Journal of Construction Engineering and Management

Incentive clauses within contracts, referred to as incentive contracts in this paper, based on a sharing of the project outcome are regarded as an important vehicle to align contractor interests with that of the owner. However, discussion is ongoing as to what is the optimal incentive arrangement. This paper derives an optimal incentive contract for a risk-neutral contractor; the owner may be either risk averse or risk neutral. An incentive is established based on a sharing of a project’s equivalent monetary outcome (expressed relative to a benchmark or target that is desired by the owner), while aligning the contractor’s interests with those of the owner. The derivation is based on solving an optimization problem. The paper shows that at the optimum and expressed relative to the target, any favorable or adverse outcome associated with both the contractor’s effort and events beyond the contractor’s influence should, respectively, be wholly received by or wholly borne by a risk-neutral contractor. Practitioners were interviewed to validate this result. This paper gives an original solution to the optimal sharing problem in incentive construction contracts, contributing to current practices in contracts management. The solution follows an ordered argument and is usable by practitioners. Additionally, this paper extends agency theory on risk-averse principals. This paper will be of interest to academics and practitioners concerned with the design of incentive contracts.

This paper presents a framework to facilitate the selection of the most appropriate company to be contracted among competitive bids. This framework is intended to be integrated in e-marketplaces to comply with the major technological advances in the construction industry. A novel feature of the system is that it allows bilateral evaluations between companies to better understand general contractor–subcontractor relationships and to improve the level of transparency within the construction sector. The performance assessment system incorporates other innovative features, such as the ability to specify a set of performance indicators suitable for inclusion in e-marketplaces covering three different perspectives: company reliability, operation performance, and bid attributes. The system also allows the integration of the preferences of the decision maker concerning the selection of the best company for a given work.

An empirical study is presented to investigate the risk factors affecting the value for money that can be obtained from using the public-private partnership delivery system to develop social facility projects. Based on a model describing the main risks affecting a project, a linear regression analysis is conducted on a data set of privately financed health care projects in the United Kingdom to explore the main factors that might have significant relationships with the annual unitary charge payment. The results reveal that the economic and political environment, the hospital capacity, the construction duration, and the concession period are significant factors of the price paid by the granting authority. The study confirms that the unitary charge is not only affected by investment, operations, and financial life-cycle costs, but also by risk factors and the level of risk allocated to the private sponsors. The proposed methodology might help both public and private parties in improving a private finance initiative project’s compensation design, in order to achieve a higher value in privately financed infrastructures. The given model might also support the process of better determining the amount of annual payment based on select drivers and appropriately transferred risk factors.

Tender review meetings form a significant part of a contractor’s tendering process. These are instances in a tender process when the members of a bid team come together to coordinate their tender preparation activities, develop their tender strategy, and quality check the output to date of a tender process. Little empirical work exists on this, particularly because of the commercially sensitive data associated with it. Here, access was negotiated into the offices of two major UK contractors, hereafter known as Gamma and Delta, and the whole tender process was shadowed for 6 and 7 weeks, respectively, using participant observation, documentary analysis, and interview. This helped to examine and analyze the various review meetings that take place in the tendering process, and how they connect with the development of a contractor’s tender strategy, program, and price. Out of seven tender review meetings identified, four main ones significantly impacted the final submission. These were tender launch, midtender review, tender clarification with client, and finalization review. The review meetings consumed 6–9% of the tender period—108 working hours in Gamma and 180 in Delta. Although this may have contributed significantly to tendering costs, review meetings provided an essential means for joint risk management and integration of the various parts of a contractor’s bid team. The findings are particularly useful for contractors because they offer a systematic examination of what actually happens in practice and the implications for tendering costs and bid formulation.

Project performance is always one of the key concerns of construction project managers. It is often regarded as the critical indicator to measure the success of construction organization. This paper further advances existing knowledge on the achievement of project performance by investigating its relationship with trust and communication. Specifically, the mediating role of communication is studied to detect any direct and/or indirect effect of communication on this relationship. An analytical approach of mediation analysis was performed to achieve this objective. Five significant mediation models were identified. These models demonstrate that trust affects communication and in so doing influences project performance. Specifically, effective information flow is the versatile mediator to the trust-project performance relationships among all of these significant models. This implies that the improvement of information flow would likely improve project performance (i.e., achieve satisfactory and worthwhile quality, maximize project time, cost, and quality). In this context, the findings point to the need for managers to direct efforts or resources to effectively manage information flow as part of the project management system. This paper contributes to research in communication in construction with respect to articulating its mediator role in the trust-performance relationship. The linking of communication with trust and performance extends the study of communication beyond the conventional premises of pattern and means.

