Project Management Competency Assessment and Development of a Bridge and Road Contractor

The application of insurances and bonds to manage the risks is not new. However, not all the contractors and clients fully understand or appreciate their benefits, even if they obtain insurance coverage for their project. The reason that they purchase is mostly to comply with standard contracts or construction laws instead of their own interests of mitigating the construction risks.

The real trouble is the difficulty in making claims which they believe that the claim service is not standard. The fear and distrust of claims discourage the contractors to buy insurance.

Bonds/Guarantees are interesting but it is necessary to note the legal aspect of them. The owner may be refused in some cases because of illegal bond. It is the reason that the State Bank of Vietnam issued on October 3, 2012 Circular No. 28/2012/TT-NHNN on bank guarantees issued by credit institutions and branches of foreign banks.

Indentifying risks and transferring by insurances and bonds are the good ways for risk management, therefore the project performance will be better.  Mr. Ly Minh Van made a case study aimed to :

(i) study the risks of owners in high rise building project development

(ii) study the application of insurances and bonds to manage the owners’ risks

(iii) study the administration of insurances and bonds

a)   Conditions and negotiation process

b)   Claim procedure

(iv) develop a risk, insurance and bonds management framework

  

1 

Conclusion

Objective 1: To study the risks of owners in high rise building project development

The findings for this objective have indicated various kinds of risks in construction projects. The external risks are weather, political, economic, legal, and public and third party. The internal risks are contractor, consultant, designer, lender related, personal related, bidders related, contractual, technical, design and specification.

The owners’ risks may come any time from the planning stage of the project to the operation and maintenance stage. Risks affect the project through three primary constraints which are time, cost and quality.

The positive aspect of risks is that if any contractor has a good management of risk, they have ability to compete with others. This aspect is illustrated in figure below:

The application of insurances and bonds to manage the risks is not new. However, not all the contractors and clients fully understand or appreciate their benefits, even if they obtain insurance coverage for their project. The reason that they purchase is mostly to comply with standard contracts or construction laws instead of their own interests of mitigating the construction risks.

The real trouble is the difficulty in making claims which they believe that the claim service is not standard. The fear and distrust of claims discourage the contractors to buy insurance.

Bonds/Guarantees are interesting but it is necessary to note the legal aspect of them. The owner may be refused in some cases because of illegal bond. It is the reason that the State Bank of Vietnam issued on October 3, 2012 Circular No. 28/2012/TT-NHNN on bank guarantees issued by credit institutions and branches of foreign banks.

Indentifying risks and transferring by insurances and bonds are the good ways for risk management, therefore the project performance will be better.  Mr. Ly Minh Van made a case study aimed to :

(i) study the risks of owners in high rise building project development

(ii) study the application of insurances and bonds to manage the owners’ risks

(iii) study the administration of insurances and bonds

a)   Conditions and negotiation process

b)   Claim procedure

(iv) develop a risk, insurance and bonds management framework

1 

Conclusion

Objective 1: To study the risks of owners in high rise building project development

The findings for this objective have indicated various kinds of risks in construction projects. The external risks are weather, political, economic, legal, and public and third party. The internal risks are contractor, consultant, designer, lender related, personal related, bidders related, contractual, technical, design and specification.

The owners’ risks may come any time from the planning stage of the project to the operation and maintenance stage. Risks affect the project through three primary constraints which are time, cost and quality.

The positive aspect of risks is that if any contractor has a good management of risk, they have ability to compete with others. This aspect is illustrated in figure below:

Objective 2: To study the application of insurances and bonds to manage the owners’ risks”

One of the risk management methods is that the owner transfer risks to the other parties by applying the insurances and bonds. Based on the case study data analysis, each type of insurances and bonds can provide different categories of risk coverage for the project as follows:

      (i) Professional Liability Insurance covers breach of professional duty arising from any act    of      error or omission.

       (ii) Worker’s Compensation Insurance covers personnel injury and death of employees in the project.

    (iii) Construction Plant and Equipment Insurance covers for unforeseeable, accidental losses, physical damages to plant and equipment because of external causes, working or at rest, being dismantled specifically excluded in the policy.

