The Communication In Design Process Between The Employers And Consultants

Construction industry in Vietnam has grown up quickly since 5 years ago. The Vietnam government is striving to attract foreign investment by altering the Foreign Investment Law and developing the tax system in the country. This has caused the development of the global construction since 2006.

Professional construction management is a major force for change in conventional practice, predominantly to manage the design process in a better way. By Pareto approach, if we can find out and solve the design changes and design errors, every rework in construction can be solved.



Design is a complex process that combines with varieties of special knowledge, such as aesthetic, technology, economic, management. Within the modern period, architecture design has borders with as many as twenty – one different disciplines and fields. The knowledge is diversified and fractured into many sub-disciplines.

From its own characteristics and disciplines, it has many problems by itself. How to solve and avoid these problems? The answers come from the nature of design process which comprises of stages such as interpretation, generation, comparison and choice.

At any point, for moving to another step, it is necessary to interact and evaluate it to understand the original problem, and so the process is continually cycling between and within the parts of the thinking process. For the thinking process move smoothly and the problems are solved thoroughly, the designer needs to have a good strategy of communication with perfect communication tools. As the practice of management and nature of design characteristics had proved, communication is a priority issues to solve all problems of design.

Ms. Tran Thi Nguyen Cat made a study which focused on the communication between Employers and Consultants in design process. The objective of her study is to investigate the communication during design process which involved the following:

1. Develop the framework to investigate the communication practice between owners and consultants during design process.

2. Investigate the communication problems with regards to:
- The expectation between the employer and the consultant
- The project organization in terms of the communication roles and responsibilities on the managerial levels and the effects of project team leader backgrounds on communication.
- The stages of design process.

3. Prepare the recommendations for input of communication in design process.

Conclusion

The Design and Construction in Vietnam is in state of globalization. The relationships in the project organization are more and more complicated, so the role of communication in design process is considered. In this study, it focused on the communication interface between the employer and the consultant design team, and among the consultants in term of function, timescale, finance and aesthetics. In there, the communication problems that can exist between expectation and realization in design process are considered, such as:

 Problems between employer’s expectation and foreign consultant’s expectation.
 Problems between employer’s expectation and local consultant’s service delivery.
 Problems between foreign consultant’s expectation and local consultant’s service delivery.
 Problems between interior design consultant’s service delivery and local consultant’s service delivery.
 Problems between the design progress and construction progress.

These problems happen because of the main reasons such as:

 Lack of understanding of client requirement by design team
 Insufficient input brief by design team
 Inappropriate composition of client briefing team
 Lack of expertise by client team leader and briefing team
 Form of brief inappropriate for communication of requirements
 Inappropriate design team experience as a whole

By using the frameworks, the components to investigate the communication problems in the relationship between the employer and consultant during the design process are as follows:

a) The communication problems in project organization regarding to
 The communication roles and responsibilities of the levels of managers
 The effects of project team leader backgrounds on communication

b) The communication problems at each stage of design process.

Throughout the frameworks of research and defining the communication problems, the recommendations have developed to achieve the success:

 Find out the barriers of communication. These barriers should be taken out and innovated to improve the communication skill.

 The communication roles and responsibilities have to set levels according to the levels of organization. These roles and responsibilities have to be clear and obvious. The intra- and inter-communication frequently need confirmation and delegation in appropriation, to avoid the lack of information.

 The backgrounds of project team leaders at each stage of design process have to be appropriated to the scope of work.

 The most important agenda of communication at each stage needs to be discussed in sequence carefully and formally. It cannot move to the next stage until the previous stage is thoroughly understood and approved.

The table below is the list of the key communication problems, recommendation to solve it and also show the person who create most problems.

The list of key communication problems and their solutions



For achieving the design success, the communication management takes an important role. Based on the investigation, the communication problems and the recommendations of communication management have been proposed. In this study, the tools of communications are not concentrated. However, for improving the communication skill, both employer and consultant need to develop a complete procedure of communication.

A further study should be:
 Tools of communications in design process.
 Procedure of communications in design process including the design checklist establishment in Vietnamese case.

Her thesis abstract is copied and posted.

Abstract

Design is the activity of turning a ‘need’ into a solution, a ‘concept’ into a reality throughout the process of human interaction, consequently, the result contains the interpretations, perceptions and suggestions of the people involved. During the design process, communication acts will occur in many channels, but in there, the main channel deciding the success of project is the communication between employer and consultants.

By reviewing the issues and knowledge regarding to communication between employer and consultant in design process, the frameworks to investigate the communication problems are establish. The literature is reviewed in two fields, one are about the communication problems and the source of communication failure, one are about the design process including the organization, leadership, tactic for developing a project culture.

Throughout a case study of the office building project in Ho Chi Minh city, Vietnam, the communication problems that exist in the interface between employer and consultants during design process will be investigate and analyze based on the frameworks. The frameworks of investigation are related to the expectation between employer and consultants; the communication roles and responsibilities of the levels of managers; the affects of project team leader backgrounds on communication; the communication at each stage of design process. In according to the common problems would happen in practice, some proposed recommendations will be discussed to improve the communication management in design process.

Factors Causing Delay In Construction Projects: A Case Study Of Commercial Construction Project In Ho Chi Minh City

When Vietnam got the WTO membership in July, 2006, it has gained greater opportunities than ever before for investment from international company and global integration, FDI has continued to rise since 1997 and it increased sharply in 2008. The development of economic always brings about the development of construction industry. In fact, the rate of construction project is increasing quickly in recent years. So, how to manage them effectively and efficiently is not only the owner’s essential requirement but also the responsibility of construction industry, this demands special knowledge and experience from project managers. However, according to recent survey, a numbers of commercial building which had the delay problems are very significant.

In commercial construction building, factors of time and quality are prioritized. Investors would have significant financial damage if their project had problems on quality and delays. The time, cost, quality and scopes of work are core factors contributing to a project success. Managing well these factors is project manager’s top priority task. There are many documents and studies of project management which have been conducted, so project managers have a lot of chances to access huge knowledge and experiences and apply them to their job. However, depending on the type of construction works, the actual circumstances and the knowledge and experiences are utilized differently. Mr. Phan Hong Hoan made a study which main purposes were to: (1) develop framework to investigate delay problems affecting on schedule in commercial building construction; (2) investigate the delay problems so that the critical delay problems can be identified; (3) propose solutions to prevent the critical delay problems from occurring during construction execution stage.

Conclusions

Delay problem is the thorny question in construction industry not only in Viet Nam but also all over the world. The cause of delay in construction stage arises from countless factors. The problem cannot be solved thoroughly, if these factors are not identified and restricted or eliminated. However, the restriction of time and finance doesn’t allow project manager to solve all influencing factors, so it is necessary to identify the critical factors.

This study developed the framework which is very practical to find out the critical factors causing the serious delay problems in construction building stage. The impact level of these factors on construction duration can be different from this project to another project, but the method to evaluate them is similar. So this approach can be applied to almost construction building.

Case study is analyzed to illustrate the systematic method to investigate and identify the delay problems and their causes in SECC, a project concerned with international contractors, consultant.

The investigation result of delay problems in SECC showed that there were many factors leading to the delay of the SECC. The severities of these elements are arranged in order of priority. Below is the table of top critical factors:



Basically, the results of the investigation showed that most fundamental source of the top critical factors was derived from the following basic elements:

- The Government’s legal regulation in importing has been inefficient and not clear.

- PM in SECC has shortcomings and weaknesses especially in risk evaluation or project planning and human management.

- Contractor’s construction organization is not really efficient and effective.

- The shortage of engineers and workers having experience and highly professional, is contractors’ inextricable questions, especially the contractors for the project which has scale and high technology specification such as SECC.

- Legal regulation in construction industry is not really strict, so the collusion among parties likely to be existent, it makes contractor collection process unfair. So some contractors having financial competence were chosen.

- Collaboration between investors and designers in the design phase plays an important role in reducing the design changes during construction.

Recommendation for project management improvement

Based on the conclusion above, human factors is one of the original delay problems. There are many potential solutions for fore-mentioned problems; however, the really effective solution depends significantly on specific situations of each construction building. The following texts relies on individual perception, these propositions need to be analyzed and studied deeper in another research or need to be verified before these assumptions become official statements.

- Build an ideology for project manager, engineers, architects etc so that they can recognize delay problems which will lead to large losses as well as the project completion on time. Simultaneously, top management should establish a fair reward and punishment policy which has to be strictly applied.

- Wage policy should meet the minimum standard of living. This will reduce the pressure of economic and help managers focus on their work fully and integrally.

- It is necessary to build up the relationship between benefits from the project
completed on schedule and the benefits of project manager and participants. This will be a motivation for them to have positive outlook to work actively.

- Each individual responsibilities and rights must be clearly defined; this will limit the avoidance of responsibility, the dodge of work and bureaucracy to a minimum.

