is more closely linked to the wider economy in Taiwan than elsewhere, like Italy, the UK and the USA. The 'push effect' increases significantly over time, indicating that the M&R (maintenance and repair) construction expenditures are growing in Taiwan. Finally, the direct and total construction input from manufacturing initially increased from 1969 and then declined after 1981, while the input from the service sector has been steadily growing. These findings confirm the increasing 'maturity' of the Taiwanese economy, a trend that mirrors the economic development of other AICs like Italy, Japan, the UK and the USA.
 
Article
During the past several decades, globalization has led to the integration of product markets. Rapid increases in cross-border economic, social, technological and cultural exchange have become the key elements of knowledge diffusion and thus technology spillovers among countries. As a result, the debate as to whether absolute convergence occurs at the cross-country level has increasingly attracted the attention of researchers. The aim of this study is to examine the changes in the input structure of the construction industry in nine developed countries between the late 1960s and 1990 and to evaluate whether convergence occurs at input industry level. The analysis of the technical coefficients for 35 industries reveals that, across countries and over time, not only the key inputs but also the new high and low input industries are similar. The estimation of variance factors on the other hand suggests that (1) during the sample period, the input structure of the industry is dominated by divergence rather than convergence; (2) among the input industries, services in particular tend for convergence; and (3) manufacturing inputs provide a mixed picture where only a few inputs show convergence and the remaining inputs show in general weak divergence.
 
Article
Problems of competitive pricing and strategic management in the construction industry are discussed. A statistical analysis of tender spread patterns over the period 1970-91 shows that changing market conditions influence levels of risk exposure and in turn affect the establishment of a market-generated 'going rate' for construction. A pattern of increasing stability of pricing is identified during the 1980s, and this pattern is linked to developments in the strategic management of contracting organizations. Despite trenchant criticism of the sealed bid as a method of price determination, the industry's price levels do respond relatively quickly to changed economic conditions.
 
Article
This paper reports research aimed at the establishment of a model of interdependence between the construction sector and the national economy, based on a long term trend, for the developing countries of Sub-Saharan Africa. This study follows research undertaken by previous writers who have investigated the relationship between the construction sector and economic development and found a positive relationship between the share of construction in gross domestic product (GDP) and the level of per capita national income. In addition, recent economic and demographic trends in Sub-Saharan Africa are presented and significant events that have had a great impact in this region are highlighted. Evidence is presented that a long term decreasing growth in GDP per capita corresponds directly to a relative decrease in construction volume. The converse does not appear to be true.
 
Article
Using the four input-output tables compiled in Turkey to date, the aim of this paper is to examine the construction sector's role in the Turkish economy and analyse its relationships with the other sectors of the national economy. Analysis results show that the share of construction in Gross National Product (GNP) and National Income (NI) tend to increase whereas the GNP share of manufacturing is relatively stable and that of services tend to increase after an abrupt decrease in 1985; backward linkage indicators and output multipliers, as well as forward linkage indicators and input multipliers of construction industry are stable; and finally, direct and total construction inputs from manufacturing show relative stability and those from services tend to increase in recent years. These findings point out the similarities between the Turkish construction industry and some advanced industrial countries (AICs) like Japan and Italy showing signs of growing 'maturity' of the Turkish economy.
 
Article
With increasing complexity of construction industry problems, researchers are experimenting with computationally rigorous techniques with the aim of seeking innovative solutions. In order to trace the applications of quantitative analysis techniques to research in the two fields of construction economics and construction management for both conventional and AI techniques, the methodology involves compiling all the relevant papers from the top two ranking construction management journals, namely, Construction Management and Economics and ASCE's Journal of Construction Engineering and Management. The period is from 1983 to 2006. The compiled papers are classified by field, area (or topic), technique applied and year of publication to enable time series and cross-sectional analyses of the data. Mainly, the results are depicted as trends when the patterns of distribution of the papers are plotted over time. The three findings are: (1) for construction economics, the overall increasing trend is higher for papers that have applied conventional techniques; (2) for construction management, there is a clear positive trend for papers that have applied AI techniques which starts from 1995; and (3) the areas (or topics) of construction management that have increasingly higher growth in the application of AI techniques are optimization of site operations and optimization of project time, cost and resources allocation. Two broad recommendations are made that relate to advancing the fields of construction economics and construction management with the view that researchers must better enable themselves to build tools that incorporate intelligence as innovative solutions for increasingly complex problems.
 
