INTERIM PAYMENT & VARIATION ORDER MANAGEMENT FOR  HIGH-RISE BUILDING PROJECT

A CASE STUDY OF INDOCHINA PLAZA PROJECT.

by

Trinh Vuong Duy

Abstract

In recent years, construction industry in Viet Nam is booming. Both Government and private sectors develop many projects in infrastructure and new cities. Especially, high rise buildings become attractive to many developers because of high profit and saving land asset.

In general, to deliver a project, one of the most important parts of process is contract management. A good contract must cover most of the significant cases that potentially happen during process of construction to prevent from disputation. Nevertheless, in the real life, people who control contract management have not got enough experiences to foresee matters may arise in the future. A regular error of contract is the lack of specifications. That will support contractors to apply low quality materials in to project. Above reasons are only examples of insufficient contracts, besides, there are many reasons that cause the contract fail.

The report analyzes to find problems in contract of Project Indochina Plaza Ha Noi, but focus on payment & variation issues. Then report will recommend solutions for specific cases. The report can help the owner to improve contract management of the project, or apply it for other projects.

Executive summary  

Rationale of research

This research has been conducted to indentify the problems of payment and variation in the construction projects and the problems with owner and contractor regarding payment and variation.

Objectives of study

To identify frequent problems, causes in payment and variation in construction projects.  Suggest frame work for payment & variation for improving situation of practice in construction.

Methodology

The exploratory research method is used to study frame work of payment & variation in construction project, application of frame into Indochaina project to identify problems to adjust in contract and to propose suitable solution for future projects.

Findings and conclusion

Contract management being important step in the construction as it control cost of project and rules and regulation regarding cost.

The big issue in construction works is delay of payment which actually is supposed to pay each month to cover expenses and due to this contractor always claim higher then what he did, causes dispute.

The representative of owner intentionally drives design at initial stage to cause variation order at the end to benefit him. Project cost overrun mainly comes from this issue.

Recommendations

The recommendations are divided into groups according to area specific

1.      Payment frame work  

·         What amounts will be paid under payment terms.

·         When a payment will be assessed in contract term.

·         How percentage work done will be defined.

·         What information need to be defined between two parties.

·         Ownership of material should be proven to transferring to owner, to pay for offsite material.

·         Owner has right to access to inspect or collect offsite material.

·         A full refund for the value of materials and components will belong to owner before they move to contractor’s factory.

·         A full refund for the value of any work off site on these materials and components will belong to owner after ownership of those are transferred to contractor.

·         The contractor has to buy insurance for materials or goods offsite that used for the owner’s project.

·         The amount supposed to be withhold and the basic for withholding payment.

·         The notice shall be informed to the contractor before the final date for payment.

·      The contractor can suspend work with 7 days notice with reason for suspension.

·      The contractor only can suspend the work that is not being paid, but not all the work.

·      The contractor shall provided time extension for any delay caused by performance pending, or compensated a reasonable cost by the suspension.

2.      Variation order frame work

To mitigate variations arise in construction project & dispute between parties these issues need to be controled in Design Stage & Construction Stage.

·         Design stage

The owner is major cause because in variation order sometimes due to lake of experience, for aesthetic appearance and to use cheaper material, so there is need of accurate estimation for financial plan & cash flow will required to reduce issue and review of contract document especially drawings should be clear from ambiguity so that contractor should not take advantage from it.

·         Construction stage

finalize quantity and confirm that is variation or not. So site investigation of variation is

In some cases, the consultant can not assess quantity based on drawing, or doubt on

Need of variation order assessment procedure to be cleared and agreed by parties at initial stage of project to reduce problems, variation orders that involve change in original price will be approved in writing by owner before execution of work.

Owner should hire project management consultant to negotiate rates in variation orders professional team can help in negotiating to minimize negative impacts of variation

 reducing the cost.

the   variation submitted by contractor. He can physical check with the contractor to

The main dispute that occurs is different assessment of work; contractor should explain the procedure of work, expenses of work, material and labor etc.

very important, it would help consultant to assess accurately the variation order.

