Journal of Construction Engineering and Management

For projects with high bid preparation cost, it is often suggested that the owner should consider paying bid compensation to the most highly ranked unsuccessful bidders to stimulate extra effort or inputs in bid preparation. Whereas the underlying idea of using bid compensation is intuitively sound, there is no theoretical basis or empirical evidence for such suggestion. Because costly bid preparation often implies a larger project scale, the issue of bid compensation strategy is important to practitioners and an interest of study. This paper aims to study the impacts of bid compensation and to develop appropriate bid compensation strategies. Game theory is applied to analyze the behavioral dynamics between competing bidders and project owners. A bid compensation model based on game theoretic analysis is developed in this study. The model provides equilibrium solutions under bid compensation, quantitative formula, and qualitative implications for the formation of bid compensation strategies.

The importance of the construction sector in national economies around the globe and the global nature of the industry require a prudent international comparison of construction costs. From the view of international construction ventures, cost comparisons have generally been accomplished using published currency exchange rates. Global organizations dealing with development aid and the comparison of the gross domestic product (GDP) of nations have used an approach that has its roots in established econometric theories. This approach is based on the Casselian purchasing power parity (PPP) doctrine that essentially conducts the comparison based on the local purchasing power of currencies, as opposed to exchange rates. The World Bank, which conducts the GDP comparison, uses the PPP-based approach to compare construction sector output. This paper provides an overview of the background and application of PPP and its use for international cost comparisons conducted for various nations. Methods currently used for construction cost comparisons are reviewed. A critical review of domestic construction cost comparison approaches is provided with the intent to identify the key differences between temporal and spatial comparisons. Case studies of construction cost factors are used to demonstrate the importance of PPP-based cost comparisons for construction economics.

Infrastructure networks such as highways and pipelines have recently been at the center of attention for contractors and owner organizations. Due to their large size and their repetitive/distributed nature, construction and/or maintenance operations for such networks become complex tasks that require huge resources, particularly manpower. In order to provide a transparent tool for quick manpower planning and sensitivity analysis, a graphical approach (using nomographs) is introduced in this paper. The nomographs encode the mathematical formulation, and the results of many optimization experiments, of a distributed model for scheduling large projects with multiple sites. Accordingly, the nomographs can be readily utilized by practitioners to estimate the manpower needed to meet a predefined deadline, under anticipated network-level risks due to unfavorable site conditions. Details on the development of the nomographs are presented in the paper along with an example to demonstrate their usefulness for supporting manpower planning decisions and for what-if analysis. The nomographs also present researchers with a simple yet powerful approach to make research results readily usable by practitioners.

In a real construction project, the duration and cost of each activity could change dynamically as a result of many uncertain variables, such as weather, resource availability, productivity, etc. Managers/planners must take these uncertainties into account and provide an optimal balance of time and cost based on their own experience and knowledge. In this paper, fuzzy sets theory is applied to model the managers’ behavior in predicting time and cost pertinent to a specific option within an activity. Genetic algorithms are used as a searching mechanism to establish the optimal time–cost profiles under different risk levels. In addition, the nonreplaceable front concept is proposed to assist managers in recognizing promising solutions from numerous candidates on the Pareto front. Economic analysis skills, such as the utility theory and opportunity cost, are integrated into the new model to mimic the decision making process of human experts. A simple case study is used for testing the new model developed. In comparison with the previous models, the new model provides managers with greater flexibility to analyze their decisions in a more realistic manner. The results also indicate that greater robustness may be achieved by taking some risks. This research is relevant to both industry practitioners and researchers. By incorporating the concept of fuzzy sets, managers can represent the range of possible time–cost values as well as their associated degree of belief. The model presented in this paper can, therefore, support decision makers in analyzing their time–cost optimization decision in a more flexible and realistic manner. Many novel ideas have also been incorporated in this paper to benefit the research community. Examples of these include the use of fuzzy sets theory, nonreplaceable front concept, utility theory, opportunity cost, etc. With suitable modifications, these concepts can be applied to model to other similar optimization problems in construction.

Project time–cost relationships were examined by using project scope factors as predictors for 161 construction projects that were completed in various Australian States using the multiple regression technique of weighted least squares. The analysis was performed between project duration (i.e., time), project type, procurement method, tender type, gross floor area (GFA), and number of stories. An alternative model to that proposed by Bromilow more than three decades ago for forecasting time and cost performance is proposed. It is shown that GFA and the number of stories in a building are key determinants of time performance in projects. Furthermore, the results indicate that cost is a poor predictor of time performance. Limitations and practical implications of the research are also presented.

In Turkey, achievement of acceptable levels of quality in the construction sector has long been a problem. Great expenditures of time, money, and resources are wasted each year due to inefficient or nonexistent quality levels prevailing in the industry. The situation is even worse in the case of mass housing projects addressing to low and middle income groups. It is the purpose of this paper to identify the type of deviations resulting in rework in mass housing projects, since construction firms can only increase their profit margins by paying more attention to the deviation types. More importantly, firms can improve their images in the sector and thus, can take new projects. To achieve the objective mentioned above, data have been derived from 400 cases by means of a questionnaire containing 108 questions, and results of this survey were evaluated by several statistical techniques. It is concluded that households are not completely satisfied from the quality of products and/or services delivered within their housing units. In future studies, the causes and costs of the rework should be researched for better understanding the results together with the remedial measures being implemented.

