CONTRACTOR’S PRACTICE FOR MANAGING SUBCONTRACTOR: A CASE STUDY OF THE EVER RICH II PROJECT IN HO CHI MINH CITY

By

Vo Khac Kien

Abstract

             

In the recent years, in most construction projects, particularly building projects prefer to hire subcontractors. Consequently main contractor need to develop management system standard in order to manage subcontractor rather than they will undertake construction work by themselves. As a result, main contractor concentrate on management strategies in term of tender process, type of contract, schedule control, quality control, progress and payment, and subcontractor safety.

In order to understand how main contractor’s strategies manage their subcontractors, this report was conducted through contractor documentation. The result shows subcontractor control strategy in a local contractor. Major improvements are needed for the subcontractor control strategy in local contractor in order to improve the subcontractor management performance. However, there are some major points, which need to be improved in order to strengthen and continually improve the strategy performance.

Executive summary

Rationale of research

This research has been conducted to identify Main Contractor’s strategy for managing  sub-contractors within a project.

Objectives of study

To study management practices of contractors in contractor’s for managing subcontractor in The Ever Rich II Project, Dao Tri Street, District 7, HCMC. Find out strengths & weakness to propose recommendations.

Methodology  

The exploratory research method is used to study management practices in Vietnam.

Findings and conclusion

In recent years, main contractor have been trending to use subcontractor in specific area accordingly like as specialist subcontractor, skilled-labor subcontractor and expertise provided by subcontractor. Especially building project, it is common for 80 percent to 90 percent of the work to be performed by subcontractors.

However, there are many subcontractors who do not have not enough expertise or skilled resources to undertake work satisfactorily and, as a result, they are not able to bring good services to clients or not reach their requirements. In order to resolve these problems that main contractor needs to develop a strategy that allows contractor to manage subcontractor effectively and efficiently.

According to the rationale stated above, this study to conduct an investigation of main contractor’s strategy for managing the subcontractor on construction project in terms of tender, unit price contract, schedule control, quality control, progress and payment, and safety.

Criteria Contractor’s Strategy

Tender           

o   Experience in subcontractor tendering.

o   Knowledge of material,resourses.

o   focus on long-term relationship subcontractor.

o   Time, quality of performance, and price competitive are the project success measurement.

o   Safety performance plays important role in this project.

Contract        

o   Apply unit price contract in order to save heavy cost of preparing many bills of quantity by the subcontractor.

o   Fair basis for competition between subcontractors

o   Changes in contract documents can be made easily by the contractor compare to lump sum contract.

o   Lower risk for subcontractor compare to lump sum contract.

Scheduling

o   CPM and Microsoft Project was adopted as a toll for monitoring subcontractor’s schedule

o   Using fast track schedule in order to save the time.

o   Weekly meeting and monthly meeting in order to discuss the progress of subcontractor’s work performance.

o   Penalty for subcontractor delay works.

o   No bonus or incentive for subcontractor early finish work.

Quality           

o   Developing quality checklist to inspect subcontractor’s performance of each work.

o   Materials enter in and out site would be inspect and check using material record form.

o   Weekly meeting

o   Need worker qualification standard for special works

o   Requesting subcontractor correct unacceptable works by a warming letter.

o   Progress and Payment 

o   Because of use unit price contract so monthly progress payment based on actual quantity that subcontractor done.

o   Monthly progress payment would be keep 5 percent retention that be paid on final progress payment.

Safety 

o   Apply Environment, Health and Safety requirements.

o   Standard safety policy.

o   Providing PPE is a obligatory condition during work at site.

o   Conducting Job safety analysis.

o   Daily site safety inspection by safety engineer

o   Weekly meeting would discuss safety issue and analysis site safety inspection report.

o   Arrange safety budget for safety program implementation.

Recommendations

·    Need to develop standard for tendering for specialized sub-contractor.

·   Main contractor should arrange international formally contract in order to manage subcontractor in terms of legal procedure.

·    Main contractor should use IT to monitor progress.

·    Main contractor should develop quality management process.

·    Main contractor should record subcontractor database to be able to know subcontractor information. 

·   Main contractor should develop safety management system in order to analysis hazard and minimize risk in subcontractor performance. 

·    Main contractor should develop long-term relationship with subcontractors.