- The working conditions should be improved gradually aiming at building proper working atmosphere; this will help work done more effectively.

- The human resource training towards professionalism in the management and professional ethic improvement need to be set out and prioritized.

- The procedures of legal regulation in imports and some other areas have remained very limited and inadequate. To be the member of WTO is a challenge which forces Viet Nam to improve this legal procedure. This legal process not only in import-export but also in the other fields must be clear and transparent. This will help project planners to have the basis to plan for their projects accurately. If this procedure is not improved soon, Viet Nam will be left behind, compared to other countries in the region and we, ourselves, will be faced with great damages.

- Consultant’s managerial skill is weak; it is not be able to satisfy the size and the demand of project. It is not only necessary to promote professionalism in the work of quantity estimates and design, but also very strict in choosing the consultant, designer and the basic of collecting consultant must rely on their capacity. Simultaneously, the responsibility must be assigned to definite individual.

- Project management has been a new concept in construction section in Viet Nam. So almost project managers were not professionally educated, instead engineers or architects who used to work many years in construction field are usually assigned as a project manager.

- The project management training should be paid more attention in the future. It should be the main goal in Construction University. It is not only reduces delay problem but also enhances the success probability of construction project. Not only project manager must be educated professionally, but also their capacity has to comply with the assigned duty.

- The collusion between supervisor, stakeholder and contractor can be existent. This intricate question not only happens in Viet Nam but also in developing countries. To restrict this problem to a minimum, the wage policy should satisfy actual living standard, and award and punish policy should be impartial.

His thesis abstract is copied and posted.

Abstract

In construction industry, a project is known to be successful when it meets three fundamental criteria such as finishing on time within the budget, the prescribed quality requirements such as satisfying customer’s demand and adapt safety in operation stage. Unfortunately, many commercial construction projects in Ho Chi Minh City have problems of project management leading to their delay. Investigating these problems has become project manager’s indispensable demand.

In general, the problems involved with project delays are solvable. In making effort to solve these problems, the critical factors influencing negatively on construction duration need to be discovered. Hence, it is very important to establish a systematical approach that will be used as a tool for the investigation.

This report will assess and analyze key factors causing the delay problems in construction project in Ho Chi Minh city. The qualitative method, basically is based on the principle of assessing the risk level of factors impacting negatively on the progress of the project, and it is conducted to fulfill the objective of the study. Case study is brought out to discus about delay problems in the Exhibition and convention Center Project (SECC).

Finally, some solutions dealing with project delay problems in construction executing stages are proposed.

The Delay Factors In Building Construction Stage: A Case Study Of Office Building In Hochiminh City, Vietnam

Recently, many construction projects in Vietnam are being delay, which become a big problem for each project and has not been solved yet. In construction stage of the project, project managers have to anticipate many factors that might cause delays. Therefore, they need to have better solutions before construction start. However, in Vietnam, both owner and consultants do not care about this, which is the reason why many construction projects are delayed.

Mr. Phan Vu made a study which main purpose was to find out the major events causing delay and consequential effects at construction stage. These were analyzed in different prospective: owner, contractor, designer and consultant. Then, recommendations for preventing delay are proposed for future construction projects.

Conclusion

An overall view and solutions for preventing or reducing delay for future projects are summarized as follows:

Table 1: The major events causing delay and their recommendations



Recommendations for the further research

This research analyzed the delay factors and responsibilities of all parties in building construction project. However, for further research, more specific causes should be analyzed. Moreover, it needs to be focused in finding solutions, which use to get back the lost schedule or push all work in site faster.

This paper mainly analyzed at the construction stage of building. Therefore, further study should be carried out to find out delay factors on preparing construction stage or feasibility study stage. These stages usually cause delay longer than construction stage. Besides, further researches should analyze other delay topics, not only for civil and industry construction but also for hydraulic projects and traffic projects, etc. Moreover, the information and coordination among parties in construction project are also very important in solving delay problem. Therefore, it is necessary to research these fields.

His thesis abstract is copied and posted.

Abstract

Nowadays, many construction projects are hardly on time (exclude the small projects). This problem is common but finding the causes and issuing the best solutions are not easy. Although it affects to all related parties. Delays in construction affect to variation of time and cost. Delay of construction project will affect to investment effect and the speed of economic increase, especially in office building project.

By using many analysis methods in methodology section, these methods will be applied in case study to analyze the major factors and responsibility of client, project manager, construction manager, consultant and contractor.

Report the findings of a research study, which was undertaken to examine the underlying factors affecting the delay of construction project. It also aims to identify factors that show a strong correlation to delay. The ultimate goal is to provide clients, project managers, supervising consultants and contractors with information that can help them become more efficient with reducing delay in construction project.

Matrix Structure In Small Scale & Fast Track Construction Project: A Case Study Of Office Fitting-Out Projects

Vietnam is a developing country which needs a large amount of investment special in infrastructure and construction industry from ODA and FDI. In infrastructure and construction industry, the technology of Project Management is one of the most important factors lead to successful projects.

Most of these projects are under project management unit of a state company (PMU). If there is a new investment, a new PMU has to be set up for new policies, forms, norms. This method wastes a lot of human resource, time and cost resulting to late delivery and over budget.

The lack of skilled persons to meet the requirement of construction projects in an emerging market as Viet Nam is a big issue especially in small and medium companies which precede small scale and fast track projects. The functional organization is not suitable for Project Management in construction because of not using & not salvaging all capability of white collar worker. Pure Project structure is also not suitable because it has hard structure and it is un-flexible in temporary sharing human resource, experience. So, the Project Matrix Structure which is more efficient using resource than other single hierarchy is a new model which can be reviewed and considered as a suitable model for Viet Nam situation now especially in medium & small scale companies, accompanied with small scale and fast track construction project.

Mr. Nguyen Phong made a study which focused on the: (1) study the literature of Project Matrix Structure in construction project; and (2) analyze a Case Study in application of Project Matrix Structure in Small Scale and Fast Track Project in Viet Nam

Conclusion

Most of private business in Viet Nam have just established around 15 years, a short of time compare with international business, so the application of a new concept in management is a risky selection. Project Matrix Structure was applied all over the world but still a new concept in Viet Nam, especially in small scale and fast track project.

The change from functional structure to Matrix Structure is a process of deep thinking and careful selection which need a lot effort of all members. Matrix Project Structure is a good choice and brings out a great success for organization in Viet Nam in which TTT Corporation is one example. TTT Corporation became a well-known contractor in small scale and fast track project, specifically in fitting-out and interior areas.

Matrix structure is not only suitable for organization development but also in helping organization members in self-study and self-development. Project Matrix structure is a good model apply in fast track project in VN which come out a lot of advantages in labor force allocation, project team allocation and major improvement of team productivity.

Recommendations

Beside the success of this model in TTT Corporation, there are many issues happened that need to improve in soft ware application, in system buidling and in human resource usage as recommeded below.

General

- Experience sharing need to be enforced to become company policy, then giving back rewards to the people having the best.
- Improve existing norm, regulation and organize training course to team members to update their knowledge
- Develop an individual assessment form for functional manager and project manager to assess the project right after the hand-over.
- Provide training to increase recognition of communication management
- Required over view report which is a part of project bonus to encourage PM to have right evaluation sent to supervisor whose not popular to project team
- The increase of internal project information is a problem in which the way end user transfer & discuss the information on CRM, need to be reviewed and be classified suitable with business strategy and not a forum.

Human resource

- Minimize the amount of virtual project manager and increase the number of professional project manager to take care of bigger projects.
- Support project manager to attend training course in order to be familiarized with new technology and new concept in project management
- Provide technical trainings for project manager because small scale and fast track projects need a project manager who understands not only project management but also all technical issues of the project. This understanding helps the project manager in making decision in a short time.
- Training about communication management, which help project manager and each member understand the importance of communication and classify it in a right way which support to long term goals of organization.

System

- CRM is a soft ware for customer relationship management, and not suitable for project management, although it gives very good support for project management process: it supports for centralize project information, clients information, integration with other soft ware (ERP, Share Point…), helps board of director in controlling, monitoring and reviewing most of project, but only the project milestone and not the general progress of the project. So Project Central is a recommendation for developing and application for some next years.

- ERP is a soft ware suitable for manufacturing and not for design & built project. This application is just for production department. To apply ERP software for construction area, it should have ERP department to manage and control ERP and support others.

His thesis abstract is copied and posted.

ABSTRACT

Project Matrix Structures are applied in large scale projects & long term projects in many western countries and comes with many successes. How it can apply for small scale & fast track projects in developing countries as VN?

There has been a tendency in recent years to manage more activities in more application areas using project management. More organizations are using “management by project.” This is not to say that all operations can or should be organized into projects but the real efficient of the management by project can be the good answer.

