Total Quality Management Application of Interior Contractors in Thailand

In Thai interior industry, there is no clear evidence related to quality of interior works, and it is one of the main problems which can be faced by the interior contractors. From site survey, the defects, reworks, and poor quality products can be found and it is realized to be serious problems in the project site and also in the interior company. These problems directly affect company reputation because of customer complaints. Furthermore, most of customer‘s complaints are related to interior works such as door, marbles, plaster and paint, tiling, timber flooring, wardrobe, see Figure 2.

Due to the specific and costly materials for decorating and finishing, the small defects influence to cost. However, the quality management concepts tend to prevent quality problems. Consequently, the benefit of increasing this prevention can be gained in term of money as shown in Figure 1.

Figure 1: Costs and benefits of quality management

(Source: Low & Ke-Wei, 1996)

Figure 2: The percentage of customer complaints regarding defects in each unit

(Source: CDL; real estate development company in Singapore,

Illustrated in Oakland and Marosszeky, 2006)

These can be a few examples of the quality problems which are usually interfaced in the interior decorated project. The common quality problems such as defects, reworks, and poor quality products, reflect the poor quality management in organizations. In conclusion, TQM will help to reduce the amount of work for employees if they no longer need to attend to customer complaints and defect problems (Low & Teo, 2004).

Ms. Nichapa Nirasok made a study aimed to:

1. understand the application of TQM of interior contractors in Thailand

2. develop TQM framework which is applicable in interior contractors in Thailand;

and

3. identify the barriers in implementing TQM of interior contractors in Thailand

Conclusions

Objective 1: To understand the application of TQM of interior contractors in

Thailand

In interior industry in Thailand, the term TQM has not been known well. However, the implementations of TQM in the case studies are observed. Most of the companies have already implemented TQM implementations, but they have not used the term TQM.

The top managements of interior contractors need to understand the importance of TQM application. The aim of TQM implementation is to increase external and internal customer satisfaction with a reduced amount of resources. In order to implement TQM in practice, the top management commitment is the key. Without the support from top management commitment, the implementation of TQM is not possible.

Employees are considered as the key asset for the interior contractor. People management is one of the essential factors for implementing TQM in interior contractor. By the nature of the interior works, the workmanship is the most important since the aesthetic is one of the good quality meanings. The importance of investment on human resources is realized by the top management. In order to improve the workmanship, the organization learning is conducted.

As the aim of TQM which is to increase external and internal customer satisfaction with a reduced amount of resources, the effective quality control system and effective working process are needed. Roles and responsibilities of employee in working process have to be clear. For example, the wood work team needs to know what are the requirements of the next team; assembly team. The wood work team has to deliver their products with the quality which is the assembly team required. In this case, the assembly team is the wood work team‘s customer. So, the wood work team needs to satisfy their customer by delivering the quality product. The details of requires of each team. This working climate could be gain the internal customer satisfaction. Once, the interior contractors can assure the quality requirements. The external customer satisfaction could be gained as well.

Besides, the effective working process, the quality information should be collected. The information should be the documents with photos. The key is this data should be used for improvement. It does not matter how big is the improvement but keep improving is the crucial. The employees have to learn and participate in any improvement.

Suppliers and subcontractor in the interior industry are the main parties as well. Without the good quality of raw materials, the quality of any interior works could not be good. For the subcontractors, in practice, sometimes, interior contractor buy the raw materials for them and pay only for the wages, for example, the glass or mirror works, which are fragile and expensive. Subcontractor may not be able to bear such risk. In the traditional approach, interior contractor companies hire the outsource subcontractors to do some parts of the works. Still, the partnering subcontractor which is mentioned as in-house subcontractor approach is successful in some companies. Some companies, they hire the in-house technicians to do all the works. This approach is also successful for some companies due the quality requirements could be easier to control but higher cost.

Equally important, the customer is one of the main parties. It could be seen that the customer service, relationship, and partnership are directly related to the top management commitment. The top management develops, and gives the priority to customer management. The specific team has assigned to work on the customer services. Especially, the process to solve the customer complaint is managed properly. The personal relationship would be developed by the top management as well. The customer feedback is the key for improvement. The customer satisfaction on the works also would be recorded and it would become to the tomorrow‘s provisions.

Objective 2: To develop TQM framework which is applicable in interior contractors in Thailand

The key dimensions of TQM and the application of TQM in interior contractors in

Thailand has been shown in Table 1. Since, there is no TQM completed implementation

company. So, these applications have been justified by the qualitative assessment as good

TQM practices by comparing among five qualified interior contractors. 

Her thesis abstract is copied below.

Abstract

The Total Quality Management (TQM) aims to increase the external and internal customer satisfaction. The key aspects of TQM are (1) top management commitment and leadership; (2) customer management; (3) organizational learning; (4) people management; (5) process management; (6) continual improvement; (7) quality information management; and (8) supplier and subcontractor management.

In this study, the qualitative approach is conducted. The applications of TQM in interior contractor in Thailand were studied. The five qualified interior contractors in Thailand are chosen to be the case study. The interviews, observations, and documentation were used as the data collection tools. In data collection and analysis, the key aspects of TQM have been a guideline.

The practices of each interior contractor are common and different. The common and unique applications are discuss in Chapter 4. Among the five case studies, the good practices which could be justified by the qualitative assessment are used to develop the framework for TQM application in interior contractor in Thailand. Also, the difficulties in implementing TQM in interior contractors are identified.