FEASIBILITY STUDY REPORT FOR URBAN

INFRASTRUCTURE PROJECT

USING LOAN FROM OFFICIAL DEVELOPMENT ASSISSTANCE (ODA).

A CASE STUDY OF LAOCAI CITY DEVELOPMENT PROJECT

FUNDED BY WORLD BANK

by

Nguyen Viet Cuong

Abstract

The development of socio-economic infrastructure plays a very important role in the country developing strategy, it is a major factor to help developing country reducing the poverty. The fund for the infrastructure development can be from many sources: private sector, counterpart, mixed credit and ODA loan…In order to meet the huge demand on infrastructure project development, the preparations of project investment such as project feasibility study is specially paid attention by Project Management Units.

Furthermore, with the project using the loan from international Donors, the feasibility study is not limited in project financial aspects like loss or profit, it also studies the other social aspect such as safeguard policies, economic benefits, benefit to the residents within project… The project feasibility study report therefore also be considered as approved factor for the Donor to give the loan.

The purpose of this study is to identify the process to prepare a feasibility study report for the urban infrastructure development project using the loan from World Bank. this process of preparing feasibility study report need to be followed the government instruction as well as complying with the World Bank regulation.   

Executive summary  

Rationale of research

This research has been conducted to indentify the course of action to prepare feasibility study report for the urban infrastructure development project using loan from World Bank.

Objectives of study

To prepare feasibility study report following guidelines of five funding agencies (Asian development Bank, French Agency, World Bank, Japan Bank for International Cooperation, German Bank for Reconstruction) to identify risk of unrealistic FS report preparation and to analyze problem during preparation of FS report.

Methodology

In this research methods are followed in accordance with the five funding agencies i-e step by step completion of FS report from collection of data to provincial people approval and World Bank non-objection letter.

Findings and conclusion

Apart from the project financial advantages, the significant advantage from project implementation is that the Project Owner and project shareholders particularly the Consultants are approached to the international standards in project preparation and implementation. Report helps in making decision of either invest or not to invest for construction.

The project shareholders, at any time during project implementation, must take note on the compliance of Donor’s guidelines, as World Bank specialists supervises strictly the project implementation to ensure the effectiveness of fund usage and development criteria are complied.

The project FS report has to be prepared in compliance with both Lender’s guideline and Governmental rule and regulation. This appears to be the biggest challenge for the Project Owner and FS Consultant, that why the selection of FS Consultant need to be always considered carefully with the Non-objection from the Donors.

The other issues such as the sustainable development and Community Awareness in sanitation and environment, institution and capacity building also need to be considered carefully and differently from the normal construction investment project

During the FS preparation stage, the difficulties will be occurred due the lack of experience in project management from project owner to this new concept of total project development, thus, the improvement of project communication and information sharing must be paid attention to avoid the unnecessary delay.

Recommendations

The FS report is more difficult and complicated when compared with commercial project report. The main procedure and guidelines are defined by donor agency and lenders criteria, so I can only give my recommendations to prepare reliable FS report using World Bank loan in particular.

·         Project management unit should be set up at early stage; matrix structure under control of provincial leader.

·         The more accurate data, the more reliable report will be so need of proper survey team and procedure.

·         As FS report preparation will be in direct supervision of World Bank so consultant need to have experience of working with WB and have experience in development of similar projects.

·          As FS preparation team is different from presentation team to World Bank expert, so there is need of proper communication system among stakeholders it can be done by telecom conference with minute notes. 

INVESTMENT COST CHANGES FOR AGRICULTURAL PROCESSING PLANT

by

Nguyen Nam Cuong

Abstract

Vietnam is a developing country with about 70% of the population works in the fields related to agriculture and rural. Through a process of development since the Doi Moi to now, Vietnam has become one of the world’s leading exporters of rice and many agricultural commodities such as coffee bean, cashew nut, black pepper… However, almost of agricultural commodities are exported in raw material types or semi products. On other hand, the procurement and exporting system has not been paying attention enough to develop correspondingly.

