Journal for the Advancement of Performance Information and Value

Recycling Services Using the Best Value Approach

Dean Kashiwagi, Ph.D., Erik Brown — Fri, 30 Dec 2022 00:00:00 +0000

The Best Value Approach (BVA) has been in research and development for 30 years [1992 – 2022]. The approach has been successfully tested in the procurement of over 2,000 projects [98% customer satisfaction, minimized contractor change orders to 1% and reduced cost of 5 to 30%]. The BVA has been successful in delivering construction projects but has not been tested in the delivery of contractual services. In 2018, a large organization tested the BVA on procuring recycling services. The BVA has two paradigm shifts: a new procurement and project management approach. The new approach minimizes the need for the client to direct and control the vendor and minimizes the need to depend on the relationship between the client and vendor. The BVA replaces the dependence on the relationship with performance information. The performance information creates transparency and minimizes the need for the client to direct and control the vendor. The objective of the BVA is efficiency: to reduce cost and increase profit, revenue and value. The paper tracks the performance of the BVA on recycling service for the first four years of the recycling service [2018 – 2022].

Delivering Janitorial Supplies to a Large International Organization

Jacob Kashiwagi, Ph.D., Jake Gunnoe, Ph.D. — Fri, 30 Dec 2022 00:00:00 +0000

The Best Value Approach (BVA) has been in research and development for 30 years [1992 – 2022]. The approach has been successfully tested in the procurement of over 2,000 projects [98% customer satisfaction, minimized contractor change orders to 1% and reduced cost of 5 to 30%] (PBSRG, 2022). The BVA has been successful in delivering construction projects but has not been sufficiently tested in the delivery of contractual services. In 2018, a large organization tested the BVA on procuring recycling services. In 2019, the organization ran a second BVA test to procure the delivery of janitorial products to 7,000 facilities. The BVA utilizes the use of performance information to identify and utilize expertise to dramatically reduce their cost. The case study shows how a vendor can use performance information to define their expertise and value. The paper tracks the performance of the expert vendor for three years [2019 – 2021]. The case study also shows the value of the expert vendor’s project manager as the project manager was the only person in the vendor’s organization who understood the importance of using performance information.

Implementing and Sustaining the Best Value Approach in a Large Organization

Joseph Kashiwagi, Ph.D. — Fri, 30 Dec 2022 00:00:00 +0000

In recent years, construction companies have lost millions of dollars due to poor project management performance on projects. The Best Value Approach (BVA) is one of the only documented systems to show an increase in the performance of project management. It has been used on over 2000 projects with a 98% customers satisfaction to cut costs, decrease time, reduce effort, and improve quality on projects. The BVA system is also the most licensed technology at Arizona State University with 65 licenses. The issue with the BVA is that professionals have struggled to implement and sustain the system in their own organizations. Research was conducted at SKEMA Business School as part of a Doctor of Business Administration (DBA) to resolve the sustainability issue. The research included a complete literature review of the BVA and 32 other buyer/supplier systems along with a practitioner’s survey (107 participants) and 10 test projects from a large organization that has been utilizing the BVA for over three years. The result of the study is 11 unique BVA characteristics, 6 identified issues by practitioners, and 15 modifications to improve the sustainability of the BVA. The research provides a foundational framework for how organizations can implement and sustain the BVA that has been tested and used with a large organization.

Use of Customer Satisfaction to Measure Performance of Systems and Contractors: Post-Occupancy Evaluation (POE) Method

Dhaval Gajjar, Ph.D. — Fri, 30 Dec 2022 00:00:00 +0000

A roofing manufacturer wants to differentiate themselves from other roofing manufacturers based on performance information. However, construction industry has revealed poor performance documentation in the last couple of decades. With no current developed performance measurement model in the industry, two roofing manufacturers approached the research group to implement a warranty program that measures the performance information of their systems and applicators. Moreover, the success of any project in the construction industry heavily relies upon the capability of the contractor(s) executing the project. Low-performing contractors are correlated with increased cost and delayed schedules, resulting in end-user dissatisfaction with the final product. Hence, the identification and differentiation of the high performing contractors from their competitors is also crucial. The purpose of this study is to identify and describe a new model for measuring manufacturer performance and differentiating contractor performance and capability for two roofing manufacturers (Manufacturer 1 and Manufacturer 2) in the roofing industry. The research uses multiple years of project data and customer satisfaction data collected for two roofing manufacturers for over 1,000 roofing contractors. The performance and end-user satisfaction were obtained for over 7,000 manufacturers' projects and each contractor associated with that project for cost, schedule, and quality metrics. The measurement process was successfully able to provide a performance measurement for the manufacturer based on the customer satisfaction and able to identify low performing contractors. This study presents the research method, the developed measurement model, and proposes a performance measurement process that entities in the construction industry can use to measure performance.