Formwork and the associated shoring represent a significant proportion of the costs associated with the construction of multilevel concrete structures. To minimize these costs, a limited number of formwork and shoring sets are recycled up the structure as construction progresses, eliminating the need for a new set of formwork and shoring with each new slab. When a slab is posttensioned using draped tendons, slab lift occurs as a portion of the slab self-weight is balanced. The formwork and shores supporting that slab are unloaded by an amount equivalent to the load balanced by the posttensioning. This produces a load distribution through the structure that is inherently different from that of a conventionally reinforced slab. This paper presents two design methods suitable for modeling the multilevel formwork process for posttensioned slabs: A modification to the simplified analysis method and a finite element model—both techniques will be of immediate use by industry practitioners and of interest to researchers examining the load distribution phenomenon. The paper also summarizes the findings of one of only a few research projects in which actual shore loads were monitored during the construction of a multilevel posttensioned building, which is used to validate the proposed design models.

This paper extends the build–operate–transfer (BOT) concession model (BOTCcM) to establishing a risk concession model for BOT contract projects. The decision for a concession period is one of the most important decisions in determining a BOT contract. BOTCcM presents an alternative method to assist in determining a concession period that can protect the basic interests of both the investor and the government concerned. However, there is a major limitation in using the model, namely it gives no consideration to the impacts of risks on the estimation of various economic variables in the model. This study considers the risk impacts to the BOTCcM model and presents an additional risk concession model. This model provides an approach for formulating a concession period to consider the impacts of risks and, at the same time, protect the basic interests of both the investor and the government concerned. A hypothetical case is used to show the procedures of formulating the risk concession period through the assistance of the Monte Carlo simulation method.

A typical proposed application for a construction simulation model is to assess the productivity of a future operation. This type of application inherently presents the modeler with a situation where there is only a limited amount of data available for choosing an underlying probability distribution function (PDF). This paper presents a formulation for developing a Beta PDF for use in construction simulation modeling. The hypothesis of this paper is that there is a ratio that relates the 75th percentile to the mode of the activity duration. The research demonstrates that using such ratios, along with the minimum, mode, and maximum activity durations, results in estimates of a beta PDF that accurately describes the underlying duration distribution of construction activities. In the methodology proposed here the minimum and maximum activity durations are predicted using deterministic methods based on the physical characteristics of the job and equipment employed. The beta-shaped parameters $a$ and $b$ are estimated using a procedure for fitting beta distributions to activity times when sample data are not available.

The process of concrete supply and delivery exhibits traits of random nature, which render control arduous. This random nature allows concrete placement operations to be considered as a stochastic system and therefore cannot be analyzed by deterministic techniques. In modeling the process realistically, it may be necessary to recreate the variability through fitting a sufficiently flexible theoretical probability distribution to observed data. There is a significant body of work relating to the probability distributions which represent general construction activities. However, there is a lack of literature aimed at determining the optimum representative of the concrete placement process. Therefore, the aim of this paper is to identify a sufficiently flexible representative of this process. To this end, construction data were collected from a number of concrete pours in Scotland, U.K. To identify a suitable distribution in this context, a computer package, PDFit, is presented. It is founded upon the production of probability density functions of select theoretical probability distributions plotted against the histogram of the input data. The principal method of assessment is a visual comparison of the shape of the probability density function and the input data histogram. This paper presents the lognormal distribution as a sufficiently flexible theoretical probability distribution to represent the concrete placing process.

A variety of innovative management processes are increasingly being introduced into the capital facility projects, thereby causing a great concern about which to implement on a particular project among project stakeholders. It is essential to identify the most effective process because varying circumstances on each project determine the level of suitability. This paper details a new systematic approach to determining the best process from among the 44 value management processes (VMPs) that can proactively achieve the articulated 12 project value objectives (PVOs). Throughout this paper, identifying and quantifying the selection principles (e.g., targeted PVOs, timing of initiation, project characteristics, and relative impact), the detailed research methodology and the findings from industry survey and VMP expert input are also illustrated. A computerized tool, programmed by Visual Basic Application on MS Excel, is described, and its ongoing validation process is also discussed. As a first-ever research, this paper contributes to a growing area of research, not only by providing a comprehensive and structured knowledge on the subject of VMPs, but also by developing a new method to effectively select the most beneficial VMPs. From the industry perspective, the results of this study, specifically the computerized selection tool, facilitate the implementation of the VMPs on the construction industry and maximize the potential benefits to a particular project.

Investigation of literature on organizational effectiveness (OE) reveals that the researchers have been in consensus for the difficulty of defining, modeling, and measuring OE, which is important for attaining high performance. Major focuses of this paper are, therefore, to construct a conceptual framework to model OE, to derive major determinants of OE from this framework, and to measure OE by constructing prediction models based on artificial neural network (ANN) and multiple regression (MR) techniques. Based on the proposed framework that investigates OE from the perspectives of organization and its subsystems, business, and macroenvironments, the most significant variables that determine OE have been collected and used as inputs for the two prediction models, which have been constructed by using the information associated with 116 Turkish construction companies obtained from a designed survey. According to the prediction results and comparative study, ANN slightly outperformed the MR model in terms of errors, correlations between desired versus actual outputs, and relations between input-output parameters. The ANN model is proposed for use as a tool to assess company effectiveness and to guide decision makers about the major determinants of OE to increase firm performance.

Construction accidents are broadly categorized into five basic groups, namely falls (from elevation), shock (electrical), caught in/between, struck-by, and other. “Struck-by” accidents accounted for 22% of all construction-related fatalities recorded by the Occupational Safety and Health Administration between 1985 and 1989. Recent (1997 to 2000) data show that the percentage of struck-by accidents constituted 24.6% of the fatalities and serious construction worker injuries. Struck-by accidents primarily involve workers struck by equipment, private vehicles, falling materials, vertically hoisted materials, horizontally transported materials, and trench cave ins. Determining possible causation factors of these accident types is often difficult, due to the broad categories utilized in the accident coding system. This study resulted in gaining insights about the root causes of the struck-by injuries. By finding the root causes, effective methods for accident prevention can be developed.