Article
The internationalization of British construction companies is not a new phenomenon. A recent stated aim of some of the larger companies has been to increase their overseas activities in an attempt to counteract some of the problems within the domestic construction market. This paper examines the international performance of British construction firms during the period 1990-1996, and is based on a questionnaire survey of senior executives of the largest British construction companies in an attempt to analyse their perceptions of the overseas market. The survey was concerned with the companies' general views, reasons, objectives, conditions, location and future expectations with regard to their overseas operations. The principal findings indicate that British firms had increased their overseas activities during the study period. However, despite theory to the contrary and relatively high levels of construction demand in some developing countries, they had tended to conduct the major share of their overseas work in developed countries. The reasons given for this bias were that developed countries provided: a secure environment in which to evaluate risks; financial security; and less corruption. The results suggest further that shareholder influence is an important factor affecting the respondent companies location overseas. It was concluded that while market demand is a factor for overseas location by British construction companies, it is only one of many.
 
Article
Construction has been perceived as a pillar industry in China's economic revitalization. Policies and programmes have been implemented by the central and local governments to promote the development of the national and local construction industries, in the hope of driving the growth of the economy. Developments in China's economy and in particular, in different regions, can be used to test the hypotheses on the relationship between construction and economic development. This paper examines the geographical distribution of construction in the provinces of China, and the relationship between construction and regional economic growth. It also studies different types of projects, ownership patterns, and levels of technology applied. The study provides useful insights into the relationships between the construction industry, and the economy and development especially at the regional level.
 
Article
An unprecedented boom in Taiwanese residential unit production is described and explained as a supply side phenomenon. Unit construction tripled from 1991 to 1993 and maintained that level for two years before falling back to normal levels. The existence of a peak in real production is identified from production data and considered as supply-side phenomenon. The evidence includes a strong growth in development loans (supply side) compared to house purchase loans (demand side), and a considerable rise in vacancy rates after the Peak. This supply side interpretation is further examined within single equation and simultaneous equation econometric models. This Peak is seen as precipitated by the interaction of the announcement of a new housing regulation (volume control) and an increase in development credit availability. These two events far outweighed demand side considerations for developers. An indirect method of estimation within a unit completions equation indicates that volume control significantly influenced construction. Conversely selling price was insignificant, consistent with the supply side interpretation. A construction approvals equation supports these conclusions. Other equations explain prices and vacancies. The model was cast in the form of a demand and supply for new completions rather than for total units in order to explain production.
 
Article
The annual survey of corporate real estate practices in Europe and North America conducted by the Corporate Real Estate Management Research Unit at the University of Reading and Johnson Controls Incorporated includes information on outsourcing trends of several property-related management functions-design, construction, facilities, and maintenance management. The visual inspection of responses would suggest a gradual trend away from outsourcing, but the statistical tests indicate a significant increase only in in-house construction management function, and only for the period between 1993 and 1994. There are no significant trends in any of the four functions for the remaining period through 1998. However, the survey shows also that these management functions are interrelated. That is, when an organization undertakes one of these functions it is likely that they will perform the others in-house as well. Finally, the shift towards in-house construction management seems to reflect a wider trend away from outsourcing.
 
Article
Many research studies have been completed on the effectiveness of ISO 9000:1994 in the construction industry. The new ISO 9001:2000 requires firms to have a completely different mindset about achieving quality. From merely compliance with requirements, firms who intend to obtain ISO 9001:2000 certification have to understand fully the new requirements and how they may 'fit' the new standards into their present quality management systems, instead of changing their original work procedures to suit the Standard's requirements. This study presents a survey of the preparation work undertaken by construction firms in Singapore in moving from ISO 9000:1994 to ISO 9001:2000. From the research findings, it was found that most firms are ready for the conversion to the new Standard with slight beefing up of their existing quality management systems.
 