    (iv) Erection All Risks Insurance covers for unforeseen and sudden physical damage during erection, including but not limited to the following risks: fire, lightning, chemical explosion, physical explosion, theft, burglary, earthquake, flood, inundation, windstorm, malicious acts, human errors, lack of skills... and for the insured’s legal liability for accidental bodily injury to or illness and/or loss of or damage to property damage belong to third parties arisen in connection with the insured erection works. 

    (v) Product Liability Insurance cover legal liability for personal injury or damage occurring anywhere in the world caused by goods or products which the Insured has supplied, sold, erected, repaired, altered, treated or installed in connection with and in the course of Business.

     (vi) Construction All Risks Insurance covers physical loss of or damage to the contract works necessary for repair or reinstatement costs caused by all risks not otherwise excluded by the policy wordings and endorsement.

     (vii) Third Party Liability Insurance covers legally to pay for accident bodily injury to any third party, damage to third party property occurring in direct connection with the construction or erection of the items insured.

     (viii) Bid Bond means a commitment of the guarantee party with respect to the party receiving the guarantee (bid solicitor) for assurance of obligation participating in bidding of the guaranteed party. If the guaranteed party violates the regulation of biding without performance or with insufficient performance of finance obligation for participation in bidding, the guarantee party shall perform for replacement.

     (ix) Performance Bond implies that the tenderer provides security by paying a deposit, providing collateral or providing a letter of guarantee for a definite term as stipulated in the tender invitation documents, in order to secure the liability of the winning tenderer to perform the contract.

     (x) Advance Payment Bond means a commitment of the guarantee party with respect to the party receiving the guarantee in order to ensure for obligation of repaying the advance of the guaranteed party under contract signed with the party receiving the guarantee. If the guaranteed party must repay advance but not repay or repay insufficiently, the guarantee party shall perform for replacement.

     (xi) Warranty Bond is similar to Performance Bonds but usually covers a warranty period after the contract completion.

Although the application of the insurances and bonds listed above brings the project owner a lot of benefits, these insurances and bonds still have some limitations that deserve the owner’s consideration.    

Objective 3: To study the administration of insurances and bonds

The main points of the insurance policy that must be taken into account include: 

(i) Preparing the survey report on the condition of any endangered surrounding property or land or building

(ii) Period of insurance;

(iii) Exclusion conditions;

(iv) Deductible;

(v) Some conditions are adverse or difficult to meet;

(vi) Some conditions need to be noticed;

(vii) Some conditions are useful for the insured.

The owners also need to pay attention to the following features of the bond:

(i) Its legality

(ii) Period of bond validity

(iii) Term of payment

Due to the perennial problem of failure to make full disclosure of all material facts and failure to promptly notify possible claims when making a claim, the claim management plays an important role in risk management. Any party taking out insurance should always carefully consider the policy wording to check that it is adequate for their purpose.

Recommendation for the owners

1. Using the insurance brokers

Policies are all too often unclearly or inconsistently worded and may contain exclusions which limit their usefulness. It is a reason that the owner should buy insurance through insurance brokers.

Technically, brokers work for the insurance buyer and are able to arrange insurance with any insurance company (Palmer et al., 1996). Under most insurance laws of the State, the broker has a legal obligation to be diligent in the placement of coverage. Their role is to represent and protect the exclusive rights and interests of their clients. Additionally, insurance brokers offer a wide variety of risk management support services such as:

(i) Issuance of certificates of insurance, endorsements, and other evidences of coverage

(ii) Premium cost estimation and billing

(iii) Advising the clients on insurance and risk management based on careful analysis and understanding of clients' requirements

(iv) Negotiation with the insurers to find the best terms, conditions and premiums based on  experience acquired in the world and in Vietnam

The owners can therefore be reasonably comfortable with the idea that their broker will make an effort to assure that there are no errors in the placement of insurance coverage.

2. Using one person specialized in insurances and bonds.

It is a good idea to assign one person full responsibility for all insurance matters. This person should maintain a checklist of a complete coverage, the due dates of reports and returns, and similar matters. It is this person’s responsibility to follow up on all reports, claims, cancellations and renewals (Palmer et al., 1996).

3. It is better if the contractor buy all insurances.

If the project scale is small or the owner chooses only one contractor for all of works, the contractor should purchase all types of insurance. The advantage is that the administration work is easier as compared to the owner buying insurance. Furthermore, the owner can transfer all of risks to the contractor.