Keywords: Total quality management, TQM, Application, Framework, Interior contractor, Thailand

Application of Value Engineering in Nepalese Building Construction Industry

Completion of construction project within given time, cost, quality and material specification has become major issues in construction industry. The typical problem that the construction industry has been always victim of is project delay and cost overrun dispute (Kaliba et al., 2009). Owner budget, and schedule constrain, design engineering’s design and preparation of contract document without deep-rooted understanding of construction method and the contractors who often builds without appreciation of design principles or consulting the design engineering are the main reasons that cause disputes among these different parties that are involved in a construction project (Bedian, 2004). This dispute is the root cause for the project delay and cost overrun. In such condition most of the time quality has to be scarified in order to save time and cost. So to avoid such critical situation there is a need of key creative ideas that can reduce the project life cycle cost without lowering quality or function of the product. The creative idea is known as Value Engineering (Dell’s Isola, 1988). Foo and Chong (2002) have given some beneficial structure on the application of VE. This concept has been implemented successfully in various developed countries across the globe and it has been successfully proven that construction industry can be benefited by the application of the VE concept.

From preliminary investigation, it was found that Nepalese building construction industry is also suffering from the problems mentioned above. In most cases, local contractors have not been able to deliver projects on time and sometimes not up to the required quality standard (Bhattarai, 1996). They still follow the old construction technology and methods.

The problems that Nepalese construction industries are facing from the past many years are as follows:

(i) Delay in project, revise and cost overrun due to lack of supervision and coordination.

(ii) Outdated standard and poor technology method used for preparing and conducting all job in site.

(iii) Lack of developing and maintaining construction schedules and incomplete drawings and terms and condition.

(iv) Lack of funding directly affecting in productivity and quality of work.

(v) Lack of effective communication which causes conflicts.

(vi) Lack of expertise which leads to dissatisfied customers and a negative reputation of the industry.

(vii) Unsatisfied customers due to poor quality service and delay in work

Therefore it is important to search for VE applications in Nepalese construction industry.

Ms. Shreena Malla made as case study to understand the concept of Value engineering that is required throughout the construction process. The major objectives of her study were to:

1. develop a Value Engineering application methodology in building construction projects by using 6 value job plans.
2. identify the cost overrun itemsin building constructions projects and apply the VE methodology to reduce the cost of the project.
3. propose recommendation and suggestion.

Conclusion

Nepal is a developing country, where construction industry is just booming. Even though construction is booming, people involved in this industry are still following the traditional construction technology. People are still unaware of the high and advance technologies that have been already adopted by other developing countries. The typical problems that Nepalese construction industry has been facing for years are project delay and cost overrun. Lack of key creative ideas, out-dated standards and poor construction technology, communication gap among project team members are the major drawbacks that cause project delay and cost overrun. So the main objective of this research was to apply value engineering in Nepalese construction industry in order to omit those weaknesses.

Value engineering is a methodology that helps to reduce project cost by generating value alternatives. So here in this research also value engineering methodology was applied in both cases throughout the research. First the VE methodology (6 job plans) developed in chapter 3 was verified from the professionals which was the first objective of this study then each step that this method consists was applied in detail. Before applying those steps the cost overrun items were identified with the help of professionals. Value engineering 6 job plans was then applied on those items in order to test the VE application, which was second and the core objective of this study. After purposing VE, it was found that the project cost was reduced by 7% and 14% in case 1 and 2 respectively.

1. The key findings of the research

In Nepalese construction industry, it was found that people always try to find the low price materials without considering the quality in order to save the project cost. Sometimes they even adopt poor construction technology to complete the projects within given time frame. But they don't think about the future consequences that might cause bigger problems than they have expected. As a result they always have to suffer from reworks leading the project towards delay, which is the main cause of cost overrun. Due to delay and cost overrun, clients are found disappointed with contractors. So, this research was done to omit these typical problems seen in Nepalese construction industry.

 After the detailed research, it is found that value engineering is quite beneficial for a developing country like Nepal where people are suffering from project delay and cost overrun due to lack of key ideas and poor construction methods. This method proved that it has a high potential for bringing a new change in Nepalese construction industry as it will help them to identify the problem areas and also provide ideas to solve them. This new method will help Nepalese contractors to bring quality in work and also to enhance their credibility. It will not only enhance the contractor's credibility but will also enhance the relationship between owners and contractors.

Other key findings observed during the research were as follows:

       (i) Lack of Incentive clause in contract document.

       (ii) Lack of VE re-proposal clause in contract document.

       (iii) Project delivery system is usually based on unit price, where all scope of works and   items are already fixed by clients.

       (iv) Designers are not ready to change the design or materials once contract is awarded.

       (v) Not applicable for Government project since the overhead cost is fixed.

       (vi) More appropriate for relation based contract.

     2. Limitation

(i) Research was done on construction phase projects.

(ii) Only contractors were involved.

(iii) Research was done on BOQ items only.

(iv) Only building construction projects were considered for this research.

3. Recommendations

A.  Recommendation as per the Research

(i) Incentive clause for VE re-proposal should be included in contract document.

(ii) Commitment from top management level

(iii) Highly experiences people to form a VE tem

(iv)Sufficient time to apply VE ( depending upon project size)

(v) Open communication among client, consultant and contractor

(vi) Complete design should be provided to the contractors to avoid reworks, wastage of materials, labor overhead cost and schedule overrun.

B.  Recommendation for further Studies

(i) Conduction study from design phase to construction phase.

(ii) Only construction companies shouldn't be focused for the research.

(iii) Incorporate all the parties involved in the project (Contractor, Owner, an Designer).

(iv) Conducting qualitative study

(v) This study can be further extended to all type of construction projects such as road, bridge etc.