Article
This paper, which focuses on the impact of the Construction (Design and Management) Regulations 1994 on the management of small building works, adds new data and analysis to the further development of a subset of findings from a major research study, supported by governmental and industry based sources, which investigated the efficiency and effectiveness of procurement methods, organizational systems and management approaches to small building works and minor maintenance projects. Within this industry subsector there has been and continues to be an apparent culture of misunderstanding in the application of the CDM Regulations. However, commonly such works are undertaken in active environments where buildings are occupied or are operational. This raises many issues and considerations which are key to the satisfactory implementation of the CDM Regulations. The application of the Regulations is examined explicitly in the context of managing small building works. The findings indicate that the CDM Regulations have left ambiguities, primarily through specified exclusions to application, through which health and safety responsibilities may be downplayed or even simply disregarded. Effective implementation of the CDM Regulations during the management of small building works requires that legislation be unambiguously translated into contract documentation, and also that there must be clear understanding by project participants of their committed and onerous responsibilities for project health and safety under the CDM Regulations.
 
Article
The Building and Construction Industry Security of Payments Act 1999—updated 27 November 2003, New South Wales, Australia provides a statutory framework which governs compulsory progress payments for those who undertake works or provide goods or services as part of a construction contract. Respondents to the process are being disadvantaged as a result of complying with the Act. Claimants are purported to be taking months to prepare detailed and comprehensive payment claims, prior to serving them on the respondents, who, under the Act, have limited time to compile a detailed payment schedule in response. This research investigates the use of two recent innovations that could assist in the administration of the process. The first is the Society of Construction Law's Delay and Disruption Protocol's model clauses, and the second is the use of web-based technology as a project administrative tool. A literature search was carried out, together with semi-structured qualitative interviews, to determine opinions of their use and effectiveness. Results indicate a recognition and appreciation of the likely benefits of transparency, efficiency and improved cost effectiveness of the project administrative processes, possibly resulting in potential savings and improved cost recovery opportunities, with the potential to reduce and/or avoid disputes.
 
Article
The constructivist model of 'soft' value management (VM) is contrasted with the VM discourse appropriated by cost consultants who operate from within UK quantity surveying (QS) practices. The enactment of VM by cost consultants is shaped by the institutional context within which they operate and is not necessarily representative of VM practice per se. Opportunities to perform VM during the formative stages of design are further constrained by the positivistic rhetoric that such practitioners use to conceptualize and promote their services. The complex interplay between VM theory and practice is highlighted and analysed from a non-deterministic perspective. Codified models of 'best practice' are seen to be socially constructed and legitimized through human interaction in the context of interorganizational networks. Published methodologies are seen to inform practice in only a loose and indirect manner, with extensive scope for localized improvization. New insights into the relationship between VM theory and practice are derived from the dramaturgical metaphor. The social reality of VM is seen to be constituted through scripts and performances, both of which are continuously contested across organizational arenas. It is concluded that VM defies universal definition and is conceptualized and enacted differently across different localized contexts.
 
Article
The wherewithal of achieving best value in private finance initiative (PFI) projects and the associated problems therein are documented. In the UK, PFI has offered a solution to the problem of securing necessary investment at a time of severe public expenditure restraint. In PFI schemes, the public sector clients must secure value for money, while the private sector service providers must genuinely assume responsibility for project risks. A broad-based investigation into PFI risk management informs the discussion in this paper. It is based on 68 interviews with PFI participants and a case study of eight PFI projects. The research participants comprised of contractors, financial institutions, public sector clients, consultants and facilities management organizations. The qualitative software Atlas.ti was used to analyse the textual data generated. The analysis showed that the achievement of best value requirements through PFI should hinge on: detailed risk analysis and appropriate risk allocation, drive for faster project completion, curtailment in project cost escalation, encouragement of innovation in project development, and maintenance cost being adequately accounted for. Factors that continue to challenge the achievement of best value are: high cost of the PFI procurement process, lengthy and complex negotiations, difficulty in specifying the quality of service, pricing of facility management services, potential conflicts of interests among those involved in the procurement, and the public sector clients' inability to manage consultants.
 
Article
The evolution of the concept of sustainable development is used as a basis for advancing understanding of sustainable construction. Principles of sustainable construction are developed and divided into four 'pillars' - social, economic, biophysical and technical - with a set of over-arching, process-oriented principles, to be used as a checklist in practice. A multi-stage framework is proposed which requires the application of Environmental Assessment and Environmental Management Systems for construction projects.
 
