Owner’s Project Control Strategy

Success or failure of a project relies on how it is being controlled. Project control strategy is an activity which compares overall project performance against the planned project. The purpose of project control strategy is to evaluate and analyze the project situation, generation of forecasts, and definition of actions to be implemented in the whole project process.

That is a process that should be continued during the construction period to make certain that the final product meets the quality, completion and budget expectations of the owners. Project control process can be divided into three major areas: the control of cost, time, and quality during the design phases; the control of cost, time, and quality during the tendering phases; and the control of cost, time, and quality during the construction phases of the project.

Mr. Nguyen Le Thuan made a case study which objectives were to: (1) study the framework and identify the problems of owner’s project control process; and (2) study the practical implementation of the framework in terms of effectiveness and obstacles.

Conclusion

There were too many components that caused problems in project control. Despite of the project owner’s effort to solve the problems and arranged all requirements in suitable order, still there were some causes that made the project out of control. In this case study, Mr. Thuan found some problems in project control such as:
1. Poor estimating techniques and/or standards, resulting in unrealistic budgets
2. The technical design is lack of regulatory system or legal appropriation
3. Database is not correct
4. Value engineering is not popular
5. Awareness of standard design is limited
6. Policies and procedures are always changed
7. Communication and coordination among participants are not homogeneous
8. Need correct awareness to lowest bid.
9. The project owner uses nominated contractor method in tender stage
10. Inadequate work breakdown structure
11. No management policy on reporting and control practices
12. Management reduces budgets or bids to be competitive
13. Inadequate formal planning having unnoticed result, or often uncontrolled, thus increases in scope of effort
14. Poor comparison of actual and planned costs
15. Comparison of actual and planned costs at the wrong level of management
16. Unforeseen technical problems and unforeseen financial fluctuation.
17. Schedule delays that require overtime or idle time costing

Conclusion for Owner’s Project Cost Control in Design Stage

The project owner should specify all performance and design standard. The design professional is responsible for producing a set of preliminary drawings as well as written report for approval by the owner. The responsibility of the designer comprises drafting complete specifications for inclusion in project tender documents, approving or initiating all design related deletions, additions and changes to project specifications and accepting ultimate responsibility for the safety and utility of all project design elements.

In this phase, the project owner must approve all design related work performed and must coordinate the overall design integration, safety of the public, compliance with legal and codes.

Conclusion for Owner’s Project Control in Tender Stage

All services must be specifically required in the contract documents and not be in violation of any applicable law. Tender documents should be clear before they are issued. The content includes tender time, date, approximate contract amount, project location, licensing requirements, approximate size, plus tender, payment bond requirements, performance, etc.

Conclusion for Owner’s Project Control in Construction Stage

The fundamental purpose of the conference is to establish acceptable ground rules for all parties concerned, and to assure that each party understands the complete job requirements and coordinates its work to produce a completed job in a minimum amount of time, with maximum economic gains, and in proper coordination with the owner, architect, engineer, prime contractor, and all subcontractors. The pre-construction conference is primarily concerned with management and operational considerations. It is in these areas of contract interpretation and clarification that the greatest value of the construction conference can be achieved.

Progress payment and management of progress payments begins with the contract specifications clearly stating how the contractor’s work progress is to be measured, how payments are determined based on the measured progress, and what documents and reports are required to be submitted by the contractor to justify the payment request. The project owner should authorize payment only when the contractor’s progress payment request is in full compliance with the contract requirements and the progress claimed has been independently verified by supervisor.

Periodically, perhaps monthly, the project owner should compare schedule progress with that shown on the project program. The purpose is to determine whether those various activities were planned.

Recommended framework for owner’s project control:

Based on the literature review, case study and PMBOK (third edition), Mr. Thuan recommended a framework for an owner’s project control as shown in the table below:

Abstract

The report expresses the key issues in Project Control Strategy that known as the important factor for any owner wants to develop and survive in the construction industry.

This study, which refers to the theories have expressed the concept of project control process in design stage, tender and construction stage. What should the owner control in these stages? How can the owner control in these stages? The study has briefed the factors that most effect to them, they consist of cost, quality and schedule. Through a case study, project control problems will be analyzed. Some proposed solutions are recommended in order to help the owner can be improved in project control process.

Project Management Life Cycle and Risk Managerment in a New Residental Development Project in Vietnam

The development of residential projects in urban areas in Dong Nai province is still not uniform just like in other parts of Vietnam. The nature of this project usually involves large capital and needs long time to accomplish due to many elements concerned such as government regulations and policies which are indispensable.

Mr. Tran Thanh Liem wanted to study the project management life cycle in new residental deveplopment project in Vietnam and the most serious proplems arising from every stage of project life cycle.

The objective of his study were to: (1) identify project tasks and activities for accomplishment and find out proplems affecting the project time; (2) propose strategies to effectively eliminate or mitigate major risks; and (3) propose solutions that identify and prevent risks for the sister projects.

Conclusions

The investment in real estate sector in Vietnam is currently out with a difference. Applying the expertise of professional knowledge and ability to finance is unlikely to succeed when investing in Vietnam.

The case study revealed a practical implementation in the early stages of residential development policy of Dong Nai province in particular and Vietnam in general. The author introduced a project with very nice location in the center of Bien Hoa city which is belong to Company D2D (a Vietnamese company which is knowledgeable on laws and policies in Vietnam and capable of performing the procedures quickly) and Joint venture company Berjaya D2D (having capacity on the implementation of procedures, adequate financial capacity, investment experience and professionalism in the field of real estate investment).

This project has all the favorable factors for success. Currently it is also one of the most successful projects of the company D2D, but the schedule shows that the project still face a lot of problems (risks), which mostly concerned to the management and policies of the government.

The report may not offer the most complete risk factors in various stages of project implementation, but clear description of the risk factors affecting the schedule of most projects in Vietnam are well established such as clearance problem and progress delay. In addition, the author proposed appropriate strategies to mitigate these major risks.

Recommendations

The author had clarified the stages in the life cycle of a project and the main works done at each stage. He also determined main risks causing delay in the implementation of D2D residential projects, its secondary project in particular and all investment projects in the field of real estate in Vietnam in general.

This study proposes some recommendations for each delay problem as shown in the tale below:

When implementing real estate projects in Vietnam, anticipate that there are many negative issues in the system of policies and regulations and have to set the elimination risks that causing uncontrollable delays.

To reduce the delay problems for similar projects in the future, this study proposes some guidelines as follows:

1. To find out carefully the system of Vietnam's policies and continuously update the change of policies during the time of project execution in order to timely adjust work flow at various stages of the project life cycle; identity sufficient risk of external and internal environment of the project in accordance with reality.

2. Together with changing policies, the corruption in Vietnam is an ominous issue and investors even consultants can not understand all the issues for investment. However, the costs for Vietnamese consultants is so cheap compared with other countries, sometimes it is necessary to pay more payola for direct consultant from administrative official.

3. To implement the procedures while waiting for the approval of governments.

4. To survey, evaluate and recommend appropriate solutions for compensation and ground clearance in order to ensure the interests of the parties and minimize delays in this stage.

5. To set up land use planning appropriate with the project requirements in each stage and progress of the mobilization of capital investment

6. To research the plan for construction planning in order to ensure compliance with long-term development strategy, to take factors fluctuations in policy and plan for appropriate preventive.

7. To train or mobilize experts with full experience in the concerned fields such as planning, design, construction techniques and finance and to set up competence project team for the best implementation.

8. To conduct activities in order to control and limit the adverse impact of risks to ensure the project in time. Risk control plan should be implemented in conjunction with several measures from the active standby to deal with the risks, actively avoid and share the risk, promptly response when risks occur.

9. To establish early warning systems and handle risk.

10. To develop a plan for mobilizing capital to response the progress of the project.

11. Risk management should be considered as an important part of project management and construction law , urban planning law, housing law or government decrees.

12. To focus on the initiation stages : Investment report, Feasibility Study, Project planning and Detail Design.

His thesis abstract is copied and posted.