Her thesis abstract is copied below.

Abstract

Construction industry is considered as economic activities that play essential role in accomplishing socio economic goals of any country. But the construction industry of Nepal has shown a continuous decline since last few years. The industry has become noticeably wasteful, unproductive, ineffective, and adversarial. The typical problems that this industry has been facing for years are poor performance, project delay and cost overrun. Lack of key creative ideas, out-dated standards and poor construction technology, communication gap among project team members are the major drawbacks that leads the project towards delay and cost overrun. To overcome such critical problems, value engineering has been introduced as a tool for cost reduction within construction industry in a developing country like Nepal. It is a proven method that has been already applied in various developed and developing countries. This is a technique that not only reduces project cost but also enhances the quality of the project. So this dissertation presents the essential fundamental of Value Engineering and its different phases that have been applied in projects to reduce the cost without compromising quality. This research discusses about building construction projects in which construction materials of the project are changed according to Value engineering methodology. The alternatives of those materials are chosen such that the cost is reduced without affecting the value of the project. Since the main objective of this research is to investigate the opportunity of VE application in the construction industry of Nepal, the VE methodology (6 Job Plans), after being verified from seven experts was applied for collecting data from Nepal. During the data collection process, cost overrun items are identified through face to face interview and then VE methodology is applied on these items. Then detail analysis of both chases has been done to investigate the opportunity of value engineering application in construction phase.

After detail analysis, it was found that this concept is very much new in Nepal but quite beneficial for the people involved in this industry. This investigation finding reflects that  this concept has high potential to reduce the project cost, but in order to apply this method commitment from top management level is required first and then highly experienced people to form a VE team.

Keywords: Value Engineering, Cost reduction, Nepalese construction industry, BOQ, VE Job plans, Value alternative.

Sequencing of Critical Activities and Resource Balancing in the Construction of Multi-Storey Buildings in Pakistan

Pakistan with a population of over 180 million stands amongst the fastest urbanizing countries in the world. With an urban growth rate of 3.5% annually, the urban population of Pakistan is above 36 percent which will become more than 50% up to 2050 (Zaidi, 2011). Given the situation there is a need for long term planning for the development of adequate infrastructure to cater for the growing residential and commercial needs of the fast growing population of the urban centers of Pakistan. Hence, construction of multi-storey buildings is a genuinely felt and pursued need in the urban cities of Pakistan. Being a low income economy with only 2.3% of GDP (Economic Survey of Pakistan) contributed by its construction sector, Pakistan needs to find out ways which can help produce low cost and high quality multi-storey buildings.

According to Mehmood et. al. (2012) construction sector of Pakistan has tremendous potential to improve the quality of its construction projects and make them more profitable and productive if it can effectively control the wastages and costs of its construction processes effectively. This obviously requires focusing on effective crew balancing, material management as well as equipment and machinery handling besides improving sequencing of critical construction activities in the construction of multi-storey buildings in Pakistan. Pakistani constructors have been traditionally relying on methods such as CPM, Primavera etc. It is, therefore, imperative to respond to the research questions such as how the sequencing of construction activities controls cost and quality in the construction of multi-storey buildings? And how the modern concepts of sequencing of construction activities vis-à-vis resource utilization can help Pakistan produce low cost and high quality multi-storey buildings? Ms. Sidra Maqsoom made a case study aimed to:

(i) identify sequencing practices being followed by Pakistani contractor firms for the

construction of multi-storey buildings

(ii) analyze how the critical activities are sequenced for the construction of multi-storey

buildings of Pakistan and their impact on cost and quality control.

(iii) understand relationship between sequencing of critical activities and factors such as

crew balancing, material management and equipment & machinery handling and their

influence on cost and quality control.

(iv) propose recommendations for sequencing of critical activities and resource balancing

such that it reduces the cost and increases quality of multi-storey buildings.

Conclusion

1. Sequencing Practices of Pakistani Contractor Firms

In order to achieve this objective, first an extensive literature review was done. CPM based sequencing practices were identified and understood. These included approaches like Line of Balance (LOB), Formalization, Simulation and Resource Activity Critical Path Method (CPM). A synthesis of these concepts was drawn into a framework named Synthesis of Sequencing Framework (SSF) incorporating the fundamental concepts underpinning each idea. This framework was then translated into a survey questionnaire into various easy to understand questions to record responses of Pakistani contractor firms on rating scales. These scales measured their general awareness of these concepts, application to real time situation and personal observations and experiences about the utility of these ideas during project execution with special reference to cost and quality control. The data was collected from 32 Pakistani contractor firms registered with Pakistan Engineering Council (PEC). It was found that respondents were generally aware and recognized various phases of construction and the critical activities involved to be achieved in specified timelines. They understood that how much the time factor is critical to control cost. Importance of resource management such as men, material and machinery in cost management was also agreed by a vast majority of respondents. They appreciated the idea that in case resources are short, then measures such as flexibility in timelines or mobility of resources between various activities are necessary. They believed that CPM is a widely used technique of sequencing of critical activities used by Pakistan contractor firms, however, there could be other methods and techniques which can be used to control cost and quality such as doing various activities in parallel rather than linear fashion to control cost. Reducing idleness of labor, improved machinery and equipment management according to standardized practices and material handling in a manner that improves efficiency and reduces wastage are also significant during the construction process of multi-storey buildings.