                                                                                                                                                

 QUALITY MANAGEMENT SYSTEM AND PERFORMANCE OF BUILDING CONTRACTORS IN VIETNAM

By

Bui Cong Luan

Abstract

The study gives a thorough description of the quality management system as practiced by the building contractors in the construction industry. This function is shown as an interconnected system that recognizes the main quality system management activities. The documents and records used in these activities are also reviewed. A model for high level quality system management is defined, including owner, supervising consultants and contractors. The model depicts the quality management system responsibilities and the roles in a scheme relating to construction quality control, quality assurance, and the interface between them. The scheme can be applied to any construction domain and quality management structure of organization. The study advances the understanding of how quality management is performed and engages participants at several management levels. The use of quality management system in the construction industry has greatly increased in recent years. Because the purpose of QMS development is to manage the performance of building contractors in Vietnam, it is is very important to assure quality in building projects and satisfy the client as much as possible in the construction industry. The objective of the quality management system is to improve the quality of construction projects and to enhance the effect and productivity during the building project in order to achieve client satisfaction. The research methodology is highlighted as the main philosophy. Besides, different sources of data will be gathered in this research, including project documents, reports from local government and project agencies, newspapers, construction law and standards in Viet Nam etc. An exploratory approach will be adopted by reviewing the available literature to develop a quality management system framework for consultant supervision building projects in Vietnam. Report the findings of a research study, which was undertaken to examine the underlying factors affecting the quality of a building project. It also aims to identify factors that show a strong correlation to good quality performance. The ultimate goal is to provide clients, project managers, supervising consultants and contractors with information that can help them become more efficient with their limited resources and, as a result, achieve better quality outcomes.

Executive summary

Rationale of research

This research has been conducted to investigate quality management system and performance criteria of building contractors in Vietnam.

Objectives of study

To study Factors that affects the implementation of QMS in building contractors in Vietnam. And effect of implementation of QMS on the performance of building contractors in Vietnam.

Methodology  

This research is based on a quantitative method with a questionnaire developed for the data collection. This research framework consists of four stages, namely conceptual stage, conceptual framework, hypothesis development, questionnaire development, data collection and data analysis in order to achieve the research objectives.

Findings and conclusion

The research attempted to measure the corporate performance though in term of NCR, Delay, Rework and Customer‘s satisfaction. The analysis of means score has been employed to measure every factor, sub-factor. In order to elucidate findings, the means have been computerized to rank the factors and sub-factors as well. Particularly, the means have been standardized into range scores to application quality management system in practice. The main goal of this study is to finding the effective factors that effect on the implementation of QMS in the building contractors in Vietnam. This study also how to measure the implementation of QMS to effect on corporate performance in terms Nonconformance records, Delay, Rework, and customer‘s satisfaction. The purpose of this chapter is to summarize the findings and to illustrate the conclusion from the above study.

The main findings

 In this study the researcher study the quality management system in building contractors in Vietnam, after literature review the researcher found five main findings in this study as a conclusion in this study, it includes as following:

1. In term of Culture the effective factors which have the highest effectiveness to implementation of QMS is Benchmarking about quality of manager and Proud of technical competency.

2. In term of Administration the effective factor which has the highest effectiveness to implementation of QMS is Clear job description.

3. In term of Leadership the effective factors which have the highest effectiveness to implementation of QMS is Project leader is good in maintaining relationship with project stakeholder.

4. In term of Strategy of quality the effective factor which has the highest effectiveness to implementation of QMS is Focus on improving the quality of human resources.

5. The greatest impact to the corporate performance that is the application of the procedures in the quality management system.

In addition, the research also shows the correlation between the application of quality management systems in the construction contractors in Vietnam for the effect that the company achieved in terms of the NCR, delay, rework, and the customer satisfaction. however, within the scope of this study the researcher also pointed give some fundamental processes in many of the quality processes that contractors can apply to their company, and processes that was elaborated by the specific issues. And the results are also given the relationship of each issue with the company's performance at different levels. Also on the factors affects to the application of quality management systems in Building contractors in Vietnam, the results also showed that almost of the factors that research given has significant positively to the quality management system, and what factors most influential was pointed out .

RISKS ON SCHEDULE OF NUCLEAR POWER PLANT PROJECT IN

VIETNAM

By

Nguyen The Phuong

Abstract

The research focuses on risks that can occur and made Vietnam NPP project delay. The main objectives are following: (1) to study risks which may affect to schedule of NPP project; (2) to study the difference perception of three major parties in project, owner, consultant and contractor; (3) what is most important risks in each stage of project; and on responsibility of major parties in project.