This Project Report has taken a general view of Project Matrix Structure in theory & application in developed countries then finding out the case study that applied in VN with a relative successful to propose some recommendations to improve & change in suitable with practical condition of VN.

Office Fitting-out has started in VN around 15 years from the time VN did the “Open Policy” to open the country and to set up relations with other countries & receiving FDI and ODA. By FDI and ODA from developed countries and International Institutes – Office Fitting-out works are developed very fast in VN with high requirements in doing the fast-track project including high quality of finishing, keeping reasonable cost & schedule.

The adoption of “management by project” is also related to the adoption of an organizational culture that is close to the project management culture but this is outside of this report.

Claim Management and Analysis: Case Study of Hydropower Plant

Construction projects may seldom be performed exactly as it was planned during project design. In addition, the underground conditions on the site are not quite exact as it was considered by the contractor or the designer at the outset to this project. Small differences have little importance to the parties involved but when the economic consequences of these differences are significant, they are of great interest. Therefore, many construction contracts, in particular those issued by governmental entities, comprise two significant clauses: a 'changes clause` and 'different conditions of the site clause". The names of these clauses can vary, but the content is generally the same.

In general, there are stated processes, often with legal requirements and keeping records, contained in the contract to facilitate the use of these clauses.

Entitlement, Cost, Documentation Sections and participation satisfaction have reflected the success of any construction claim management.

The entitlement is usually presented in two parts. First, the claim description must clearly establish the law of the part of the party of relief. This part of the narrative should always flow from the contract. Secondly, as part of the law section, there is usually a technical description which links the facts of the evolution work or failure to perform the right theory. It is generally substantial in detail describing this subject. It is the story of the project, which uses of journalists classic 'who, what, when, where, why and how' method in both quantitative and qualitative terms.

The cost section concerns the costs incurred by the party or owner to the following changes. This section is generally organized in such a way that it goes hand in hand with the organization of the technical description. The costs are directly related to each element detailed in the technical description.

Documentation is the ultimate success of a construction claim. Even a claim to merit may be failed if it fails to show itself in this section. Generally, the right description will mention contact provisions and appropriate case law, copies of which would be established in this section. The technical description could probably be supported by copies of relevant correspondence, calendars, the reports, agendas, newspapers, etc. Documents submitted in support of the cost section could include invoices, compensation, time sheets, delivery tickets, etc.

In addition, the claim management success is based on an interdisciplinary method, involving project managers, engineers, lawyers, construction site managers. This broad range of expertise is necessary to the analysis of often complex claim situations whose origins and scope might, at first sight, resemble a maze.

Therefore, by company audit, you may discover possible weaknesses of your claim management so you may close the gaps. After solving those gaps, the strengths of your claim management can be demonstrated. Strengths that your company may use can complete projects with the maximum profit.

Audits typically, but not exclusively focus on:
- Integrating claim management into your project design and handling.
- Internal and external communication of your company in claim situations
- Complete, court-proof and transparent project documentation.
- Efficiency of existing contracts and vehicles for securing payment.
- Decision-making processes in strategic claim situations.

In construction claim management, the most potential problems affecting project entitlement, document and cost in construction claim related with:
- Incomplete and inadequate definition of scope
- Lack of mutual understanding of scope
- Contract document
- Owner does not complete any conditions which are necessary for contractor’s to work
- Accelerating the time of completion.
- Constructive acceleration
- Owner asks the contractor to accelerate the progress to meet the planned completion schedule. In other words, no time extension is given.
- Delay with excusable and non-excusable or compensable and non-compensable
- Disruption with Incomplete and incorrect contract drawings or changes in the work.

Mrs. Truc Thi Thanh Nguyen made a research which main purposes were to: (1) develop a framework on claim analysis approach; and (2) study the application of the framework in Hydropower Construction Project Claim.

Conclusions

The design process for the development of framework on claim analysis is evolutionary and informal. The claims analysis approach was adapted to offer a simple framework for describing the claimant activities and goals, framing them in a way that supports the claim reasoning. The claim format set forth in this article is a general outline of what should be comprised in a claim. The actual framework should be modified to present the claim in a persuasive manner.

In addition, in the hydropower plant construction project, the contractors followed the specifications closely and keep good documentation. As the owner strives to improved contract quality, the contractor followed the contract and specifications very closely, found out the deficiency of the contract, and keep good documentation. Therefore, the contractor has received a higher offer from his claim. Besides, the contractor was aware that the litigation opportunity cost is more than the direct litigation cost. The contractor understood that opportunity cost also includes indirect litigation costs, such as schedule interruption, idle labor, idle equipment, damaged reputation, and contractor-owner relationships.

In this case study, force majeure claims become complicated when there is a major event that not only directly impacts the work but also creates potentially changed working conditions after work resumes. Therefore, several questions regarding the contractual language with respect to allowable project extensions, responsibility for mitigating the event’s impacts, as well as the costs associated with mitigation efforts create complications when preparing and analyzing force majeure claims. The primary challenges associated with complex force majeure claims relate to continued impacts and mitigation responsibilities. Certain continued impacts may result from severe natural disasters, including idling cost of manpower, plant and machinery.

It is our sincere hope that all construction projects will be executed without claims. However, if claims are inevitable, the claim framework may attend as a template to analyze a claim situation and help to bring quick solutions to an interruptive event.

Her thesis abstract is copied and posted

Abstract

In general, construction claim happen on various reasons. It is required to understand the dynamic nature between construction claim and opportunist tender. Therefore, negotiation is a significant stage in construction claim management process. Unluckily, most construction claim negotiations are conducted inefficiently due to various reasons. The recent development of multi-agent systems supplies an innovative method of facilitating various negotiations. Besides, standard forms of contract supply for extensions of time (EOT) due to excusable delays, and EOT claims are frequent in many construction projects. The contractor and the supervising engineer commonly spend important time proving and estimating such claims. However, a variety of different techniques has been employed for such evaluations.

Only a small number of contractors fail to utilize some form of a scheduling device to determine the sequence of construction activities and events. A correctly though out schedule permits a contractor and owner to correctly coordinate the work with resources that are required to finish the project on time. Therefore, the cost of scheduling software is reducing and at the same time the level of complexity of the completed schedule is increasing. However, the correct usage of such software demands a basic understanding of construction scheduling concepts.

The idea of delay and disruption within projects is well-known and is frequently the subject of litigation claims. However, the term is not clearly explained, and it is difficult to justify such claims within a legal process. This paper shows a well-developed method that is a reasonable, translucent, auditable and sustainable means of presenting such a claim.

Quality Management in Design Phase of Construction Project

With the rapid growth of the economy since 1990s, the boom of construction industry has brought a quite new face for Viet Nam. Many large and complex projects are attracting international companies to attend. These multinational companies have introduced the new technologies and modern knowledge on project management in Viet Nam which have created a new and fresh air to the construction market – a more and more competitive market. This has new standards and needs. The customers have more choice. In order to survive in such an environment, the domestic companies have to change themselves to fit them in the market economy with the higher requirements of the customers/ owners.

High quality construction works is always the final target for any customers as well as the relevant parties – contractors, designers, etc. However, people used to imply about the construction process quality more than other factors that have the same affect on the construction works such as setting up investment project, survey and design, etc., –the first phases before execution. Therefore, if there is any problem to a construction project, construction companies is always find at fault due to poor quality. But in fact, people have forgotten a very important part in the chain of a project - the design consulting phase or designer.

In Viet Nam the role of consultant/ engineer in the design phase of the construction project has not been concerned properly, especially in the state own projects or small private projects.

Design consulting is the essential knot to the success or failure of a project. Those who consult in the design phase must be responsible to the owners and the law for the design quality. They are requested to ‘eliminate hazards which may give rise to risks’ and to ‘reduce risks from remaining hazards’. They therefore must consider the materials and process in their design for the construction. They also must concern to the factors regarding health and safety in the project.

Some well-known factors in design phase affecting to the project quality are as follows:
- Misunderstanding the clients’ requirements to develop the design
- Using incorrect/ out-of-date information
- Lack of co-ordination between the co-workers
- Loose or inappropriate specifications

To have a good construction work, it is necessary to have a good design. It has been recognized that each error will cost ten times more to fix in development than it would to fix in planning, and 100 times more if the error actually reaches the customer. (Peter E.D. Love, 2002)

Mr. Nguyen Anh Kiet made a research to identify the activities should be taken to implement the quality management system in design phase of the construction project.

The awareness of the value of quality design would ensure that sufficient time and fees are available to allow designers to provide the needed level of services in order to satisfy customers, save time, cost and finally to maximize the benefits thanks to more projects will be completed on time, within budget, and with less rework and disputes. In addition, implementing the quality management system will help to measure the performance, increase efficiency and to create a more competitive position in the market.