On the other hand, the project scale is large or has many contractors; the owner should purchase Construction All Risks and Third Party Liability Insurance. The good point is that the owner just only purchase one time covering for all contractors. Therefore, the owner can get cheaper premium. However, the administration work may be complicated.

4. The consultants must purchase professional liability insurance with high limited liability.

The expense for consultants (soil survey, design, supervise, management) is often very small (3-5% of project cost), so it is difficult to pay compensation if the big loss come from the consultants’ fault. The owners should require the consultants to purchase professional liability insurance with high limited liability.

5. Getting bonds from the guarantee bank that is prestigious and reliable.

The prestigious bank with financial strength assures that the finances are available during the performance of the project. The reliability of the bank is also essential to assure the legality of the bond.

6. Risks, insurances and bonds management framework

Table below illustrates the recommendation for risks, insurances and bonds management framework. 

His thesis abstract is copied below:

Abstract

Construction projects have a lot of uncertainties and risks that affect both project performance and human being. Particularly, the high-rise building projects have more uncertainties and risks. Geological risks, height and others are one of the causes. In such cases, insurance and bond are very important to these projects because they can cover the risks and the contractor’s default. As a result, the project can get the financial and performance security.

With a focus on a case study approach to the high-rise building projects, an eighteen-storey complex in Ho Chi Minh City conducted in this study is to examine different types of risks, insurance and bonds of the owner. 

Although a variety of risks occur in construction projects, most of them can be protected by applying for insurance and bond schemes. The most common insurable risks include professional errors or omission, personnel injury and death of employees, material damages and losses, erection risks, public liability, construction risks and third party liability. The other risks which can be protected by bonds are contractor’s breach from tender phase to warranty phase.

Some problems, however, occur in administrating the insurances and bonds. This study is then to analyze the conditions of the processes and claim procedures. A framework for risk, insurance and bonds management are recommended at the end of the study. 

Quality Management System for Engineering Consultant Firms

Since the 1990s, Vietnam began integrating into the world economy, the Government has boosted infrastructure investment with many capital sources such as government budget, government bonds, ODA loans, etc. Although the country has gained great achievements, but the quality of these infrastructure projects is also an issue being debated, especially in foreign-invested projects designed and constructed by the well-known main consultants and main contractors in the world. Series of works having trouble in construction as well as operation, such as:

- The collapse side span of Can Tho Bridge in 2007

-Cracked appear at four submerged segments of Thu Thiem Tunnel in 2008

-Serious landslide on the Ho Chi Minh Route during operation in 2009

-Serious settlement and crack at Thanh Tri bridge project in 2011

-Settlement and crack on Cầu Giẽ - Ninh Bình Expressway in 2012

-Crack and settlement at Cai Rang bridge in Can Tho city in 2013

-Crack and settlement at East-West Highway project in 2013

Causes of these incidents have been explained or are being studied, which do not exclude the errors caused in design stage and supervision stage.

Loss because of problems in construction is usually great, so every employer wants to control the quality as soon as possible in order to eliminate the problems which can be anticipated. Through the project life cycle, risk and uncertainty at conceptual and design stage completely dominate other stages, so quality management in design stage is efficient. 

Moreover, according to Project Management for Construction: Fundamental Concepts for Owners, Engineers, Architects, and Builders by Chris Hendrickson and Tung Au “As with cost control, the most important decisions regarding the quality of a completed facility are made during the design and planning stages rather than during construction”. Therefore, quality management system is strongly necessary for not only the contractor but also the consultant to assure quality and prevent any unexpected problems.

However, now the local consulting firms do not really understand the meaning of the quality management system. Many companies simply think that QMS certificate is an amulet, which will give them competitive advantage in bidding. And most local consultant firms focus pay more attention to the profit but less to the quality.

Mr. Nguyen Quoc Huy made a case study which main objective to develop a quality management system for a consultant firm in design phase, which specified to infrastructure project in Vietnam, focusing mainly on four issues as follows:

(i) study of the theory and practices of project quality management in design phase;

(ii) evaluation of practical design quality in Southern Coastal Corridor Project;

(iii) analysis of the strength and weakness of quality in design;

(iv) lessons learnt and recommendations from the quality of design.

