Comparing the Chinese Construction Industry with Other Developing Countries to Identify an Applicable Solution to Low Construction Performance

The Chinese Construction Industry (CCI) has become one of the largest in the world within the last 20 years. However, due to its rapid growth it has been experiencing issues causing the industry to struggle with delivering high performing projects. Due to the differences between developed and developing countries construction industries, research from other developing countries that were similar to China (Vietnam and Kingdom of Saudi Arabia) were used to help identify solutions to improve the CCI. Previous research has identified the major risks in Vietnam and Saudi Arabia. It has also been identified the only solution that has documented evidence that it can improve construction performance is the Best Value Approach that was developed in the United States at Arizona State University. A literature research was performed identifying the major risks and issues that have been documented in the CCI. These risks were then compared to that of the Vietnam and Kingdom of Saudi Arabia’s construction industry risks. It was identified that the majority of the top risks were similar in all three countries. Identifying that developing countries have been experiencing the same issues. This also identifies that the Best Value Approach might be a solution to help improve the CCI.

Development of the Use of Performance Information

This paper documents the history of the development of performance information [1982-2020], for the delivery of services. It identifies traditional industries as client controlled. In the past, clients utilized a structure of technical professionals who had education, certifications, and experience. Professionals set both policy and structure for their professionalism. The traditional industry does not differentiate between the values of vendors, professionals and stakeholders. This paper identifies that professionals are resistant to using performance information which differentiates. The initial proposal to successfully implement information management was to use automation. However, the industry resisted the automation and the research identified that simplicity and transparency was the only solution. This paper identifies that the Performance Based Studies Research Group’s (PBSRG) success in performance information development was due to a unique design and methodology to research performance information as a disruptive technology. A new methodology called the Information Measurement Theory (IMT) was designed to redefine risk, expertise and information. The major source of validation of the new concepts was joint academic and industry research tests. Three major research tests confirmed that the client creates over 90% of all risk. PBSRG worked with a manufacturing company to design a high-performance roofing program which ended after 16 years due to it being based on client centric concepts. An expert contractor took the lessons learned and maximized the use of performance information with a vendor centric approach.

Success Factors for Project Risk Management in Construction Projects: A Vietnam Case Study

Despite being one of the oldest industries in human history, the modern construction industry is still suffering from delays, cost overruns, and low satisfaction levels. As construction activities greatly contribute to economic growth for any nation, the study of how to achieve success in construction projects should be continuously developing and attracting scholars’ attention. The Vietnam Construction Industry (VCI) is no exception. The economy in Vietnam has been growing fast and steady with significant contributions from construction activities. The VCI also faces unique risks pertaining to the conditions of developing countries that require a separate study on project risk management strategies. This paper focuses on a survey that is adopted from 23 Critical Success Factors (CSFs) pertaining to common construction risks in the VCI. Factors were found through extensive literature reviews, and inputs were solicited from 101 VCI participants. The participants ranked those CSFs with respect to impact to project success. The study reveals the top five impactful CSFs such as all project parties clearly understand their responsibilities, more serious consideration during contractor selection stage, test contractors’ experience and competency through successful projects in the past, project team members need to be well matched to particular projects, and promote pre-qualification of tenders and selective bidding. Spearman’s rank-order correlation tests determined no significant differences between the participating groups. Factor analysis was conducted to explore the principal success factor groupings and yielded four outcomes – Improving Management Capability, Adequate Pre-Planning, Stakeholders’ Management, and Performance-based Procurement. The findings lay the foundation to understand project management in developing countries and assist project managers in planning and forming strategies to ensure high performance in their projects.

The Effect of Expertise on Project Complexity

Project complexity has commonly been cited as a major cause of poor project performance (Al-ahmad et al, 2019). Although literature has identified various methods to measure and define project complexity, research insights did not find an explanation of how to reduce project complexity or its effect on project performance. Expertise has been identified as a potential solution; however, little is known about the extent of impact that expertise may have on project complexity. Using a multimethod approach inclusive of literature, survey and interview research we investigate the “effect’ of expertise on project complexity. We analyzed the effect of expertise on 22 unique project complexity factors. Data consists of 97 survey respondents and 15 interview participants. The research led to the following results which should be incorporated into future models: (1) expertise reduces project complexity, (2) experts do not perceive ICT projects as complex while nonexperts perceive ICT projects as complex, and (3) experts’ challenges that relate to project complexity factors correspond to project stakeholders as they ultimately fall outside the control of the expert.

The Impact of Utilizing Expertise to Project Risk and Performance

Organizations have had difficulty in finding good project and risk management techniques that will deliver high performing projects. Research has identified common risks that occur on projects, but previous research has had difficulty coming up with reliable methods to mitigate those risks. However, the Best Value Approach (BVA) has proven to be effective in minimizing risk and increasing project performance. The crux of the BVA is the utilization of experts to minimize project risk. The BVA approach is unique from other project management methodologies which focus on increasing communication, collaboration and decision making. Previous research shows that client stakeholders are the cause of the majority of project risks, while the expert vendors usually do not cause risk on a project. It has been observed that expert vendors are able to minimize client stakeholder risk by transparent planning and tracking. Using case study research, an expert contractor’s project is analyzed to determine the impact of using the BVA project management methodology to minimize project risk. As a result, the contractor did not cause any risk based on time and cost and helped the client minimize their risk. The research identifies eight risk mitigating actions the contractor applied through the BVA. The majority of the risk mitigating actions were performed primarily in the preparation and preplanning phases of the project.