Conclusion

Quality management in the design phase is as important as it is in the construction phase. It will help all parties involved in the project to save their time, cost and assure the project life. Although most of the companies have their own systems to manage the quality of the products and services from conception through disposal, there are still many works need to be done because no study has been done within the company to measure how effective were these quality management systems. The problem is that, companies need a good system to track accurately the causes of the failure and find out where the cost can be minimized.

In order to apply quality management system to the design phase of the construction project, companies need to define the factors that affect to the quality of the design phase in a construction project and set quality as performance to requirements. It depends on the characteristics of projects the quality management should be focused to different aspects. For example, requirements for a brewery project will be different from those for textile factory project. This means that the designs and specifications of the two projects will be different. Therefore the problems (if any) of each project will also be not similar. An experienced project manager will foresee the difficulties and has suitable preventive actions.

Below are the common factors that have serious affects on the design tasks:
- Misunderstanding the clients’ requirements to develop the design
- Using incorrect/ out-of-date information
- Lack of co-ordination between the co-workers
- Loose or inappropriate specifications

To improve the quality in the design phase, the drawings and documentation are considered as one of the most important factors which are assessed by the accuracy, time, completeness and conformance. Besides, the co-ordination between the team members and relevant parties will help to maximize the quality of the construction works and minimize the extra cost and time, by which will reduce the risks of disputes. Improvements in drawings and documentation in the design phase will create the efficiency in the construction process. Improved quality in design phase will lead to less construction waste and optimum performance of project stages. This will lead to significant cost savings both with regards to the project cost and to the cost to the environment.

To implement the quality management to the design phase of the project, there are a lot of activities that the organization must pay attention to.

Common Problems in Design Phase

Many researches showed that the followings are the most important causes of problems in a construction project that generates from design phase.



His thesis abstract is copied and posted.

Abstract

In a perfect quality management system, changes should be confined to the design phase of the construction project. However, in the reality the changes often happen during construction phase and cause serious disruption to the project because the quality management in the design phase. Many researches showed that do the right things at the design phase can improve the overall project performance. The study focuses on the role of quality management in the design phase of a construction project and the factors influencing on the quality management systems.

Mendelsohn (1997) observed that up to 75% of the problems happened on site were generated at the design phase. Therefore, eliminating these problems at the design phase can reduce the problems on site. (Causes of discrepancies between and construction by Faisal Manzoor Arain, Sadi Assaf, Low Sui Pheng).

A systematic research on the effects of design in construction was performed by Design Task Force of the CII, by which the design were evaluated mainly on accuracy and usability. The quality of the design is very important as it influences on the quality of the whole project. The AQSC has published a guideline for quality system, in which “… it should assure that drawings and specifications provide a clear and cost effective design definition that incorporates all applicable requirements”.

Customer-Driven Strategy And KPIs Using CRM Approach: A Case Study Of Construction Enterprises In Vietnam

Vietnam construction enterprises seem to be far behind compared with other industries in application of marketing strategy, customer study and enterprises business strategy adaptation. Construction industry should be the one to apply CRM the most. The value of a project is always very big; the number of projects and customer is very limited in comparison to any other industry. And because of the uniqueness and rarity, customer is different from any other. They require special, customized care and service. So, each customer is critical to construction project marketing.

Besides, CRM in construction is different from CRM in other industries due to the characteristic of construction industry.

The most important and different characteristic of construction industry from other industries is project-based production. Any projects are unique. Construction projects are always executed on site which much influenced by many factors such as weather, technologies, culture, social, politic, etc conditions, much more than any kind of production in the factory. Projects are always constrained by resources available, time for completion and quality required by Client.

The characteristic of customers is also much different. The number of customer is very limited. And the demand of the customer is much different from consumer product customers. Those characteristics make the marketing in construction different from other industries, especially CRM.

Those conditions make the construction industry marketing different from others. So it requires changes and adaptation in application of marketing strategy and technique.

Mr. Tran Dang Manh made a study to look into the CRM marketing technique and application in construction industry which includes:
- What is Customer relationship management?
- What is the characteristic of project-based construction industry?
- How to adapt and apply CRM in construction industry, especially in Vietnam?
- Based on real case of a construction enterprise in Vietnam, explore the actual conditions and level of CRM application. Identify any vacancy and adjustment applicable in CRM development to propose.

Conclusion

CRM is new to Vietnam construction enterprises. But CRM is a must for the enterprises development.

CRM helps enterprises understanding its customer and its own performance, classifying its customers, satisfying its targeted customer, and creating values to its share holders by creating values to both its targeted customer and its own.

CRM requires the commitment of the whole organization- from top leaders to every employee, and all of its related supplier chain. Only with the commitment of the whole production chain, the final product and customer service shall be achieved.

CRM requires the construction of information system capable of gathering customer information from any sources, media, and channel, analyze to give instructions to the production and management system, and store all information.

CRM requires its KPIs definition and application to give feedback to CRM system, continually improve itself and the whole organization.

Besides common strategy for general business, project-based industry has special characteristics: Uniqueness, non-standard working conditions, limited number of customers. It makes the CRM in project-based industry different from others.

In construction, the values that are critical to both customer and enterprises are time, cost, quality, and safety. To be competitive, each enterprise needs a unique strategy to ensure the value to themselves and customer. For all of that, CRM shall be able to find all necessary information, analyze, and evaluate the performance.

Vietnam construction enterprises are applying CRM in a very preliminary level. They do not have strategic approach to develop. Their management system also does not incorporate CRM. They need to change from its business ideology, its organization and business culture, its management system, and its employees’ behavior.

The primary values in construction- time, cost, quality, and safety- are still far from requirement in Vietnam. The CRM also has not been written and developed as an official strategy for the enterprises.

Vietnam construction enterprises need to assess its own performance to decide its targeted customer segments, apply appropriate customer policy, media, and channel, information system to manage CRM system. The assessment shall be based on clear and quantifiable KPIs set at the start of the development of CRM system. The KPIs to be used should be at least three categories:
- Enterprises general performance: profitability, operational criteria such as rate of inventory, liquidity ratio.
- Project performance: time, cost, quality, safety, and number of customer claims
- CRM performance: rate of customer retention, rate of referral.

CRM is a cross-functional activity. In order to develop CRM, enterprises need to change business ideology, organization and business culture, management system, and employees’ behavior. The improvement of CRM is part of an overall corporate restructuring

Only with the customized application of CRM, enterprises may understand their customer more, continually improvement of performance, and ensure its future development.

His thesis abstract is copied and posted.

Abstract

Customer relationship management (CRM) has been developed for centuries. It decides the design, function, and cost of the product, turnover, and profit of the enterprises.

CRM is a cross-functional activity. In order to develop CRM, enterprises need to change business ideology, organization and business culture, management system, and employees’ behavior. The improvement of CRM is part of an overall corporate restructuring.

But it seems not to be in Vietnam construction enterprises. Construction industry should be the one that apply CRM the most. Throughout understanding each customer is critical to construction project marketing.

By this study, I would like to study Customer-driven strategy and KPIs using CRM approach- a case study of construction enterprises in Vietnam so that I can propose a framework for the application and development of CRM in Vietnam construction enterprises.

Contract Clauses In The EPC Contract: A Case Study Of The Dinh Vu Polyester Project, Hai Phong, Vietnam

The Vietnamese Textile and Garment (T&G) industry consists of around 2.000 enterprises (25 State owned enterprises, 1.500 private enterprises and 450 reign direct investment enterprises) with over 2 million employees involved. Vietnam is ranking the 10th largest textile and apparel export countries in the world. Currently in Vietnam there are only two foreign companies producing PES fiber and filament yarn ‚ namely Formosa and Hualon company. Vietnam Textile industry has to import most PES fiber and filament yarn from abroad.

In order to minimize the interfaces and risks between the separated contractors and the Owner during executing a polyester project, Owners normally prefer to award and sign an EPC contract with an EPC contractor. However, this project delivery method will take a lot of time to make bidding, clarification, explanation and get the mutually agreement on the contract clauses between the contractor and the Owner. The following problems are normally involved with the EPC contract clauses:

1. Take time to make the bidding, clarification and finalization before contract signing;
2. Wrong understanding and interpreting of stipulated clauses in the contract;
3. Conflict between contractor and the Owner during project execution.

An EPC contract is generally applied for developing a polyester project, in case of problems or disputes during the project execution, these problems and disputes shall be resolved in accordance with stipulated clauses in the signed contract. Mr. Vu Dinh Duy made a research which focused on the following issues related to EPC contract:
1. to study EPC contract process and management from literature review;
2. to study the contract clauses in EPC polyester project;
3. to study the implementations of the contract clauses and their performance with reference to project advantages and problems.