As the result, the value of exported agricultural products of Vietnam is normally underestimated in the international markets because of low quality. The low margin of agriculture products, in turn, contributes to increase income gap between rural and urban area. Therefore, one of the key objectives of the Vietnamese Government is to develop systems for storage and processing of agricultural products, improving production and processing capacities, autonomy in purchasing and export of agricultural commodities with quality, contributing to improving Vietnam’s position on world agricultural markets.

Executive summary  

Rationale of research

This research has been conducted to find out the way for capital estimates and analysis of estimates

Through frame work, the focus of evaluation is on financial problems analyze and change in actual cash flows and why these changes occur.

Objectives of study

To propose a solution through analysis, doing general feasibility study of project and analysis, evaluation of project cost changes.

Methodology

The qualitative approach has been used to resolve issues during construction to achieve performance.

The process includes data collection, processing and data analysis. Considering mutual relationship inside and outside using standards, normative in accordance and propose solution.

Findings and conclusion

Investment project being important document for owner to assess investment decision, owner can see big picture of project.

However the important factor in investment project is construction cost, which always seen with bias. The feasibility study is always dependant on owner and consultant and project management methods so as to reduce risk in cost fluctuation. And owner can control cash flows.

 List of factors affecting investment project

• Expertise and experience in project management of the Owner.
• The financial capability of the Owner.
• The professional ability and knowledge related to the field of investment consultancy and project design.
• Ability to coordinate the implementation of tasks between the Owner and contractors design and consulting in the preparation period of investment.
• Ability to coordinate between the Owners and construction contractors in the construction process.
• The professionalism of the construction contractor.
• Mechanisms and incentives to support investment in the locality.

The agricultural processing plant from initial stage to implementation is long process with constant change; thus success of project depends upon owner control on such movements and ensuring quality and time of investment.

During the project, the change in cost is often by different reasons, divided into four stages.

1.      The cost of construction in terms of rates of investment costs for Feasibility Study.

2.      The cost determined by the total estimated cost.

3.      The value determined by the construction contractor's proposal is approved.

4.      The actual value of the settlement package.

It is almost impossible to determine the final cost of each package at construction stage except package having fix-price, and change in cost can only be observed in above three steps.

For the changes in fourth stage that can determine final value,it is necessary to consider risk in construction process

·         Project area actually decreased compared to the record.

·         The detail design is inappropriate to the construction.

·         Price volatility of construction materials.

·         Difficult to find workers and construction equipment.

·         The impact of weather on the construction process.

·         Fluctuation of currency exchange rates.

The owner can have actively appropriate countermeasures, to minimize the negative impacts, including the choice of contractual form, in accordance, and contract with the consultant of supervisor, design consultants and contractors to strictly control the changes arising in the construction process. These are also the mission of Project Management.

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

by

NGUYEN TIEN THUC

Abstract

The report raises important issues in quality management systems (QMS), it emphasizes the important factors for any organization that would grow and survive in the free trade market.

In which this study refers to the theory and the standard system, presents the concept of quality in construction, models of quality management systems in the organization, the requirements necessary for system quality management of the Owner in construction and its benefits. The research presented briefly the factors most affecting the quality of the project from the public report and the key points to control the quality of construction from design phase to construction phase. The report introduced a model of QMS for the construction company for the purpose based on the available model of quality control and edit the successful application of model quality management of the company to have is a project that really matter.

Report the results of a study, carried out to examine the basic factors affecting the quality of a construction project. It also aims to identify the factors showed a strong correlation to performance quality. The ultimate goal is to provide clients, project management, monitoring, consulting and contractor information can help them become more effective with their limited resources and achieve the ultimate goal better quality. 

Executive summary

Rationale of research

This research has been conducted to study quality issues in construction projects of Vietnam, in recent years quality of construction works marked as question in public as well as private projects.

