Cost Normalization for Global Capital Projects Benchmarking

The objective of this study was to determine the relationship between project manager’s leadership style and performance of water projects in Kenya. Operationalization of leadership style was based on transformation and transaction leadership style while project performance was based on project time and cost performance. The study analyzed secondary and primary data for 102 water projects that were completed between 2011 and 2014. Hierarchical regression analysis was undertaken on the variables. The results show that a significant relationship exist between project manager’s leadership style and project time performance. In addition, the findings show that adoption of transformational leadership style leads to higher level of project performance. However, no significant relationship was established between project manager’s leadership style and project cost performance. This may be due to the use of fixed price contracts that specify the conditions for escalation and the maximum allowable cost escalations which could have made cost changes insignificant. The study has provided empirical evidence on the relationship between project manager’s leadership style and project performance within a developing country context. To enhance project time performance, project manager’s leadership style is critical and managers should strive to intellectually stimulate project team members.

Benchmarking is a proven technique for improving project performance and, as such, is a critical component of any mature project delivery system. Competitive benchmarking requires industry‐specific metrics in absolute terms since processes vary by industry, and any metrics used within a single industry must be attuned to its particular processes. A framework is developed for evaluating pharmaceutical capital facility projects using metrics specific to the characteristics of these unique projects. Establishment of the framework made possible the development of a set of industry‐specific metrics and a flexible data collection and reporting system for measuring project performance. Preliminary findings from an initial sample of 40 pharmaceutical projects confirm that meaningful industry‐specific metrics can be produced for pharmaceutical capital facilities benchmarking. Developing such a framework enables the industry to measure project performance more accurately, get meaningful project performance comparisons, and ultimately establish credible norms for project performance.

This study uncovered inhibiting factors to cost performance in large construction projects of Malaysia. Questionnaire survey was conducted among clients and consultants involved in large construction projects. In the questionnaire, a total of 35 inhibiting factors grouped in 7 categories were presented to the respondents for rating significant level of each factor. A total of 300 questionnaire forms were distributed. Only 144 completed sets were received and analysed using advanced multivariate statistical software of Structural Equation Modelling (SmartPLS v2). The analysis involved three iteration processes where several of the factors were deleted in order to make the model acceptable. The result of the analysis found that R2 value of the model is 0.422 which indicates that the developed model has a substantial impact on cost performance. Based on the final form of the model, contractor's site management category is the most prominent in exhibiting effect on cost performance of large construction projects. This finding is validated using advanced techniques of power analysis. This vigorous multivariate analysis has explicitly found the significant category which consists of several causative factors to poor cost performance in large construction projects. This will benefit all parties involved in construction projects for controlling cost overrun.

This study investigates the cost and time performance of highway projects from the viewpoint of the public owner. It differs from previous studies which focused on the contractor’s perspective on project performance. A total of 13 success factors were identified from literature and the opinions of experienced engineers. Data was collected from 99 projects handled by the Department of Highways (DOH) in Thailand Discriminant analysis was used in this study to build the cost and time predictive models, which were generated from samples of cases, which had already been grouped and known as successful and unsuccessful projects. The models were then applied to new cases with measurements for the predictor variables, to predict that the projects were either successful or unsuccessful. The results show that success in cost performance depends on the management of construction resources, budget management, construction method, and communication. By contrast, schedule management and human resource management inhibit cost performance. Success in time performance depends on choice of construction method, management of construction resources, schedule management, supervision and control, and communication. Quality management, budget management, human resource management, owner involvement, and team relationships impede time performance

The construction industry has been slow to adopt competitive benchmarking as a tool for continuous improvement. The nature of the industry, its projects, participants, and methods of execution differ widely from the manufacturing sectors making traditional benchmarking models developed for manufacturing difficult to adapt. This paper presents a benchmarking system developed by the Construction Industry Institute (CII) for broad application in the construction industry. During the past couple of years, the CII Benchmarking and Metrics (BM&M) system has been ported to a web-based system of data collection, performance and practice use reporting, and industry analysis. CII serves as a third-party facilitator and data clearinghouse to permit the sharing of highly confidential project data in a competitive environment. Cost, schedule, safety, practice use, and productivity data are now collected on-line during project execution 24/7 from the most remote project sites. Confidential reports are returned online showing metric scores, performance quartiles, and graphical comparisons of individual project performance to a database of similar projects. This paper addresses many of the issues that have served as barriers to benchmarking for the construction industry and provides an overview of how CII is confronting these issues. A background and a descriptive discussion of the database is provided and a few key findings from the data analyses are presented.