2.  Sequencing and Resource Balancing and its relationship with Cost and Quality

Control

Second and third objectives were set to understand the relationship between sequencing and resource management with cost and quality control during various phases of construction of multi-storey buildings. Literature available on the issues such as critical activities, sequencing practices, modern and standardized practices for effective and efficient crew management, material handling and equipment and machinery management was explored in detail. Based upon the literature reviewed, two frameworks named Integrated Sequencing Framework (ISF) and Integrated Resource Balancing Framework (IRBF) were developed. Two case studies were done for a commercial cum residential and official multi-storey buildings were conducted using these frameworks. It was found during the analysis that sequencing done initially during the planning stages of projects are not always followed and keep changing due to various factors.  These factors involve legal issues, procedural problems, design changes, withdrawal or addition of works by the clients, environmental concerns etc. The delays in sequencing cause cost increases. Similarly, defiance from standardized practices of men, material and machinery management also results in coast increases. As far as the quality controls are concerned they are to be exercised both from internal as well as external means. Internal controls involve having material testing labs, recruitment of quality control engineers and developing linkages with public and private sector quality control organizations. External controls are exercised by public sector organization’s requirements to be complied with, clients satisfaction etc.

Recommendations

Objective four of the study was to propose recommendations for sequencing of critical activities under each construction phase, such that, it reduces the cost and increases quality of multi-storey buildings. To achieve this objective, the following recommendations have been proposed in light of the issues and problems noticed during the analysis done both for quantitative and qualitative research mentioned:

A) Related to Sequencing

1. Planning Engineers should involve all possible stakeholders during the making of initial schedule of work like design engineers, client, consultants, site engineers and concerned government agencies like development authorities, environment control organizations etc. to minimize post execution changes.

2. To avoid post execution litigations, the bye laws and buildings regulations should be strictly adhered to. In case of any deviation special approvals should be obtained beforehand following the requisite procedures.

3. To avoid delays in inspections by the government led teams inspection schedules should be sent in advance by the contractor well before the completion of the stage of construction to be inspected.

4. Contractors should have guarantees from the clients in advance that they have sufficient amount reserved in the name of the project under execution to avoid delays in payments.

B) Related to Crew Management

1. To avoid seasonal shortage of unskilled workers contractors need to raise wages during sowing and harvesting seasons.

2. To control work idleness, instead of focusing on the working hours performance standards be set to be achieved on daily, weekly and monthly basis.

3. Contract agreements between skilled workers and contractors be signed to avoid their early drop outs and resultant suspension of work.

4. To avoid idleness the labor force can be engaged in other activities which can go in parallel to another activity.

C) Related to Material Management

1. To overcome the problem of restricted movements at main roads, the number of material laden trucks should be increased at main roads rather than moving less truck in less time.

2. To avoid wastage of material due to weather tarpaulin, material should be used during odd weather.

3. Procurement procedures should be simplified by using IT based software to avoid delays and resultant increase in price of material.

4. Soil testing labs should get their samples tested from the soil testing and conservation departments as well rather than relying on limited number of labs.

5. Standardized samples of material required are kept available for comparison with the new purchase to achieve uniformity in the quality of material

D) Related to Equipment and Machinery Handling

1. Stock / inventory registers be updated on regular intervals to know the condition of the machinery.

2. Use of a specific implement, equipment be monitored in terms of its recommended frequency in a day or so to reduce wear and tear.

3. Mutual exchange between projects located in same area should be managed by a proper command and control system.

4. Only skilled and dedicated operators are deputed with tasks of machinery handling rather than adhoc arrangements.

5. Placement of machinery at project site should be in a manner that it does neither create any pollution nor is injurious to environment.

Her thesis abstract is copied below.

Abstract

Pakistan with a population of over 180 million is one of the fast urbanizing countries of the world. By 2050 the urban population of the country is estimated to be more than half of the total population of the country. This requires to develop adequate infrastructure such as multi-storey buildings to cater to the growing urban needs and shrinking space in the urban centers of Pakistan. Being a low income economy Pakistan needs to find out ways through which low cost and high quality multi-storey projects could be produced. Previous researches have shown that Pakistan can increase the quality and profitability of its construction projects by improving the construction processes. These processes mean the construction activities and the resources such as workforce, materials used and the equipment and machinery handling. This research study has reviewed the literature available on the sequencing practices being used in modern day construction industry as well as the best practices recommended for adequate resource balancing to achieve efficiency in construction projects. A generic model on sequencing practices has been developed with the objective to understand what kind of sequencing trends are followed by Pakistani construction firms. An integrated framework on sequencing and an integrating resource balancing framework has also been developed to achieve the objective of analyzing that how sequencing and resource balancing practices of Pakistani construction firms within conventional CPM schedules effect cost and quality control in different phases of construction of multi-storey buildings of Pakistan such as foundation, structure, architecture, electrical and mechanical installations and finishing.

A quantitative as well as qualitative research has been undertaken to achieve the above mentioned objectives. Quantitative research has been done through a questionnaire survey. Whereas, the qualitative research has been carried out in a case study mode. Based upon the findings of these two approaches some tenable recommendations have been suggested for the Pakistani contractor firms to bring improvements in sequencing and resource balancing practices to achieve efficiency in construction projects characterized by reduced cost and enhanced quality.