Abstract

Vietnam has just been developing in recent years. Together with urban development, real estate and construction market are growing rapidly. The speed of economic development is growing rapidly but substandard managerial capacity has not satisfy the actual requirements, so great urban areas of Vietnam are now facing with complicated issues of urbanization process and urban development such as migration, accommodation, labor, career, traffic jam, flood, environment pollution.

The real estate and construction fields have reputation of the most opportunity, risk, expensiveness and challenge. The implementation of construction also requires long time with huge investment capital and various participating components.
Besides, there are so many unsound problems, for example government policies in real estate market and construction industry are usually amended and overlapped among authorities. Therefore; the implementing process of project will be usually changed, risks would easily arise and we will meet difficulties in estimation, appreciation and control… All these will make project not completed as expected.

Risk Management of Basement Construction Affecting Adjacent Buildings: A Case Study of Construction Project in Ho Chi Minh City, Vietnam

With restricted height in the central of Ho Chi Minh City, basements for building are even more needed. However, recently, a lot of basement construction has encountered incidents affecting adjacent buildings which may be due to difference in geologic conditions and number of basements, and probably use of different execution method.

Mr. Dang Tuan Anh made a research just to present the risks that are related to basements construction by top-down method with diaphragm wall for soil retaining. This is an advanced execution method and usually use for those buildings having more than two basements. However, if risks in this method were not checked carefully, it will seriously affect adjacent buildings.

The table below shows some typical problems and consequences of basements construction in Ho Chi Minh City:
With these problems, developing risk management frame in basements construction is critically important to reduce impacts on adjacent buildings.

Conclusions

At present, most of the buildings in Ho Chi Minh City have basements. Therefore, risk management to reduce impact on adjacent buildings becomes more and more important. Practice shows that quite many projects caused problems during process of basement construction and create serious consequences such as damages, collapse and casualties.

From data analyses, the problems below still need to address:

The above problems are mainly due to subjective factor and lack of experience of the managers. Besides, awareness of Clients in preparing finance for risk management is one of the key issues. If the budget of risk management is not enough, plans for risk management will be limited and not efficient.

Recommendations

It is necessary to have adequate finance package to cover risk management, and based on that finance, planning risk management will be studied carefully and combined from experts. In addition, advanced techniques and equipments can be used to observe, prevent and deal with incidents when they happen.

For those risks that might cause serious incidents (pierced holes on diaphragm wall, deformation of king-post system, etc), there must have strict observation and control. It is necessary to plan urgent risk-solving methods with respect to manpower, equipment and finance. Moreover, establishing good relationship with people who live around the project is also very important to have their cooperation during the process of observing and solving incidents, even temporary moving if necessary. Therefore, professional verifying teams should be combined to observe and propose solutions when problems occur. This will set surrounding people’s mind as well as local government’s mind at rest.
It is suggested to study carefully risk management frameworks whichever is suitable with each specific project to get the most efficient and which will contribute in achieving the project.

His thesis abstract is copied and posted below.

Abstract

This project report studied about risk management of basement construction affecting adjacent buildings. In the field of construction, basement construction in rural areas is one of the most risky and difficult works.

To limit risks in this issue, it is very important to study about risk identification and solving methods when preparing and constructing basements. Although many projects have risk management system, risk still occurs, even causing very serious damages.

Therefore, experience and thoughts in risk identification becomes more and more critical.

Risk Factors In Resettlement Project Project: A Case Study Of Binh Khanh Development Project

In recent years, Vietnam’s construction industry has improved. However, many projects which invested by the government are still meeting some problems like cost overrun and schedule delay, which are caused not only by weak project management but also complicated legal procedures.

Ho Chi Minh City is one of the centers of Vietnam with a rapid growth in economic. However, the urban projects development in Ho Chi Minh City is not synchronic and slow because problems happened in investment process. The main reason is the land clearance and resettlement. Resettlement projects were built without profit for moving vulnerable people before the main project were deployed.

Mr. Le Minh Dang made a case study to research and find out the risk factor occurs in each stage of a resettlement development project, and then analysis impact of some typical risk factors, and propose effective method to mitigate them and ensure project objectives. The objectives of his study were to: (1) identify risks create in resettlement development project in each stage and find out risk factors effect to project finance, implementation; (2) propose strategies to effectively eliminate or mitigate major risks; and (3) propose solutions that identify and prevent risks in similar projects and improve management of Resettlement development project.

Conclusions

The case in this report described a special project implementation of urban development in Ho Chi Minh City, and obviously revealed high-risk factors that can seriously affect the success of the project. Actually, the government has enormous efforts to overcome policy and reduce the cumbersome procedures in investment, but investors still face a lot of problems (risks) when implementing project.

The report may not define all problems in various stages of project implementation because the author only analyzed main problems that may affect the efficiency of the projects such as: progress delay and project costs incurred compared to initial estimates. Based on the analysis, the author proposed appropriate strategies to mitigate these major risks and problems as shown in the table below.

Recommendations

In scope of this report, the author just emphasized major problems effecting on Binh Khanh project objective. The findings of this study are expected to contribute to identify major risks and more effective project management process in project. To achieve this objective, this study proposed some recommendation:

1. Researched carefully feasibility study, legal procedures, investment policies to ensure compliance with long-term development strategy, taking factors fluctuations in policy and plan for appropriate preventive.

2. To train or recruit experts with full experience in the concerned fields, such as planning, design, construction techniques, financial ... to set up competence project team for the best implementation.

3. Investigate and research risk factors of project, impact of risks to the investment effectiveness of the project. Setup the risks control plan to minimize impact of risks to project, especially in project finance.

4. Setting up risk monitor plan for opportune action such as dealing with the risks, actively avoid and share the risk, promptly response when risks occur.

5. Develop a plan to mobilize capital to meet the progress of the project.

6. Propose and persuade Director Board to approve risk management and risk management cost.

7. Especially focus on the initiation stage: Investment report, Feasibility Study, Project planning and Detail Design.

8. The Investors should monitor to changing of investment policies to avoid the risk factors effect to project planning.

9. Design&Build contractor must be selected by biding. The contractor must have appropriate capacity management and experience in Design&Build method.

His thesis abstract is copied and posted below.

Abstract

Social projects that change patterns of use of land, water, and other natural resources can cause a range of resettlement effects. Resettlement losses most often arise because of land acquisition, through expropriation and the use of eminent domain or other regulatory measures, to obtain land. Housing, community structures and systems, social networks, and social services can be disrupted. Productive assets, including land, income sources, and livelihoods can be lost. Cultural identity and potential for mutual help may be diminished. Loss of resources for subsistence and income may lead to exploitation of fragile ecosystems, hardship, social tensions, and impoverishment. In urban areas, displaced people might swell a growing squatter population. The people affected have no option, and must try to rebuild their lives, incomes, and asset base elsewhere.

To ensure that some people are not disadvantaged in the process of development, the Government tries to avoid or minimize resettlement effects by Real estate law.
The law stipulated the rate of land for resettlement and business. The investor have to develop the resettlement projects for vulnerable people.
So, the management of resettlement projects is an important issue for the investor because the resettlement projects are always low benefit and affect to time schedule and cost of the main project.

The purpose of management of resettlement project is identify all problems before they occur so that management may be planed and mitigate adverse impacts on achieving objectives. To effectively manage the resettlement project, it is necessary for organizations to identify important issues in time, cost, quality and safety , then provide a suitable method to manage in each stage of resettlement project life cycle and suggest the effective solution methods as minimized, shared, transferred, avoided or accepted but can not be ignored.

Assessment of Risks on Design Management Aspects in Luxury Hotel Development Projects

Each building project has a unique process. Thus, requirements for planning, construction, and service systems of most modern buildings are really complex, and taking control of the process becomes a continuing issue for management, as the pressures to satisfy these diverse requirements are often conflicting.
The hotel that was being studied in this case has many complex issues which required comprehensive incorporation with a great diversity of technological inputs and diverse requirements from clients to adapt the market needs. This is the first issue for the design management team to focus on & build their competency.