At the beginning stage, all risks that are related to NPP project in Vietnam searched. It is made though breakdown the procedure for NPP project; collect schedule risks of NPP projects in the world; risks from construction project studies and guide, experience from some international experts. The questionnaire is built with 81 risks, divided into 11 groups: risks relate to project decision - making stage; bidding stage; design stage; owner and consultant in construction stage; contractor in construction stage; payment; commissioning and pre-operation; human resource; government management; regulation, approval; and external risk.

The quantitative method is used to assess the risks, include level of likelihood and consequence of the risk. Respondents are consultants, contractors, owners, experts who have experience in NPP and knowledge about Vietnam investment environment. A total of 62 respondents completed the questionnaires. After collecting the data, risks were ranked base on likelihood, consequence and important mean in total the project and in each group, in that delay in approval procedure for site selection is the most important of the project.

There are differences in perception of parties. Owners indicate that most causes of delay are related to contractor and regular – approval; consultants agreed that problems relating to government and some of owner are most important; while, contractors pointed out that important risks are responsibilities of owner and some are of government. In assessing the level of most important risks, mean of important risks is calculated by owner is the lowest, and of contractor is the highest.

The result has indicated that the most important problems of Owner that cause delay in the NPP project are regulation approval; management; human. Most responsibility of contractor came out during the design stage. While, Government has great responsibility related to regular approval problem; finance; and human resource.

Executive summary

Rationale of research

This research has been conducted to study delay risk in Nuclear power plants projects in Vietnam.

Objectives of study

Study risks which may affect to schedule of NPP project and difference in perception of three major parties in project, owner, consultant and contractor.

Rank most important risks at each stage of project; on responsibility of major parties in project.

Methodology  

The literature review of management process is studied to find out the main activities, its tasks and risks in each task was analyzed first. Finding schedule risks in construction, NPP project in the world also on documents and from international experts, the owner, contractor and consultant.

Data collection, information, opinion about the risks had been collected from experts about NPP project.

Findings and conclusion

Based on the world reports about the NPP project practice, delay in construction project in

Vietnam, opinions of experts, partners’ relation to the project, and researcher get 81 risks that can influence to schedule of NPP project in Vietnam. The project was done for a long time. In addition, this is the first time Vietnam builds a NPP project, so there are many new problems arisen in human resource and regulatory. Total risks are divided into 11 groups which include: risks relate to project decision - making stage; bidding stage; design stage; owner and consultant in construction stage; contractor in construction stage; payment; commissioning and pre-operation; human resource; government management; regulation, approval; and external risk.

Responsibility of major parties

• Owner

Result has indicated that the first problem of Owner that cause delay in the NPP project is regulation approval. Many great risks in the area are delay in approval procedure for site selection and delay in licensing procedure in the design process. The second problem of

Owner is management. The risks which are indicated the most are poor management of owner in budgeting and scheduling, ultimate cost of the plant exceeds original budget and funding expectations. Another important problem of Owner is human resource. Owner’s lack of trained personnel and lack of qualified professional in bidding stage are two risks indicated.

• Consultant

Consultant has the responsibility to assist Owner in management the project. So, the responsibility about human resource should also divide to Consultant. Besides, consultant is still warned with communication, coordination between parties, conflict and lack of supervision in a number of jobs problems.

• Contractor

Most responsibility of Contractor came out during the design stage. The most problems occurred are late design completion and all identifiable engineering before construction starts; and design that does not meet the quality and safety standard. In addition, some other problems that can influence to schedule of the project are shortage of experience, skill workers, equipment’s, error in construction of sub-contractor, and machinery breakdown in hot testing and commissioning phase.

• Government

Government has great responsibility related to regular approval problem in the first NPP project. Delay in approval procedure such as licensing procedure and lack of circular, and regulations are most interesting to almost all parties. The second issue is about finance like delay in state budget due to political decision associated to financial conditions and difficulty in arranging foreign loans are ranked at high level. Third is human resource problem that all parties are worried. In this problem, regulation, training, and research agency’s lack of manpower is point out. The last most important risks of Government are related to management problem, in that, typical is lack of regulation and support agency relating to the project.

DO NOT discredit yourself with a fake degree - is this worth it?

http://thestar.com.my/news/story.asp?file=/2012/7/27/nation/11742579&sec=nation

525 sought over degree scam

Police are tracking 525 people who allegedly bought fake degrees and certificates from non-existent international universities.

