sou · H0B339d4 · 2012-06-14 00:00:00 — Design-Build and its variants, if used correctly, have better potential to influence productivity, at least in the long run. There are many factors that can influence productivity both positively and negatively, which were previously mentioned earlier in the report. contractor involvement into the design phase usually produces better outcomes. One important feature is how to drive the correct behavior of the road contractors to be more productive. Perhaps the main role for clients is to have a successful framework, provide enough flexibility, and the ability to accept contractors innovations and efficiencies. For maintenance contracting, productivity is not measured by the public entities. Productivity gains are mainly achieved by open competition for the services. A performance based approach, long term duration, integrated services (bundling services) as much as possible, and a substantial sized road area should contribute to better efficiency and productivity. In the final state, the productivity is driven by the contractors processes, methodology, ingenuity, project management skills, innovation, and by lean construction practices (reducing waste in all phases). The main influence by the client is to use the best procurement method for the project and allow enough freedom for the contractors without corrupting the objectives of the using the roads. There is no guarantee for success, but the clients should provide the best opportunity or framework for success. Road agencies (clients) can mainly influence factors related to productivity through the project delivery methods. According to this study, even though somewhat subjective, the Design-Build method is more likely to influence productivity. The DBOM, DBFO (DBFM) and other Design-Build variants are speculated to positively influence productivity since they use the DB component, but the test of time and objective data are not available and cannot make any valid conclusions. These advanced DB variants have other benefits and attempt to focus toward Life Cycle Costing (LCC), and subjective comments suggest that these models are somewhat promising. Other factors contributing to productivity are; performance based requirements (functional requirements), to allow more freedom and flexibility of the contractors (done in many ways), to use incentives and disincentives where appropriate, to allow Alternative Technical Concepts (ATCs) or innovations, by using various forms of time based criteria (where appropriate), prefabrication and structural innovations, the Information Model (), bundling projects to take advantage from the scale of economy and scope, allow value concepts, and additional design freedom for the contractors. These factors should be used wisely and in accordance to the unique details of each project and their objectives. Also, what works for other countries may not necessarily work as well in your country! The most important finding is that it is possible to productivity in any procurement method by including those factors and concepts mentioned in the report or accrued elsewhere. The main benefit of the Design-Build model is time savings, the potential to innovation and customer oriented solutions (especially time savings) by integrating the design and construction phases. The Design-Build project delivery methods need to be implemented correctly in order to receive the intended benefits. A classic example is to minimize the amount of design as possible, yet retain enough to have a clearly defined scope and technical solutions. Other arguments or characteristics of Design-Build projects include a clear scope, more suitable to complex project, schedule driven (time demands), budget is approved, environmental approval, no extensive constraints, allowing ATCs, and sufficient client resources to enhance the cooperation and teamwork. A significant enhancement to the DB model is co-location of the client, designer and contractor to enhance the teamwork and expedite the process. The overall productivity influence is the means and methods used by contractors to organize the work processes and are not typically under the influence or control of the clients, but can be encouraged by providing the right circumstances, the right incentives, and attempting to drive the correct behavior. In essence, creating an environment of opportunities and framework for success can have a positive influence on the productivity of road contractors. The public entities are also not measured productivity of the maintenance contractors. Productivity gains in maintenance contracts are more difficult because maintenance is mainly dealing with the repair and upkeep of assets. The main productivity gains are achieved by placing the maintenance services into open competition, which may be a highly contentious and controversial issue in some countries. All countries in this study except for a handful in the have placed all their maintenance services in full open competition and are using a Agree- ments (PBSA) concept. The PBSA approach deviates significantly versus outsourcing using traditional methods and practices. Other factors contributing to productivity are; using incentives and disincentives, allowing more freedom and flexibility of the contractors, using longer term contracts (as much as possible), using larger areas (economy of scale), bundling of services (economy of scope), a balanced approach to risks, having innovative and modern intelligent equipment, using partnering, measuring the performance of the maintenance contractors, applying an ICT system that is flexible and easy to use, and using the hybrid model. Asset management systems need to be robust and flexible to manage the assets and make sure that performance, reliability, efficiency, potential savings, and quality are achieved. Also, what works for other countries may not necessarily work as well in your country, as the cultural differences may have a significant impact. Having a well organized and efficient maintenance regime certainly influences productivity, but is mainly dependent upon the contractors processes and practices. This requires a learning process and may not be achieved by the novice clients and those having a traditional approach to asset maintenance. In essence, creating an environment of opportunities and framework for success can have a positive influence on the productivity. The project has produced significant information on the factors influencing productivity and the procurement methods used in some of the progressive countries. Productivity through procurement was the main theme of the research, and the project delivery system selected has a great influence on the success of a project and is substantiated by practical results and other research studies. The results also indicate that it is possible to productivity in any procurement method by including factors discussed in the text or accrued elsewhere. The recommendation is that the Design-Build model should be increased and used to a greater potential. It