Construction schedules are uncertain in nature; therefore, predicting construction duration is a difficult task. Extensive research has proposed mathematical models to predict construction duration based on regression analysis, Monte Carlo method (MCM), and so on. Yet regression analysis cannot capture duration uncertainties. Studies normally use Monte Carlo methods to simulate hundreds to thousands of activities in a project schedule. This can be complicated, time-consuming, and unrealistic because the statistical properties of all the activities cannot be readily determined in practice. Typical construction sequences in condominium building construction were first identified, and then the statistical distributions of controlling activities on the sequences were surveyed. Two-stage questionnaire surveys and goodness-of-fit statistical tests were conducted to achieve the mentioned objectives. Subsequently, a model for predicting the duration of building construction was proposed and applied to a high-rise building project. The results showed that the proposed model reasonably predicted the construction duration for this apartment building. The model fills the gap in knowledge of construction time forecast by introducing the concept of controlling activities to simplify the evaluation of the schedule uncertainty in multistory building construction. This research is beneficial for practitioners to estimate an overall construction schedule of building projects, especially in preconstruction phases.

Noise and vibration caused by pile driving may disturb surrounding areas to the extent that nearby residents and businesses may file civil complaints, which can bring construction to a halt. To overcome these issues, construction engineers have worked diligently to develop low-noise and low-vibration pile driving methods. One such method, involving noise-free and vibration-free pretensioned spun high-strength concrete (PHC) screw piles, is proposed in this paper. This pile driving method penetrates the ground by rotating and compressing the pile to minimize noise and vibration in addition to maximizing capacity. A noise-free and vibration-free PHC screw pile prototype, the first of its kind, was manufactured and subjected to two pilot tests to determine its production and construction requirements in addition to its performance. In pilot tests, the new noise-free and vibration-free PHC screw pile driving method was found to successfully reduce noise and vibration compared with pile driving involving conventional piles.

Defects produce economic and temporal deviations in construction projects. Although learning from past experiences can help reduce defects and their consequences, usually data is not easily available or is poorly structured and difficult to analyze. Several structured classification systems for defects exist, but regionally specific construction activities make the data unviable for research use. This paper presents the development and the validation of a defects’ classification system for the Spanish housing sector. From the analysis of the existing defect classification systems, a first draft was developed to be discussed and improved in a series of workshops done by a panel of experts. Afterward, the final classification was validated by experts’ interviews. The experts evaluated the epistemological adequacy and reusability of the proposed classification system. The results demonstrate the suitability of the classification system. In addition, the validation revealed that the classification can be implemented in tracking systems, and it can be used to analyze defects in the Spanish housing sector. Finally, the classification was used in a case study to analyze the real use, and it demonstrated the potential uses of the classification.

In the last decade, the state departments of transportation in the US have experienced an increase in their construction projects, while the level of their in-house inspection staff and resources has either remained the same or declined. Previous studies have found that one strategy that may reduce the inspection workload is prioritizing construction activities for inspection. However, reducing the number of inspections also has its risks, such as functional failures and reduced design life. Thus, available inspection resources should be allocated to the activities with significant risk consequences if inspection is reduced. The objective of this paper is to develop a risk-based inspection protocol to facilitate efficient allocation of available inspection resources to minimize the risks associated with reduced inspection. First, the risk consequences associated with reduced inspection are identified for various construction activities linked to transportation projects. Based on data collected from 23 state departments of transportation, 58 engineers and inspectors from the Indiana Department of Transportation and 20 inspection consultants in the Midwest, the subjective perceived probabilities associated with the occurrence of each risk consequence are encoded by using fuzzy analysis, from which the risk impacts due to reduced inspection are obtained. The construction activities are prioritized based on the risk impacts associated with reduced inspection into five priority levels. The greater the risk impacts are as a result of reduced inspection, the higher the priority would be for inspection of that activity. Thus, the proposed protocol can be used for resource allocation based on risk impacts. The proposed list of prioritized construction activities can assist project and program managers in state departments of transportation in better allocating their limited inspection resources while reducing the risks due to reduced inspection.