The construction planning process (adapted from Hendrickson, 2000)  
Article
Since the early 1990s, there has been a growing interest in four-dimensional computer aided design (4D CAD) for construction project planning. Commercial 4D CAD applications are becoming more accessible and the use of this technology allows the construction planner to produce more rigorous schedules. A review of the technical competencies of these packages highlights that most of the commercially available packages concentrate on the use of 4D CAD simulations for aesthetic visualization purposes. Very few packages offer the ability to carry out analytical tasks on the developed simulation and this is often left to the interpretation of the user. A thorough appraisal of emerging research developments in 4D planning highlights that this technology is employed for various applications; however, the amount of detail required in a 4D simulation is still ambiguous. A model is proposed to determine the attributes required for use with each of the various applications of 4D CAD simulations. Finally, various lines of future research are highlighted, including the need for improved use of data exchange standards and the automation of linking the construction tasks to the 3D CAD model.
 
Article
This article addresses the accounting process for a long term construction contract and the effect of recent income tax reform on revenue recognition for income tax liability purposes. The Tax Reform Act of 1986 (TRA '86) introduced several significant changes in tax accounting for long term construction projects. Further tax legislation reform was promulgated via the Technical and Miscellaneous Revenue Act of 1988 (TAMRA '88). Prior to the promulgation of these income tax reform acts, a US contractor could use the percentage-completion method for reporting income to creditors and investors, while using the completed-contract method for income tax recognition purposes. After TRA '86 and ending with TAMRA '88 tax legislation, the contractor is now required by law to utilize a 90/10 split for an income recognition schedule if a contract is longer than two years and the contractor has sales of more than $10 million per year. An intent of this article is to create an awareness of these rules and resulting practices, so that international readers may gain a better understanding of any global implications.
 
Article
Client driven 'pushes' for ISO 9000 certification in Hong Kong are observed to have overtaken any spontaneous 'pull factors' (motivators) towards quality improvements 'for their own sake'. For example, the need for ISO 9000 certification as a prerequisite for even being considered for public sector construction works appears to have distracted some organizations from a more comprehensive organization-specific development of their quality management systems. Both positive (beneficial) and negative (detrimental) outcomes from ISO 9000 certification, as observed from relevant previous studies, are summarized herein. These provide a useful background against which to present perceptions derived from the current study in Hong Kong construction. The target groups were predominantly from consultants in the initial survey and all from contractors in the second and more comprehensive survey. The more significant positive and negative outcomes from ISO 9000 certification as derived from the two current surveys are identified. Recommendations are made for realigned approaches to ISO 9000 certification and for seamless integration with other quality management approaches such as TQM, as well as with other management subsystems, such as for productivity improvement and dispute minimization.
 
Article
With the adoption by construction firms of BS EN ISO 9000 there has been much debate concerning its effectiveness and value as a quality management system. In spite of the reported benefits of ISO 9000 certification, however, concerns regarding its overall benefit to construction firms due to unnecessary bureaucracy and paperwork, increased costs, stifling of innovation, etc. still persist in the industry. This paper reports on the results of a research carried out on the implementation of BS EN ISO 9000 as a continuation of BS5750 in the UK construction industry from the view point of the experiences and perceptions of quality assurance managers of selected construction firms.
 
Age profile of ISO 9000 certified precast concrete firms
External influence diffusion curve
Adoptions due to internal and external influences in the mixed influence model
Article
ISO 9000 is one of the most important administrative innovations of the last two decades. The Turkish precast concrete industry is an interesting example of the diffusion of this important administrative innovation. Innovation diffusion theory proposes that the diffusion of an innovation is driven by internal (i.e. behaviours of copying others) and external (i.e. complying with client requirements, changes in government regulations, demand conditions, and consulting firms' suggestions) influence factors. The propositions of innovation diffusion theory are empirically tested by using three mathematical models: the internal influence model, the external influence model and the mixed influence model. The mixed influence model has the highest explanatory power and the diffusion of ISO 9000 certification in the precast concrete industry is primarily driven by internal rather than external influence factors.
 