Conclusion

EPC Contract, (known as the “Lump-sum Turnkey Contract”, “package deal”, or Engineering, Procurement, Construction and Commissioning Contract) places the duty to design, procure, construct and commissioning solely on the Contractor. The term “Lump-sum Turnkey” tends to mean the most extreme form of placing design, procurement, construction and commission responsibility on the contractor, such that after completion the Owner need only turn the key to commence operation of the Plant or Constructed facilities.

The use of EPC Contract results in a considerable reduction of intervention by the Owner in design, procurement, construction and commissioning process throughout the Project. The role of the Owner will consist primarily of contract administration, such as supervision, review and/or approval of critical works of detailed designs, procurement of long-lead items etc.

Lump-sum pricing method is often used for EPC Contract and enables the use of fixed payment by stages of completion. Lump-sum pricing and fixed installment payments provide the Owner with greater certainty in overall cost as well as in the timing of payment.

Advantages and Disadvantages of EPC Contract:

Advantages:

The EPC Contract makes contractor entirely responsible for the whole project regarding detailed design, procurement, construction and commissioning. The Owner receives a completed project in accordance with his performance specification.

The Owner does not need to worry about co-coordinating contractors effectively and avoids claims resulting from lack of interface definition.

In addition, single-point responsibility can also reduce the opportunity for claims by the contract. The Contractor must deliver the works that are fully operational to the specifications of the Owner; any defect or default is necessarily his responsibility except where the contract provides otherwise. Everything relating to the works can, thus, be concentrated in a single point of responsibility – the contractor.

With lump-sum pricing method, this system reduces front-loading by the contractor and encourages rapid completion. Also, it facilitates financing, as lender will have greater certainty of financial exposure and the timing of draw-downs.

The control given to the contractor should facilitate implementation of new and better approaches to design, developed through his experience and expertise. The contractor will have an intensive to implement such time saving changes under the turnkey structure.

Since the designer, purchaser, constructor work as a team, they are more likely to identify critical flaws in the design at an earlier stage, ensuring avoidance or mitigation of the flaw when such action is more effective. This team approach will help avoid many design, procurement, construction, commissioning risks which a separate designer, purchaser, constructor would not be able to identify, The joining of the design, procurement, construction and commissioning task under on contractor may also reduce the number of disputes which arise between the contractor and Owner.

Disadvantages:

Loss of control. The overall supervision role of the Owner is absent from the EPC Contract. The EPC model generally contemplates less day-to-day intervention. Under the EPC contract, it may be more difficult for the Owner to exercise his variation power properly. He may be distanced from the design, procurement, construction activities, reducing his understanding of the process used and his ability to verify for a variation and whether a variation proposed will affect the performance of the finished works.

The contractor will want to execute the works within the parameters of the Owner’s requirements for the least cost possible. The contractor in a EPC contract may be tempted to under-design the project in order to cut his costs and save on time.

Cost of risks. Under the EPC contract the Owner benefits from an increased amount of the risk of the project being placed on the contractor. However, depending upon market forces, a contractor will attempt to increase the contract price in accordance with the increase in risk. Where there is little competition, the Owner may have to assume the cost of the increased risk placed on the contractor. Thus the Owner may end up paying a higher overall price for the project due to the degree of risk that is placed on the contractor and the need for the contractor to price such risk.

So that, EPC contracts nowadays become popular in construction projects, especially in oil and gas sector. However, together with the advantages, EPC contract also exposes its disadvantages and is quite complicated in terms of legal issues, therefore the Owner and the EPC Contractor shall have enough experiences and knowledge to understand lump sum contract characteristics from the perspectives of both the contractor and the Owner in order to avoid their faults and mitigate the risks during contract execution.

The EPC contract also come many new risks that are often severe, due to the complex nature and high cost frequently associated with this type of project. Understanding the risks and some of the other unique characteristics of EPC contracting is critical to a successful project where both the owner and the contractor obtain the high rewards for the risk.

His thesis abstract is copied and posted.

Absract

The Vietnamese Textile and Garment (T&G) industry consists of around 2.000 enterprises (25 State owned enterprises, 1.500 private enterprises and 450 reign direct investment enterprises) with over 2 million employees involved. Vietnam is ranking the 10th largest textile and apparel export countries in the world. The industry generates an economy contribution of 8% to country’s GDP. The T&G industry is employing 12% of national industrial workforce, holding the second position in export turnover and making the contribution of 14% to country‘s export turnover. Average growth rate from 2002 - 2007 is about 18% per year.

Therefore, valuable arguments for the implementation of a Polyester fiber project:
 Saving of foreign currency due to substitution of imported Polyester staple fiber and filament;
 Creation of new employment for qualified labor;
 Further strengthening of the textile industry in Vietnam as a second largest export earner after crude oil;
 Establishment of the whole polyester esterification, polycondensation, spinning and fiber drawing process through introduction and transfer of state-of-the-art technology;
 First step in the Vietnamese synthetic fiber industry to extend the business into the upstream petrochemical industry, e.g. production of PTA;
 Stable and long term local supply of staple fiber to the domestic downstream textile industry including the improvement of quality due to close cooperation between domestic companies.

Normally, for building a polyester plant the Owner will sign an EPC (Engineering, Procurement and Construction included pre – Commissioning and Commissioning and training) contract with an EPC contractor. In the petrochemical and polyester industry, there is not any EPC Contractor in Vietnam who can execute a full EPC project, therefore the EPC contractor is selected and awarded by the international bidding. The major factors for executing an EPC project are the contract clauses which are normally stipulated too generally with unclearly understanding and interpreting when having disputes between the contractor and the owner. Therefore, studying the method to develop the effective clauses in the EPC contract is necessary to simplify and make involved parties to understand and interpret clearly during the contract negotiation prior to the EPC contract signing and commencement. The understandable and applicable contract clauses properly will help an EPC project to be executed smoothly and effectively.

The sensitive clauses in the EPC contract are also needed to focus in order to minimize the conflicts and risks between the EPC contractor and the Owner. This study will also discuss on point of view and how to managing the EPC contract of Dinh Vu Polyester project and focus on the following issues related to EPC contract:
i. To study EPC contract process and management from literature review;
ii. To study the contract clauses in EPC polyester project;
iii. To study the actual Dinh Vu polyester project Contract implementation.

Quality Management System For Manufacturers And Contractors Of Pre-Cast Pile Foundation In Vietnam

Recently, Vietnam has kept highly economic growth in both public and private sectors. Therefore so many construction projects including buildings, factories and infrastructures have been invested to meet the country’s economic demands. Realizing the benefits of quality management, both investors and contractors attempt to improve the quality of the local construction industry.

Quality has been found as the most key components of project success. Deficiencies and errors in construction will require reworks or will result in failures after a product has been delivered to a customer. Such failures may result in claims, customer dissatisfaction, or dire consequences to the user.

So far, there are so many projects with piled foundation in Vietnam construction industry, especially building projects. Some serious problems in building foundation have been found with too much settlement of foundation. One of the most serious mistakes in both designing and construction of piled foundation was the collapsed 12-storey building in Shanghai City, China in March 2009. After those problems, not only owner, designer and consultants but also contractors are more and more concerned about quality management system.

The negative impact of indirect rework on profits can have serious consequences on projects’ and an organizations’ costs. For example, once design errors or omissions are identified in contract documentation, rework will occur. This process may continue to magnify until ultimately, the design firm finds itself in serious financial difficulties due to the prolonged impact of an unheeded increase in rework costs, coupled with a declining professional image and low morale.

Therefore, quality management system for the piling foundation works is really necessary for all of owner, designer, contractor and manufacturer to assure quality and prevent any unexpected hazards.

Mr. Pham Quoc Hung made a research which major objectives were to; (1) study quality management system in manufacturer of pre-cast pile and contractor of piling works for construction of project’s foundation; and (2) recommend the framework of quality management system and project quality plan based on a lesson learnt from these real cases study.

Conclusion

In order to assure the quality of construction works, it is first the contractors who determine the quality of construction project. The quality management program aims to find the most efficient way of managing the quality of work as to satisfy customers’ requirements. This study applied a framework of QMS using ISO9000 for manufacturer of pre-cast PC pile and PQP using ISO9000 for piling construction works in Vietnam.

The case studies have been conducted to investigate the construction methods and processes associated with quality assurance. The framework of QMS as presented in the report has been developed based on existing standards and regulations.

In these case studies, all major processes and detailed instructions for fabrication of pre-cast PC pile and construction of piling works have been presented. These are guidelines for contractors who implemented the QMS and PQP to achieve quality targets in construction.

The case studies found out significant tangible and intangible benefits for manufacturer of pre-cast PC pile and for contractor of piling construction project when applying QMS and PQP using ISO9000.

