Accuracy in design cost estimating

The level of achieved accuracy in design cost estimating is generally accepted by researchers as being less than desirable. Low accuracy has been attributed to the nature of historical cost data, estimating method and the expertise of the estimator. Previous researchers have suggested that the adoption of resource based estimating by designers could eliminate data and method-related problems. The work in this thesis has shown that this will not solve the problem of inaccuracy in estimating. A major problem in assessing accuracy in design cost estimating has been the absence of a generally agreed definition of the'true cost' of a construction project. Hitherto, studies of accuracy in design cost estimating have relied solely on the assessment of errors using the low bid as a datum. Design cost estimators do not always focus on predicting the low bid. Rather, they may focus on the lowest, second lowest, third lowest or any other bid, mean/median of bids, or sometimes, on just being'within the collection'. This has resulted in designers and researchers having different views on the level of achieved accuracy in estimating. To resolve this problem, an analysis package, ACCEST (ACCuracy in ESTimating), was developed to facilitate 'fair' assessment of accuracy in design cost estimates. Tests - using cost data from 7 offices, the ACCEST package and the OPEN ACCESS II package on an IBM PS/2 - have shown that error in design cost estimating (averaging 3.6% higher than the predicted parameter) is much lower than portrayed in construction literature (averagel3% higher than the low bid). Also, false associations between project environment factors (such as geographical location, market conditions, number of bidders, etc.) and the level of achieved accuracy has been developed by researchers through using the low bid as a datum. Previous researches have also demonstrated that design estimators do not learn sufficiently from experience on past projects. A controlled experiment on design cost estimating information selection was designed to explain this occurrence. Failure to learn, and the persistent use of information on one project for estimating, has been shown to result from the method of information storage in design offices, the illusion of validity of inaccurate rules and over-confidence resulting from inaccurate assessment of individual expertise. A procedure for aiding learning from experience in design cost estimating has been suggested. Finally, the work has shown that by distinguishing between different trades, and selectively applying different estimating strategies, based on the objective evaluation of the uncertainty associated with cost prediction for ear h trade, error in design cost estimating could be further reduced. Two formulae for predicting tender prices using data generated from historical cost estimating experience are represented

Competitive Aggressiveness of Contractors: A Study of Indonesia

AbstractHigh level of competition are consideredto be a major challenge for contractors. As such, ‘winning the competition’ is an important goal for contractors in running their businesses. Contractors need to be aggressive in competition to respond to their competitors’ actions and gain competitive advantage against their business rivals for survival and growth. This study aims to clarify the issue of competitive aggressiveness of contractors by identifyingits key factors. Semi-structured interviews were carried out with 19 top managers of contracting companies in Indonesia, in order to explore the concept of contractors’ competitive aggressiveness. The qualitative data collected during the interviews were analysed using an inductive thematic analysis method. The analysis resulted in identifying five key factors of contractors’competitive aggressiveness: 1) acting as a problem solver for clients; 2) being different compared to competitors; 3) building and maintaining clients’ confidence in the company's trustworthiness and reliability; 4) maintaining good relationships with clients; and 5) positioning on markets that are concerned about quality. Based on these findings, contractors will be able to establish an appropriate strategy to allow them to be aggressive in competition

A dynamic framework for managing the complexities of risks in megaprojects

The future of mega infrastructure projects is certain - there will be more risks to manage. The challenge is being met through research and innovation combining current approaches with new. This research adopted a dynamic approach through the combination of Analytical Network Process (ANP) and system dynamics (SD) as an innovative methodology known as SDANP to model complexity in megaprojects design and construction. We communicate how the SDANP model could explore problems caused by Social, Technical, Economic, Environmental and Political (STEEP) risks to construction cost, time and performance and provide insights that lead to organizational learning. We proceed to exemplify by means of a real-life case project in the City of Edinburgh and offer suggestions on what front-ended stakeholders could do to improve the management of risks in megaprojects. The results of the application showed that, when compared to traditional risks assessment methods, this SD model with integrated ANP revealed improvements in managing risks according to STEEP risks criteria. The new framework appears to be a superior solution for solving the dynamic complexities of risks during megaproject design and construction. The findings of the study contribute to the project management theoretical development within the field of megaproject management

Using Structural Equation Modelling (SEM) to Understand the Relationships among Critical Success Factors (CSFs) for Stakeholder Management in Construction