Selangor police chief Deputy Comm Datuk Tun Hisan Tun Hamzah said police would like to question the 525 people in the course of their investigations.
The syndicate, which has been active since 2003, has sold up to RM5mil worth of fake certificates and degrees, he told a press conference at Selangor police headquarters.
Police have so far arrested a 37-year-old man, believed to be the mastermind, and a woman, 36, following a recent report in a Malay daily exposing the syndicate.

http://thestar.com.my/news/story.asp?file=/2012/7/27/nation/11742579&sec=nation


========================


My suggestions to verify a valid or fraudulent degree:
- check the history of the university
- check the alumni network. who are they? what are they doing? 
- check the physical infrastructure of the university: campus, library, sport facility etc.
- check the publications (journal and research) of the professors.  you can access via "Google Scholar" or SCOPUS.com, and search the faculty members' name.

reported by
Dr BHW Hadikusumo 
Asian Institute of Technology
www.ait.asia

 

 CONSTRUCTABILITY IMPLEMENTATION DURING CONSTRUCTION PHASE OF THE LARGE HIGH-RISE BUILDING PROJECT IN VIETNAM

By

Nguyen Anh Khoa

Abstract

Generally a construction project usually involves a heavy cost. So, time and resources to play a leading role in determining project costs. In general, the construction phase faces with many risks and uncertainties. As a result, the project could be delayed, cost overrun, and poor quality. In many previous researches all over the world, the constructability program was suggested to become the effective tools to help the project team control the project effectively. Although the constructability concept is not new with the developed countries, the constructability application in developing countries is still very limited. The study aims to identify the application of constructability during the construction phase in the large high-rise building projects in Vietnam.

Researcher uses two cases as the research design. The basic factors will be identified by literature review and they would be verified by the experts who have a lot of experience and management knowledge in construction. The data collection will be conducted in Hochiminh city to support for the data analysis activities to provide the understanding about the constructability application in Vietnam.

Executive summary

Rationale of research

This research has been conducted to study constructability to make efficient construction process for high rise building construction in Vietnam.

Objectives of study

To identify the factors affect constructability, to analyze and evaluate the constructability application. Providing recommendations to improve constructability.

Methodology  

In this study, researcher decided to use the qualitative method by using the case analysis as a key to obtain the objectives of the study. In general, there are three main approaches when using the qualitative method. (1) Participant observation (2) In-depth interview (3) Focus group.

The advantages when using the qualitative method is that participants have opportunities to response based on their opinions rather than selecting the fixed responses. Moreover, qualitative method provides the flexibility for the researcher by asking during the interviews. The opportunities to find out the answers for the study will be enhanced by getting the detailed information and data.

Findings and conclusion

Constructability concept is no longer a new concept especially for the countries which have the developed construction industries. In order to improve the constructability, many researchers put their efforts to achieve this purpose. Constructability application will become the powerful and effective tool to help the project teams implement their project successfully by increasing productivity, quality, and safety at construction site. Moreover, the risks and the conflicts between every parties involved in the project could be avoidable.

According to Vietnamese construction industry, constructability has been begun use as a tool to manage the project. Some contractors who have the big scale and reputations such as Coteccons and Hoa Binh Corp realized the benefits of implementing the constructability. As a result, constructability was used as a key tool to help them increase the efficiency and the profits.

Recommendation

• Involving finishing sub-contractors from the beginning:

In some cases, involving finishing sub-contractors from the beginning could bring many benefits such as reduce the reworks and avoid the interruption in finishing activities. However, the possibilities to apply seem incredible because of the long duration for tendering. Moreover, the traditional contract (DBB) is still used very common in Vietnam. As a result, few experts (3/7) agreed that involving finishing sub-contractors from the beginning is possible in reality.

However, the contractor and consultant should provide their finishing engineers in the beginning to join the project team. This action is also the good solution to consider.

• Capture and transfer lesson learned from previous project:

Setting up the lesson learn system (LLS) also enhance the constructability. The project would be managed better. Project team capacity and knowledge could be increased. The problems could be deal by using the learning captured from similar projects.

Action should be considered:

§  Provide seminar to train employees and transfer knowledge.

§  Record database, provide meeting to analyze the previous project and learn the experience.

§  Provide checklist about common mistakes.

§  Provide database of lesson learned for all employees.

• Consider possibilities about using pre-cast concrete
• Pay more attention to the innovative hand-tool and equipment usage.

Construction hand-tools:

§  Use automatic hand-tools

§  Use cordless power hand-tools

§  Use new hand-tools or modification of the available hand-tools

§  Portable hand-tools

• Construction equipment:

§  Use microprocessor control and diagnostics devices.

§  Automatic equipment.

§  Remote, non-destructive sensing and inspection system.

• Using the innovative in temporary facilities:

§  Consider tent cloth to enclosure the structure and workplace

§  Centralized supply network.

§  CCTV to control the site.