Ms. Tran Thi Thien Trang made a case study which main objectives were to find out the risks or obstacles in a hotel construction projects and to conduct a risk mitigation to improve the situation. In order to achieve her main objectives, the following sub-objectives needed to accomplish: (1) to identify the risk factors by averaging different views of project experts, PM, CM, DM for the hotel project through project phases impacted by design management aspects; and (2) propose mitigation for the major project risks averaged by different views of PM, CM, DM and literature review.

General conclusion for the risk identified of this case study

This research found out series of consequences caused from management aspects to the project. Mitigation for the shown obstacles are systematized under scheme by necessary activities remarked in each stage. With appropriate project coordination, stake holder requirement and adequate management tools will lead to the success of the project.

Causes of the risks discussed are mostly come from:
1. Lack of the process for controlling project program, un-stable program, restrain schedule

2. Defining scope and client/operator requirement.

3. Inadequate in contract review, procedures and strategy in tender

4. Organization between construction and design management team with other department
and lead to negative results to project

5. Obstacles caused to next stages to be run.

6. Project delay from sub-key project mile stone to potential delay in final completion date.

7. Reworks are often occurred due to the project condition of management, which in turn lead to cost overrun,

8. Project quality would be potential affected since design deliverables under expected.

Design management responsibilities and scope of work

The list below shows the design management responsibilities and scope of works. Based on this, it is clear that design management team is one of the most important key departments in a project that contribute much to reducing project risks impacted by design factors as well as improve project quality in general. These responsibilities are as follows:

1. DM prepares coordinating schedule with required inputs, outputs, its milestones to ensure clear project targets and programs.

2. DM establishes tools to control design quality and to manage project requirement coming from owner, operators and other.

3. DM identifies additional consultants, pre-selection, evaluation and final selection (such as kitchen and laundry, lighting, SPA specialists or any other required consultants...) to ensure required inputs for project on time.

4. DM reviews consultant contracts to ensure required scope of services in lined with project program and DM reviews contractor contracts to ensure arranged scope of work reflected on design document to be bound in contracts, to ensure contractor service or their deliverable/ offers met project requirement.

5. DM sets up target dates for design output and to ensure the timely submission of the design so as to obtain expected project milestones and in line with intended purposes.

6. DM sets up program required operators, owners and third parties review and approval to ensure designs complies with requirements and design can be moved to next stage.

7. DM reviews with clients and design consultants to clarify required code and standard for project, in compliance with government.

8. DM manages and coordinates all issues on design aspects in during project phases so as to ensure design quality, project budget, project schedule in lined with project program contracted with owner and operators.

9. DM coordinates design during phases and with cost estimation to ensure design within budget, and DM evaluates and prepares MEMOs, letters for phase completion record to owner.

10. DM develops/ monitors/ controls drawing schedules in coordination with the design consultants.

11. DM establishes design procedures with associated flowcharts, forms and reports during phases.

12. DM develops/ monitors and controls drawing schedules in coordination with the design consultants.

13. DM effectively communicates & coordinates with various designs to ensure conformity of designs as well as minimize conflict among designs.

14. DM chairs design review workshops and meetings.

15. DM verifies design development against the agreed brief to ensure designs met project, owner / operators objectives.

16. DM verifies design deliverables with contract, with owner and operator requirement.

17. DM organizes value-engineering workshops.

18. DM prepares scope of work of contractor to ensure design consultants providing comprehensive design information for tender purpose.

19. DM prepares tender document to call contract together with relevant parties.

20. DM evaluates tender submission by coordinate with experts in the project.

21. DM reviews shop drawings together with CM, then works with design consultant and owner, operator to ensure latest design come to site for executing on time.

22. DM prepares plan for solving and updating changes to construction works, changes management during construction stage.

23. DM controls also the proper coordination between the Architect, the C&S and the Engineering Consultants and others.

24. DM manages design information filing well in a system.

25. DM is a center to manage, to coordinate with all design consultants, owners, operators, independent checkers, QS department and construction management team to ensure quality for project optimized in term of design impacts.

Her thesis abstract is copied and posted below.
Abstract

Project outputs are in lined with client’s expectation in term of time, cost and quality, which is one of the targets of a project and the competitive factors among organizations. On PMC aspect, how to sail successfully the wind for obtaining objectives is a critical point that I focus to study. My research is based on surveys about the project risks on design management aspect impacted by planning stage and been causes for other next stages. Risk assessment is studied together with theory application for reducing the consequences of poor performance; What to be prepared, done shall be systemized as a well being prepared for future projects (Risk management) and a contribution to improve overall project management performance through project phases.

The Le Meridien Saigon Hotel is the case for this thesis, it is located in heart of the center of Ho Chi Minh city, invested by TP& 990 co. Ltd and operated by Starwood organization with Le Meridien brand name, a mix project with 5 star international hotel and office grade A. Thus, it seems challenge for management!

‘Do the right thing at beginning stage’.

Project Organizational Structure Roles and Responsibility: A case study of Marriott Five-Star Hotel

Organizations are often complex with internal and external relationship intertwine with each other and difficult to apprehend. In the construction industry, the situation may worsen as a real estate development project may employ hundreds or thousands of people. It is crucial to understand the key concepts of organizational management and appreciate how to organize, lead and motivate people to make projects successful. Good organization management structure will safeguard the firm’s long-term survival. These reasons lead to Mr. Tran Duc Quang to study in depth the subject of organization management. His research main objective was to study the application of Project Organizational Structure Roles and Responsibility in a construction project from Appraisal, Feasibility Decision to completing -handing over phase.

Conclusion

In conclusion, the report has attempted to explore and study in depth the key concepts of organizational management and appreciate the various organizational structures that are relevant to the real estate and construction industry.

Given the very complicated nature of construction whereby each constructions project is unique and may involve many stakeholders, the real estate developer needs to consider both vertical and horizontal ways of structuring its organization and project. That is why matrix structure is proven very useful. Furthermore, in different stages of the project life cycle, the tasks required are different and hence need for different structure during different phases of the project. Knowing when to employ which structure is important, as organization structure is a tool for managers to carry out the strategies set forth.

Having the appropriate organizational structure is essential for the real estate developer, as having an appropriate framework and good organization management structure, the organization will enjoy many benefits such as appropriate use of resources and prevention of many possible risks. The tool will also help to close up the gap in project governance, as good structure will allow constant interaction in between different levels. A well-run project will generate both financial benefits and high satisfaction to the stakeholders involved. It will help the firm stand strong in terms of crises and thus safeguard firm’s long-term survival.

Recommendations

The rational of organizational management is to facilitate the application of knowledge, skills, tools and techniques to project activities to meet project requirements in terms of Scope, Cost, Time, Quality, Participant satisfaction. In organizational management, the important steps include:
1. Choosing the right people
2. Setting up the right organization
3. Using the right system

The concept of how to choose the right people for the task and how to set up the right organization was also discussed in this study. There are many organizational structures and each one of them has its own application, advantages and drawbacks. Selecting the appropriate structure for an organization will therefore be dependent on the task, the size of the firm, the subordinates, the managers and the environment. Managers, in choosing the right organizing structure, need to study its vision, mission and its strategic intent and then strive to pick strategies and structures that are congruent. In choosing the right people for the team, managers need to define what kinds of skills are required, what kinds of individuals required in what time frames and then select the right people.

The Case Study of Marriott Hotel based revealed that implementing the best organization management system involves a few stages, starting from finding out the right strategies, to matching the project life cycle stages to the correct type of structure. The case study of Marriott Hotel is a very good example that other real estate developers can study and replicate.