Key Words: Multi-Storey Buildings, Sequencing, Construction Activities, Resource

Utilization, Cost and Quality Control

Procurement Method Selection Of Internationally-Funded Highway Projects In Thailand

Procurement method selection in construction industry needs experiences, knowledge, current circumstances, etc., and will not always lead to the best results or cannot be properly assessed compared with outcomes of the other unselected decision-makings. Prior to a final determination which procurement method to adopt for a project, enormous numbers of intricately interrelated underlying factors which influence procurement method selection should be scrutinized (e.g. characteristics of a project, owner’s project familiarity, flexibility to the project, market status, life cycle cost, politics and so on). These respective factors are selectively taken account of or not taken and/or weighted differently by level of owner’s priority, that is, it depends upon each project characteristics as well as owners’ organizational nature. Nevertheless, academies, institutions and government authorities have, for decades, attempted to find the systematic approach to procurement method selection for construction projects of all sizes and complexity so as to facilitate decision-makers and to select the most appropriate procurement method for a project expecting satisfying quality within budget and construction time, and the other emerging aspects of project success.

In addition to the systematic approach to procurement method selection, a variety of forms of contract and contract prices have been introduced and discussed for the sake of ultimately non-disputable and more profitable projects at the same time meeting the objectives of each participating party (Win-Win-Win Situation: Owner-Consultant-Contractor). For instance, partnering has recently been widely introduced for a new concept of project delivery which impels amicable contractual relationship as well as amicable social relationship among the parties, and which targets success of all parties’ objectives during the project implementation. In parallel with such trend, many standard forms of construction contract such as FIDIC, JCT, ACA have been published for advantage of reduction of contractual risk analysis time due to lack of precedent data. As a result, owners will have great opportunities not only to increase the numbers of perspectives tenderers, but also to seek more beneficial procurement methods such as EPC, BOT, etc. rather than in-house conventional procurement methods such as DBB.

However, the problem is that, regardless of the procurement method progression, owners are still uncertain about what method to adopt for a given construction project to achieve success (Love, Davis, Baccarini, Wilson and Lopez, 2008). Comprehending all the interrelated procurement methods and choosing the most appropriate procurement method for a certain project has become a more complex and challenging task due to emerging methods such as partnering, two-stage tendering, Public-Private Partnership, and special contract types used in the particular countries /regions.

Figure 1 depicts the relevant parties where procurement selection process is carried out. Some government regulation/law and lender’s requirements may stipulate the restriction of forms of contract, contract prices, tendering methods and evaluation methods or suitable experienced contractors in the local market may be reluctant to take part in the emerging procurement methods, and thus, the owner may have to solicit participation of international construction companies or modify the procurement method. In case that consultancy service is present, he strives to propose the most appropriate procurement method to the owner. But the owner still needs its knowledge to give the go sign. In addition to knowledge on procurement methods, comprehending characteristics and conditions of respective parties and surrounding circumstances will be also important for owners to select the most appropriate procurement method.

Although adoption of an appropriate procurement method will lead to a more project success probability, owners are still uncertain about what procurement method to adopt and what selection process to follow for their construction projects to achieve success. Mr. Takuya Watanabe made a research which focused on procurement method selection in the Department of Highways (DOH) in Thailand, especially for the internationally-funded highway projects. The main objective of his study is to identify the actual practice on procurement method selection in DOH, and finally to propose a new framework for their future projects. To fulfill the main objective, the sub-objectives were as follows:

(i) To figure out procurement methods' experience of project major stakeholders including government authority, engineering firms, and construction companies in Thailand. 

(ii) To analyze criteria and process of procurement method selection in internationally-funded highway projects in Thailand.

(iii) To propose a new framework of their procurement method selection for the purpose of the maturity and budgetary strategy of internationally-funded highway projects in Thailand.

Conclusion

1.  Findings and Recommendation from Procurement Methods’ Experience

 a.) Form of Contract

The most applied form of contract for Thai highway construction companies was Design-Bid-Build (DBB) type. In adopting the different forms of contract for future projects, The Department of Highways (DOH) might have difficulty to have prospective tenderers due to no experience issue of local construction companies, being reluctant to take part in the costly tenders.

b.) Contract Price

Although re-measurement is the most applied contract price to all the local construction companies in Thailand, lump sum contract prices can be considered for the future large-scale projects with expectation of prospective tenderers from the large-sized construction companies. These construction companies have its experience and are capable of evaluating project risks generated by the lump sum contract price. For the other contract prices such as reimbursement and Guaranteed Maximum Price (GMP), even though they have no experience, most of construction companies are probably willing to take part in the projects since their financial risk is very low. On another front, high financial risk will be shouldered by DOH.

c.) Tendering Method

While E-auction tendering method is compulsorily adapted to the domestic infrastructure projects in Thailand, single-stage one-envelope tendering method is adapted to majority of internationally-funded infrastructure projects. The other tendering methods for future projects can be also adopted depending on the project characteristics with assistance of experienced tendering experts. There is a high possibility to adopt E-auction for DOH future projects with international financial aids. However, it may result in high price competitiveness without consideration of quality and reluctance to take part in the tenders for international construction companies though International Competitive Bidding (ICB).

d.) Evaluation Method

Most of the past and on-going projects have adopted Cost Based Selection (CBS) evaluation methods. This brings in easiness of evaluation process to DOH but burdening construction companies due to simple price competition. Proper application of Quality Cost Based Selection (QCBS) evaluation methods may help better quality and higher maturity to their organizations increasing international competence in the construction field. 

By including experienced oversea contractors in their contract packages, knowledge transfer for unfamiliar procurement methods may be easily put into practice, especially knowledge on the payment and document systems, and thereby local contractors can be fostered by following those systems with assistance of DOH/BOIHC.