• Using the advance computer technology:

§  Building information modeling (BIM)

§  Advance software support for planning and control project or analyzing and simulating the site activities and structures.

Professional Master Program in Project Management in Construction in Ho Chi Minh city (20-24 July)

Asian Institute of Technology

Professional Master Program in Project Management in Construction 

in Ho Chi Minh city (20-24 July)

CE70.9010 - Applied Project Management in Construction Business and Project Simulation

Instructor

Dr. BHW Hadikusumo, Associate Professor, CEIM/MPM Coordinator, AIT

Students are learning simulation to apply organization and strategy, tendering, project management, human resources, financial and accounting management.

BUSINESS PROCESS MODEL OF THE PROJECT MANAGEMENT

PROCESS: A CASE STUDY OF WATER SUPPLY CONTRACTOR IN VIETNAM

By

Nguyen Thanh Tung

Abstract

In a developing national like Vietnam, the infrastructure system has not completed to support the demand of people in the country. Thus, the government of Vietnam has invested a huge of money to build and upgrade the infrastructure system. However, the infrastructure project are usually delayed and cost overrun, especially water supply system project. Almost those projects are delayed and cost overrun because of lack management, detail planning and schedule. Besides, a lot of water supply projects, those have built recently, got suffer design or construction fails due to lack of appropriate equipment and material, management skills or financial source. All the causes were led by inappropriate project managements and the tasks delivery during whole life of project. However, there is no research to find out the business process model of project management and the tasks delivery during whole life of water supply project.

Concerning the above issues, the research concentrated on three main objectives: (1) To map the business process model of project management in water supply projects; (2) To study efficient tasks delivery and find out the main cause of the inefficient tasks in water supply projects; (3) Suggest the solution and recommendation for making work being more efficiency.

 Executive summary

Rationale of research

This research has been conducted to develop business process model for water supply project contractors.

Objectives of study

To map project management tasks in water supply projects and efficient tasks delivery in water supply projects.

To find the problem in the process providing solution for making efficient process.

Methodology  

The study will start with the problem statement that was defined by study the practical statement of water supply projects in Vietnam. And then, the literature review of project management process during construction and business process management are studied to find out the main activities and its tasks to support the next stages of the research. During Data collection stages, the typical case study is collected from Vietnam.

Findings and conclusion

• The business process model of project management in water supply project of contractor

The business process model of project management in water supply project was mapping to help understand the business process of contractor. In which, the management tasks map illustrated the activity of contractor from bidding process to project handover. Furthermore, the relationship between each tasks and the input and output of each tasks were also found out and described on the map. Besides, the individual group and person who have responsibility for each task also were determined. It helped the researcher could see the mistake and inefficiency of each tasks or progress come from where and who have the responsible for them. To draw the model, a lot of interviews have done with key people of project to get the detail information supporting for the mapping work.

• Inefficiency tasks delivery of contractor in water supply project

According the case study, the project delayed in a lot of work section and cost overrun.In this study, the researcher had determined at least seven inefficient processes as following:

1. Inefficiency of estimation process.

2. Chose wrong the construction teams, subcontractors.

3. Shortcoming of preliminary processes before executing the project.

4. The inefficiency of executing on site of subcontractors and construction teams.

5. Lack of management and observation of Site management Board

6. Inefficiency of observation and inspection from Planning and Economic Dept.

7. Inefficiency of payment management, Inefficiency of doing final document works

In which, the executing on site of subcontractors and construction teams was the most major process that significantly affected time, cost, quality of project. In this process, every mistake and error occurred that led a lot of delay and cost overrun in the project.

• The main Causes of inefficiency in project management of contractor in water supply project

After analyzing project document and discussing with key person, the researcher found out some main causes that led the project got problem during bidding, construction and handover process. It includes:

1. No concrete regulations on contract management among main contractor, subcontractors and construction teams.

2. Conflicts of responsibilities

3. Lack of qualified staff and labors

4. Inappropriate work planning of subcontractors and construction teams

5. Contractor’s poor site management

6. Inadequate experienced construction teams and subcontractors

7. Problem with subcontractors

8. Lack of implementation equipment and material

In which, inappropriate work planning of subcontractors and construction teams were one of the most popular cause in the case study.

Recommendation and solution to improve the efficient project management

To improve the efficient project management, some recommendation and solution were provided to deal with the problem remaining in each process. All recommendation and solution were suggested after not only discussing with experts and key person in the project but also finding from journal and book to get the best solution. The researcher had recommended and proposed the solution for each inefficient process or task to improve the efficient project management of contractor.