The most common problems related to managing quality often occurred during construction implementation and developments are found as follows:

Table 1: Problem and solution on implementing QMS and PQP



Recommendations for improvement

After understanding how the manufacturer of PC pile and contractor of piling construction project implement the QMS and PQP using ISO9000 Approach, recommendations for improvement can be as follows:

1) It is very important to have available resources with continual training and improving for better applying the QMS and the PQP. It helps the manufacturer and contractor of pre-cast piling foundation to always run smoothly for ensuring the quality targets.

2) So many benefits in implementation and development of QMS and PQP using ISO9000, some problems occurring can be reduced and eliminated with more detailed supervision and instructions.

3) ISO9000 is a framework for processing paper. However, other factors can be very important to contribute good quality products such as:
- Company culture from the beginning;
- Company strategy led by commitment of strong management;
- Company vision and policy in concentrating on satisfaction of customers and employees;
- The trend to exist in highly competitive condition forces the company to ensure its quality products;
- All company people have the same targets on quality.

His thesis abstract is copied and posted.

Abstract

ISO9000 has become more and more popular to apply for every modern business organization on all over the world. ISO9000 is considered as the most effective ways to apply for quality managing system of any company.

The study discussed the quality management system for manufacturer and contractor related to implementing construction services of pre-cast pile foundation:
- QMS using ISO9000 of the pre-cast pile manufacturing factory;
- Project quality plan with QMS using ISO9000 of piling contractor.

The main objective of this study is to recommend and develop a framework of quality management system using ISO9000 for pile manufacturer and project quality plan for piling contractor that can be effectively used to manage the performance of highway contractors in Vietnam.

An exploratory approach shall be adopted by reviewing the available literature to develop a quality management system (QMS) for pile manufacturer and project quality plan (PQP) for piling contractor and find out how is the applicability and effectiveness of this QMS and PQP in a real case study projects. The case study projects are aimed to answer following questions:
- Are the QMS and PQP applicable?
- Are the QMS and PQP effective and how is the effectiveness?
- What and how are the tangible and intangible benefits of the QMS and the PQP?
- What are the benefits and problems and impacts in implementation and development of the QMS and the PQP?

In case study, all important processes of pre-cast pile manufacturing and piling works have been clearly identified and developed with full details of guidelines for applying to achieve quality targets and satisfaction of customers.

Report of the findings and suggestions can show much more effectiveness of using ISO9000 for QMS and PQP in pre-cast pile manufacturer and piling contractor with their limited resources to achieve much better quality outcomes.

Delay Causes In The Construction Of The Refinery Projects In Vietnam: A Case Study On The Dung Quat Refinery Project

During the execution of construction project, project completion on time was commonly considered the key of project’s success. Project time can be evaluated as the vital factor in project management point of view because it affects directly on the profit of project if project time delay happens. The perception of project time management in construction industry has been applied in Viet Nam for recent years. Vietnam carried out the open-door policy to attract the investment from FDI (Foreign direct investment) projects. For this reason, it is essential to collaborate with oversea business and knowledge for Vietnam’s construction industry. However, many problems have been revealed due to the deficiency of the proficiencies in project management, such as:

- Project delays take place usually in the development projects due to deficient transmission among other parties, weather condition, social policy or other factors. It is surmised that about from 70% to 80% of projects of the PetroVietnam have the problems with time project delays.

- Even projects were finished on time; there are still many claims during the execution project.

Besides, the implementation of the project time management in construction industry in Viet Nam and PetroVietnam does not still achieve the effectiveness. Annually, the Vietnam Government still import large amount fuel for consumer and the result of the refinery project delays causes the huge loss of total investment and balance foreign currency of the Government.

Ms. Nguyen Thi Thu Huong made a study which main objectives were to: (1) identify delay causations in the refinery construction projects which were completed up to now or under construction; and (2) develop a framework to control and prevent delays in the remaining or under construction projects of the Refinery construction project.

Conclusion

Time delays in construction industry are a global phenomenon. The consequences of this research indicate that project delays have commonly occurred in most of construction project and the refinery construction project is no exception. Therefore, the results of this study provided a framework for project managers can better understand to reduce the incidences of delays during the refinery construction project, particularly in planning, implementation, monitoring and controls.

Delay causes in the Dungquat refinery project:

It is found that there are many delay causes seriously affecting on time extension and cost of the Dung quat refinery project. The impact of delays and appropriate response strategies and solutions to control delays are summarized in this study.

The impact of delays on time can be realized by the comparison between project schedule and the real situation. The Dungquat refinery project was started in 1999 but up to now the Refinery still not operation with full capacity. Throughout the research, the refinery construction project can be considered a case study to illustrate the success in control and prevent delays causation. Figure below shows the attempt to control and prevent delays during the construction of the refinery construction project.



Framework to control and prevent delays for future refinery projects

In order to significantly prevent and control delays in the future refining construction projects, the guidelines having the most potential were considered. The result from the real situations showed that delays could be prevented and controlled by carrying out several important strategies during the implementation of the project. Vietnam Government and Petrovietnam have been summarizing all of the difficulties and mistakes during implementation time to construct the Dungquat refinery, therefore we can avoid delaying time when construct the incoming refinery projects.

The problems need to solve when investing in the refinery project:
1. Making good planning & control for the project.
2. Management of escalation in material prices.
3. Contractor’s finance controlling.
4. Management of site clearance work.
5. Management contractors’ ability.
6. Establish communication system between the partners.
7. Building standard system for every process.
8. Surveying, collecting and deal with all of the information about weather and geological conditions of the site and other problem relating the site to make good decisions for constructions of the project.

Her thesis abstract is copied and posted.

ABSTRACT

In general, project completed with destined time, cost, and quality is the basic target of construction project management. The Dung Quat Refinery (DQR) construction project is a great and vital grassroots refining construction project in Viet Nam. DQR project is located in Dung Quat Economic Zone, Binh Son Distric, Quang Ngai province. Total cost estimation is around 2.5 billions USD, 100% invested by Vietnamese Government through Petrovietnam. The construction phase was started in 2005 and planned to complete on 2009. Regretfully, the refinery could not be finished within intended time, budget and resources. Until now, whole refinery has not passed all performance tests yet.

Normally, time delay always happened in big construction projects in Vietnam. With the purpose to solve this problem, it was found that several approaches have been affected project time completion. There are many factors found as the major source leading to manage project time completion affectively.

This report summarized the delay causes factors involved in the Dung Quat Refinery project during construction stage. This research will be conducted by using qualitative research; the data will be collected to analyze the facing problems. It was discovered from this study that there were many factors causing project time delays in the project. From the case study, effective solutions for controlling the delays will be investigated and be proposed for precious experiences to control and prevent delays in other construction projects in the future.

Marine Facility Design And Its Impact On Project Cost In Refinery Projects: A Case Study Of Nghi Son Refinery And The Petrochemical Complex Project

Most construction projects begin with recognition of a need for a new facility. Long before designers start preparing drawings and certainly well before field construction can commence, considerable thought must go into broad-scale planning. Elements of this phase include conceptual analyses, technical and economic feasibility studies, and environmental impact report.

For example, location is fundamental to planning for a new industrial plant. Where can the plant be located to provide desirable, nearby employment for an adequate supply of skilled and productivities workers? What are the present and projected costs and customs associated with the labor force? Depending on the natural raw materials input and its products, will the plant have access to the most appropriate and economical forms of transportation, via air, water, highway, rail or pipeline? Does the local provide access to raw material and to market? Are there adequate sources of energy, including gas, oil, and electricity; and are there convenient communication facilities? What political or institutional factors may ease or impede development and operation of facility? What will be the sociological and economic impact of this plant on the community? What will be environmental impact? What do all these factors taken as a whole, mean for the technical and economic feasibility of the project? Perform the feasibly study to ensure the effectively of the project.

The problem in getting a project started involves:
• Design concerned by possibility that owners spend a lot of time and money
• Uncertainty as to what the Scope of the project should be
• Worries about how much would be the cost

Construction projects, especially refinery project have a lot of items to study and to design including marine facilities, which affect the cost. Mr. Le Tu Anh made a research to study how design and selection of an optimal location for marine facility of refinery project affects the project cost.

Conclusions

The Nghi Son refinery and petrochemical complex Project has been studied for long time. In this research, the author proposed the following:

First, the research must be performed and then economic analyses need to be established. The data may use for analyzing the base on the Primary design of marine facilities.

Second, the projects begin with recognition of a need for a new facility. Long before designers start preparing drawings and certainly well before field construction can commence, considerable thought must go into broad-scale planning. Elements of this phase include conceptual analyses, technical and economic feasibility studies. All the factors taken as a whole mean for the technical and economic feasibility of the project. The costs of the marine facilities are estimated. The research shown the optimal design and show its impact to the project cost. The owner determines time, money and scope of the items.

Finally, an analysis on the result of the plan shows that the project is well planned and this project brings high advantage to owner.

His thesis abstract is copied and posted.