Purpose Stakeholder management plays a significant role in successfully delivering construction projects. However, being able to carry out effective stakeholder management in construction is contingent upon understanding the interrelationships among critical success factors (CSFs) for stakeholder management in construction and how they are related to project success (PS). This would enable the persons responsible for stakeholder management to know the logical process for addressing the CSFs in order to get stakeholder management right. The understanding of this relationship has not been addressed. The purpose of this paper is to investigate the interrelationships between the CSFs for stakeholder management and PS in construction. Design/methodology/approach From an extensive literature review, 23 CSFs for stakeholder management in construction were identified. A conceptual structural equation model (SEM) of the relationships between CSFs was developed (including measurement and structural models) using the groupings of the CSFs for stakeholder management in construction. A questionnaire survey was used to collect data from construction industry practitioners. The data so collected were analysed using SEM in analysis of moment structures (AMOS). Findings The SEM analysis of data collected resulted in the best fitting measurement model comprising 16 CSFs as indicators of four latent variables, namely, stakeholder characteristics and project characteristics (SCPC); stakeholder analysis (SA); stakeholder dynamics (SD); and stakeholder engagement/empowerment (SE). Furthermore, it was found that only SE has a direct positive impact on PS. The other three constructs SCPC, SA and understanding SD collectively impact on PS through the construct, SE. Research limitations/implications The research reported in this paper was carried out in the UK; hence, the findings may have portrayed the UK construction professionals’ opinion. However, the theoretical principles on which the research was based are general and similar research could be replicated in different countries whose construction procurement processes and industries are structured like those of the UK or otherwise. Practical implications The main contribution of this study to existing knowledge is an empirical evidence of the interrelationships among the CSFs for stakeholder management in construction through their latent variables which is portrayed in the best fitting structural model showing the relationships between the constructs of CSFs for stakeholder management and PS. This should serve as a guide to construction project management team or responsible professionals for undertaking stakeholder management in construction projects. Originality/value The paper contributes to theory by empirically identifying the interrelationships among the CSFs for stakeholder management linking to PS which will serve as a guide to construction professionals. </jats:sec

Establishing a common ground for the use of structural equation modelling for construction related research studies

The use of structural equation modelling (SEM) for research studies in construction related field has been on the increase over the years. The essence of this study is not to compare the level of usage of SEM with other modelling methods, neither is it to examine its extent of adoption in construction management - as this has been researched in previous works - but to arrive at a common ground for future construction related research works, based on the findings and recommendations from existing studies on the subject of SEM. Research materials within and outside the field of construction management were reviewed and it was discovered that SEM using AMOS (covariance approach) is the most appropriate method for construction research studies. This is not just because it is the most available of the software programs, but because of the numerous benefits and advantages highlighted from previous studies. The study also recommended appropriate sample size as well as cut-off value for various required goodness-of-fit tests of SEM model

Linking Personal Competencies With Transformational Leadership Style Evidence From The Construction Industry In Thailand

This study explored the linkage between personal competencies and leadership behaviours as well as their influences on leadership outcomes and subordinates’ work performance. Personal competencies were measured using the Project Manager Competency Development (PMCD) tool. Leadership behaviours and outcomes were measured using Multifactor Leadership Questionnaire (MLQ). Data was collected from construction projects in Thailand. Findings revealed that leadership outcomes have significant positive relationship with all personal competencies specified in the PMCD framework, every factor in the transformational style and contingent reward factor in the transactional style. Transformational leaders tend to produce high work quality, work quantity, and problem solving creativity from subordinates. Findings further verified that all PMCD personal competencies have significant positive relationship with every factor in the transformational style. It implies that project managers who apply the transformational style and/or have high personal competencies indicated in PMCD framework are likely to generate greater leadership outcomes and work performance on construction project

An analytical network process model for risks prioritisation in megaprojects.

Megaprojects are complex and expensive projects that often involve social, technical, economic, environmental and political (STEEP) challenges to project management. Despite these challenges, project owners and financiers continue to invest large sums of money in megaprojects that run high risks of being over schedule and over budget. While some degree of cost and schedule risks are considered during project planning, the challenge of modelling risks interactions and impacts on project performance still remains. To tackle this technical problem, this research adopted the Analytical Network Process and combined it with a new Risk Priority Index as an innovative approach to model risks analytically based on data collected from the Edinburgh Tram Network project at the construction phase. The approach provides an interactive way for developers to prioritise risks across the project supply network and to initiate timely mitigation strategies against significant cost and time consequences of STEEP risks on megaproject performance

Best Practice for Financial Models of PPP Project

Public-private partnership (PPP) project’s arrangement involves many participants with complex transactions and diverse interests at 5 different project stages. Especially in the project financing perspective, this arrangement creates the entire project evaluation process prone to take an extensive period before reaching financial closure. The importance of utilizing financial model as a tool for project evaluation and negotiation is highlighted in this study. 26 input assumptions and 16 output variables have been identified through comparison study of three PPP financial models, and their significances were verified based on pilot studies in India and the UK and expert opinion solicited worldwide through a structured questionnaire survey. SPSS program was used to evaluate the survey responses. The best practice PPP financial model was identified quantitatively by the agreement of four groups of stakeholders (i.e. sponsors, authorities, lenders, and consultants) upon the most preferred financial input and output indicators. Keywords: Public-Private Partnershi; Stakeholders; Financial Model

Megaproject risk analysis and simulation: a dynamic systems approach.

Providing new knowledge on risk analysis and simulation for megaprojects, this book is essential reading for both academics and practitioners. Its focus is on technical descriptions of a newly developed dynamic systems approach to megaproject risk analysis and simulation. This is backed up by a discussion of the methodology as applied in a comprehensive case study on the Edinburgh Tram Network (ETN) project. The book informs both academic researchers and megaproject stakeholders with the latest information on risk as applied to megaprojects. As well as the complete case study, the book includes a general risk analysis framework for megaprojects, an analytic network process (ANP) method for risk quantification, a system dynamics (SD) method for risk simulation, and practical guides for the application of the dynamic systems approach in megaproject research and practice. The file for this record represents only a sample chapter from the whole work, which is available for purchase from the publisher