Article
This study analysed how the ISO 9000 framework could be employed in the construction process. Interviews were conducted at twelve companies in Sweden that utilized the quality system standard ISO 9001. Many of the concepts contained in the quality system standard were experienced as being too abstract and too difficult to comprehend. Frequently quality mangement was considered as serving the function of improving the company's competitiveness and allowing the company to be more efficient. It appeared difficult, however, in view of the many stages the construction process encompasses and the diverging interests represented, to meet the needs of the construction sector by the use of ISO 9001 alone. Some of the paragraphs it contains also tended to be confused with one another and to be misinterpreted. Others, although useful elsewhere, appeared scarcely to find application in the construction sector. Developments in the area appear to be going in the direction away from using large bureaucratic inspection systems and quality handbooks aimed at impressing customers and towards employing more diversified systems. Certification was found to be a matter of concern to all of the companies investigated.
 
Article
The real option approach is used to value the minimum revenue guarantee (MRG) and the option to abandon in Build-Operate-Transfer infrastructure projects. The option to abandon is formulated under an investment option held by the concessionaire at contract signing and to expire before construction commencement. MRG is formulated as a series of European style put options in a single option pricing model. When combined with the option to abandon in the pre-construction phase, MRG is reconstructed as a series of European style call options to develop a compound option pricing formula. The Taiwan High-Speed Rail Project is chosen as a numerical case to apply the formulas. The results show both MRG and the option to abandon can create values. When MRG and the option to abandon are combined, they will counteract each other and their values will thus be reduced. Increasing the MRG level will decrease the value of the option to abandon, and, at a certain MRG level, the option to abandon will be rendered worthless.
 
Total number of companies, response frequencies and response rates 
General structure of the questionnaire survey  
Green ACAP—a revised ACAP model  
Summary of linear regression analyses 
Article
Applying the model of absorptive capacity (ACAP), antecedents, predictors and moderators for green innovation and performance in the construction industry are investigated. The aim is to identify mechanisms that influence green innovation and environmental performance in a construction company. Data come from a questionnaire survey assessing environmental attitudes, management and performance within the Swedish construction industry. For data analysis, linear regression analysis was used. From testing the ACAP theory and model, it was concluded that it has a promising potential in explaining mechanisms behind green innovation and performance. The application of ACAP has resulted in a revised ACAP model, green ACAP. Findings indicate that organizations can affect their capacity to absorb green innovations and improve their business performance by focusing on three predictors of green business advantage: acquisition, assimilation and transformation. As such, the green ACAP can serve as a framework for focused efforts within the construction industry.
 
Article
This paper focuses on how knowledge is produced by academics and on mechanisms for and constraints upon absorbing new ideas within the construction sector. It draws upon two bodies of work: Cohen and Levinthal's concept of 'absorptive capacity' and Gibbons and coworkers' 'new production of knowledge'. Much of Steven Groak's work was concerned with technology transfer and how ideas generated during research could be put into practice. He developed the concept of 'practitioner-researcher' to illustrate the ways in which many built environment professionals approach their work. The paper suggests that a few construction firms have the capabilities to absorb and act directly upon the results of academic research in the UK. These firms are likely to employ a critical mass of professionally qualified practitioners and they usually compete for work in technically demanding and often specialist areas. They probably have a track record of collaboration with university researchers, and are likely to have their own internal technical support infrastructure which assists in learning between projects. However, the majority of construction organizations learn of new ideas through a range of different published media and by participating in complex sets of interactions in a wide range of networks. The role of professional institutions is important, acting as repositories of knowledge. But these institutions may also constrain development when they adhere to outmoded notions of narrowly defined discipline-based activities. Governments can play a part in putting ideas into practice as catalysts in bringing academic research and industrial practitioner communities together through sponsorship of collaborative research projects. The paper concludes that construction organizations could improve their absorptive capacity by developing better feedback and life-long learning mechanisms, education and training.
 
Article
The contribution made by economic theory when studying construction-related subjects has a muddled history. This theme was carefully reviewed in Ofori (1994) where he bluntly concluded that: 'Construction economics cannot be regarded as a bona-fide subject' (p. 304). This short note takes a retrospective look at George Ofori's paper and suggests that during the subsequent period little has changed. This is despite the publication of government reports that stressed the importance of creating a culture of economic efficiency within construction and the need for the industry to become sustainable. This paper is informed by a brief survey of what is currently taught at British universities under the title of construction economics. Two points for debate emerge. The first is the worrying observation about the present state of play, as it seems that construction economics continues to lack any coherent conceptual structure. The second is the more promising suggestion that in the foreseeable future the sustainability agenda could provide the impetus necessary for construction economists to agree a common purpose and conceptual approach.
 
Article
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.
 