is important to understand that not all projects favor the Design-Build model and it is important to use the appropriate model for that particular project. A teaming and partnering approach and co-location (medium to large sized projects) in Design-Build often produces the better Other recommendations include allowing innovations and alternative practices as well as using more performance based requirements, time based aspects when appropriate (A +B Bidding), and incentives that drive the correct behavior/results. Recommendations are listed as follows in their order of importance. First Recommendation – Systematic Evaluation There is a lack of a thorough systematic quantitative evaluation of each project and via project delivery method. This would be significantly useful to practitioners in determining the success level of a completed project. Also, hand-in-hand is to develop a decision matrix for selection of project delivery methods, which could potentially determine the best fit. There are guidelines available from other countries, which could be used for a base reference and be considered for further development. Second Recommendation – Testing Alternative Methods It is wise to test each method and learn best practices for each method. Design-Build should be the first step before advancing into the complex variants, because they typically demand more knowledge and resources. It should be understood that it is the Design-Build component in advanced variants that influences efficiency and productivity. A few projects may not be sufficient to determine its merits and validation. It is not possible to evaluate the success if alternative project delivery methods have not been used or tested to some degree. Third Recommendation – Freedom, Flexibility and Innovation Allowing the contractors more freedom and flexibility when performing the work, can lead to productivity gains. Innovations are strongly desired and the best approach should be determined, whether by Design-Build or other methods. Also, a process should be created to determine the acceptance of ATCs. This also includes the use of more performance/functional requirements, which requires due diligence and robust data. There is a concern that the cost data in the form of unit prices need to be collected and used for evaluating productivity. The question then becomes at what level do you to compare the productivity and if it is the clients obligation? Cost data is a good benchmark as it is a quantitative measure. However, collecting the cost data is not a means to an end, even though the cost data is important. Even if data is collected, it is important to have homogenous elements within the cost data to make objective comparisons. Cost data is also important politically and not knowing the costs of various elements/groups is not a good outcome. Knowing the cost is also important when considering Life Cycle Cost (LCC) and also important in asset management. Fifth Recommendation – Implementing Robust Factors Factors that influence productivity have been gathered and demonstrated. The next step is the implementation of these diverse factors into the practices and project delivery methods. It is also important to identify which factors are more favorable and their relative importance. This means that a robust collection of data and results is needed to determine the scale of importance. This may or may not be possible to determine objectively, but may be qualitatively inferred. Sixth Recommendation – Continue Benchmarking The study shows several findings and the complexities of productivity related to procurement. The Design-Build method shows strong evidence and results, but should not be considered a panacea. It is recommended to continue benchmarking as there may not have been enough projects to objectively compare results. It is possible that the lessons learned and best practices were not utilized properly during the first few Design-Build projects so this should be taken into consideration for the next application of DB. Seventh Recommendation – Design Degradation The study revealed that the design quality is not as good as in the past. This seems to be a common problem internationally. This requires further analysis to determine if this is possibly related to the outsourcing of design, the procurement practices (lower bids), a loss of expertise, or other factors. For maintenance contracts, healthy/functional competition is a vital aspect in order to have success now and in the future. Each country needs to find ways to make it happen. The other recommendations are continue adding more performance requirements when appropriate (not all aspects have fully developed robust performance requirements), use a hybrid model which has the possibility to allow for innovations, and to balance the risks. Five to seven year contract duration (the longer the better) is also recommended and aligned with international practices. This would provide economies of scale and assist in the investment of equipment which is difficult in three year contract durations. The index should be re-evaluated to determine if risks are properly distributed to the contractors. This may require further study. Asset management systems need to be robust and flexible to manage the complexity of the road assets and make sure that performance, reliability, and quality are satisfactorily maintained. Knowing that the implementation of alternative methods and changing the culture takes time, it is still considered being a worthy process. Design-Build for infrastructure projects should be seriously considered, because the time element is the benefit most widely accepted by professionals around the world. Most infrastructure projects today consider time, innovation and productivity as important features. Teamwork was an original intend in the DB method and is an important tool to solve problems and disputes. In both capital and maintenance contracting, productivity gains are mainly at the control and of the contractors. ductivity is driven by the contractors processes, methodology, ingenuity, project management skills, innovation, and by lean construction practices (reducing waste in all phases). The main influence by the client is to use the best procurement method for the project and allow enough freedom for the contractors. There is no guarantee for success, and implementation may be burdensome or take time to fully develop a viable practice. The clients should take the lead position and provide the best opportunity or framework for success. Adetokundo A. and 2006, Relative Effectiveness of Strategies. and Management, January 2006. 132, Issue 3: page 3–13 (). 2006, Measuring Productivity and Evaluating Innovation in the U.S. , R. Butry, D. , A. 2010, Measuring and Improving U.S. Paper at 2010 – a Better World. () 1997, Institute, : CM at Risk, Design-Build, Design-Bid-Build, , Research Summary 133–1, (). (), 2008, to Improve Construction Productivity, Summary 240-1, (). 