sou · H0B339d4 · 2012-06-14 00:00:00 — The main findings include: Design-Build projects had about less cost growth compared to traditional projects Lump sum projects have experienced the lowest average cost growth Alternative contracting projects had four times lower total time growth compared to traditional ones Alternative and traditional contracting have about the same contractor performance Design-Build projects saved about 54 455 project days (from 68 projects) The comparison of award cost to the FDOT official estimate were about higher for alternative project delivery compared to traditional projects A + B contracting produced the highest time savings for construction Contractors achieved bonuses on of the projects using A + B with bonus contracting and using bonuses alone in the also performed a study termed the Design-Build Effectiveness Study in FHWA (2006). The conclusions revealed similar findings and showed that the Design-Build method typically does enhance time savings, lower cost growth and less change orders. Adetokundo and (2006) also mention that the project delivery system selected greatly influences the efficiency and constitutes a success factor. Also, by having a structured process, it allows for greater insights for decision making. Gransberg et al. (2010) also conclude that there is no optimum or best project delivery model that is applicable to all transportation modes. Mostafavi and Karamouz (2010) also agree that there is no ideal project delivery system and selecting a method involves criteria that meet the clients needs and requirements. As clients needs vary, then the criteria should be flexible. Ibbs et al. (2003) addresses productivity in terms of cost change and schedule change. Discussion indicates that productivity levels for both DBB and DB were very similar even though DB showed a slight increase in productivity when the project schedule is reduced (this is the main advantage of DB). Interestingly, the cost increased when the level of productivity decreased. It was also mentioned that cost savings are debatable when using DB. The key issue is to determine the appropriate project delivery method for any given project, and not all projects are applicable to only one method. Projects that have design development almost completely finished probably should use the DBB method. The benefits of the Design-Build model and main advantages are summarized in the following: Time savings (accelerate projects) Co-location enhances the teamwork, productivity and project interactions Concepts (ATCs) innovative construction techniques (especially ) freedom and flexibility compared to traditional model Integration of design and construction stimulates productivity Functional requirements (performance requirements) go hand- in-hand with the DB model There are challenges to DB and some are listed as follows: Client cultural change and internal resistance Design-Build projects typically require significant client involvement Implementation takes time when using alternative methods Sometimes the designers have been treated unfairly (like lowbid) The tendering cost can be significant (consider using stipends to offset expenses) Sometimes contractors have difficulty pricing the risks Ability to accept alternative proposals and ATCs Quality control decision made by the contractor can be challenging and difficult Large DB projects are more suitable for large construction companies as they reduce competition Lack of real teamwork, partnering, creative thinking and sharing rewards Some other issues when using DB are as follows: Performance and technical requirements are sometimes conflicting the design development to a minimum to stimulate contractors innovations (typically this means design is about Allowing enough time for thorough examination for proposal preparation Specify the design review times required by owners/clients Having enough competitors to take advantage of DB Risks should be clearly identified and allocated appropriately DB has been used as a viable method to enhance project outcomes, but is not a solution for all projects Takes time to become savvy in all aspects of DB Figure 3 shows the main benefit of the Design-Build model which is time because the design and construction can be done simultaneously versus a consecutive approach. Source: Finnra. 2.3Characteristics or Factors when Selecting DB Projects It is important to identify potential projects that might be suitable for the Design-Build model. Not all projects are suitable for Design-Build and it is important to understand what characteristics or factors might steer the project to be considered for Design- Build. A successful framework for the Design-Build model requires above all, a cultural change in both the client and contracting industry. This also includes the participation of the design community, which should understand how to solve challenges, yet retain their previous expectations as a quality proponent for the clients, even though their contract is with the contractor. Songer and Molenaar (1997) investigated the characteristics of successful public sector Design-Build projects and revealed six important factors: Projects were on budget Projects were on time Project met the specifications Project met the users expectations There was a high quality of workmanship Molenaar and Songer (1998) provide insights into significant characteristics of a projects to be considered as a successful framework for Design-Build. These findings include: The schedule duration or completion date High confidence in budget definition Applicable to complex projects Having sufficient owner/client experience and staffing resources Adequate time to prepare proposals and work better with performance requirements Using a combination of quality and price for contractor selection criteria Having prequalification for Design-Builders (1994) looked at project drivers, owner drivers, market drivers, contracting issues and risks. The main project drivers include time constraints, flexibility needs, preconstruction services, design interaction and financial constraints. The owner drivers evaluated construction sophistication, current capabilities, risk aversion, method restrictions, and external factors. These are included in a flowchart scheme that will guide the owner selecting the correct method. Touran et al. (2009) provides guidelines for transit professionals as a practical tool to help transit agencies selecting the most appropriate project delivery method. The tool includes a three tier process for the selection of project delivery methods and the guidelines can be applied to the road sector. The three tiers include an analytical, a weighted matrix and an optimal risk-based approach. 