Article
Timely completion and high performance are becoming key factors in modern road projects, so research is needed to have reliable contracts and acceptance criteria. The goal of this paper is confined to the formalization and validation of a unique model for the determination of pay adjustment on the basis of both quality (mechanical and surface performance of road pavements) and timeliness. Three main topics are addressed. The first is the estimation of pay adjustment (PA, negative or positive) when both structural and non-structural deficiencies/surplus in characteristics are detected (e.g. low drainability in porous asphalt concretes). The second is the estimation of PA based on the quality of all the layers of the pavement. The third is the estimation of PA for early or late completion of the work. The formalized model is applied to an experimental case history. Analyses and validation demonstrate that the proposed model can efficiently solve typical problems in contract administration, in which decisions based upon objective criteria are needed.
 
Article
The integration of time and cost management of construction projects has been recognized as the most effective way for close management. However, it has not been effectively used due to the presence of a large quantity of data with many complex interrelationships. Advanced software using current state-of-the-art could be developed to solve this problem. Nevertheless, construction organizations, especially those of small to medium size, cannot afford to procure such software due to the high cost involved in development and training. Probably, the maximum capability of small to medium size contractors is to purchase general applications - spreadsheet, database, etc. - and general time planning software. Thus, a computer solution for an existing problem using general software will have a higher potential for application. In this context, research was undertaken to establish the feasibility of the use of MS Access™ and MS Project™ to provide an integrated time and cost management information system encompassing estimating, scheduling, cost control, resource monitoring and costing, and financial control. First, through a literature review, documentary search in contractor organizations and interviews of professionals, the requirements of such a system were identified. Second, detail procedures were established by use of standard system design procedures. Third, a data modelling was developed and a relational database was established with data transfer mechanism between database and time planning software. The research proved that an effective integrated project cost management system could be developed using MS Project™ and MS Access™ as an economical solution for small to medium construction organizations.
 
Article
Construction work in oil and gas projects is both challenging and hazardous. The occupational hazards are often associated with fatigue and stress, and an accident is one possible outcome. The purpose of the two-part study was to identify the new and emergent risks within the top 10 ranked risks and to evaluate their contribution to accidents. Three hundred and twenty stakeholders, from four oil and gas construction projects in mainland China participated in the survey questionnaire. Fifteen workers, who have experienced actual fatigue-related accidents, were also interviewed. All of the stakeholders unanimously ranked fatigue as the most critical risk perceived to cause accidents with emotional disturbance, the emergent risk. This is the first time that fatigue has been identified as the leading accident risk in the construction industry. It was further reported as a trigger risk to a bundle of other synergetic risks. The new discovery confirms the need to consider fatigue as a complex multidimensional phenomenon and the lynchpin to reducing accidents. These findings have created new responses to the problem of accident causation and alternative views to accident mitigation. The discoveries will open new opportunities for future research in the areas of fatigue and stress risk management in construction.
 
Article
Despite recent changes in legislation and advances towards an integrated project-wide approach, health and safety management in the construction industry is still a major problem, involving a substantial cost to business, society and individuals. A prerequisite to improving the situation and developing an effective management strategy is monitoring, providing a detailed understanding of the effectiveness of different approaches to intervention. This paper describes a feasibility study using in-depth interviews with senior managers to explore the quality of accident and health data of nine large, high profile companies from the engineering construction sector. The interview dialogue comprised a series of questions and issues to be explored on the organization's accident reporting systems (e.g. what is reported, analysis performed, computerization), unsafe act and near miss auditing (e.g. definition, validity), failure type indicators (e.g. auditing, quantification) and safety culture indicators (e.g. commitment, health). Although safety was a priority for companies, health (i.e. medicals and monitoring systems) had not been given the same consideration, especially with regard to subcontracted labour. This study shows that the validity of accident statistics as a measure of safety remains a limitation, and that there is a requirement for a consistent and integrated approach to the measurement of health and safety performance.
 