2.   Findings and Recommendation from Procurement Method Selection Criteria and Process

As a result of the interviews with the staffs in BOIHC and the financial institutions, the procurement method selection criteria and process for internationally-funded highway projects in Thailand under the current procurement system in DOH have been identified. There are six (6) sub-phases in their procurement phase. These are Initiation, Initial Study, Feasibility Study, Approval Process, Bank Negotiation, and Tendering and Award, involving several bureaus within DOH, the Ministry of Natural Resources and Environment and so forth. Each sub-phase has the underlying factors for procurement method selection criteria given from the literature reviews and the interviews. However, no matter what characteristics of projects, the single procurement methods are adopted, which are DBB forms of contract, Re-measurement contract prices, One-envelope tendering methods and Cost based selection (CBS) in conformance with the rules and regulations of DOH, and Prequalification (PQ) and International Competitive Bidding (ICB) requested by the Banks. For use of the new guideline, this rules and regulation should be amended first.

3.   Findings and Recommendation from New Guideline for Future Internationally-funded Highway Projects

The new guideline was proposed considering the nature of the government functions and the absence of the current procurement method selection guideline in DOH. In the guideline, the five (5) sub-phases were remained, some underlying factors were added and the new structure of the project team was proposed by the researcher. In addition, the attached reference documents such as pros and cons of each procurement method, procurement methods’ experience of the stakeholders in Thai highway construction, the project team acquirement, project management structure and stakeholders’ identification aim to assist decision-makers on the final procurement method.

4.   Encouragement to Use this Guideline for DOH

It is understood that technology to be proposed in most of infrastructure projects shall have been substantiated and it is not acceptable to attempt using non-established technology especially to any internationally-funded infrastructure projects. Just because so, does not mean its planning and design in the only technology that is outdated should be carried out. Technology is advancing faster and faster. In particular, there is a remarkable technical progress in electrical, electronics and machinery fields. Even though civil engineering technology is conservative, new tools, techniques, technology have been steadily assimilated. Thus, we shall be greedy to incorporate new technologies constantly. Applying the other emerging procurement methods promotes to improve this concern by construction companies to propose innovation technology, time- and cost-saving construction methods, etc.

Furthermore, most of lending targets under the conventional loan assistance used to be the construction of infrastructure facilities for the purpose of economic and social developments. However, problems for solution and objects for development have been various and complicated nowadays. Therefore, the use of financial aids is recommended not only to construct facilities but also desirably to promote the incorporative programme packaging the issues related to facilities’ system.

For example, the incorporative programme for road construction may be:

1.   main use of local contractors, and competent foreign contractors to join the project for mentoring the local contractors and fostering the human resources,

2.  expansion of existing vocational training center and/or schools for the human resources to be involved in road construction and maintenance,

3.  promotion of implementation of self-active system and toll collection system,

4.  distribution system centering on roads to be improved,

5.  environmental protection along roads, and so forth.

Success of the said incorporative programme may generate the synergy of development outcomes.

This guideline is also useful for DOH to promote BOT type forms of contract such as Public-Private Partnership (PPP) and Privately Financed Projects (PFP), and seek possibility of the international financial aids. Demands of BOT type have been increasing due to aid fatigue of developed countries and debt crisis of developing countries. This trend may continue unless fiscal reason of a country drastically improves. Under the circumstances, it should be well considered that infrastructure projects with this type of forms of contract acquire in-depth support from both an owner and participants since some precedents of BOT type projects have resulted in unexpected inflation of the utilities’ fee or monopolization of the business field due to no competitors inside the country.

Lastly, infrastructure management, especially planning of operation and maintenance during procurement phase, has recently become significant. Reference is made in "2009 Report Card for America's Infrastructure" published by American Society of Civil Engineers (ASCE). It is reported that the comprehensive evaluation of U.S. infrastructure has been severely criticized as D (Poor) in G.P.A. The comparison of GPA evaluation in the last 15 years shows no improvement. To make matters worse, the funds required for the improvement of the infrastructure is increasing from 1,300 billion US dollars in 2001 to 2,200 billion US dollars in 2009. This result should be referred to practitioners not only in Thailand but also other developing countries, and the in-depth study on the project life cycle including O&M and abandonment of the facilities should be carried out in the procurement phase.

Benefits of the Research

Use of this guideline enables DOH to understand the comprehensive approach to adopt the other procurement methods and develop the maturity and budgetary strategies for their organization. This systematic procurement method selection improves transparency and accountability to public people in Thailand promoting democracy principle. The proposed structure of the project team can tackle various and complex issues and propose appropriate procurement methods for their projects. Understanding and practical application of this research paper will provide staffs’ proficiency on procurement methods and stimulate local contractors to have better knowledge on the other procurement methods.

His thesis abstract is copied and posted below.

Abstract

On the benefit of development of communication tools/channels and information technology such as e-books, websites, etc., knowledge on various procurement methods in construction has nowadays been available to any of entities like owners, consultant and contractors. These knowledge are being instantly shared from west to east over the seas and vice versa, as letting them become more knowledgeable procurement strategic organizations. Under the circumstances, owners can refer to pros and cons, lesson learned and issues/problems of emerging procurement methods as alternatives to traditional ones such as DBB and DB forms of contract. The problem is, however, that, regardless of the procurement method progression, owners are still uncertain about what method to adopt for a given construction project to achieve success and what process to follow for selection of the method. In this research, the researcher focuses on the highway projects with international financial aids under the Bureau of International Highways Cooperation (BOIHC) within the Department of Highways (DOH), Thailand, and attempts to promote new guideline of procurement method selection for their future projects.