Conclusions

Design quality management is a significant factor affecting not only the design performance but also the construction performance and operation & maintenance. However, there are a few clients and consultant companies being aware of the important of quality management in design project in Vietnam. Therefore, great expenditures of money, time and resources are wasted every year due to non-existent or inefficient quality management. Reasons for this might be stated as follows: clients and consultants lack experience; construction market in Vietnam does not have enough transparency for fair competition; project management level is limited. Although many consultant companies in Vietnam have established their quality management systems according to TCVN ISO 9001:2008 as a movement, a few of them carry out study careful how to measure the effective of these quality management systems in their company, and what key performance indicators can be apply to increase the effective of their quality management system.

In order to achieve sustainable development in construction market, consultant companies must apply quality management in design. Objectives of the application quality management in the design are not only satisfying customer requirements, meeting the requirements of the regulatory and statutory, making benefits for clients and the community but also contributing enhanced the position of the company in the market. Quality management also helps to increase productivity of design engineers, decrease operation cost of design offices, improve service reliability, and provide an essential environment for technology advancement and innovation. With the desire to understand deeply the quality management in design, the existing practice design project - Southern Coastal Corridor – is studied. From this study, the strength and weakness of quality management in this project are identified and clarified, and lessons learned will be useful for future projects. Some main strength aspects in this project are management commitment at project level, establishing detailed document control procedure, and setting up a clear project organization chart. While there are many weakness aspects such as: does not have quality, quality policy, quality procedure, quality planning, customer focus, value engineering, monitoring and measurement, control of non-confirming product, analysis data, and improvement; design review just is formalistic; does not mobilize competent experts and useful design softwares.

In order to apply successfully quality management in design, project manager or team leader and administrators should consider some following factors

-          Management commitment on quality and continuous quality improvement should be established. Top managers must participate in development and implementation process.

-          Defining the requirements of the client as clear as possible, and as soon as possible will help to implement project smoothly. Define characteristics of project, analysis the present situation of project, identify problems root causes and their effects, and develop plan for corrective action.

-          Engineers must be instructed with the basics of quality management. Training and education about practice and theory of quality management at all level and in all phase are essential.

-          Teamwork should be encouraged to facilitate every engineer could get enough assistance to be successful individual. Improved quality performance must be implemented for the whole project team.

-          Statistical methods are the useful tool for monitoring and improving quality. Expenditure for measurement to achieve quality should be considered as an investment, because the companies which supply high quality services can enhance their competition and increase their revenue.

-          Design engineers must learn, understand and be familiar with contemporary construction techniques and construction materials. Then they can design projects constructible in terms of building.

Recommendation for further study

This research is done in terms of design phase of a project. But in a project, there include other phases such as feasibility study, bidding, construction and supervision, and operation & maintenance. In order to have a complete picture about quality management of construction consultant organizations as well as to achieve successful in implementation quality management in construction, further study should be done for other phases of project, especially in feasibility study phase and supervision phase.

His thesis abstract is copied below.

Abstract

Why do most of clients just concentrate on the quality in the construction stage? It is too late. Clients should control the quality from the input, and especially from the design phase. Because the more allocation during the design phase affects about 80% the cost, the project might save investment cost as well as avoid the unfortunate consequences later.

The study aims to assess the strength and weakness of project quality management in the design phase. The scope of study was limited in design organization specified in infrastructure work in Vietnam. Cross literature was reviewed and real case analysis was implemented in order to find out the strength and weakness of quality management, then lessons learned for design process. Another objective of this study is providing project managers, design engineers and who concerned a practice knowledge of quality management in design in order to help them manage the project, achieving the high quality outcome.

The result of this study shows that both client and consultant in the studied project still concentrate more on the cost and budget than the quality although this is a significant project funded by ADB and AUSAID. The study also recommends some work instructions for improving quality in the design phase. Design quality can only be improved when clients and consultant firms change their attitude toward quality management.