2.4Lessons Learned in Design-Build When considering Design-Build it is important to consider lessons learned from other colleagues, publication resources and international practices. It is wise to study the practices and challenges from others because Design-Build is not a traditional way of doing business. Some lessons learned from Design-Build are presented in Box 2. Selection of project delivery method does matter Development of a systematic process to determine project delivery selection Not all projects are suitable for DB Changing the internal culture and practices It takes time to change the culture and implement Design- Build successfully DB is appropriate for time critical and complex projects DB usually provides savings, but not always Use functional requirements as much as possible Develop a successful approval process for ATCs Use incentives and disincentives appropriately Keep Design-Builders equipment and employees working throughout the project (fast tracking) Co-location of client, contractor & designer on large DB projects. Co-location often improves the teamwork. The client should be actively involved throughout project duration. Good project management from client and contractor Partnering is an important feature when co-located Selecting the appropriate project delivery method can be a complex decision making process and it should be made as early as possible in the planning and design stages. The results in this section are mainly from the interviews with the road clients and the influence between procurement practices on productivity. Other published resources are included to enhance the discussion. Capital investments are those projects that consume a great deal of capital or money and it represents the of new roads, , tunnels and significant rehabilitation or road widening. 3.1How Infrastructure Clients Affect Productivity The infrastructure clients can affect the productivity of contractors mainly through the procurement processes. Indirectly, the clients can also communicate their wishes to improve contractors productivity through close communications, sharing of ideas, and some loose forms of client-contractor activities or associations. Outsourcing or competition is the main avenue to increase productivity. In most cases the works or construction has been introduced into competition for a long time, and maintenance is the new competitive market. The issue then becomes, what forms of procurement potentially enhance the productivity of contractors. One of the challenges is to have a fully functional competitive market for alternative project delivery methods, which may not exist in all the Nordic countries. The experience in the Nordic countries is that there is limited competition when using alternative project delivery methods. 3.2Factors that Potentially Influence Productivity One question in the survey was to determine the factors that influence the productivity of the contractors. Based upon the literature review there were several reports that listed several factors that lead to productivity gains. (2010) describe the usage of life-cycle processes, technology/innovation utilization, highly skilled workforce, offsite prefabrication and modularization, and the Information Model () as factors that influence productivity. Also, CII (2008) states that newly developed construction equipment (intelligent machinery), automation and integration of project information systems, prefabrication and modular components, and interoperability via the could all influence to improved productivity. General that Potentially Influence Productivity Box 3 summarizes the results from the interviews that describe the general factors that possibly improve productivity. These aspects have the potential to increase productivity, efficiency and even innovation. General that Potentially Influence Productivity Open and healthy competition Incentives and disincentives in contracts Use of performance-based requirements Prefabricated and off-site production (self-propelled transport) Innovative or Alternative Technical Concepts (ATCs) Time based criteria; like lane rental and A + B Bidding Information Model (): not fully developed freedom and flexibility for the contractors in-house work performed by main contractor () during construction Partnering and teamwork – collaborative process – indirectly Open and healthy competition is very important, especially if alternative and innovative practices are desired. Where there is a healthy and competitive market for the services, there is more potential to increase the productivity and efficiency. In some countries the competition in Design-Build contracts is not optimum. Some infrastructure clients are using incentives and disincentives in the contracts and these have often led to productivity gains because there was a motivation and reward mechanism in place. Reward mechanisms have been mainly time-based criteria, where a completion date must be adhered or during peak periods must be avoided (lesser working days or evening work). Several reported success stories have been reported especially when integrated with time-based aspects. Performance/Functional