1997, Project Delivery Systems For Construction, Associated General of (). , R. Pyeon, J. Herbsman, Z. Minchin, E. Molenaar, K. Evaluation of Alternative Contracting Techniques on FDOT Construction Projects. 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Typically, in a public organization the proposal is in an open competition according to the procurement rules. (Countries in the EU must conform to the EU rules for procurement). After the project is completed, the owner is responsible for operations and maintenance. (At Fee - CM@Fee): This is a process similar to the DBB model (traditional model), where the owner/client is responsible for the design, bidding, and construction of a project. However, the CM organization takes on the responsibility as an advisor to the client for administration and management, constructability issues, day-to-day activities and possibly quality verification. The CM organization has no contractual obligation to the design and construction entities, and is usually paid a fee for the services. - At Risk Advisor (CM@Risk): In this scenario the owner/client has one agreement with the Construction Manager, who then has an advisory role with the design consultant, and then usually becomes the general contractor (or assumes the risk if another contractor is used) to complete the project. CM@Risk assumes the risks for constructing the project, which differentiates this model from CM@Fee. After the project is completed, the owner is responsible for operations and maintenance. Design-Build (DB): Design-Build is a project delivery method in which the owner/client selects an organization that will complete both the remaining design portion and the construction of a project in one agreement. The completion of design and construction may occur simultaneously. Usually the initial design is procured by the design consultant. After the project is completed, the owner is then responsible for operations and maintenance. Design-Build-Operate-Maintain (DBOM): Design-Build-Operate-Maintain is a project delivery method in which the owner/client selects an organization that will complete the design, construction, maintenance and an agreed upon period of operational parameters under one agreement. Upon termination of the contract agreement, the owner is responsible for operations and the maintenance of the project. The DBOM model has the potential to be more aligned with Life Cycle Costs (LCC). Design-Build/Finance/Operate (DBFO) and Design- Build/Finance/Maintain (DBFM): Design-Build/Finance/Operate is a project delivery method similar to DBOM, except that the contractor is also responsible for financing the project. The contractor assumes the risks of financing, design, construction, and maintenance until the end of the contract period. There are various types of payment schemes used to receive payment for the services. The DBFO model has the potential to be more aligned with Life Cycle Costs (LCC). Build Own Operate Transfer (BOOT): Build Own Operate Transfer is a project delivery method similar to DBFO, except that there is an actual transfer of ownership. The Contractor is responsible and assumes the risks for the design, construction, maintenance, operations, and financing of the project. Lump Sum is considered as a fixed price agreement for the total work and products of a given project. Sometimes this is also referred to as a Fixed Price contract. Unit Price or Schedule of Rates: This refers to price considerations for specific activities or services performed for the project, such as construction work and/or materials. For example, the cost per unit for a guard rail is measured in /meter. Appendix B: Questionnaires 1.Please provide a short overview of your procurement practices? 2.How do you measure the Contractors Productivity? What key performance measures (KPIs) or are you using? How can you affect Contractors Productivity and what are some examples? If there are no measures, what are some potential measures? 3.What factors in general contribute to productivity and innovation? What factors in procurement contribute to productivity & innovation? 4.What are the present Procurement Practices used for Projects? 5.What are the incentives for increasing productivity using procurement? How does the client benefit from more productivity in construction? 6.What are your experiences, benefits, and challenges from using each method? there any pre-requisites before using other models? What changes were needed, if any? Are there any quantitative results? 7.How do you decide which model to use & why, for a given project? Do you have a project decision matrix or equivalent? What are the arguments for using each method? Are you planning to change the practices in the future and why? 8.Since the Design-Build Model appears to be increasing, what are the pre-requisites, measurable results, productivity results, & challenges with this model? 9.What are Contractors concerns, challenges, and perception of 10.What are Designers concerns, challenges, and perception of 11.How do you tender the projects? What Contractor Selection Criteria is used? 12.What are some of the Best Practices in Contractor Selection Criteria? Are there any Incentives used? What are the challenges? How can a contractor propose innovations during the tendering phase and also during the actual project implementation? 13.Does the use of Performance Specifications/Measures increaseing productivity or innovation? Please explain how? 14.Is there any standardization or prefabrication? What are some examples? (It could be for processes, specifications, work flows, prefabrication, off-site techniques or others). 15.Does Project Management affect productivity? What are some examples? 16.What type of evaluation is done after each project? What factors are considered? Do you have a systematic approach? Is there any government agency involved in evaluation of the project? Or involved in evaluation of the procurement process? What are you measuring in terms of cost? (Unit prices, overall cost or other)? 17.What are some of your success stories? Which models have better overall cost containment? 18.Is partnering used? Is it formal or informal partnering? Describe how it functions? other forms of Teamwork used? 19.How do you train the clients staff in becoming procurement experts? Are you using consultants? Are there any official training ? How is this implemented all the way into the organization and to the local offices? Please provide some examples? Appendix B: Questionnaires (Contd) 1.Please provide a short overview of your procurement practices? 2.How do you measuring the Maintenance Contractors Performance or Productivity? How is it accomplished? What key performance measures (KPIs) or are you using? 3.What factors in general contribute to productivity and innovation? What factors in Maintenance Contracts contribute to productivity & innovation? 4.What are the present Procurement Practices used for ? 5.What are your experiences, benefits, and challenges from using each method? there any pre-requisites before using the various models? What changes were needed? Are there any quantitative results?