Changes Required to Sustain a Best Value Environment

The BV environment was introduced into the Netherlands in 2004. By 2008 testing was being done by a partnership between Arizona State University and Scenter (private entity led by Sicco Santema). In 2010, the $1B fast track projects were procured by the Rijkswaterstaat, using the Best Value Procurement. By 2015, instead of the BV approach being treated as just another option, NEVI, the Dutch professional procurement group (third largest procurement group in the world) designated the Best Value Procurement as one of the main stream procurement approaches, and hired a full time Director to guide their Best Value Procurement training programs. However, in three major areas: IT delivery, professional services and the medical arena, buyers and larger-traditional vendors were having difficulty adapting to the approach. The BV approach utilizes the expertise of experts to replace the need for owner management, direction and control (MDC). However, a stumbling block occurred, when a “Best Value” vendor was selected, but did not have their detailed plan as a baseline from which they could identify risk that was outside of their control, their risk mitigation plan, and a simple way to create transparency to help the client/user. This is a case study that shows how the Best Value Approach was requiring a paradigm shift with both the user and the vendor, which neither party was well-prepared for.

Development of a New Construction Research Model for Saudi Arabia

The Saudi Arabian construction industry has had poor performance for the past thirty years. There have been many publications identifying the problem and potential causes. There have been no publications identifying what the source of the problem is, how to mitigate the problem, and actual testing to validate the proposed solution. This paper discusses why this problem exists, what is a potential solution, and an action plan that mirrors the most successful (construction management, risk management, project management and procurement delivery) research and development program in the world (22 years, $16M, +1750 tests, six different countries, 31 states in the U.S. and 98% customer satisfaction). The solution proposed in this paper is unique to the strengths and weaknesses of the research and development programs at universities in the Saudi Arabian kingdom.

Factors Causing Construction Litigation in Saudi Arabia

The problem of litigation and disputes in the construction sector is a major impediment to a country’s development goals. The purpose of this paper is to investigate the problem of high legal costs and long delays that arise due to litigation involving project owners, designers, contractors and other construction parties worldwide and in Saudi Arabia, as well as give recommendation according to the outcomes of this research. The causes of litigious behavior in Saudi Arabia and around the world were identified and documented; also the differences in litigation of the Saudi Arabian construction industry as compared to other countries were identified. Preliminary investigations revealed that there is some level of similarity in the nature of the causes. Thus, these causes were grouped into three main categories, which are expectation factors, communications factors and documentation factors. Further research based on existing literature showed that the practices used to minimize litigation in the construction industry were investigated. The following delivery processes were researched: Design-Build (DB) Delivery Method, Alliance Contracting, Construction Manager at Risk (CMAR), Best Value Model (BVM), Integrated Project Delivery (IPD), Public-Private Partnerships (PPP) and the Best Value Performance Information Procurement System (BV PIPS). Many of these delivery methods were found to have issues, which means the methods by observation do not seem to be the ideal solution to minimize litigation in the construction industry. The only delivery method found to have no litigation issues was the BV PIPS approach.

A Procurement Method that Considers Innovation

A challenge facing buyers in the delivery of innovative construction and facility services is to utilize expertise without increasing project risk. The traditional price-based Design-Bid-Build approach minimizes the utilization of expertise of expert construction vendors by using an owner driven specification. The non-traditional approaches such as design-build, construction management @ risk (CM@Risk), and integrated project delivery are more flexible but still have no methodology to minimize the risk caused by innovative practices. The Best Value Approach utilizing the Performance Information Procurement System (PIPS) and the Information Measurement Theory (IMT) has been tested for over 20 years with high customer satisfaction and performance. However, the use of past performance information still gave the perception of high risk when considering innovative concepts that have never been previously utilized. This research uses a case study of a hospital owner competing the risk of innovative systems with existing, proven systems. The research group had the opportunity to interject the Best Value Approach into the case study delivering the innovative service/equipment requirement, allowing them to see how the approach and created Best Value environment reacted to the expertise that uses innovation. The case study involves the delivery of cutting edge cancer technology, the proton cancer treatment equipment/system. Even though the delivered service is not standard construction, the delivery approach can be easily used in construction.

Innovative Technology Is a Key to Facility Management Survival

The business environment is rapidly changing. Automation and information systems are eliminating stakeholders out of the supply chain at a dizzying speed. Facility managers (FM) must change to prevent extinction. The path to extinction is clear; outsourcing, followed by loss of benefits, followed by commoditization and abusive work hours and demands. Often a major method of survival is cutting costs which results in poor performance. FM accountability and performance decrease under these conditions. FMs must identify and utilize cutting-edge information system practices that simplify and minimize FMs’ workload and cost, while increasing value and impact. Technology developed at Arizona State University (ASU) over the last 25 years, and now in testing by government and private organizations, allows FMs to become information workers, expand their influence and responsibilities, and cut their costs by 90%. This new FM approach increases capability to lead and deliver all building systems with minimal experience.