Requirements The use of performance-based or functional requirements was agreed by all to increase the productivity of contractors. Functional requirements can provide flexibility, freedom to use alternative materials or methodology, and it enables contractors to be more savvy and innovative. FHWA (2002) shows the relationship of performance specification toward more innovative type practices shown in Figure 4. The x denotes the clients main responsibility in referring to the type of specifications required. The figure shows that performance specifications are highly related to the application in Design-Build methods and its variants. Development of functional requirements is more of a long-term process and it takes time to create measures that produce the correct behavior for the contractors. It is also known that there are many proven standards and long-term research efforts in the background of functional requirements and should not be considered as cure or a solution. It requires a robust and proven approach before performance requirements can be applied broadly. Source: FHWA (2002). Prefabricated , off-site production, and Self-Pro- pelled (SPBT) are used in some countries but rarely in the Nordic countries. The main issue is to reduce congestion and traffic reductions, when constructing or replacing or structures. This is an innovative solution without significantly impeding or disrupting passenger or freight traffic. Prefabrication techniques have vastly improved since earlier years and are gaining acceptance. However, these new and innovative techniques may not be utilized due to untested/unknown results and they require a new way of thinking from the departments. It is especially true in the Nordic countries, where this has not widely gained acceptance. Alternative Technical Concepts (ATCs) have been used successfully in some countries, but the difficulty arises when the evaluation of these technical concepts is included during the tendering phase. When ATCs are accepted, the contractors have often provided the client with increased productivity, savings, and innovations (usually go hand-in-hand). ATCs can be used by any procurement method, provided that they are accepted and approved by It is difficult to conclude why they are not used more often, but comments from the interviews indicate it may be due to the lack of time constraints or expertise approving these ATCs. The inclusion of ATCs has been more of an exception than the normal processes. ATCs that present untested or unfamiliar techniques to the clients may be casually rejected due to the unknown risks and potential consequences for negative results. One example is the use of advancements seen in some countries, where are built near the site and placed in position within a few days. ATCs are a significant challenge and it appears that the clients have to take the risks and be courageous to test these innovations. How can the client become more willing to accept the risks of ATCs? This may require further study and research. This is a key challenge since ATCs are examples of innovations and productivity gains. One possible solution is to test these innovations via pilot projects and possibly applied to non-critical locations. criteria such as, A + B bidding and lane rental, have an influence on productivity, because there is a sense of urgency to use lean construction principles and make the methods more efficient. A + B bidding in the has been used quite successfully and there have been some lane rental projects. has used A + B bidding with incentives and disincentives with both good and unfavorable results. The Information Model () is gathering momentum for infrastructure applications in many countries and was agreed to increase productivity. is expected to decrease the amount of errors and omissions to a point where productivity gains can be achieved. Land mass calculations, visualization of the end product for the key stakeholders, automated calculation of cost, and other parameters can be used from the . When the is fully operational it can be used directly into the production processes of the contractors or supply chain. Intelligent machinery allows performing repeatable operations and has been applied to graders, pile drivers, excavators and bulldozers. Not only is the equipment getting savvier and highly interchangeable, but the quality control data from the outcomes can be automatically generated through Information and () systems. In addition to productivity gains, the quality of the end results has been quoted as better than that with traditional equipment. In general, the equipment has significantly improved and is more functional compared to traditional ones. Allowing the contractors more freedom and flexibility when performing the work can lead to productivity gains. There are numerous rules, regulations, and restrictions that are placed upon the contractor and there needs to be more freedom and flexibility. This can be applied generally throughout the project and can be challenging to release perceived control issues. Risks play a significant role in most capital projects. It is wise to know what factors cause risks to increase or decrease, as contractors will bid them in the contract. There is a tendency to reduce the risks for the contractors in order to achieve lower prices, but there is a proper balance or tradeoff. Balancing the risks usually comes from experience. When using alternative contracting methods, the risks are often transferred to the contractor, but there are some risks like geotechnical risks that should be shared or use a sliding scale risk for those difficult and challenging areas. A sliding scale risks may usually include a maximum risk that contractors will be responsible. One interesting factor noted from a few countries suggested that a main portion of the work was self-performed or used by the contractors owned subsidiaries which increased the integration and production. This