Today’s construction business relies on first-to-market product strategies to gain competitive advantages and increase profit margins. This has created an increased demand for a high performance capital project delivery system that can achieve a dramatic reduction in project cycle time. Very few decision tools and guidelines exist to assist owners in choosing appropriate delivery systems and project strategies to radically reduce the project cycle time from the preplanning stage through start up. The research presented in this paper surveyed the construction owners and architectural/engineering/construction firms to identify projects that have achieved greater than 25% reduction in overall project cycle time when compared to current industry standards. The data collected were analyzed to determine the techniques that facilitate radical reduction in project cycle time. These techniques include, best practices and schedule reduction techniques as well as the various management techniques employed on the projects identified by the Construction Industry Institute (CII). This research also identified the barriers to radical schedule reduction. The research concludes that radical schedule reduction well in excess of 25% can be achieved through the selective employment of management techniques, schedule reduction techniques and CII best practices. Almost every construction manager can utilize this research to improve project performance whether for radical reduction or simply more effective execution.

PurposeManagement capability is one of the major criteria for evaluating construction contractors during prequalification and tender evaluation This paper aims to investigate the impact of contractors' management capability as a prequalification criterion on cost and time performance of selected building projects.Design/methodology/approachPrequalification assessments of management capability of wining contractors as well as cost data relating to 77 completed building projects executed between 2004 and 2007 are obtained. The data obtained from a questionnaire and archival data are analyzed using one‐way analysis of variance and multiple regression.FindingsThe results reveal that contractors' management capability has significant impact on cost and time performance of building projects as evidenced by p‐values of 0.042 and 0.039, respectively.Practical implicationsThe research could be of significant benefit at the research implementation stage of public procurement practice especially in relation to the construction industry in Nigeria. Construction practitioners involved in prequalification and tender evaluation should continue to seek relevant information relating to management capability from the candidate contractors during prequalification and tender evaluation.Originality/valueModels capable of predicting the final cost and duration of building projects are eventually derived based on prequalification assessment of contractors on management capability, proposed contract duration and the initial contract figure. The goodness of fit of the models as defined by the value of R2 is found to be 96.2 percent and 90.01 percent for cost and time, respectively; thus signifying high predictive efficacy of the models.

Defining a clear project brief at an early stage is critical for the project success. A lack of project brief clarity can cause design and construction changes or errors throughout project delivery, which ultimately leads to project time and cost overruns. This research proposes a dynamic simulation model to evaluate the overall impact of briefing on cost and time performance of construction projects. The causal feedback loop model portraying the impact of briefing on project cost and time performance is developed. The interrelationships that exist among the influencing factors incorporated into the stock and flow model of the project briefing. Then, the proposed model is applied in a road project to assess its applicability and performance. The results indicate that a clear project brief aid in reducing brief changes, design changes, and construction changes throughout project delivery, which can ultimately improve project cost and time performance. Despite the fact that the clear brief increases required budget and duration for the project briefing, it still represents good value to the project cost and time performance overall.

Design/build has become one of the favored project delivery methods in the engineering construction industry. Numerous studies have advocated the use of design/build over the traditional design/bid/build delivery approach. A comprehensive analysis of 67 global projects from the Construction Industry Institute's database shows that design/build projects may not provide all the benefits to project performance. The study found timesaving was a definitive advantage of design/build project delivery, but, the positive effects of cost and productivity changes were not convincing. Based on the results of the study, the project management expertise and experience of the contractor may have a greater impact on project performance outcomes than focusing on project delivery strategy only.