Organizational management aspect of project management includes Human Resource Planning, Acquire Project Team, Develop Project Team and Manage Project Team. Therefore, choosing the right people and organization structure alone is not enough. Managers need to be aware of many other factors that can be crucial success factors in running the organization such as managing culture issues and facilitating good communication channel. Organizational management also includes active management of the employees in the organization. Making sure that employees are well motivated is crucial for organizational management. Below are some examples of how to manage the employees that other firm can adopt:

Providing Constant feedback to employees
1. Progress Reports: Reports providing feedback to the project team about performance against the project plan.

2. External Feedback: The project team must periodically measure itself against the performance expectations of those outside the project.

3. Project Performance Appraisal: Performance appraisal objectives include re-clarification of roles and responsibilities, development of team member’s training plans and establishment of specific goals for future periods.

4. Performance Reviews: Meetings will help to access project status or progress.

Provide various trainings to employees

Other things that a project management team can do are to send employees for courses to increase his skills. The courses that a company can consider are:
1. Conflict Management: Successful conflict management results in greater productivity and positive working relationships.

2. Cultural Management: With cultural management skills, employees will be more confident in dealing with people from various backgrounds, especially for the large-scale joint venture project.

3. Trend Analysis: Forecasting project results over time to determine if performance is improving or deteriorating.

Finally, managing an organization is an ongoing process, and managers need to be actively engaged in running their own company. Once the situation changes, managers need to be nimble in adapting to the changing environment by changing the organization structure.

His thesis abstract is copied and posted below.

Abstract

This report focuses on various aspects of the main theme - Organization Management, which is a crucial factor for the success for real estate project.

Year 2007 was a booming year for real estate in Vietnam. Many housing development projects were successful built. However, as the financial turmoil started since 2008, the real estate industry globally has encountered one of the worst hit in the recent history. Competition for developing new housing projects with high quality yet low cost in order to win customer base is intense. In order to survive in this tough environment and emerge as winner, there is an urge for real estate developers to re-look in to building up their organizational structure in order to carry out smoothly the projects in accordance with customer’s expectation and international standards. In general, the success or failure of the real estate development project is dependent upon the quality of the employees, the clarity of the operation, the availability of the resources and most importantly, the appropriateness of the structure and the management system adopted.

This study, which refers to different theories and standards, has studied in depth the concept of organization management. The project indentifies the key concepts of various types of organization and its relation with the construction phases. It spells out the core governance tasks in the area of strategy, structure and organizational culture and suggests the best strategy that a real estate developer should adopt in order to cope with the increasing pressure of the internal and external environment. It further elaborates how to exercise authority and allocate power within an organization.

Finally, the real life case study of building the Five Star Marriott Hotel in Nha Trang City, a complex project that involves various team and parties, will demonstrate the key concepts and application of these concepts.

Risk Factors in Vietnam Power Plant Projects – Case Study of Nhon Trach Power Plant and Camau Gas Power Fertilise Projects

Recently, the oil and gas prices increase day by day which makes difficulties for developing countries to have a stable economic condition. In addition, the demand for oil and gas all over the world is increasing, therefore the services required in developing new offshore facilities and its exploration also increases.

In developing the facilities for an offshore oil and gas field such as platform, normally Oil and Gas Companies (hereinafter referred as the Project Company) sign an EPC (Engineering, Procurement and Construction) contract with the EPC contractor through the international bidding tender. The major factors for executing an EPC project are the contract clauses which are normally generally stipulated, with unclear understanding and interpretation when having disputes between the contractor and the project company.

In the past, risk management has been an important tool to control safety-related risks. However, we see the shift away from the traditional compliance and insurance-motivated risk management to one that is closely linked to business performance and long-term society commitment. In order to minimize the interfaces and risks between the separated contractor and the project company during the execution of an oil and gas project, the oil and gas 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 mutual agreement on the contract clauses between the contractor and the project company. The following problems are normally involved with the EPC contract clauses:

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

An EPC contract is generally applied for developing the oil and gas project. In case of problems or disputes during the project execution, then these problems and disputes shall be resolved in accordance with stipulated clauses in the signed contract. Mr. Nguyen Duc Thanh made a case study which objectives were focused in the issues related to EPC contract: (1) to study the contract of EPC project and contractual risks; (2) to study contractual problems occurring in a project; and (3) to propose a recommendation for improvement

Conclusion

The research study summarized the concern and the risks we often meet when executing EPC oil and gas project in Vietnam. It also mentioned and suggested effective solutions that can be performed to avoid or overcome the obstacles in contractor management.

The literature review sections introduced and covered the form, phases and activities for general EPC project. It also listed advantages or disadvantages and challenges when we apply EPC model to manage project, especially managing Vietnam EPC project. The advantages under investor’s point of view of EPC contract model in respect of following:
- Reduction in project management works for an investment owner;
- Reduction in risks of difference between design and construction;
- Costs for an EPC package are easier to estimate and control because it is lump sum contract.

The chapter also raised reason which case EPC should be applied in Vietnam such as:
- Project with multiple options of construction methods;
- Projects in which whose design and equipment production cannot be separated
- And in case a project has urgent progression.

In two case studies revealed that through collecting related document and attending as one of duty to solve these problems, Risk in Vietnam appeared in oil and gas projects normally come from what parties haven’t defined or stipulated in contracts. Moreover, maybe some contractors want to expand profit as much as possible, so they change some conditions except in some case which is compulsory for pushing project schedule.

According to studies and data statistic, client needs to play as interface when many contractors participated in project. It requests a professional team to monitor, assess and can hold point the whole activity of contractors. Schedule is always updated and mobilization plan of employee and equipments must comply with master schedule.

Through the review of literature on EPC model and risk in EPC contract, it is proposed that solutions of effective EPC risk management needed as stated below:

The problems often appear in the execution stage of the project and we have difficulty in avoiding them. However, we can ignore or minimize the problems through understanding by clarifying the term and the scope of work in contract. In addition, these problems can be predicted or determined to happen in the next phases which can’t solve at this time, therefore we need to stipulate them in the contract on how to find the solutions to control, monitor or solve.

In conclusion, for each EPC project, the risks are not the same. The risks depend on whole EPC project such as: scope of work, material specifications, equipment style and requirements of client. Therefore, risks management application for the kinds of EPC projects will be different. So, application should be considered via EPC project style.

His thesis abstract is copied and posted below.

Abstract

Oil and gas projects are established intensely to satisfy the energy demand on the world. In an EPC contracts help provide ‘turnkey ‘systems for companies. This is where a single point of contract is given which includes the design work, engineering procurement, installation works, commissioning, start up, supply chain materials, testing activities. Due to this single point of responsibility, almost all the risk is transferred from the owner to the contractor. In this contract, there are guaranteed completion dates, performance, clear division of obligations and liabilities. EPC projects which are also known as turnkey project service face many challenges to stay in the competitive within the industry business environment despite of the efforts made towards compressing activities by phase overlapping, in order to reduce time scale and to obtain better EPC projects. These project challenges lead to cost overrun and schedule delay. Understanding the function of EPC Project Risk Management is important to protect interest of both parties and to engage tools and techniques to allocate risks between the owners and contractors.

Most projects are bound to be affected risks such as construction risks, operational risks, financial and economic risks, legal risks etc. All these risks are interrelated and have a chain effect in overall start-up and commissioning. Common delays and cost overruns can have severe effects and causes as a primary effect on construction risks. Therefore it is important in a project when structuring EPC contract. EPC contract comes many new risks that are often severe due to the complex nature and high cost frequently associated with this type of project involved

By finding out and analyzing the problems happening in Nhon Trach power Project and Ca Mau Project, through collecting data and assessing status of project in each phase, the research study aim to identify and analyze problems that often occurring as well as resolutions and try to suggest solutions which are effective to solve the problems.

Solutions to manage Risk in EPC project was developed as a result of the research case study which is helpful for Vietnam oil and gas projects wishing to overcome obstacles by avoiding or minimizing these risk.

Risk Management in Low-Income Housing Project Development in Ho Chi Minh City

Ho Chi Minh City (HCMC) is the one of the cities having highest population in Vietnam. Currently, migrants account for 21 percent of total population, and the average migration rate increases from 0.02% (1979-1989) to 0.84 (1989-1999) and reaches 2.33% (1999-2004) (Thanh, 2006). Most of people migrate to HCMC in order to get better employment opportunity, education condition, medical care, and so on (Thanh, 2006).