Project Schedule Delay in Infrastructure Construction in North Vietnam: A Case Study of Noi Bai-Laocai Highway Project-Package A3

Recently, delays occur commonly in almost all projects in Vietnam. So they become a big problem mostly for every project where good or suitable solutions are not always used. In the project implementing phase, anticipating the factors causing delays is one of the important scopes of project manager. Therefore, project managers need to understand and analyze the causes of delays before giving reasonable solutions prior to construction commencement. Normally, the prominent characteristic difference between infrastructure project and office building project is that road or highway connects many locations together so that it needs a lot of time to discuss, communicate and negotiate with local residents living inside or along the project, while this issue is not existing in the office building project. However, in Vietnam, for infrastructure construction project, the owner doesn’t pay enough time and cost for detailed investigations or land acquisition for good planning in schedule and budget prior to performance, but the project implemention and land acquisition are doing at the same time popularly. Consequently, land acquisition caused delay in this performing time very prominently.

Besides, there are also many other factors causing delays in this kind of project such as design changes, price fluctuation, delay in sub-construction work, etc. These factors are necessary to address to find out the reasons and solution for each case. Finally, all are needed for all involved parties to learn the lessons for their success in the future. 

Mr. Tran Le Minh Triet made a case study to find out the major events causing the delay and consequential effects at construction stage. These events were analyzed in different prospect of the owner, contractor, designer and consultant. Then, recommendations of mitigation of delays are proposed for future construction projects. For this reason, this study aimed to:

1. find out some delay factors in an infrastructure project and to analyze the relationship of these factors

2.  give suggestion for prevention from delays, by the way to extract the lessons for experience.

 Conclusion

 In this project, most of delays are from the client, the contractor, the project (slow interim payment from the project), the engineer (delay in a new material approval by the engineer) and the external, but they are almost within the control of the client, the contractor and one factor is from external (price fluctuation) out of control of anyone. However, due to the infrastructure construction site spreads in long and wide areas, some reasons such as land acquisition; design changes; differing site conditions are prominent and typical more than in the building construction also contributed to the delays.

For the client, the reason such as slow decision making process is also difficult to improve in the developing country like Vietnam. Besides, for the contractor, other reasons such as poor site management and supervision; delay in sub-contraction work; inadequate experience of the main contractor and delay in a new material approved by the engineer are usually happened to both inexperienced and experienced contractors. Also, many delays will arise many claims later. Finally, recommendations common to the above mentioned are both general and from experience. Hopefully, these can used in consideration with the real conditions in order to make it more real in similar projects. To avoid or/and mitigate delay, working plan is prepared carefully for inevitable project setbacks and good collaborative project management will facilitate and ensure minimal project delays.

His thesis abstract is copied below.

Abstract

In construction industry, a successful project normally meets 3 basic requirements. It meets time requirements within the budget, required quality specifications and safety requirements in the operation. Unfortunately, the highway Noi Bai-Lao Cai project-package A3 under construction has the progress behind schedule in the terms of project performance due to some problems in project management where there are many causes leading to partial delays and overall project delay. Lessons learnt from these problems have become essential for successful project managers. Generally, the problems involved with project delays are solvable. To know how for solving problems, the critical factors impacting negatively on the phase of project performance need to be discovered and identified for analysis.

This report will present the basic types of delays and analyze ten reasons causing the delay problems in the highway Noi Bai-Lao Cai project-package A3 in the North Viet Nam. The method applied to analyze the delays based on the 4 ways to categorize delays of Theodore J. Trauner, Jr., PE, PP (Construction delays, 1990) to conduct the objective of the study.

Finally, some suggestions dealing with project delay problems and lessons learnt in the project executing stage are proposed.

Project Management Competency Assessment And Development Of A Bridge And Road Contractor: A Case Study Of A Taiwanese Contractor Operating In Vietnam

At the present, Vietnam is executing many large scale transport projects, especially some expressways such as Noi Bai-Lao Cai Expressway Project, Ha Noi-Hai Phong Expressway Project, Ho Chi Minh-Long Thanh-Dau Giay Expressway Project, etc…, with the participation of many well-known international contractors from Japan, Korea, China, Taiwan as well as big contractors of Vietnam which have confirmed their names through previous successful projects.