is a very unusual finding because many contractors in most countries have divested their internal operations (downsized their organizations) and have relied on project management in the supply chain. Generally, when there is an ownership interest there is generally more control, which may lead to better results. The use of () where there are significant traffic volumes in and around construction work zone areas have encountered better results and increased the productivity. The contractors can use larger than planned work areas to maximize efficiency. The area allowable for construction not only can influence productivity gains by the contractor, but can significantly affect worker safety. Other factors like warranties, partnering, bundling of projects or individual activities, the project managers competence, and standardization broadly applied, will most likely have a positive influence on productivity. Almost all interviewees stated that these influence productivity, but are difficult to evaluate quantitatively. Factors in Procurement that Potentially Influence Productivity The factors in general that potentially influence productivity were previously described and most of these can be included in the procurement practices. According to the results from et al. (2007) and from practical experiences, it does matter which project delivery method is chosen and which ones influence productivity. Adetokundo and (2006) also state that the project delivery system selected greatly influences the efficiency and success of They also mention that having a structured process allows for greater insights for decision making. The results from the interviews are subsequently listed and provide insights to those methods that potentially influence productivity. Box 5 shows those factors that potentially influence productivity. Factors in Procurement that Potentially Influence Productivity Design-Build model and potentially its variants Performance/functional requirements Innovative or Alternative Technical Concepts (ATCs) Time based criteria like , A + B Bidding and () during construction Prefabricated or off site fabrication (Self-Propelled ) Information Model (): not fully developed Value (both design and contractor inputs) Stipulation of in-house work performed by main contractor (e.g. minimum) Design-Build Model and its Variants It was unanimous that all interviewees stated that Design-Build has the potential to improve productivity and provide better performance. The integration of design and construction provides the framework for potential innovations, efficiencies and time savings. When implemented correctly, Design-Build permits problem resolution, integration of many services and creativity. However, there are certain characteristics that need to be implemented and some prerequisites were mentioned in Section 2. It was interesting to observe that only and have used the Alliance or ECI model. The findings vary and the overriding experiences are that cooperation, partnering, teamwork and problem resolution functions extremely well. It is uncertain at this time if Value for Money (VfM) was achieved as the model is quite new. A significant challenge when attempting to use the Alliance model would be limited competition. There have also been some Design-Build projects that have performed poorly and any project delivery model can be abused or have some unsuccessful outcomes. On the other hand, there have been so many numerous examples of good outcomes and successful projects that override the subjective evidence, in favor of Design-Build. It is believed that the teamwork between the client, designer and contractor (when used successfully), and the integration of design and construction potentially drives productivity. This may not be conclusive, but inference and responses during the interviews indicate that this is the main difference between DB and traditional methods. However, there are certain characteristics that need to be implemented and some pre-requisites were mentioned in Section 2. Other factors like incentives and disincentives, more performance requirements, allowing for contractor innovations and ATCs, warranties, time-based criteria by minimizing delays and disruptions, bundling of projects or individual activities, partnering, standardization broadly applied, the project managers role, and the potential of the will most likely contribute to the positive influence on productivity. These were already discussed and highlighted in Section 3.2. Value can be defined as a systematic process to improve upon the value or products and services by thoroughly evaluating other functions or possibilities, and is related to the cost. Value can be increased by improving the products or services or by reducing cost. Value was noted to affect productivity, especially when both design and constructability are included in the early planning phases. Value is extensively used in the . model is the main procurement model that incorporates value attributes because the value attributes are included in the model and performed by the Alliance team. A study by Koppinen and Lahdenpera (2004) describes features of the Alliance model in more detail. Unfortunately, the Alliance model has not been tested significantly and results are not known (too early to evaluate) from the countries in this study. It has been commented that cooperation and teamwork make the model work well, but there are no objective results on costs, quality, construction speed and overall better value. Reported results from and using the Alliance model have shown significant reduction in the overall project time, better environmental value, and superior teamwork and partnering. A significant challenge when attempting to use the Alliance model would be the limited amount of competition, especially in the Nordic countries. The main challenge or difficulty is measuring the quantitative influence of each aspect towards productivity.