Curriculum Framework Development: A Case Study of Implementing a Construction Management Roofing Course

Sat, 21 Aug 2021 00:00:00 +0000

The U.S. construction industry is currently facing the significant challenge of a declining workforce. Studies of age-related demographics show that the construction industry will not be able to meet its future workforce demands. The roofing industry, one of the essential sectors within construction, faces a similar workforce challenge, presenting a need to build a platform to prepare the next generation of leaders within the industry. With this in mind, the objective of this study was to develop a curriculum framework for a three-credit course (not currently offered in the curriculum) on roofing at the undergraduate and graduate level. An industry-wide survey was developed and distributed to understand the industry’s perception regarding current workforce challenges and the perceived need for a course at the higher education level. The study further provides details on the involvement of industry professionals in the course development and implementation, the impact of the course on student’s learning and their perception regarding the roofing industry. The findings of the study addressed a current curriculum gap within construction management. The students indicated that they had significantly increased their knowledge about roofing and had generated an interest to explore career options in roofing.

Using the Best Value Approach to Improve Construction Project Performance in the Chinese Construction Industry

Yutian Chen, PhD, Oswald Chong, PhD, P.E. — Sat, 21 Aug 2021 00:00:00 +0000

The Chinese Construction Industry (CCI) is struggling with poor project performance (including cost overruns, delays, and lower satisfaction ratings). Previous research has identified that other developing countries are struggling with similar issues. According to the available economic data (GDP, growth, corruption, etc.) the CCI is very similar to construction industries in Vietnam and the Kingdom of Saudi Arabia. A literature review suggests that the CCI struggles with similar risks as these two countries. The primary difference between the CCI and other industries is the socialistic environment. Several research efforts have shown the Best Value Approach (BVA) to be a feasible solution to reconciling project performance in both Vietnam and Saudi Arabia. The research shown herein investigates whether the BVA is a feasible solution to performance issues in the CCI. Using available literature, the authors created an industry expert survey to investigate whether BVA concepts can address the performance issues in the CCI and if they can be implemented despite government policy. From 204 responses, the results suggest that most professionals are dissatisfied with the CCI performance, over 50% believe BVA concepts will improve the performance of the CCI, but only 40% believe that the BVA would be implementable in the CCI.

Synthesis of Practices and Tools for Cost Estimation and Cost Management for Transportation Projects

Minsoo Baek, PhD, Baabak Ashuri, PhD — Sat, 21 Aug 2021 00:00:00 +0000

Cost escalation during project development is inevitable on transportation projects. The lack of a systematic process for establishing a baseline budget with the consideration of potential issues (risks) that negatively impact project cost throughout project development presents a major challenge for State Departments of Transportation (DOTs). The overarching objective of this paper is to identify best practices for cost estimation and management that can aid project managers and engineers throughout the project development process (PDP). To achieve the objective, this paper conducted a systematic literature review, comprehensive content analysis of cost estimation and cost management processes in other State DOTs, and interviews with transportation cost professionals. A systematic literature review identified four key areas for cost estimation and cost management, including: (1) risk analysis and contingency; (2) identification of cost escalation factors; (3) accuracy of preliminary cost estimate; (4) and constructability review. Cost estimation and control processes in Minnesota, California, Texas, Ohio, and Washington State DOTs are provided as examples of best practices for establishing reliable baseline cost estimates. This paper represents a current synthesis of state DOTs’ practices on cost estimation and cost management in the U.S.