However, a common situation in executing transport projects in Vietnam is that most of the projects are behind the expected schedule. On 6^th of June 2012, the Ministry of Transport of Vietnam held a conference on “Hastening the speed of work and quality assurance in some transport infrastructure projects with the participation of foreign contractors”. In the conference, Mr.Mai Tuan Anh, who is the General Manager of Vietnam Expressway Corporation (VEC) stated that,

“Besides the objective factors such as site problems, weather, increase of material, etc…, the main causes leading to the slow progress are that the contractors are weak in project management, construction planning, and lack of intenseness when developing the works, and contractors’ project managers do not meet the requirements of the works.”(Website www.giaothongvantai.com date 07^th of June 2012)

It can be realized that the lack of modern project management knowledge is the current problem of not only Vietnamese contractors but also of the international contractors. This is one of the major causes that affects the progress as well as the quality of the projects. Besides, transport projects are becoming more and more complex with the participation of many organizations, therefore, it is very necessary for the contractors to assess their project management competencies and from that they can know what are their strengths and their weaknesses so that they can improve themselves in order to manage the projects successfully as well as to have better competitive competencies.

Mr. Nguyen Hong Phuoc made a case study aimed to:

1.  identify project management competency factors.

2. assess project management competency of a bridge and road contractor.

3. analyze the strengths and weaknesses of the competency.

4. provide project management competency development framework and strategies for improving the project management competency.

Conclusion

Based on both the result of Project Management Competence Assessment and reviewing the Company’s current project management practice, it can be said that so far the Company has managed its project just based on ad hoc basis and the importance as well as benefits of project management has not been recognized by the Company’s top management.

The recommendations provided are just the frameworks for the Company to start implementing project management methodology. And in order to successfully implement it, the Company is suggested to develop a detailed step by step plan on how to make the whole Company getting used to  apply the project management knowledge in managing it projects.

Recommendation

First, all staff members should be educated about the benefits of project management function.

After that, the Company must define the necessary project management roles in accordance with the project management knowledge area and the competencies of each roles. For example, the roles might be Project Manager, Schedule Manager, Cost Manager, Risk Manager, etc.

The next step is assessing the selected key staffs in order to determine the knowledge and skills of them about project management, to find the gaps to be fulfilled in the future.

Providing training on project management knowledge in general, as well as focus on the specific knowledge areas that are need to improved. After training programs, the staffs will apply what they have learned to managing their work, and the Company should conduct survey after that to determine whether the staff members successfully applied the knowledge and what else needs to do for improvement.

Develop a project management knowledge base, such as tools, templates, previous project information (lesson learned), best practices, etc for better support the project management activities.

Finally, the Company should monitor and assess the whole processes regularly for continuous improvement.

His thesis abstract is copied and posted below.

Abstract

Nowadays, more and more businesses are acknowledging the benefits of project management to their organizations. A well managed project will be finished on time, within its approved budget and provide satisfaction to the client. In order to manage projects effectively, an organization is required to improve its project management competence. So it is very important for the organization to assess its project management competence so as to know which areas that require improvement.

This report will review the literature related to project management competence assessment, study and assess the current practice of project management of the case study company, and propose recommendations for improvement of the company.

Owner’s Project Quality Management System: A Case Study of Bored Piles Part of High Rise Building Project for Resettlement of People Relocated

The Ministry of Construction in Vietnam has issued new codes and standards in order to improve the quality and safety of the project and address the high requirement and concerns from the clients. However, some high-rise building projects for resettlement are doubted having quality problems during construction phase and after putting into operation. These projects might have various defects but the main factor causing quality problems is quality management system of the company.

Mr. Hua Van Hung made a study aimed to:

1. study the Owner’s project quality management practices from literature view

2. study the Owner’s project quality management practices in bored piles part of high rise building project for resettlement of people relocated.

3. develop Owner’s project management strategy framework for this part of high rise building project for resettlement of people relocated

4. discuss strengths and weaknesses

5. propose recommendations

6. develop a Quality Management System framework.

Conclusion

The Owner’s Quality Management System is responsible in managing the implementation of the quality management system of the Contractors’ construction works. Aside from the financial, scheduling planning and all contractual requirements at optimum cost and time, it is also responsible to oversee that the project meets the quality requirements.

In order to achieve it, the Owner should think the term Quality Management System (QMS) and refers collectively to the series of inter-related processes intended to manage the planning, design and construction activities necessary to deliver projects. The QMS serves as the vehicle to communicate and ensure to understand the contractual requirements and the process to be followed for successful project delivery.