In order to increase housing supply for the poor, government has implemented different policies in various periods. However, housing supply for the poor is still low compared to demand. This market segment is still risky for developer (MOC, 2009).

Mr. Le Quoc Tuan made a case study which main objective was to propose the possible solution to manage the risks in low-income housing (LIH) project development. In order to achieve his main objective, the following objectives were needed to accomplish: (1) investigate the risk factors in each project phase during the implementation low-income housing project development, and (2) propose the recommendation to manage the risk factors in low-income housing project development.

Conclusion

In order to satisfy the first objective, the researcher reviewed book, journal, previous thesis, guideline, newspaper and so on to identify risk factors and then arranged them in four phases of project which are planning, financing, construction, and selling. After that, these risk factors were verified by 5 experts including deputy directors, government officials, and academician. Finally, the verified risk factors were analyzed through case study. The second objective, which was recommendation to manage risks, was made based on analysis case study and study literature.

It was found out that there are eight key risks for developer when investing in low-income housing project which are (1) complicated legislation procedure to get approval (2) low-profit margin controlled by government (3) unrealistic government support policy (4) risk in land acquisition from landowner (5) lack of fund to developers (6) inappropriate building standard (7) revenue risk due to ineffective demand (8) delay in selling housing unit.

Recommendation

The recommendations were made based on the risk analyses, suggestions from interviewees, and from literature review. The recommendations are presented as in the table below.

His thesis abstract is copied and posted

Abstract

Demand on low-cost housing for the poor in urban area of Vietnam is very high due to its high population, and high urbanization rate. Even though Government implemented many policies since 2009 in order to attract developers, the supply in low-income housing is still low compared to its demand. So far only 31 out of 263 registered low-income housing projects have been implementing. According to Ministry of Construction (2009), this market segment is still risky for developers. However, there are few researches on risk management specific in low-income housing projects. The purpose of this study is to propose recommendation to manage risks in low-income housing project development in Ho Chi Minh City.

This study used case study to conduct its two objectives. The first objective is to investigate risk factors in each phase of low-cost housing development. Researcher reviewed book, journal, previous thesis, guideline, newspaper and so on to identify 48 risk factors and then arranged them in four phases of project which are planning, financing, construction, and selling. After that, these risk factors were verified by 5 experts including deputy directors, government officials, and academician. Finally, the twelve verified risk factors will be analyzed through case study in Ho Chi Minh City. The second objective is to make recommendation to manage risks. The recommendation was made based on analysis of case study and study of literature.

The study found that developers are facing 8 risk factors and 12 risk sub-factors which are (1) complicated legislation procedure to get approval (2) low-profit margin controlled by government (3) unrealistic government support policy (4) risk in acquisition of land from landowner (5) lack of fund to developers (6) inappropriate building standard (7) revenue risk due to ineffective demand (8) delay in selling housing unit. Some recommendations to manage the risk are: (1) establish one independent government agency responsible for legislation issues, land acquisition, select the target low-income people, and guarantee for the output (3) government channels the fund borrowed from international agency such as World Bank, Asian Development Bank to developers with favorable interest rate or government guarantee for developers to borrow fund from bank (4) lower building standard.

Risk Management in the Design of Large - Scale Construction Projects: Case Studies of an Urban Area and a High-rise Building Project

Problems in the design of large-scale construction projects may come from many stakeholders: Owner, Designer, Project Management Consultant and external environment.

There are many kinds of problem arising from the Owner such as (i) sometimes they can’t finalize what they really expect in their project. The requirements are very vague and just base on their feeling; (ii) the structure is not well-organized. Everybody can give out opinions but no one makes decision; (iii) when employing the consultants, owners don’t have the right model of project team structure. The consultants are not put in the right position with proper scope of works and obligation.

The problems of Project Management Consultant are that sometimes they can’t fulfill their duty in assisting Client to conclude their requirements reasonably and to arrange the project team structure in a right way or can’t define the procedure of working and making decisions. Also, they can’t well manage the project team to shorten the time, eliminate the error, and reduce the cost. The project working environment is not efficient and effective because people in the team are not aware of the other member’s duties or how to contact them. In other words, many Project Managers in Viet Nam nowadays are just the Post Men.

As to Designer, most of their problems come from the unclear design contract without necessary conditions binding relevant parties to their commitment. This weak point becomes more serious especially to the large projects owned by many organizations and involve in many parties with different cultures, different customs and constructive understanding.

Last but not least, problems may emerge from the external environment, such as laws, regulations or market. These factors form an uncertain circumstance which needs to be well identified, and planned the measures to deal with.

Mr. Do Tran My Thuy made a case study which objectives were to: (1) identify the key risks affecting time, cost or quality during design process; (2) find out how to mitigate these risks through contract conditions, communication or some other management tools. Also, to define the role, responsibility of three parties: Owner, Project Management Consultant and Designer in mitigating these risks; and (3) identify the activities and required documents in each step of Design process.

Conclusion

In the design of large-scale projects which involved many investors and many professors in different fields, there are usually 12 risks relating to 3 groups of stakeholders such as Owners, Project team and external environment. Two among these risks are from the external environments which are “unpredictable response from Authorities” and “changes by unforeseeable causes”. These are difficult to be prevented, so the mitigation is just the negotiation between Owner and Designer on how to share the consequences if the risks happen. Ten reminders can be prevented or mitigated through a proper working process and three kinds of document.
A proper working process is the one which creates the reliable bases for the Owner to make proper decisions.

Three kinds of document are Design service contract, Design Brief and Project Management Plan. The purpose of these documents is to set out a clear, impartial working environment for all parties in the project. Depending on the specific situation of the project, each document can be amended a little bit, but there are some critical issues in these documents which are necessary to be considered and discussed carefully by the Owner, Designer and Project Management Consultant. The role and responsibility of these three parties during the design process are also found. Details of the finding are summarized in figure 4-1. Apart from these preparations, another tool to mitigate the risk is Communication. Communication should also be planned through three aspects: communication method, communication form and critical points to communicate.


Recommendation

The Project Manager should consider the steps shown in the table to prepare for large-scale construction projects.


His thesis abstract is copied and posted.

Abstract

Managing risks in construction project has been recognized as one of the key factors in the process leading to the success in term of time, cost and quality of a project. However, until now most researches in risk management have focused on the construction phase, rather than design phase. This paper aims to identify the risks in the design of large-scale construction projects and find out how to mitigate these risks. Through the two case studies in two different types of projects (one Urban Area project and one Building project), twelve risks are identified and risk mitigation are proposed. It is concluded that to mitigate these risks, the Project Manager should pay attention in several issues. Firstly, the Pre-design phase at the beginning of each project can not be omitted. This important phase results in a Design Brief and Project Management Plan which together with the Design Service contract made stronger commitments of parties. Secondly, FIDIC- white book which is usually used as the standard form in Architectural Design practice in Viet Nam nowadays needs to be added or amended some conditions. Lastly, communication also needs to be planned and implemented in a right way.

Claim Management And Analysis: A Case Study Of High Rise Building Project

Normally, the success of construction claim management is the satisfaction of all parties involved in the project. This success must be started from the preparation of each claim such as entitlement, cost and documentation.

Normally, there are two parts of each entitlement for each claim. The first one must set up the legal / law as well as other data base on which normally extracted from the construction contract document. In case there are conflicts, the entitlement must be separated into many branches so that they can be understood easily in a logical express. The second one must describe the variation of the work and express the action of the contractor to each change, especially in quantity and quality.

The cost section is normally based on the available cost in the signed contract. The costs of each work must be considered carefully because they can affect the relationship between each party. In the contract, cost is always limited such as “can not be changed in case the total variation is smaller than 0.2% of contract amount for example”, etc. It is necessary to breakdown and explain the party how the cost is developed in this section.