Abstract

The refining industry is one of the key industries playing a very important role in the development of the national economy. In addition to ensuring the national energy security, i.e. the supply of strategic energies such as LPG, gasoline, kerosene, jet fuel, diesel, etc, the establishment and development of this industry with the building of refineries will pave the way for the other related industries such as petrochemical industry, basic chemicals production, petroleum products transportation, storage, trading and distribution.

Additionally, the existing of the refineries will definitely bring about positive benefits in the socio-economic fields as well as the national security and defense, making contributions to speeding up the process of industrialization and modernization as proposed by the Government of Vietnam.

Therefore, this thesis deals with how design and selection of a optimal location for marine facility of refinery project to reduce project cost.

Managing The Precommissioning And Commissioning Phase In Epc Contract: A Case Study Of The Dung Quat Refinery Project, Quang Ngai, Vietnam

Developing oil refining and petrochemical industry is an index for success of each country’s industrialization because it is a spearhead industry with an essential role that widely influences many aspects of the national economy. Vietnam is one of the leading countries in Southeast Asia, after China, Indonesia and Malaysia, having large crude oil reserves.

The project to build Dung Quat Oil Refinery is a national key project in oil and gas field that is of great significance for social and economic development in Vietnam’s Central region in general, and Quang Ngai Province in particular. Investment in the construction of Dung Quat Oil Refinery will help facilitate domestic crude oil processing, step by step to ensure energy security and reduce reliance on petroleum imports, and contribute to boosting national industrialization and modernization.

Dung Quat Oil Refinery was built in Binh Tri and Binh Thuan Communes, Binh Son District of Quang Ngai Province, under the planning of the Dung Quat Economic Zone. Together with a deep-sea port system and the bay out of wind, it creates a strategic position in the Central key economic area. When invested for development, this area will have a very important role in security and national defence, as well as economic interaction and integration.

In order to minimize the interfaces and reduce any conflicts between the separated Contractors and the Owner during executing a grass root refinery project, Owners normally prefer to award and sign an EPC contract with an EPC contractor. Mr. Dinh Van Ngu made a study during the precommissioning and commissioning phase for the EPC contract of DungQuat refinery project due to limited time. The problems of his study were to; (1) define and describe the precommissioning and commissioning organisation, roles and responsibilities; (2) provide information as to how precommissioning and commissioning is to be executed and controlled; and (3) the sequence in which process and utility Units shall be commissioned.

An EPC contract is generally applied for developing a Refinery project, in case of problems or disputes happen during the project execution, then these problems and disputes shall be resolved in accordance with stipulated clauses in the signed contract. Therefore the objective of his report was focused on the following issues related to EPC contract:
i. To study organisation, roles and responsibilities of EPC contractors;
ii. To study executed and controlled the precommissioning and commissioning phase in accordance with the signed Contract;

Conclusion

To ensure a successful implementation of this phase of the Project, Owner must have full support from its Stakeholder and the Government. The Owner must have a strong leadership and commitment from senior management throughout the execution of the Project. The availability and competency of the Project Management core team also contribute an important factor during the initial/ preparation phase when the rest of the team will be mobilized. As many cost-schedule trade-off areas may be required, Owner must prepare a strong financial status and willing to accept or compromise some commercial terms.

The results from this study have identified that the Managing of Precommissioning and Commissioning phase play important roles on Project. In this report, Mr. Dinh’s identified the most important key success in managing EPC pre-commissioning and commissioning phase of the project based on his real experience. These are the following:

1. Safety system and site safety team: it is essential for the success of commissioning phase that the Safety system must be in place. During the commissioning phase, there are still many activities that belong to the construction phase. Therefore the site safety inspection team is vital for keeping safe situation at site.

2. Organizational structure that fits to the Commissioning phase: To have a suitable organization with full authority at site and proper coordination procedures is a key for success of commissioning stage. It should be noted that both EPC and Owner must nominate the Commissioning Manager position who will take sole responsibility and single contact point for any decision making related to the commissioning.

3. Qualified and experience commissioning staff in all disciplines: having experienced staff who has several commissioning assignments will be the key for success. He/she will lead the team to conduct the required activities because they know exactly what to do and how to do it following the general commissioning procedures and guidelines. Therefore having experienced staff in the team will help to reduce risk of schedule slippage, avoid common problems and failures and help the team do it right first time.

4. Approval authority for site team for any additional work: During the commissioning of the plant with such complex like Dung Quat refinery, there are many new issues that may raise. For that reason Commissioning manager and its team must be authorized to take the decision, cross the table without any delay.

5. Availability of Utilities: service water, electricity, instrument air, plant air, nitrogen, steam and some chemical for chemical cleaning, passivation of piping must be available at anytime in sufficient quantity to meet the commissioning requirement. It was experienced that during the commissioning phase of Dung Quat refinery project, there were several electrical cut-off from the EVN net work that make the commissioning activity interrupted and delayed the overall schedule.

6. Work Permit System: Having proper Work Permit System in place will ensure that work activities are in good order and sequence.

7. Coordination between EPC team and OWNER's team: Owner team will normally support EPC team for any commissioning activities. Any misunderstanding between the two parties may have impact to the schedule, that’s why a clear coordination procedure must be agreed and implemented.

8. Roles of daily coordination meetings: there are many activities happen daily and new activities raise that require discussion and agreement before conducting the work.

9. Equipment availability: commissioning equipment like crane, vaccum trucks, portable pumps, instrument portable devices, tools, analyzers, etc. must be available at any time for commissioning needs.

10. Maintenance workshop& its equipment readiness: this will ensure that many broken part of the equipment, material, etc. can be repaired at the site workshop to save time of commissioning.

11. Commissioning Spare parts; Tools & Materials availability: any spare part missing like flanges, gaskets, bolt and nuts, mechanical seal, thermo couples, etc. that may takes months to get it delivered at site therefore commissioning spares must be kept in sufficient quantity at site.

12. Ready stage from Construction phase- Mechanical Completion: for any section of Plant or unit, it must be mechanically complete before any commissioning activities but note that between section, there may be some overlapped activities of construction and commissioning can do in parallel.

13. Detailed level III, IV schedule for each Section and each discipline: this will help the team know exactly what to do next for each area, each disciplines and can plan ahead and prepare for incoming activities.

14. Vendor technical representatives availability: there are many major equipment that EPC staff does not have a specialized knowledge to commission the equipment first time that’s why it is mandatory to have vendor representative at site to support and advice on commissioning and start-up of such equipment like compressors, turbines, fired heaters, boilers, major motors, major pumps, etc.

15. Quick resolution of Punchlist and outstanding technical issues: from a public source of data, it is known that there are over 100.000 punchlist items found by EPC and Owner team during the plant check and inspection against specifications and requirements. It requires lots of time, effort, manpower and cost for fixing, correcting, replacing, etc. such items. This is considered as most time impact for the plant completion.

16. Availability of Commissioning procedures: without procedures, commissioning work may be delayed, prohibited and more chance for mistake.

17. Access of Project database and Vendor document: these document must be available for reference, guidelines and also used for making procedures.

18. Roles of good document control.

19. Rotation of shift work round- the- clock concept: Commissioning work is very time consuming and happen in continues manner so the activities must be taken 24 hour a day and shift work is required.

20. Availability of sub-contractors: they will provide manpower, tool, and equipment for commissioning therefore it is important to mobilize subcontractors to work at site.

21. Impact of weather conditions: any rain, thunder storm, flood of water at site will impact to the schedule. The commissioning if cannot avoid from raining/ bad weather season, EPC and Owner must be aware and prepare for that to minimize damages due to flooding or storm. As well as ensuring suitable condition and schedule to work during the bad weather season.

The initial assessment will consider items such as those above to ensure timely correction of operational and maintenance issues that affect the ongoing refinery operation.

Finally, with the limit time, the author was not discussed all the problems in Precommissioning and Commissioning phase in the thesis. Author wants all readers and colleagues have practical suggestions and comments for the thesis are more effective.

His thesis abstract is copied and posted.

Abstract

In the process of industrialization and modernization in Vietnam, the construction of Dung Quat Oil Refinery is considered an extremely important step to lay a foundation for the spearhead industry of the country. Capitalized at over 2.5 billion USD, the Dung Quat Oil Refinery Project will effectively meet the demands on jobs, shifting the economic structure, increasing the State budget and developing other services of the locality during the construction and operation periods. The construction of Dung Quat Oil Refinery also encourages domestic and foreign investors to invest in Dung Quat Economic Zone in the fields of chemical industry, engineering, manufacturing and installation industry, ship building and repairing, steel refining and laminating, transport, electronics, processing and other industries. With its scale and significance Dung Quat Oil Refinery is considered the heart of Dung Quat Economic Zone.