Methodology consists of three steps. The first step is questionnaire survey to find out procurement method’s experience of the stakeholders in Thai highway construction. Respondents’ last 5-year experiences on procurement methods were analyzed to find out its respective frequencies and patterns. The respondents and interviewees were vice presidents, managing directors, civil engineers in charge of tendering from 19 different highway construction companies and 5 different highway engineering firms. The second step is expert interview to identify the applied procurement method selection under the current system of BOIHC. Several meetings were conducted with staffs from BOIHC and international financial institutions as well as a project manager from the engineering firm currently working with BOIHC so as to comprehend their project approval process, organization structure, procurement method selection criteria and so forth. As a result of analyses from the first two steps, a guideline to select the appropriate different procurement methods for their future internationally-funded highway projects was proposed along with new process framework including the criteria to be considered during each sub-phase of procurement phase.

Use of this new guideline can be helpful to not only BOIHC but also other owners who have no in-house process asset for procurement method selection and no experience to adopt procurement methods differently considering different project characteristics. This will guide them in understanding the systematic approach to procurement method selection and developing their own guideline by following the same research methodology and adjusting the framework based upon the owner’s nature.

Keywords: Procurement method, Selection, Contract, Highway, FIDIC, Form of Contract, Contract Price, Tendering Method, Evaluation Method, Department of Highways, Thailand 

CEIM-SET Congratulates the Graduates of the 116th Batch

We would like to congratulate the new graduates who received their diploma during the 116th AIT Graduation Ceremony on January 21, 2011 at the Thailand Science Park Convention Center (TSPCC), National Science and Technology Development Agency (NSTDA). The names of graduands and their Thesis/Project title are listed below:

Master of Engineering (Professional) (Inter-semester 2011)

1. Doan Thai Duong

Project: Owner’s Project Quality Management: A Case Study of Northern PVOil Petron Station

2. Pham Van Hung

Project: Safety and Health Management in Oil and Gas Construction Projects: A Case Study of Block-O-Mon Gas Pipeline Construction Project

3. Ho Chi Linh

Project: Delay and Contract Management in Construction: A Case Study of Administration Centre and Postgraduates Trainings at Can Tho University

Master of Engineering (August 2011 Semester)

1. Khaing Kay Thwe

Thesis: Project Management Competency in Myanmar Construction Projects

Master of Engineering (Professional) (August 2011 Semester)

1. Pham Viet Cuong

Project: Project Owner’s Quality Management System: A Case Study of Quality Management System in Bong Do Housing Development Project

2. Nguyen Viet Cuong

Project: Feasibility Study Report for an Urban Infrastructure Project Using a Loan from Official Development Assistance (ODA): A Case Study of Laocai City Development Project Funded by World Bank

3. Le Do

Project: Delays in Flood Prevention Projects: A Case Study of Urban Drainage Project Management Unit

4. Nguyen Thi Thu Nga

Project: Analysis of Developer’s Mistakes in Appraisal, Approval and Permit Issuance of the Construction Investment Project in Ho Chi Minh City

5. Ha Chi Nghia

Project: Maximize Profit of Construction Contractor: A Case for Nam Thinh M & E Contractor

6. Linh Hoang Ngo

Project: Causative Factors Leading to Cost Overrun in EPC Power Project: A Case Study of Vung Ang Power Plant Project in Vietnam

7. Dang Quang Ngoc

Project: Owner’s Quality Management: A Case Study of a High Rise Building Project for Resettlement of People Relocated

8. Nguyen Nhat Tai

Project: Owner’s EPC Project Management in a Power Plant Project: A Case Study of the Nhon Trach 2 Power Plant Project (750 MW)

9. Le Thanh Phieu

Project: Quality Management for Building Construction Projects: A Case Study of Residential Area for Cantho University Students

10. Tran Viet Sinh

Project: Cost Estimation Problems in Thermal Power Projects: A Case Study of Thai Binh 2 Thermal Power Project

11. Nguyen Thai Son

Project: Effective Planning and Control of Multiple Projects: A Case Study of GR60-Nokia Stores Chain in Vietnam

12. Nguyen Binh Son

Project: Risk Factors and Management in a Cable Stayed Bridge Project: A Case Study of Nhat Tan Bridge Project in Hanoi

13. Ngo Quoc Thai

Project: Cost Escalation Management in a Low-Income Apartment Project

14. Le Anh Thai

Project: Business Process Management and Key Performance Indicators in Real Estate Construction

15. Nguyen Xuan Thang

Project: Project Delays in Construction of Taxiway S1 in Noi Bai International Airport

16. Nguyen Ngoc Thi

Project: Owner’s Project Quality Management System: A Case Study of Imperia An Phu Project in Ho Chi Minh City, Vietnam

17. Bui Viet Thi

Project: The Delay Factors During Construction Phase of a Residential Project in Binh Duong, Vietnam: A Case Study of An Dien Urbanized Residential Commercial Zone

18. Nguyen Tien Thuc

Project: Development of a Quality Management System in a Hospital Construction Project: A Case Study of the Projects Management Board of Investment and Construction of Thoi Lai Districts

19. Vu Van Tinh

Project: Construction Management in Process Piping Installation: A Case Study of Dong Quat Polypropylene Project

20. Tran Xuan Canh

Project: Project Management in High Risk Basement Construction: A Case Study of Construction Project in Hanoi City, Vietnam

21. Tran Cao Hy

Project: Delays and Claims in Hydropower Plant Project: A Case Study of Dong Nai 4 Hydropower Plant Project in Vietnam

22. Duy Vuong Trinh

Project: Interim Payment & Variation Order Management for a High-Rise Building Project: A Case Study of Indochina Plaza Project

Master of Science (Professional) (August 2011 Semester)