Documentation seems to be the most important for the success of a construction claim. Generally, all the documents which involve to the claim such as variation order, drawings, contract, specification, etc must be included in this section. Project manager, site manager, engineers, consultant, lawyers and others are always involve supporting for the full success of this documentation.

Base on the above analysis, expert can pick out the weak points and strong points of each company for claim management and they can improve them. The guidelines below would be helpful to companies to improve their claim management :
• The project design and handling must be integrated in claim management
• Make the tight communication inside your company about the claim situations
• Prepare and check carefully the documentation which will support for the claim
• Reviewing all signed contract to check if they are feasible contracts or not
• Have an expert in making decision for the strategic claim

The following normally are the most related potential problems which affect the project entitlement, cost and document in construction claim:
• Scope definition is incomplete and inadequate
• Lack of integrating and understanding of each scope of work
• Not tight contract document
• Not enough condition from the client to support the contractor to execute the work
• Catch up the schedule by accelerating
• Acceleration of contractor without submitting claim to the client
• Delays
• Changes in work because of imperfect contract drawings lead to the disruption

According to Keith Pickavance (2008), “Poor quality of project documentation leads to poor factual evidence and present serious difficulties in identifying the rights of the parties.”

Lack of communication normally leads to the delay of the project and also shows that the project management is bad.

Mr. Giang Thien Duy Nguyen made a case study which objectives were to: (1) study claims in high rise building construction progress; (2) study what analysis method is used for claim; and (3) study the prepare effective claim analysis frame work.

Conclusions

In this study, the framework on claim analysis is designed. This study helped the claimant understand clearly about the claim documentation, the way to prepare a claim, the method to calculate the quantity – cost - profit – overhead, etc. The design documents are the most important thing during construction progress. The fewer the errors, the fewer the missing information, therefore fewer claims. So, the Client just should sign consultant contract with a very experienced Project Management company.

Furthermore, the Contractor’s ability is also very important. Their experience will help the Project Management foresee what would be the errors, and what information should be adjusted instantly. Their experience will both PM and Client to reduce the cost of the project by properly proposing method statement as well as cheaper but good quality material.

Recommendations

• In general, a tight contract such as the signed contract of the above project seems to be unfair with the contractor because of the clause “Contractors have to arrange and execute themselves to complete the project, no claim of weather condition be admitted by the PM, by the Client”, because in fact, contractor can not complete their mission if the weather condition is of disadvantage.

• Claim framework as well as procedure of claim approval should be applied but not in all cases. It’s up to each project character, it’s up to the relationship between the Client, the PM and the Contractor. Personally, the applied solution of the above project (using “technical meeting book”) is highly appreciated. This solution helps all parties speed up the schedule and everything can be solved quickly and fairly.

• Any how, the documentation, the factual support for the claim, etc should be prepared carefully so that every parties can review those easily and also for easy contract liquidation later.

• Careful preparation of all related document will help parties to avoid disputes.

• The level of project manager of the Client, and of the Project management is also very important. Their experience will help all the claims if any, be solved and be approved without disputes.

• Once again, a successful project is a project which brings benefit to all parties involve in the project. Therefore, before the problem starts, all parties must try their best to solve them first.

His thesis abstract is copied and posted.

Abstract

High rise project budget increased, project delayed in construction can be caused by a number of changes in a project such as scope change, extra work, lost productivity, acceleration, contract termination, etc. Many factors by many parties cause those matters. However, in general, cost & schedule control are really complicate. Non-critical activity does not make the affect to the project schedule, does not make the delay, and does not impact to the project amount. On contrary, the delay of a critical activity will make the project delay and impact the project amount also. The delay caused by critical activity will cause the damage to other parties. The reason of delay does not origin from any party but origin from no party (e.g. bad weather conditions). Base on those factors, each party can claim each other to protect the right of them. So, for a high rise building project, what should we do with a claim, when will we claim, how claim can be calculated, etc, that is main content of this case study.

Chuc mung Tet Tan Mao 2011

A Critical Appraisal Of Client Briefing Process In Construction: A Case Study Of Residential Project

Briefing is a communication process combined with record system to publish a set of documents to the design team. It is a process of developing a deep understanding about the client's needs, and it is a continuous interaction and involvement of the client where in this process, the role of professional team is very important. Through good briefing and grasping what the real needs are, client and professional consultants can work more effectively and productively on project and make decisions confidently.

Since Vietnam’s construction industry is attracting investors impressively by the possibility of its profitability, therefore, the development of strategies for international construction demands is very essential to meet the client’s objectives in terms of function, quality, value, time, and cost certainly. In contrary, Vietnam’s big problem is the lacking of skilled person to meet the requirement of construction project which lead to late delivery and over budget. Oftentimes, requirements and demands from clients are not collected adequately to provide solutions and the result is inappropriate.

Ms. Nguyen Chau Dieu An made a case study which objectives were to: (1) review the concepts, definitions of client and client briefing in construction in order to understand the client’s expectation through the client’s briefing process; (2) review the methods for strategic client briefing and other relevant literature on client briefing; (3) present the problems of briefing in a specific project in Vietnam and its solutions; and (4) propose a framework of briefing for next project.

Conclusions

Briefing has long been recognized as an important and essential part in the international construction process. It has a substantial contribution to the success of a project. However, briefing has not been acknowledged in the formal way by client and consultant in Vietnam construction industry. Client and consultants are not aware of the importance of the briefing process and most of them have not been trained with the factors related to the client’s brief.

The literature study shows the essential activities and interactive relationships involving the client organization and the design team as they progress through each phase of the project. It provides valued information to achieve assessments and project objectives.

Some problems in this study revealed that architect is stuck by not admitting what a paramount briefing and clarifies elements which important roles play in a successful project.

To know the client’s objective through the briefing process, the literature has been reviewed on the concepts of the briefing process, the definitions of a client, client’s expectations and the client briefing process within the construction. The investigation tried to understand the expectation of clients through the client’s briefing process.

To apply techniques of briefing process for architect, exploring different methodologies and tools that can be used to establish client’s demand and expectation on construction project such as questionnaire development, need analysis, briefing content, and communication.

To understand the administrative and official process impacting on the briefing process, involvement of client, stockholders, end user, and consultant during the process is very essential. Managing changes of requirement, recording verbal communication, and making decision are factors in briefing administration which has impacts towards the success or failure of project.

Aside form these, this research also provides the methods to the briefing process to get requirements from client such as empowering client, managing project, parties’ involvement, team building and using computer system, communication skill, and record system.

Although there are still some problems in Vietnam construction industry, this study has been achieved by the conclusion that the industry will be focused on a briefing process especially in application methods of briefing, training and proper acknowledgment of a brief to get efficiency and profitability from the project.

Recommendation

Recommendation to improve briefing process in Vietnam construction industry

Perceive role of briefing:
Need to train all parties involved in a project, be aware of how important the briefing is, the role of briefing in a project and contribution of briefing to the success of a project. Through a better briefing, an architect can get what the real client’s wants and client’s expectation. Even the clients will be able to make decisions related to investment with great confidence.

Understand briefing process:
Briefing process is an interactive process between the client and professional teams and briefing happens continuously during a construction process. Briefing process needs many techniques, tools to get requirements and demands from client such as team building, getting information, analyzing, managing changes of requirement, recording, and communicating.

Apply different techniques in construction:
Find out various techniques to apply in a briefing process such as using computer system to improve communication between client and professional team (Science & Engineering Research Council) includes general approach, questionnaire development, data analysis, and system contents.

Her thesis abstract is copied and posted.

Abstract


Client briefing plays a crucial role in success of a construction project. A successful briefing can achieve the target time, cost and quality for a project and make decision on project confidently. Although there are many attempts to approach client’s requirement and needs for a project, it is still not collected adequately to make appropriate solutions in design. In Vietnam, client briefing is not considered an important process and architects usually focus on design without paying any attention what their client really wants.