Objectives of study

To propose recommendation for improvement in quality of construction by studying and analyzing  quality management systems and practices in construction projects, quality management system in development and implementation in hospital construction project.

Methodology

In this research, case study approach has been used to focus on studying and analyzing different sources of data to develop a quality management model for owner

Findings and conclusion

By observing case of hospital construction project based on  available data and observations it is very much clear that the responsibilities at each level are clearly defined. The overall management system of the project is clearly defined and managed, but still there are some problems in some areas which needed to examine.

The project staff needs to train and encouragement for quality of work, leadership and stability within organization.

Morale improvement of staff, customer focused and quality checks from start of conceptual design.

Recommendations

Need of a clear mechanism from project manager to improve quality in construction and to reduce risk of early quality.

·         Control measures must be designed from the product when completed.

·         To determine the quality control tasks from the beginning.

·         To select the contractor fully qualified and experienced.

·         Regular training and quality control training for staff.

Need of developing evaluation system from owner side, which will collect and store updated data the contractors completed projects. The evaluation system clearly defines the method of assessment.

·         Develop a quality benchmarking assessment skills of construction contractors, materials and equipment during construction.

·         Establishing a benchmark for assessing the safety and sustainability of the project.

·         Establishing a benchmark for assessing the response of work with the regulations on construction rules and technical standards may be applied to build the project.

·         Establishing a benchmark assessment of the art construction.

·         As a basis for evaluating and scoring capabilities businesses such as contractors involved in tendering for other projects.

·          As a basis, the documentation for quality control of a new work.

·          Making facilities and materials for the workshop on improving quality control in order to draw experiences for subsequent work.

THƯ MỜI THAM DỰ

HỘI THẢO CHUYÊN ĐỀ

NHỮNG THAY ĐỔI VỀ CƠ SỞ HẠ TẦNG VÀ XÃ HỘI TẠI NHẬT BẢN

Viện Công nghệ Châu Á tại Việt Nam (AITVN) xin gửi lời chào trân trọng.

Đa số các nhà quản lý dự án và điều phối các dự án phát triển cơ sở hạ tầng của Việt Nam đều có cơ sở tốt về kỹ thuật như kỹ thuật xây dựng, cơ khí, điện, v.v… Để có thể là nhà quản lý chuyên nghiệp điều hành và tham gia các dự án lớn họ cần được trang bị đầy đủ kiến thức và các kỹ năng cần thiết cho quản lý dự án như quản lý về quy mô, hợp đồng, thu mua, tài chính và thời gian hoàn thành dự án,... Do đó, nâng cao năng lực về quản lý dự án xây dựng là một trong những nhiệm vụ trọng tâm phát triển nhân lực quản lý cao cấp của các tập đoàn xây dựng lớn, các công ty đầu tư xây dựng cũng như các nhà thầu.

Để đáp ứng nhu cầu ngày càng cao đội ngũ cán bộ chất lượng cao về lĩnh vực kỹ thuật và quản lý xây dựng dân dụng của Việt Nam, Viện Công nghệ Châu Á đã triển khai rất thành công khóa đầu tiên chương trình đào tạo thạc sỹ về “Quản Lý Dự Án Xây Dựng – Kỹ thuật Xây dựng và quản lý cơ sở hạ tầng” tại cần thơ năm 2010-2011 với các chuyên gia, chuyên viên kỹ sư đầu ngành làm việc trong lĩnh vực xây dựng, cầu đường, ban quản lý dự án vùng đồng bằng sông Cửu Long ,… Trong khuôn khổ Chương trình, AITVN xin trân trọng kính mời Quý vị đại diện tham dự Hội thảo “NHỮNG THAY ĐỔI VỀ CƠ SỞ HẠ TẦNG VÀ XÃ HỘI TẠI NHẬT BẢN”, được tổ chức lúc 9h00, Thứ năm, ngày 25 tháng 05 năm 2012 tại AITVN Cần Thơ.