This paper reports the results of research on the application of nanomaterials to improve the quality and durability of road infrastructure. The research investigated road transportation infrastructure failures and the feasibility of preventive engineering solutions using nanotechnology. Laboratory experiments were conducted on different treated and untreated Nigerian soil samples (laterite, clay, and black soils) to study the changes in their fundamental geotechnical properties. Common engineering standards were used for the experiments and results analysis. Laboratory tests showed that treated laterite and clay soils had improved the liquid limit, plastic limit, and shrinkage index, including hydrophobic properties. The California bearing ratio (CBR) improved by as much as 87–125%. However, the black soil sample only passed the hydrophobicity test. The black soil did not exhibit any bearing strength in the CBR test, even after treatment with the nanomaterial. The paper contributes to understanding how nanomaterials can be used to engineer construction materials (laterite and clay soils), used in road pavements, and alter their normal geotechnical properties. This construction innovation results in improved performance characteristics. The paper also makes a pedagogical contribution by discussing the basic science and reaction chemistry that underpin material transformation processes and performance enhancement. This contributes to construction engineering practice and durable, economic, and sustainable highway infrastructure. The paper discusses the empirical results and gives recommendations on further work.

Maintaining project control demands construction project managers navigate the discrepancies between target and actual performance—a specific challenge for large-scale construction projects that generate large amounts of ever-changing data. Project managers often use visual representations of data to make better-informed decisions; however, current approaches often fail to manifest the multifaceted considerations that render a successful project. Better visual representation tools would streamline communication and improve project efficiency. Applying a variety of research methods ranging from literature reviews to simulation and usability tests, this investigation’s six-step process developed four alternative visual representations prototypes for improved performance monitoring: Activity Icons, Map of Activities, Activity Wall, and Activity Gazer. This paper contributes to the body of knowledge by iteratively designing these four prototype visual representations in consultation with experienced project managers and by assessing industry’s receptivity. This paper also lays the foundation for long-term expansion of research into the most successful of the developed visual representation prototypes: Activity Gazer.

One-fourth of construction industry fatalities are caused by worker collisions with construction equipment. Nonvisible areas (blind spots) for equipment operators are contributing factors to many of these fatalities because equipment operators are unable to see ground personnel at certain locations around their equipment. Presented are the design and validation of a unique technique for measuring blind spots by using laser scanning data. The work demonstrates how the design of construction equipment impacts the visibility of its operator. The contribution of the developed technique to the body of knowledge is that it can precisely evaluate and compare different equipment models and design characteristics. The blind spot measurement data for several similar pieces of equipment provides design suggestions that increase operator visibility. By increasing operator visibility through advanced equipment design, safety can be promoted on construction sites and in any other work environment, particularly with nearby ground workforce equipment.

Workers’ consistent attendance is an indispensable condition for successful construction projects, but many construction projects still suffer from the productivity loss originating from workers’ absenteeism. To deal with this problem, construction managers have mainly used formal controls (e.g., penalties) targeting those individuals who present excessive absenteeism. However, recent research papers on absenteeism have testified to the paramount role of social factors, such as social norm, on workers’ absence behavior. Despite the increasing attention being paid to the social factors of workers’ absence behavior, discussion on how a social norm in favor of worker attendance control can be developed is sparse. If how such social norms emerge and how they play a role in controlling workers’ behavior are clear, construction managers can invest time in promoting favorable absence norms rather than focusing on regulations targeting individuals. Therefore, this paper studies the system-level effect of workers’ social learning using an experimental analysis with simulations in order to extend the knowledge of the social aspect in workers’ absence behavior. To conduct the analysis, an agent-based model was developed to serve as a comprehensive model that incorporates mechanisms of workers’ formal and social learning. The model was constructed by using theoretical and empirical findings on absence behavior drawn from scholarly literature. Then the constructed agent-based model was used to explore possible scenarios in organizations with simulations. With the simulation results, the following are demonstrated: (1) high social adaptation can work as a force to either increase or decrease workers’ absence rates; (2) when strict self-regulation is prevalent among workers, high social adaptation can lead to the development of a positive social norm at the jobsite; and (3) when high social adaptation reinforces formal rules, this occurrence reduces the need for additional formal controls on worker behavior. The results from this paper are expected to help construction organizations in understanding the availability of social norms in favor of management, and ultimately in using the social norm for effective labor control that meets little resistance.