The objective of this research are to provide a basic knowledge of briefing process which is not consider as a integral process in construction process in Vietnam, present research, analysis of problems of briefing in a project and recommend a briefing framework in order to avoid client’s frequent changes and control information collected systematically.

This Project Report has taken a general view of Briefing Process in theory and analyzing a case study that applied in VN to find out reasons of failure, lack of briefing techniques. The report points out that a framework of briefing need to be established for identification what a client really wand and clarification of client’s demands.

Risk Management in Price Adjustment Contract: A Case Study of a Construction Project in Vietnam

During the past years, Vietnam’s construction projects used lump-sum contract and fixed unit price contract as the universal contracts. The lump-sum contract has advantages of easy acceptance of work and contract payment. If the Contractor implements the drawing and specs correctly as agreed, they would be paid 100% without any dependence on increase or decrease of the original work in the contract, or any price fluctuation in the market. While fixed unit price contract has advantages of enabling all parties to quickly implement contract payment. That is because the unit price is already fixed no matter what the real price in the market. The remained problem is determining the volume of work under actual situation. This part is quite easy to carry out and unlikely to cause argument.

However, both of these two contract forms revealed their big disadvantages in "price-storm" from the end of 2007 through the end of 2008. At that time, prices of fuels and materials such as gas, petroleum, steel, cement, brick, sand, stone, electric cable, wood, glass increased suddenly. Some materials increased the price three times. This is not the first time that contractors encounter problem of price fluctuation. At present, the price is gradually approaching the global price. Therefore, construction projects during this period were affected significantly by the “price-storm” and many contractors face risk of bankruptcy.

To solve this problem, the Prime Minister launched document 164/TTg-CN on January 29, 2008 saying “...deal with construction cost in lump-sum contracts”. After that, some authorized institutions like Ministry of Construction and Department of Construction launched many documents to guide adjusting form’s contractual prices of lump-sum contracts and fixed unit price contracts to contract price based on adjustable price form. The purpose of these documents is to solve the difficulties for Contractors and hasten projects implement.

After this event, contract price based on adjustable price form (volume under actual situation and cost adjusted under conditions in the contract) was preferred to use for many projects. However, most of this type of contract only has a very general content as “adjustment under guidance of the Government in case of price fluctuation” without any specific scope and methods to adjust. The result is, during the process of implementing the contract, there were many arguments on determining the adjusted unit price to pay the Contractor. Until now, many projects cannot execute price adjustment.

Mrs. Hoang Thi Hai Anh made a research in which she wanted to point out the problems in signing and implementation of the contract that has contract price based on adjustable price form of a project in Ho Chi Minh City, Vietnam.

Conclusions

Form and lump-sum or unit price contract is no longer suitable for big construction projects especially those with long construction time due to fluctuation in price of materials in Vietnam as well as in other countries. Using contracts under adjusted cost now is encouraged by the Government. However, during contract signing, all parties need to bring out their own rules clearly and specifically, and have to commit to obey those rules. Through the case study, there are two reasons revealed which lead to troubles when implementing the contract such as:

1. The Contractor intentionally proposed low price to win the tender. However, they misunderstood the meaning of the contract under adjusted cost. They think that although the price bid was low, still, they will be paid according to real price on the market during the time of payment, where actually, price adjustment is just to supplement fluctuated price between the time of signing and paying the contract, not dependent on if the tender price is high or low.

2. The Client was passive and did not foresee difficulties when paying the contract. They also relied too much on Government guidelines. Before planning the contract, they did not put forth conditions in relation with adjustment price such as adjusted scope, formulas, and bases to determine adjusted cost.

Recommendations

In the long term, the contractors need to know how to protect themselves and have to consider carefully when receiving the tender to implement the contract accurately. They should also be fair to accept loss. All parties need to learn experiences from developed countries to apply international rules in construction contracts. At the same time, they should also be more active and fearless to bring out conditions for cost adjustment with appropriate characteristics, scale and schedule for each project.

Her thesis abstract is copied and posted.

Abstract

Risk management in construction contract is always important items helping reduce the arising damage or disputes and is a solid basis to force the parties to fulfill their responsibilities in the contract.

In the contract, payment issues are always the core issues and often controversial if it's not really clear. Contract price adjustment due to price fluctuation is quite outstanding issue in Vietnam from 2008 to now; it has made the authorized agencies issue up to ten guiding documents within only one year to settle the problems during contract performance. With my own experiences, in this report I would like to talk about the popular errors while preparing the terms of payment of contract, especially the contracts in which form of contract price is based on adjustable price of the State-funded projects in Vietnam.

I do hope that my ideas shared above will help the Contractors and the Clients of the similar projects minimize the risks in the construction contract.

Environmental Impacts Assessment of Nam Ly Bridge – Ho Chi Minh City, Viet Nam

Given Vietnam’s newfound prominence in Asia as the “The New Land of Opportunity”, people search for every opportunity to develop the economy and to satisfy the increasing demands especially in construction of infrastructure. When people gets profit in exchange of other use of land, water and other natural resources, there will be an equal impact in the environmental condition both natural and social.

The question is how to reduce these changes, while still aiming for economic growth.

Ms. Trinh Thi Thu Ha made a case study which main objectives were to: (1) study environmental impacts assessment methods; (2) compare of the Viet Nam’s policies and ADB’s policies in EIA; and (3) study environmental impacts assessment of construction project in Viet Nam

Conclusion

EIA is one of the policy tools that are used to evaluate project proposals. It is also a relatively recent development when compared to use of economic appraisal methods in Viet Nam.

Most of the construction projects in Vietnam which will invest funds from many different capitals are required to comply with laws and regulations to implement the project, and EIA must be researched in Preparation stage and presented in the Appraisal stage.

The contents of the EIA is usually consists of 9 parts such as: Introduction; Description of the Project; Description of the Environment; Alternatives; Anticipated Environmental Impacts and Mitigation Measures; Economic Assessment; Environmental Management Plan; Public Involvement and Disclosure; and Conclusions.
The EMP explains how the measures will be managed, who will implement them, and when and where they will be implemented.

During project implementation, the clients must implement properly the approved content of the EIA to ensure that the negative impacts have been mitigated so that the environment and the community have been protected for the sustainable development objectives.

There are differences between Vietnamese policies and the sponsors’ policies for EIA in Vietnam. With ODA projects, World Bank and Asian Development Bank have also established regulations and guidelines to ensure that EIA applies to projects funded. Possible policies and activities required them in different way, but the process is relatively the same for the building and approving the EIA. In Vietnam, in addition to the applicable policies of the sponsors for the project, the EIA also have to establish compliance with current policies of the government of Vietnam.
However, if there are differences between the policies of Vietnam and the donor's policies, they must apply the policies of the donors, which is required in the loan terms.

Recommendations:

1. Adjustment or harmonization of policies and laws in the implementation of EIA, without gaps to the policies of the donors (ADB, World Bank, etc.).

2. The Government should establish training programs for students of the EIA and raise awareness and capacity about the protection and management for environmental leaders, department managers and community;

3. Establish public databases and share the parameters of environmental quality for other projects in Vietnam;

4. There should be public participation during the implementation of EIA. The project must be publicly reviewed and evaluated by the public.

5. Full finance for the EIA study.

Her thesis abstract is copied and posted.

Abstract

The demands of people increase rapidly while the resources are limited. To satisfy the increasing demands, people search for every opportunity to develop the economy. Because of that, investing for construction of infrastructure is a need to develop economic regions, is a progress in the development of the society.

When human bring in financial to change the patterns of use of land, water and other natural resources, they will receive back profit from economy development, but will also change the other elements of the environment like natural condition and social.
Reducing the burden of environmental impacts is necessary if development is to become sustainable. Environment Impact Assessment (EIA) has become of ever increasing importance as a tool for development decision-making.

Environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority.
In practice, EIA is applied primarily to prevent or minimize the adverse effects of major development proposals.