The formation and implementation of the project on Dung Quat Oil Refinery, the first of this kind in Vietnam, have lasted many years and experienced through different periods and with various forms of investment. The decision to build Dung Quat Oil Refinery with Vietnam’s own investment in 2003 showed the great determination of the Vietnamese Party and State in the strategy to ensure national energy security and promote national industrialization and modernization. Deeply aware of the project’s significance and with responsibility of an investor, Vietnam National Oil and Gas Group has been concentrating all sources on the management and supervision of the project to ensure construction of the refinery to be completed on schedule, safely and with high quality.

This study will also discuss on point of view and how to managing the precommissioning and commissioning phase for the EPC contract of DungQuat refinery project that can be happened during the project execution phase.

Contract Management How Owners Can Be Responsible For Changing Orders In Oil And Gas Project Management

Many oil and gas projects endure cost overrun or delay due to change order. Contractors send many change order requests to owner but many owners do not respond on time, leading to project delay. Contractors have to spend extra time waiting for owner’s approval, and claim extra payment for the project extension. So how could Owner manage change order request on time, to reduce minimum extra money and project could finish on time?

Mr. Do Van Hanh made a study which main objectives were as follows:
- How owner could minimize change order in pre-contract phase.
- How owner could respond to manage change order during construction phase
- Analyze the practice of change order through a case study of offshore oil and gas construction project.

Conclusion

All construction projects, even the best planned projects have experienced change, cost overrun, impacts, and disruptions associated with implementing the change. The Author realized some keys to managing the change which are: 1) to be knowledgeable about pricing change orders, and understand the potential for changes, to have additional impacts beyond the direct cost of the change; 2) Owner should prepare a contract form with adequate clear clauses, term etc, that prescribe contractor to have response to engineering, procurement, construction and installation, and each parties have to respond with time limit when a change order happens; 3) owner and contractor should set up a good communication; 4) Both owner and contractor should assign contract management and administration to an experienced person; 5) Owner should hire a well-experienced and professional consultant company to manage the project.

1)By understanding and including these costs in early change order pricing, both the owner and contractor can have impacts associated with changes, and can limit conflict and claims later in the project. Furthermore, by understanding and implementing these change management steps, the changes of the parties resolving the outstanding change orders more effectively and efficiently during the construction process greatly increase.

2) If Owner prepares a good contract with adequate clear clauses, term, standard, norm and criterion… that prescribe clear responsibility, authority of each party, it will be easier to have agreements during negotiation.

3) Communication is very important to solve early problems; it helps the owner and contractor to understand each other. If Owner and contractor should set up a good communication mode, both parties will have a trouble-free agreement.

4) If the owner assigns contract management and administration to an experienced person, he or she is knowledgeable about terms, clauses, and how to solve each kind of situation.

5) A consultant will help the owner to gather and can give best advice in solving problems.

His thesis abstract is copied and posted.

Abstracts

Viet Nam is a developing country needs to develop projects to build infrastructure, investment production base is a huge. However, the new approach and experience should not have management contracts particularly weak resolving issues, related to treatment change order. Many owners do not have the experience or the responsible handling of problems arising inappropriately caused the projects’ capital increase, and project delay.

In this report, the author wants to highlight the theoretical overview to investors arising manage and resolve them effectively. Also make some recommendations to reduce the risks of change order due to the project caused.

Furthermore, the authors also offer a case study and analysis baked each issue during project implementation, thereby giving recommendations as well as the lessons and conclusions for management change orders of investors.

Contract Clauses In EPC Thermal Power Projects: A Case Study Of Hai Phong Thermal Power Project

Demand of electrical energy in the world is increasing very fast with the development of economic and population growth in the global. In Vietnam, there are 27 Thermal power plants (TPP). The overall project duration for developing a thermal power factory is normally take 2 to 3 years depending on the size of facilities to be built.

Developing the facilities for a thermal power field such as platform, Thermal power Companies (hereinafter referred as the Project Company) normally sign an EPC (Engineering, Procurement and Construction) contract with the EPC contractor. For this field of industry, there are not so many EPC Contractors in the Asian South East countries who can execute a full EPC project, therefore the EPC contractor is normally selected and awarded thru the international bidding tender. The major factors for executing an EPC project are the contract clauses which are normally stipulated too generally with unclearly understanding and interpreting when having disputes between the contractor and the project company. Therefore, studying the method to develop the effective clauses in the EPC contract is necessary to simplify and make involved parties to understand and interpret clearly during the contract negotiation prior to the EPC contract signing and commencement. The understandable and applicable contract clauses properly will help an EPC project to be executed smoothly and effectively.

In order to minimize the interfaces and risks between the separated contractor and the project company during executing an thermal project, the thermal power companies normally prefer to award and sign an EPC contract with the EPC contractor, however this project delivery method will take a lot of time to make clarification, explanation and get the mutually agreement on the contract clauses between the contractor and the project company. The following problems are normally involved with the EPC contract clauses:

i. Take time to make the clarification and finalization before contract signing;
ii. Wrong understanding and interpreting of stipulated clauses in the contract;
iii. Conflict between contractor and the project company during project execution.

An EPC contract is generally applied for developing the thermal power project, in case of problems or disputes happen during the project execution, then these problems and disputes shall be resolved in accordance with stipulated clauses in the signed contract. Mr. Bui Tien Dung made a study which focused on the following issues related to EPC contract:

i. To study EPC contract process and management from literature review;
ii. To study the contract clauses in EPC thermal power project;
iii. To study the implementations of the contract clauses and their performance with reference to project advantages and problems.

Conclusions

Results from this report discussed and focused on some clauses applied for an EPC contract for developing a thermal power project as well as other EPC contracts in the construction industry. These clauses are normally defined and given by the Project Company in order to protect the project objectives and the Project Company from any kind of risks may happen. However from contractor’s point of view, it will be very risky if the Contractor complies with all these clauses without any exception or amendment. Therefore, providing the effective clauses based on the project documents and the Project Company’s interest shall be addressed during the bidding preparation and negotiation.

In summary, the effective clauses are the terms and conditions stipulated in the contract which shall be defined based on the interest and “win-win solution” basis for both the Project Company and the EPC Contractor.

Conclusion for important clauses in the contract that clearly identify risk, roles and responsibilities of each party

As discussed above, the EPC contract is quite complicated in term of legal issue, therefore the Project Company and the EPC Contractor shall have enough experiences and knowledge about the nature of project facilities in order to avoid their faults and minimize the risks during contract performance.

The Owner wish to transfer all of the construction risks to the contractor and be certain of his commitment. Usually, the responsibility for the package is vested in a single contractor, and bid evaluation is straightforward. The contractor agrees to carry out the work for the amount of money stated in the contract regardless of its actual cost as long as there is no change or breach of the contract from the owner. This is quite common for schools, warehouses and similar works where the scope is relatively well defined and the work is straightforward.

In this project, a fixed price lump sum turnkey contract is identified as the most suitable contract strategy provided the project could be completed within the owner’s budget. The owner can utilise model forms for the contract based on other projects procured in this manner.

Conclusion for the EPC project performance and how the contract contribute to the performance

The contract clauses are the most important tool to manage the EPC project. Therefore, the involved parties (Project Company, EPC Contractor) shall understand and know how to apply this tool effectively to manage the project in term of costly, timely and quality to the performence.

The contract clauses will be only effective when these are defined and stipulated in accordance with the project specification, documents and nature of work to be performed. Finally, these clauses also are established and finalized according to the mutually agreement between the Project Company and EPC Contractor.

General Conclusion

In conclusion, the major clauses in the EPC contracts are not the same for all project, these also depend on each project scope of work, complexity, specification and documents, the project company’s requirement and expectation and mostly on the outcome of contract negotiation between the Project Company and the EPC Contractor. Therefore, the meaning and application of major clauses in the EPC contracts shall be different in term of the standard form contract i.e. FIDIC or other organizations as well as in each kind of industry i.e. construction, etc.

His thesis abstract is copied and posted.

Abstract

Nowadays, the EPC contract is very wide applied in energy industry (specially in thermal projects) in this Region for developing an energy field project, this EPC contract is as a “fast track” tool to reduce the project duration. In order to execute this kind of contract successfully in term of the benefit for all involved parties, it is necessary to focus on some key factors that shall be affected on the project during execution phase i.e... contract terms and conditions clauses. Therefore, understanding and interpreting the application of term and condition clauses clearly in EPC contract will help the project to be executed and monitored by using the proper manning level in accordance with project specification and the project will be achieved its goals without the minimized disputations and conflicts happening.

This study will also discuss on the advantages and disadvantages of EPC contract from both Contractor and Project Company’s point of view and how to manage the EPC contract in accordance with term and condition clauses stipulated in the signed contract documents; how to resolve problems by understanding the contract clauses. However, the improvement of some major clauses are still needed in order to specify and define clearly the duties and responsibilities as well as obligations of involved parties to minimize the conflicts, interfaces, risks and disputes that can be happened during the project execution phase.