Địa chỉ Tòa nhà Trung tâm Học liệu, Khu II- Đại học Cần Thơ, đường 3-2 TP Cần Thơ.  

AITVN trân trọng kính mời Quý cơ quan, đại diện phụ trách Nhân sự, cán bộ và đào tạo, các chuyên viên kỹ thuật, các nhà quản lý các dự án đầu tư/xây dựng lớn, các cá nhân quan tâm đến Hội thảo và các chương trình đào tạo của AIT đến tham gia Hội thảo.

Xin liên hệ địa chỉ sau để đăng ký tham gia:

Chị Mỹ Trang, Điện thoại:0710-3815523, email: trang@aitcv.ac.vn

Trân trọng,

 -------------------------------------------------------------------------------------------------------

Nội dung chương trình:

v      8:45 – 9:00	Đăng ký tham dự
v      9:00 – 9:15	Khai mạc Giới thiệu về AIT-AITVN
v      9:15 – 9:45	Những thay đổi về cơ sở hạ tầng và xã hội tại Nhật Bản
v      9:45 – 10:05	Giới thiệu về Chương trình Thạc sĩ Chuyên nghiệp của AIT về Quản lý Dự án xây dựng ·         Giới thiệu Chương trình đào tạo – các đặc điểm chính ·         Giới thiệu về yêu cầu tuyển sinh ·         Học phí và các chi phí liên quan
v      10:05 – 10:25	Giới thiệu chương trình đào tạo Thạc sĩ hai giai đoạn của AIT về “Xây Dựng, Kỹ Thuật và Quản lý Cơ Sở Hạ Tầng”
v      10:25 - 11:00	Hỏi – đáp Trao đổi kinh nghiệm với cựu sinh viên khóa MPM1

 

Trình bày:       Tiến sĩ Takayuki Minato,

                        Giảng viên trường Đại Học Tokyo

                        Tiến sĩ Hadikusumo

                        Trưởng khoa, Khoa Quản lý Xây dựng, Kỹ thuật và Cơ sở Hạ tầng,

                        Trường Kỹ thuật và Công nghệ - Viện Công nghệ Châu Á (AIT)

QUALITY MANAGEMENT FOR BUILDING CONSTRUCTION PROJECTS

A CASE STUDY OF RESIDENTIAL AREA FOR CANTHO UNIVERSITY STUDENTS

by

Le Thanh Phieu

Abstract

The thesis shows the key issues in Quality Management System (QMS) considered as the essential factor for any organization that wants to develop and survive in the free trade market.

This thesis reviews the theory about quality management and its importance in construction project. In fact, this theory shows the important role, requirements and benefits of applying o construction quality management. The thesis briefs the factors that most effect to project quality and the key points to control project quality from the design to construction stage. The thesis has introduced a QMS to the construction contractor and the investors that they really need to be familiar with at present.

The other part of this thesis is the case study on Residential Area for CanTho University Students where the quality management system is applied. During this project, the system is well applied leading to great achievements despite some unexpected problems. Through this research, there are several good lessons that the parties related to the project should realize and study. They should have owned a quality management system, well-trained staff and disciplined top executive managers looking for high quality.

 Executive summary  

Rationale of research

This research has been conducted to study quality management systems and its application in government projects in Vietnam. To propose suitable solution to quality management system  by studying case study of Can Tho University student residential area.

Objectives of study

To propose recommendation by studying quality management system and practices in building construction projects, analyzing quality management practices in Can Tho University students residential project.

Methodology

In order to conduct research there is immense need of a frame work, which will describe how research will be conducted.
In this research case study approach has been used to focus on studying and analyzing different sources of data; i-e project documents, newspapers, local construction law and standards etc.

The research design is based on single-case and single unit of analysis, exploratory research is used in reviewing the literature to develop a frame work for building construction projects in Vietnam.

Findings and conclusion

Due different understanding of QMS in parties of the contract, the QMS in construction industry is still not established properly .Contractors tend to be more focused towards profit.so, it can be difficult to implement QMS. The common understanding for QMS in industry is considered as high cost of devising that strategy at initial level; there might be counterbalances in weakening of quality of work.