Planning for Improving Efficiency of Housing Project’s Development Process

The increase in housing demand and the high cost of land in big cities in Vietnam such as Hanoi and Ho Chi Minh create a huge market for high-rise housing projects. However, development of these housing projects face many obstacles such as low income, high inflation, high bank interest rate, high land price, increasing construction materials and labor cost. In addition, the long project development period due to lack of transparency in local regulations and authority submission procedure also makes the investment projects less efficient. It requires the project managers / project planners having a good understanding on Vietnam law and regulations, and good planning skills to improve the development process of housing projects.

According to the 2009 Governmental Investment Project Assessment Report by Ho Chi Minh City People’s Committee, there are 1,177 projects completed until the end of the year 2009, which are currently equal to 20% of 5,886 operational projects in Ho Chi Minh City. However, 65% of the projects were delayed and only 20 projects achieved the 30% target progress. The obvious reasons for these are:
1. Weak financial capacity of the project owners.
2. Lack of experienced project managers and project management human resources.
3. Long period for authority submission and lack of transparency of Vietnam law and regulations.
4. Land clearance and resettlement

Mr. Bui Quang Huy made a study to investigate the basic requirements by Vietnam law and regulations, the common practice of housing development projects in Vietnam complying with Vietnam law and regulations; and to find out a more efficient process for developing a housing project in Vietnam.

Conclusions:

- The housing development industry has its own characteristics. Every single activity in the project development process has to comply with local law and regulations. Hence, the good understanding about local law and regulations is very useful for developers in their business. The success of the case project in this study also greatly depends on the understanding about local law and regulations beside the project management knowledge.

- The old practice of housing project development process complying with Vietnam law and regulation is not efficient, it takes 60 – 78 months to finish the project from the feasibility study and planning phase to handing over and obtaining the ownerships for the house buyers. The longer the project development period is, the more costly the investment in housing projects. Besides, Vietnam population and housing demand are developing very fast, the supply could not satisfy the demand. Hence, the housing price could not be reduced and a major part of people with low and medium income cannot afford to buy houses. It causes a lot of social issues in Vietnam.

- With the improved housing development process proposed, it takes 45 – 57 months to finish the project. If we only consider the Project Launching Preparation phase, 15 – 21months would be saved, then it takes 12 -15 months in the improved process instead of 27 - 36 months of the old process. This is a valuable improvement. The investment in housing project becomes more efficient when the developers can recycle their investment faster and cut down financial cost in housing projects. It helps to increase the supply of housing products and reduce house price.

- Besides the understanding about Vietnam market, the knowledge from lean production and last planner theory also offers a basis for evaluating the whole development process of housing projects and identify waste times in the process. The project manager/ planner should examine and schedule the project with all constituent and continuous activities as a whole. By implementing that, it will make the timing of whole project period more efficient, rather than only taking care of shortening the period of its individual activities. The application of lean theory is absolutely suitable for the current situation of Vietnam housing market. It helps to shorten the project development period and make the process more efficient by ignoring waste time. There are no additional costs to apply these theories.

Recommendations:

- In general, when the understanding about local law and regulations is very important in housing project development, the developers should continuously update and study local law and regulations, especially, the new issuances.

- A good relationship with government also helps developers in their submission works. This relationship could be created by contributing to society and maintaining the good image in the local market. The developers should properly deliver what they committed to the government and buyers.

- The developers are recommended to maintain their efforts in evaluating the working and project development process to find any problems for improvement, not only waste of time, but also any other wastes such as cost, manpower, etc.

- Lastly, the good schedule should never achieve the good actual result if it is not well controlled. The control system also needs to be established to monitor the execution of the project to ensure it is carried out in accordance with the plan.

His thesis abstract is copied and posted.

Abstract

Vietnam is a developing country, it means that the country need a lot of knowledge for development, especially in the field of construction project management.
Some “old men” think that all the construction projects are similar, about the process, technology and method, especially housing development projects. They are actually not similar, there are many projects carried out in such a way of wasting time and cost; and achieving bad quality.

In this study, a more efficient process for housing development project is introduced. Hopefully, it could help the project managers / planners schedule and execute their projects strictly complying with the local law and regulations, in shorter cycle without any additional costs for advanced technology and materials.

This study also affirms that there is always inefficiency in project development process of every construction projects. The project managers should always spend enough efforts to identify wastes and improve them. This is helping the projects, the company and the country, in a wider angle of view.

Project Management Practice in Small and Medium Vietnamese Contractor: A Case Study of Nhat Dang Company

In the last ten years, Viet Nam economy is one of the fastest growing economies in the world. Along with this economic development is the boosts in construction industry which mostly involve are small and medium construction enterprise. These SMEs are comprised of small number of employees and have limited total assets. According to Vietnam’s Decree 56/2009/NĐ-CP, SMEs are divided into three levels based on the total assets and number of employees such as:
- Micro enterprises: under 10 employees.
- Small enterprises: total assets are under 20 billion VND and number of employees is from 10 to 200 peoples.
- Medium enterprises: total assets are from 20 to 100 billion VND and number of employees is from 200 to 300 peoples.

With limited financial and human resources, SME contractors are unable to win big projects or operate many projects at the same time. SMEs also easily encounter cash shortage problem. According to Ling et al. (2009), one of the weaknesses of Vietnamese contractors is lack of project management ability. Almost all performed projects in Vietnam encountered delay, low quality or cost overrun due to low project management capability of the owners and contactors. Most SMEs are founded by an engineer or architect, who had worked for a bigger company and who is well-experienced in construction but not in management. With limited financial capacity, SMEs cannot hire good project manager resulting to poor project management capability.

The requirement of strong project management ability is becoming more essential for Vietnamese SME contractors since more projects have participation of foreign owners, consultants or main contractors, where requirement of schedule and quality performance are very strict. But how could SME contractors do it effectively with limited resources is still a question.

Mr. Vo Dinh Nguyen made a project study which objectives were to: (1) investigate project management functions of a small construction company; (2) identify strengths and weaknesses of project management of the company; and (3) propose recommendations for improvement of project management functions in small construction company.

Conclusion

By reviewing related theory of project management and analyzing the operation practice of Nhat Dang Company, the strengths and weaknesses of the company in certain areas of project management are summarized in table below.



Project management is not just limited in these aspects and to have a more general view of company management capability; other areas of project management knowledge should also be studied. These include:
- Project scope management;
- Project human resource management;
- Project communications management; and
- Project integration management.

Base on identified strengths and weaknesses, the case study proposed solutions to improve project management competency of the company in studied areas. Some solutions that require more resources should be planned to apply when the management capability reach a higher level. They may be useful for some Vietnamese SME contractors which are in the same situation but may be unsuitable for others. Some essential solutions that the company needs to achieve to ensure their operations are:
- Full utilization of earned value technique for better schedule and cost control.
- Develop an advance resource requirement plan for each project.
- Establish the project spending plan and funding requirement and follow the plan in operation.
- Carry out the project risk management process.

- Enhance the role of the project team.

Another weakness that the company management has is the lack of measuring, recording and analyzing the results of management processes for improvement. A useful model for continuous improvement is the Plan – Do - Check – Act cycle as show in figure below.



Plan : Define the goal and processes to achieve it

Do : Implement processes

Check : Measure the process and results against defined values to find out variations.

Act : Analyze variations and determine necessary actions to improve future operations.

This model is helpful and can be applied in any process of management, any organization for improving management competence.

His abstract is copied and posted.

Abstract

Project management plays a very important role in the management of construction enterprises. Although being the major element in Vietnam construction industry, most of Vietnamese SME contractors are still weak in project management capability. Improving project management capabilities are essential needs for survival and development of SME contractors.

This report reviews theory of project management in areas of time, cost, quality, procurement and risk management. Necessary processes and knowledge for those project management functions are identified and analyzed.

By analyzing past performance and practice of project management in Nhat Dang construction company, a typical SME contractor in Ho Chi Minh City, the report point out strengths and weaknesses in project management of the company. Necessary solutions for improvements of project management functions are proposed. These solutions can be applied to similar small construction companies either.