Article
The aim of this study is to examine those occupational accidents at construction sites that are related to materials handling as compared with all reportable occupational accidents at construction sites. The main concern is to define the kinds of accidents that occur in materials handling. The data were gathered from two sources: a large Finnish construction company and the database of reports of serious occupational accidents (Sammio). One third of all the reported accidents in the studied construction company occurred during materials transfer and 36% of the absenteeism days resulted from these accidents. Materials handling thus caused more serious accidents than other work activities (t = -2.44, df = 351, p < 0.005). Minor accidents were mostly due to over-exertion whereas serious accidents were mostly falling from a height and injuries caused by falling and collapsing objects. The manual transfer of materials caused most of the materials transfer accidents in the company and mechanical transfer most of the serious materials handling accidents. Over-exertion can, therefore, be decreased by reducing manual materials handling. On the other hand, replacing manual transfers with mechanical transfers means that there arises a risk of serious accidents.
 
Article
Direct financial costs of accidents are the tip of the iceberg when compared to the indirect costs. Notwithstanding the difficulties involved, it is very important to estimate the indirect costs borne by society, and the non-material losses due to pain, suffering and loss of enjoyment of life undergone by the victim. This study investigates the pain and suffering costs (non-material losses) of the victims of construction accidents in Hong Kong based on relevant High Court personal injury case judgements in the years 1999-2003. The 54 non-fatal accident cases and 14 fatal accident cases analysed indicate that the average percentage of compensation awarded for non-material damages (pain, suffering and loss of enjoyment of life) to that for material damages (loss of earnings, medical and travelling expenses, etc.) during those years is about 30%. This result enables estimating the pain and suffering costs of the society for a particular year if the total material losses of all construction accidents in that year are known. Based on previous research in which the material losses in Hong Kong were evaluated for the years 1999, 2000 and 2001, the corresponding pain and suffering costs could be estimated as 219 million, 150 million and 107 million Hong Kong dollars, respectively (US$1.00 = HK$7.80).
 
Article
Most contractors' financial losses associated with accidents, but not all, are also social costs. Some social costs are not incurred by contractors, but by society. Social costs of construction accidents have been gathered for years 1999-2001. The safety investments made by both contractors and society are also identified based on data assembled for these three years. These social costs and safety investments were identified from 119 construction projects involving 1414 accidents and from 18 government departments in Hong Kong. The data shows that there was an increasing trend in social safety investments and a decreasing trend in social costs of construction accidents from 1999 to 2001. During this period, for every extra $1 of social safety investments made, a reduction of $2.27 of social costs on construction accidents was achieved in Hong Kong.
 
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In consumer electronic markets, rating mechanisms are important facilitators of trust between market participants. This paper investigates whether source credibility theory can support the evaluation of bidders in architecture/engineering/construction (AEC) electronic market places. In contrast to consumer electronic marketplaces, the raters in AEC communities are skilled and connected, necessitating a reputation mechanism to account for the relationship between the user and the rater. To solve this problem, TrustBuilder, a prototype rating tool, facilitates information sharing between peer industry practitioners by calculating a weighted rating based on source credibility theory. An experiment shows that AEC industry practitioners who evaluate bidding subcontractors trusted the information provided by TrustBuilder significantly more than information from a standard unweighted rating tool.
 
TFP index of the construction industry of Singapore and MFP index of economy of Singapore during 1984–1998, (1984 = 100)  
Article
Total factor productivity (TFP) determines long-term economic growth and is a comprehensive industry-level productivity measure. This paper proposes Jorgenson's method as an appropriate TFP measurement for the construction industry. The method is less restrictive than the conventional Chau's approach, as it does not impose the Hick Neutral Technical Change assumption. Jorgenson's method is then applied to estimate TFP growth in the construction industry of Singapore over 1984-1998. TFP growth is found down by 1.53% per annum over this period, indicating that the performance of TFP in the construction industry lags behind the rest of economy. TFP growth is also found to be fluctuating over time and tends to move in tandem with the construction business cycle. As a monitor of progress towards TFP achievement, factors influencing TFP growth in the construction industry of Singapore over 1984-1997 are identified. Seven factors are found to be significantly related to TFP growth. Among them, economies of scale, R&D by the industry, investment allowance granted and labour unions are leading contributors to TFP growth; while foreign worker, construction accidents and pre-cast are major hampers. The general methodology presented in this study can be applied to other countries. Future studies are required to find appropriate indicators for factors unquantified.
 