It can be more difficult to device on site due to opposition from the parties involved, and can also device in organization, but team members within organization can resist changing. They can be educated for changing norms and systems of organization

When considering the QMS of Can Tho University students residential area, the theory give the impression to be fit in the owner’s desires for QMS.

The project is prototypical for future projects of CTU for achieving extraordinary value projects. QMS delivers a foundation for getting quality construction through procedures and practices to comply customer needs and business performance in industry.

Recommendations

o   Availability of funds to maintain cash flow.

o   Most updated QMS to be provided to contractor & contractor should be informed for any change in QMS immediately.

o   QMS to be applied according to regulations and requirements of standard construction.

o   Internal staff must be trained for maintaining high quality construction, through quality audits.

invitation

TECHNICAL SEMINAR OF AIT

IN INFRASTRUCTURE ENGINEERING AND DEVELOPMENT

The Asian Institute of Technology (AIT), as the Asia-Pacific Region’s first postgraduate engineering school, has striven to promote technological change and sustainable development through education, research and outreach. Over the years, AIT has produced a number of engineering and technology alumni for key organizations/sectors in Vietnam. Advanced education and research in engineering and technology continue to be among the Institute’s greatest strengths.

School of Engineering and Technology (SET) is one of the three schools at AIT. SET’s mission is to develop future leaders, highly qualified engineers and technologists who play leading roles in promoting the region’s industry competitiveness for its integration into global economy. Besides offering state-of-the-art multidisciplinary programs, SET annually conducts expert seminars to promote its cutting-edge applicable researches to interested experts/professionals.

We would like to inform you that SET is organizing a half-day technical seminar in “Infrastructure Engineering and Development” in Hanoi and Ho Chi Minh City. 

The topics to be discussed would be as follows:   

• Analysis of GW recovery and consolidation and their effect on substructures of Bangkok
• Highway Technologies

Date & time:    8:30-11:00; 9 May 2012 in Hanoi

8:30-11:00, 10 May 2012 in HCMC

Location:          In Hanoi: Sofitel Plaza Hanoi, 1 Thanh Nien Street, Ba Dinh Dist., Hanoi

                        In HCMC: Duxton Hotel Saigon, 63 Nguyen Hue Boulevard, Dist. 1, Ho Chi Minh City

Language:        English with interpretation

We are pleased to invite you or representatives from your institution, company to this technical seminar. You are kindly requested to confirm your attendance not later than 07 May 2012 to:

• Hanoi: Ms. Kieu Phuong Ly at (04) 37669493 (ext: 131); email: kieuly@aitcv.ac.vn, Fax: (04) 37669492.
• Ho Chi Minh city: Ms. Nguyen Le Tuong at (08) 39107423 (ext:117); email: ngletuong@aitcv.ac.vn. Fax: (08) 39107422.

We look forward to meeting you all at the seminar and thank you for your cooperation.

------------------------------------------------------------------------------------------------------------------

 

08:30 - 08:45	Registration
08:45 - 09:00	Welcome speech AIT/SET Introduction
09:00 - 09:45	Presentation: Analysis of GW recovery and consolidation and their effect on substructures of Bangkok Dr.Pham Huy Giao- Geotechnical and Earth Resources Engineering Field, School of Engineering and Technology, Asian Institute of  Technology (AIT), Engineering Geology & Applied Geophysics, FEM Groundwater modelling,  Land subsidence analysis.
09:45 - 10:00	Discussion
10:00 - 10:45	Presentation: Highway Technologies Dr. Kunnawee Kanitpong- Transportation Engineering Field, School of Engineering and Technology, Asian Institute of  Technology (AIT), Highway Materials, Pavement Design and Analysis, Asphalt Mixture Design, Asphalt Rheology, Pavement Performance Testing, Pavement Management
10:45 – 11:00	Discussion
11:00 – 11:30	Coffee break