Purpose Construction process is complex and traditionally fragmented; thus, it is almost impossible to have a project completed without changes to the original plan or the construction process. The purpose of this study is to identify and examine the causes of variation orders, ascertain their effects and establish the cost and time performance implication as a result of variation orders. Design/methodology/approach This study obtained information from 90 construction stakeholders on 30 completed educational building projects to ascertain the causes and effects of variation orders on project delivery using questionnaire survey. In addition to this, a pro forma document was designed to obtain the project characteristics, cost and time data from these 30 completed educational building projects. Factor analysis was used to categorise the causes of variation orders, while severity index was used to examine their effects on project delivery. The hypothesised statement was tested using paired t-statistics to examine whether a statistically significant difference existed between variation orders, cost and time performance of the projects. Findings The study identified 13 main factors as causes of variation orders and the results revealed that the most frequent effects of variations were increase in construction costs, time, client dissatisfaction, increase construction project rework and demolition and project abandonment. The results also showed that variation orders had significant effects on both cost and scheduled performance of the educational building projects with average cost and time escalation of 33.95 and 29.45 per cent of the original project cost and time, respectively, for the entire projects studied, while average cost implication of variation orders is 23.79 per cent. Practical implications The findings in this study will be of assistance to government agencies and management of public works in higher institutions of learning in managing variations in construction projects. The study will also add to the current literature on the impact of variation orders on educational building projects in developing countries. Finally, it will create the much-needed awareness on the severity and implication of change or variation orders on project delivery. Originality/value The study identified and examined the causes of variation orders, ascertained their effects and established the cost and time effects of the causes of variation order on project performance. This will assist project initiators, contractors, consultants and other stakeholders to fully appreciate and understand the significant effects of variation orders on project performance.

This study aimed to develop predictive models that could be used to estimate the cost and schedule performance of reconstruction of transportation infrastructure damaged by hurricanes and to determine the predictors that are robustly connected to the developed models. Stepwise multiple linear regression and extreme bound analysis (EBA) were used to develop the models and determine the robust and fragile predictors, respectively. The results demonstrated that seven cost performance predictors and nine schedule performance predictors accounted for Adjusted R-Squared of 92.4% and 99.2%, respectively. The results of the EBA revealed that four cost and seven performance predictors were robustly connected to the developed cost and schedule performance predictive models. It was concluded that increases in laborers' wages, the number of inspections, information and data management, and addressing safety and environmental issues prior to a project's execution were predictors of both the cost and schedule performance of reconstruction projects. The outcomes of this study provide knowledge and information that will be helpful to decision-makers who are responsible for mitigating delays and cost overruns, and effectively allocating their limited resources available following a disaster.

The construction industry in Saudi Arabia has been experiencing poor cost and time performance, leading to financial losses for all project parties involved. This study analyzes the cost and schedule performance of horizontal and vertical projects constructed at a public university between 2012 and 2022. Data on construction costs and schedules were collected and compared to assess project performance, such as cost growth and schedule growth. The findings from analyzing the project data were then used to formulate the interview questions designed to understand key factors contributing to cost and schedule growth and to explore potential solutions. Additionally, factors influencing project cost and time, as identified from a thorough review of previous studies, were used to guide the analysis and the interview process. The results indicate that vertical projects experienced more cost and schedule growth than horizontal projects. Altogether, 80% of both vertical and horizontal projects exceeded their planned budgets by an average of 5%, and ~95% of those projects were completed behind their planned schedules, with an average delay of 160%. The interviews revealed several factors affecting project performance, including owner‐related issues such as change orders, payment delays, design errors, and inaccurate quantity estimates; contractor‐related issues such as delays in material approvals and inadequate planning; labor‐related challenges such as shortages of workers and unavailability of skilled laborers; and government‐related challenges such as taxes, visa restrictions, and localization requirements. The findings of this study can help universities in taking proactive steps to reduce changes in construction project costs and durations, thereby improving the overall performance of construction projects.