Using the Best Value Approach to Improve Project Performance in the Vietnam Construction Industry

Nguyen Le, PhD, Oswald Chong, PhD, P.E., Dean Kashiwagi, PhD, P.E. — Sat, 21 Aug 2021 00:00:00 +0000

The Vietnam Construction Industry (VCI) has been facing risks that cause delays, budget overrun, and low customer satisfaction that required continuous research efforts on solutions. This paper focuses on how the Best Value Approach (BVA), a procurement and project management philosophy, could be utilized in VCI projects to improve overall performance. Analysis from six industry experts determined how current VCI conditions, namely risk and success factors, are related to the BVA. Sixteen BVA success principles were identified and ranked based on their perceived impact to project performance by an industry survey with 98 VCI practitioners. The results show high agreement rate with all sixteen BVA principles. Spearman’s rank-order correlation test determined relatively high agreement between owners and contractors, and lower agreement between owners and consultants on the ranking. The majority of participants agreed that the BVA would improve project performance and were interested in learning more about the BVA. The results encourage further BVA testing and education in the VCI. This approach is not limited to the VCI but could be followed by other developing nations.

The Effect of Expertise on Project Complexity

Isaac Kashiwagi, PhD — Fri, 13 Nov 2020 00:00:00 +0000

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.

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

Yutian Chen, PhD, Oswald Chong, PhD, P.E. — Fri, 13 Nov 2020 00:00:00 +0000

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.

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

Nguyen Le, PhD, Oswald Chong, PhD, P.E., Dean Kashiwagi, PhD, P.E. — Fri, 13 Nov 2020 00:00:00 +0000

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 Impact of Utilizing Expertise to Project Risk and Performance

Jake Gunnoe, PhD, Alfredo O. Rivera, PhD, Delbert Feenstra — Fri, 13 Nov 2020 00:00:00 +0000

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.

Development of the Use of Performance Information

Jackson Harare, M.S., Jacob Kashiwagi, PhD, Joseph Kashiwagi, M.S. — Fri, 13 Nov 2020 00:00:00 +0000

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.

Case Study of Sustainability of the PIPS Best Value Program at the University of Minnesota

Kenneth T. Sullivan, Dean Kashiwagi — Mon, 02 Jun 2008 00:00:00 +0000

This is a case study testing the hypothesis that the best value PIPS process is a sustainable process/structure. The best value PIPS process has been tested 450 times over 13 years. However, the process/structure has not been sustainable, meaning that users have been successful at individual tests, but unable to imbed the system into their organization and standard operating procedures. It has been resisted because it minimizes the need for construction management, simplifies the delivery process and transfers both risk and control to the contractors. The University of Minnesota approached the Performance Based Studies Research Group (PBSRG) to test and implement the process. Unlike other research clients, they agreed to meet the requirements for sustainability: implementing a long term strategic plan, using and instructing a core team, running tests before full implementation, and implementing continuous education to both client professionals and contractors. This study shows the results of the hypothesis testing.

Assessment of Pakistani Construction Industry – Current Performance and the Way Forward

Rizwan U. Farooqui, Syed M. Ahmed, Sarosh H. Lodi — Mon, 02 Jun 2008 00:00:00 +0000

The Pakistani Construction Industry has always been of economic and social significance to the country. In contrast to the prospective share of Pakistani construction in the local and global economic market, conversely, the development of the sector has not been at par with the market demands. With the recent rapid economic growth of the country, Pakistan now offers a growing market for the construction industry. The Government of Pakistan has responded to this opportunity by planning extensive infrastructure expansion programs. All of these programs have the potential to lead the local Industry to establish respect, status and international recognition when the appropriate efforts are extended to achieve the same. Even with the opportunity for growth the challenges will be extensive. This research presents the current state of performance of Pakistani Construction Industry and provides directions for strategic improvement of the construction industry on a sustainable basis. Major findings of the research include: a cultural and behavioral shift in the mind-set of all participants in the construction process especially top management is necessary if the construction industry is to improve its performance and competitiveness; the “boom cycle” and corresponding shortage of labor trades has increased the need for industry participants to adopt and apply construction project management philosophy, tools and techniques to help them manage the industry performance and productivity in a sustainable long-term mode. The major obstacles to improving the performance of Pakistani construction industry were found to be lack of expertise/resources in construction project management and its applied areas. A rigid attitude and behavior of executive management toward quality, safety and risk management, plus more management and emphasis on employees’ commitment toward project performance, better education and training to drive the improvement process, and tendency to cure the cause of the problem rather than the symptom. If coordination, teamwork, productivity and industry performance in the long run is going to improve, then extensive awareness and training programs to improve the clients’ understanding and approach toward construction project management must be initiated without exception.