Article
Infrastructure projects are still being plagued by cost overruns, delays and revenue shortfalls despite decades of practice and research. Risk-based estimating (RBE) is growing in popularity and has the potential to overcome the two main cost overrun factors—optimistic bias and strategic misrepresentation. Yet, little is known about the accuracy of RBE and its performance drivers. A comparison of water projects using RBE with a sample of construction projects using the conventional estimating approach shows that the projects estimated using RBE have better estimation accuracy than those estimated using more conventional approaches. In addition, the projects using RBE appear more likely to be under-budget while the ones using the conventional approach appear more likely to be over-budget. Further, through interviews and observations of the RBE process, three main performance drivers for the RBE method were identified to include outside view/collective experience, attention focusing and probabilistic, bottom-up modelling.
 
Article
A pre-tender building cost estimate is an important piece of information when making decisions at the project planning and design stage. The important project characteristics influencing the accuracy of pre-tender building cost estimates are examined and practical improvement for increasing the accuracy of estimates are considered. A quantitative approach is used to address the research problem. Analysis of data from 56 projects and from a postal questionnaire survey of 102 quantity surveying firms suggests that the accuracy of pre-tender building cost estimates varies according to project size and principal structural material. When eight identified project characteristics are controlled in a multiple regression analysis, the accuracy of estimates is influenced by project size. The estimates of smaller projects are more biased than the estimates of larger projects. It was discovered that pre-tender building costs are more often overestimated than are underestimated. Overestimated forecasts are incorrect by a larger amount than underestimated forecasts. Data analysis also revealed that the accuracy of pre-tender building cost estimates has not improved over time. The majority of the respondents are somewhat dissatisfied with the accuracy of estimates in the industry. Probability estimation and simulation of past estimates, reducing quantity surveying and cost engineering skill turnover, incorporating market sentiments into estimates, early involvement of the quantity surveyor at the brief stage, and proper documentation of experience gained in the estimation of projects should help firms increase the accuracy of estimates for new projects.
 
Article
In the current state of research in construction demand modelling and forecasting there is a predominant use of the multiple regression approach, particularly the linear technique. Because of the popularity, it may be useful at this stage to gain an insight into the accuracy of the approach by comparing the forecasting performance of different forms of regression analysis. It is only through such formal means that the relative accuracy of different regression techniques can be assessed. In a case-study of modelling Singapore's residential, industrial and commercial construction demand, both linear and nonlinear regression techniques are applied. The techniques used include multiple linear regression (MLR), multiple log-linear regression (MLGR) and autoregressive nonlinear regression (ANLR). Quarterly time-series data over the period 1975-1994 are used. The objective is to evaluate the reliability of these techniques in modelling sectoral demand based on ex-post forecasting accuracy. Relative measures of forecasting accuracy dealing with percentage errors are used. It is found that the MLGR outperforms the other two methods in two of the three sectors examined by achieving the lowest mean absolute percentage error. The general conclusion is that nonlinear techniques are more accurate in representing the complex relationship between demand for construction and its various associated indicators. In addition to improved accuracy, the use of nonlinear forms also expands the scope of regression analysis.
 
Article
Public-private partnerships (PPPs) have been applied widely in the global construction market. During the life cycle of PPP projects, their performance could be affected by a number of factors and their interactions, which might cause the inefficiency and ineffectiveness of the projects. Previous researches on PPPs mainly concentrated on the procurement, success measurement and risk management of PPPs, but paid little attention to the process factors that can strongly influence the performance of PPPs. In order to improve process and performance management in PPPs, the performance objectives and key performance indicators (KPIs) are identified to improve the partnership outcomes. Based on the goal-setting theory, 15 performance objectives are selected. The relative significance and difference of performance objectives for different stakeholders are presented based on a structured questionnaire survey. The survey results show that all identified objectives are important. In spite of stakeholders' common opinions on the objectives of quality, costs, time and the services provided by PPPs, there are evident differences in the objectives of budget constraints of the public sector, risks, revenue and guarantees. According to the survey results, a conceptual KPIs framework is established. Furthermore, the KPIs are identified to assess PPP projects' performance. The performance objectives and the KPIs, which can be used to identify the strengths and weaknesses of PPP projects, are useful tools for effective project performance management in PPPs.
 
Top-cited authors
Martin Skitmore
  • Bond University
Akintola Akintoye
  • Leeds Beckett University
Andrew Dainty
  • Manchester Metropolitan University
Helen Lingard
  • RMIT University
George Ofori
  • National University of Singapore