First, the Owner’s Quality Management System should be established and the top management has to be committed. The Project Manager shall organize the project team and ensure that qualified and experienced staff is appointed for each position with clear responsibilities.

Secondly, procurement in construction has been developed for selection of contractors and suppliers, which are handled under close coordination with project engineer, in order to produce effective results from the project’s technical and management stand-point.

Thirdly, the project team is responsible for ensuring that the construction project performed meets the requirements established by the owner and also responsible for preparing the quality assurance manual together with quality control standards, and ensuring continuous monitoring and inspection is being performed by the QA/QC officers to guarantee that the QA/QC standards, procedures and tests are implemented throughout the project construction.

Lastly, the Quality Management System should regularly improve and review the effectiveness of the system.

In this project case, a part of bored piles construction of high rise building was an option, because this structure becomes popular in construction nowadays. The Quality Management System from the Owner’s project in the construction phase has been anatomized and pointed some strengths and weaknesses of the existing system. Moreover, the effort from this existing system has been discussed and improved project quality via this case study project. In order to reduce some problems in project’s quality, the Project Management team has made a decision to strengthen and increase the efficiency of Quality Assurance (QA) and Quality Control (QC) programs, speed up and increase the efficiency of supervision work from Consultant, improve health and safety measures and record all non-conformance products. Due to some impacts and reasons, activities from improvement are not efficiently enough. As a result, the frequency of problems in quality is not completely reduced.

The author proposed some solutions for improving the efficiency of Quality Management System, and also proposed frameworks to help the Owner in solving problems and managing the quality project during the construction phase. In conclusion, this proposed framework, if effectively implemented would generate not only in this case project but also for the other project for all parties in the construction industry.

However, due to time constraint, this report only discussed the information relating to the Owner’s quality management system in the construction phase. In addition, there are remaining of quality management system in design and tendering phase, two phases are considered an important roles to the project quality.  

Recommendations

·     In order to ensure the efficiency of the Quality Management System, define clearly the responsibilities and designate appropriate members of the project team. When the member of the project team and their sub-consultants are competent and has teamwork, chances of quality are greatly increased.

·    Company quality manual would normally be produced by head office and authorized by the Chief Executive. It should set out the policy, organization and rules to implement company quality policy

·    Manufacturers’ and suppliers’ literature and instruction in procurement of construction should be developed and improved. Specifications often contain the requirement “to be fixed strictly in accordance with the manufactures’ instruction”. It follows, therefore, that these instructions become part of the contractual requirements, so when starting a project make sure that all such manufactures or supplier information is available on site.

·     Let the Contractor always understand that work performance has met in accordance with programs. Plan is a must.

·    Project Communication on a construction site must take place at all levels for a variety of reasons. All meetings involving the Contractor should be accurately informed for future references. Clear communication information such as requirements, expectations, scope, cost, schedules and technical data are vital elements in producing quality in constructed project.

·    One of the very basic requirements of a quality construction program is that the construction site must be kept clean. Materials and equipments must be neatly stored for future use. The reason is very simple. If a person comes to work and the workplace is disorganized, it will be difficult for him to believe that quality work is really a priority. The result is that an undesirable attitude would already be established for lack of quality. Conversely, if the worker arrives at the site that is clean, neat and orderly, a quality image is set. The worker can perform his tasks without interference. And lastly, in addition to the site cleanliness, another basic criterion on any quality construction program would be site safety, and this safety practices must be followed during construction.  

His thesis abstract is copied and posted.

Abstract

Construction activities is an important factor that contribute to gross domestic product (GDP) in most industrialized and developing countries contributes significantly to universal economic growth (Walsh and Sawhney, 2002). With growing commercialization of human activities, construction industry has been a major commercial activity. Stakes (capital investment) became high as technology advanced. Huge construction projects have been common. Large roads and rails system are taken up. Huge urban centers have been sprung up. Increasingly more and more people are getting engaged in construction and allied industries all over the world.