Green principles have been increasingly incorporated into planning, design, construction, and maintenance processes in the engineering and construction industry. Along with the growth of the green initiative, going green not only demonstrates corporate social responsibility, but may yield significant economic benefits. This study compares financial performance between green and conventional firms in the engineering and construction industry. A total of 22 sample companies used in this empirical analysis are categorized into two groups—green versus conventional firms—in accordance with Engineering News Record and Newsweek green company lists. Two groups are compared in terms of short-term financial performance, long-term economic value, and market value. The analysis shows that green firms outperform conventional firms on return on equity (17.4 versus 8.2%) and economic value added margin (0.35 versus $-1.43\%$). However, the green strategy has not yet been factored into corporate market value. The findings yield important managerial implications for engineering and construction organizations to integrate sustainability into their business operation.

Construction operations have been modeled and simulated using discrete-event simulations with effectiveness and fidelity that have continuously increased over the past four decades. Today, it is possible to model construction operations so that its discrete components are represented very faithfully. However, construction operations often include activities that are simultaneously continuous and stochastic in nature. These continuous activities have typically been modeled by discretization and in some cases using combined discrete-continuous simulation. The current literature does not discuss the series of important statistical issues, such as divisibility of fitted distributions and a significant possibility of the discretized activities not being independent and identically distributed, which are brought along by discretization and can significantly impact the results of the simulation study. Combined discrete-continuous simulations have treated the continuous portion dynamically (i.e., based on differential equations of rate change) but either deterministically or disrespecting statistical properties of the underlying continuous stochastic process and its interactions with the discrete portion. These approaches can seriously affect the accuracy of the model in representing the system behavior, grossly impact the simulation results, and can be detrimental to the acceptance of the model due to difficulties in verification and validation. A clear understanding of the underlying problems is thus required when modeling simultaneously continuous and stochastic activities. This paper investigates the major issues associated with modeling continuous stochastic construction activities that have been traditionally modeled using discrete-event methods. This paper contributes to the body of knowledge by identifying the issues pertaining to and impacts of discretization of continuous activities. The paper improves awareness of these issues that have been ignored or not understood by previous studies and help future researchers in building valid and credible simulation models. The paper also demonstrates the effect of discretization on the behavior of the model and the simulation results using a case study of a road-paving operation.

This paper summarizes a mathematical model that relates the geometric and geotechnical features of a road construction site with the allocation of materials, searching for a minimum construction cost. This paper proposes a linear programming model to optimize excavation and paving services. With this model, it is possible to evaluate site alternatives with different soil strata and different degrees of compaction. The borrow pit materials are allocated in the most economical way, and it is possible to incorporate more inputs like materials mix. Software was used to solve the model, and a spreadsheet application was used as an interface for data input. The proposed model demonstrated possible cost savings in earthwork planning. It is expected that earthwork and paving optimization with linear programming will reduce road construction costs considerably.

Many studies have documented the merits and problems of nighttime work for highway construction. Most of these studies have examined the safety of the construction site for workers or the traveling public. Illumination standards, sign requirements, and crash rate data have been studied to determine whether crash rates increase during nighttime hours, and the reasons for these crashes. Few studies have addressed either the effects on cost or productivity that nighttime construction has on a project. This study used hard bid unit prices to focus on the effect that performing certain construction activities at night has on cost and productivity. Specifically, the study assumes that a contractor’s bid amount reflects expected relative project productivity and answers the question, “What impact, if any, does night work have on construction productivity and therefore bid price?” This is the first paper to answer both questions as related. Among the results was the fact that for the most part, the owner would have saved millions of dollars by allowing the contractor the option of working at night or during the day, though some items were bid lowest if the contract allowed for night work only.

A major driver to project success is the ability to manage the project cost effectively. Despite the agreement among scholars and practitioners on the importance of managing the project cost, excessive cost overruns continue to occur on major power transmission projects. In this paper, the author, through a Delphi method, will discover problems of managing the project cost, suggest solutions to overcome these problems, and identify lessons learned from these projects. The study was conducted with two different project teams in the same organization in Canada. Key findings from this study will highlight similarities and differences between the two cases in terms of how each team managed the project cost and learned from it. The paper will contribute to the body of knowledge by identifying lessons learned from power transmission projects on how to manage the project cost and by suggesting solutions to overcome the problem of cost overrun in these projects.