1. Nguyen Duc Huan

Project: Owner’s Tendering Strategy to Obtain a Qualified Contractor

2. Nguyen Tran Tuong Ly

Project: Pre-Construction Delay in Building Project Development: A Case Study of “Investco Babylon” Project in Ho Chi Minh City

3. Phan Hong Ngoc

Project: Human Resource Management in a Construction Project: A Case Study at the Foundation Phase of a Construction Project Executed by Saigon-RDC Workforce

4. Cuong Nam Nguyen

Project: Project Financial Feasibility Study for an Agricultural Processing Plant

5. Vo Thanh Phong

Project: Variances in Financial Model between Feasibility Study and after Design Stage in Bau Sen Building Project

6. Vuong Hoang Thang

Project: Owner’s Project Scheduling Management Strategy: A Case Study of SHB-Da Nang F. C Sports and Training Complex Center Project

7. Tu Thien Tu

Project: Project Management Competency of a Small Contractor: A Case Study of Kien Tao Ltd., Company

8. Le Van Tuan

Project: Risk Factors in a Water Environment Improvement Project: A Case Study of Bien Hoa City in Dong Nai Province

World Bank's expert in transportation planning and engineering gives lecture at AIT

Dr. Asif Faiz, an adviser/consultant with the World Bank in transportation planning and engineering, delivered a lecture entitled “The Promise of Rural Roads” on 30 August 2011 at the Milton Bender Auditorium. All students from the field of Construction, Engineering and Infrastructure Management were encouraged to attend this seminar.

Dr. Faiz’ presentation is based on his keynote address at the 10th International Conference on Low Volume Roads, held in Orlando, Florida in July 2011. Below is the abstract.

Abstract

About 33.8 million km. of roads girdle the earth‘s land mass of 148.9 million sq.km., (an average 0.23 km of road per sq.km of land area); about 61%.of this kilometerage is paved. Nearly all the unpaved roads (13 million km) and an estimated 85% of paved roads (17 million km) are low-volume roads (LVRs) -- with an Average Annual Daily Traffic (AADT) of less than 1000. These 30 million km of LVRs have a wide variety of geometric and paving standards ranging from barely motor able earth roads to modern high-speed two-lane paved highways. The global asset value (replacement cost) of these LVRs is conservatively estimated at about US$ 7.6 trillion (a lower-bound estimate) equivalent to about 50% of the estimated 2010 Gross Domestic Product of the United States. Beyond this classified system is another realm of designated trails, tracks, and paths as well as minor roads that serve enclave development (mines, industrial estates, agricultural plantations , irrigation schemes, tourism, forestry and so on), that together number into millions of kilometers and also contribute to basic access and mobility.

The presentation reviews the role of rural roads in improving rural connectivity, catalyzing economic growth and reducing poverty, managing natural disasters and man-made crises, sustaining rural livelihoods and enhancing livability. In short the paper highlights the promise of rural roads as a harbinger of opportunity, progress and prosperity. In addition, the presentation discusses what sustainability and its more practical subset--livability, mean in relation to rural roads and how the application of context sensitive solutions to rural roads could help achieve a better balance among the economic, social, and environmental dimensions of sustainability.

About the speaker

Dr.Asif Faiz, a Pakistani citizen, is currently an adviser/consultant with the World Bank in transportation planning and engineering. He holds a Ph. D. in transportation engineering from Purdue University and is a Member Emeritus of the Low Volume Roads Committee of the US Transportation Research Board. He has had a distinguished 33 year career in the World Bank including several advisory and management positions. He served as the World Bank's Highways Adviser from 1999-2002, and the Country Manager for Sudan from 2005-08. He is the author of over 60 publications including a book on automotive air pollution. He has received several awards for his professional and research work from ASCE, IRF, Purdue University, and TRB, including the Eldon Yoder Award from the US Transportation Research Board .His professional work covers some 40 countries and he has lived in Pakistan United states, Argentina, Nepal and Sudan.

CEIM open applications for August 2011 intake

We open the application for August 2011 intake for AIT Thailand campus. Limited numbers of scholarships are available for talented applicants. Some of the scholarships are Royal Thai Government scholarship, The King of Thailand scholarship, The Queen of Thailand Scholarship, Asian Development Bank scholarship etc.

What is CEIM? CEIM master and doctoral programs aim to prepare engineers to manage large construction projects starting from planning, design, tendering, construction and commissioning.

What will you learn? you will learn important knowledge and skills in project management in construction such as project planning/scheduling, project cost and financial management, organizational management, project contract, project risk, project quality management, project performance management and project financing.

Where will you work after graduation? You can work in strategic industries that highly need project management such as:

- Contractors (highway, building, oil/gas and energy)

- Consultants

- Property and real estate developers

- Bank and Invesment companies

- Public Private Partnership Consortium

- Financial and Banking institutions that lend fundings for construction projects

- hotel and apartment development

- oil and gas construction

What else will you learn during your study with us in AIT?

AIT is a very multicultural insitute. Our students and faculty members come from different parts of the world such as Thailand, Vietnam, Bangladesh, India, Taiwan, Pakistan, Indonesia, China, Korea, European Union. Aside from studying knowledge, you will also learn different cultures and different ways of thinking from your friends; and develop your global international networking.

Please contact CEIM Secretary (Ms. Woranuch, phone 025246060 or email woranuch@ait.ac.th) for further information.

Visit CEIM: http://www.set.ait.ac.th/ceim

How to apply? http://www.ait.ac.th/AIT/admissions/admissions

Regards

Dr. BHW Hadikusumo

Associate Professor

CEIM Coordinator

MPM Coordinator