We conducted a survey of corporate preparedness for pandemic influenza among biotechnology and pharmaceutical companies in Montgomery County, Maryland, to determine the level of preparedness for this industry and geographic region. The survey, based on the HHS Business Pandemic Influenza Planning Checklist, established whether a company had a preparedness plan specific to pandemic influenza, the contents of its plan, or its reasons for a lack of a plan. A total of 50 companies participated in the survey. Of these, 40 did not have any type of preparedness plan, 3 were drafting plans, 6 had general preparedness plans that could be applied to an influenza pandemic, and only 1 company had a preparedness plan specifically designed to address pandemic influenza. Biotechnology and pharmaceutical companies in this geographic region are currently not well prepared for pandemic influenza. Public health officials should offer more help, possibly in the form of a model small business preparedness plan, and collaboration between companies should be encouraged to foster sharing of preparedness plans.

PurposeEmpirical evidence suggests that many triggers influence poor cost performance in highway projects, whereas previous studies about the cost overrun triggers stem from a positivist standpoint supported by conventional statistical techniques, thus disregarding the sophisticated interactions and overall dynamics of the triggers. This study contends for a paradigm shift in investigating and understanding cost overrun triggers by adopting a holistic perspective through the lens of system thinking. This study aims to contend for a paradigm shift in investigating and understanding cost overrun triggers by adopting a holistic perspective through the lens of system thinking.Design/methodology/approachSemi-structured interviews with industry stakeholders in Nigeria were conducted buttressed by textual data from literature sources and project documents. Data analysis based on a developed data compatible coding framework and causal relations from textual data sources was used to develop a causal loop diagram depicting the interactions of the triggers which were validated by experts.FindingsThe analysis of the causal loop diagrams (CLDs) allowed identification of action points used to suggest changes for improved cost-effective highway project delivery. Among the suggested interventions are ensuring the provision of adequate funding prior to contract award will result in timely delivery of projects and indeed delivering key projects at the contractual agreed budget. This can be achieved through ensuring strict adherence to the provisions of Section 4 (2) (b) of the Nigerian Public Procurement Act, 2007 which stipulates that no contract should be awarded if funds are not available from the onset.Research limitations/implicationsThe study was limited to only highway infrastructure projects in Nigeria and as such caution must be taken before using the outcome of the study to other context within Nigeria and beyond.Practical implicationsFrom a practical point of view, the causal model demonstrates that this study is capable of being used to make pragmatic decisions regarding policy leverages about improving cost performance in highway projects provision in the Nigerian highway infrastructure sector of the construction industry. Moreover, it will aid a clear understanding of the key influencing triggers of cost overrun by the relevant stakeholders within the highway sector of the industry.Originality/valueThe hybrid-based approach applied in the development of CLDs in this study is expected to provide new insight into understanding the linkages, interactions, feedbacks and processes among the key cost overrun triggers and suggesting leverages for cost performance improvement within the philosophy of system thinking.

The lack of proper management of the unique modular risks hinders the construction industry from maximizing the potential benefits associated with the use of modularization. Capturing the full cost benefits of modularized processes requires careful consideration of different aspects related to material, design, technology, logistics, installation, and so forth. Although many previous research efforts provided models to assess the feasibility of modularization in construction projects, no previous study developed a risk-based approach to assess the impact of adopting modular approaches on the cost performance of construction projects. This paper fills this knowledge gap. The authors followed an interrelated multistep research methodology. First, 50 modular risks were identified based on an extensive analysis of the literature conducted in a previous research study. Second, an industry survey was conducted in which 48 construction professionals—with an average of 24.25 years experience in construction operations and 13.6 years experience in modular construction—examined and assessed the impact of modular risks on cost performance. Third, integrated statistical and mathematical techniques—including distribution fitting—were utilized to develop a predictive model that (1) maps the 50 modular risks under investigation to cost performance data collected from 56 modular construction projects, and, consequently, (2) computes the associated cost saving and/or growth. The proposed model was verified using extreme condition tests, surprise behavior test, and sensitivity analysis, and was validated by industry experts. The authors provide guidelines for using the proposed model by industry practitioners. The developed model allows for maximized use of available project information to enable a reliable a priori cost assessment for the modularization processes throughout the different project phases. This is particularly important in the case of varying conditions over the project lifecycle. The developed model helps project stakeholders identify cost enablers and barriers that are interrelated with modularization processes. Accordingly, corrective actions and mitigation plans can be established. This research provides improved practices for decision-making, risk management, and project team alignment to maximize the cost benefits of modularization in construction projects.