Unlike the construction sector, it is well-known precept that the manufacturing industry has notably well-instituted quality systems. This is due to the differing nature of the two-sectors. Manufacturing calls for repeat process with products primary put out in large batches. On the other hand, construction activities is undertaken in the main in single batches or projects (i.e. one building, one bridge, etc.). Although many of basic processes are repeated from job to job (e.g. concreting and plastering), the specifics of application are always changing. However, this is not to say that management systems, which have worked well in the manufacturing industry, cannot be applied to construction. Explains the rationale for project performances in construction phase, and then discusses the proposed solutions on how to get better performance for any cases especially bored piles part of high rise building project for resettlement for relocated people.

Quality is one of the critical factors in the success of construction projects. Quality of construction, as well as project success, can be considered as the fulfillment of expectations of the project participants. The construction sector in Vietnam has been struggling with quality issues for many years.

Regarding to the practice process, this report has also built the quality management system framework to serve as a management tool for developing next projects. 

Project Owner Contract Administration And Problems In Building Project

Every project is expected to be finished on time, within the budget and has good quality. The project cost is very important to the owner; therefore, it must be controlled well. However, project cost may increase as projected due to many aspects such as labor cost increase, material increase, and change in design etc.

Before commencing the project construction phase, there are a lot of permits and documents that has to be processed and these have taken longer time which will lead to project delay. However, there are also some reasons which often cause delays such as weather, design changes, materials’ unavailability, lack of communication or delay of payment.

When the owner has knowledge in reviewing the contract and with good contract administration, it will have positive effect to the contractors and also to the project.

Owner and contractor agree about the scope of works, time for working and some other rights and obligations through the contract. However, there are still certain conditions that cannot be controlled during the project completion. Normally, the contract consists of date of start and duration for construction, but cannot predict what might happen during the project. In addition, usually there are no payment form and procedure which creates confusion to the contractor when there is a rework. Moreover, project always has variation and if it is not resolved on time, project schedule and cost will be impacted.

Mr. Tran Trong Khiem made a case study aimed to:

1. Investigate contract administration of project regarding with schedule, cost, payment, variation.

2. Analyze problems in each process or contract administration.

3. Propose recommendation for improvement of contract administration.

1. 

Conclusion
 
Recommendation
 
In order to manage the contract more effectively and to reduce the problems, the following recommendations have to be considered:
- Set the milestones so that project team, supervisor, contractor have specific target. Give reward or punishment if contractor or supervisor can or cannot reach the milestone. Project team must make project schedule but not as detailed as of contractor’s. This schedule represents main stages of project together with milestone.

- Before starting the construction, the owner, supervisor and owner must agree on calculation and measuring method, and payment condition.

- Define time for checking payment request not only with owner but also with supervisor. Project team of the owner must have clear responsibility and time for solving documents; so that time for payment requests or variation order can be reduce.

- When signing a contract, owner and contractor must agree about the formula to calculate advanced payment.

- Make a plan for payment including time for State Treasury.

- Before starting the project, owner, supervisor, and contractor must have communication plan and time for each participant to solve problems or variation, and payment approval.

-  Contractor must assign staff to check the design while doing the construction. Read carefully the bidding documents and contract.

- Owner, supervisor, contractor, and designer must agree about the time for each one to check variation.

- Check carefully the material price, labor cost, and compare those with government rules.

- Evaluate project schedule which was extended.

- Owner must control the budget especially when there is adjustment in material price or labor cost.

- Set many milestones for the project, and that must be agreed by the owner, contractor, and supervisor.

- Contractor must have a person who prepare and check weekly schedule, compared it with master schedule, and give proposal if project is late.

There are some problems encountered in the project. First, project team did not manage the time well and had no plan to have milestones for the whole project. In addition, the team was not well-prepared before finishing the project, therefore project time was extended.

After analyzing the problems in payment, design variation, cost variation and schedule, there are some strong points in contract administration. Even there were some problems in the final stage of the project; the project’s first phase was still finished during start of the new school year. The Owner negotiated with the contractor to finish the project despite of difficulty in payment, material price increase and many other projects in Ho Chi Minh City were stopped at that time.

His thesis abstract is copied and pasted below.

Abstract

Construction is risky and owner usually signs contracts with other participants of the project to make clear rights and liabilities of each side in the contract. Especially in the construction phase, time may take many years and owner has to pay so much money for contractor. Moreover, because the time is long, there will be many problems and cause bad effect to the project, such as disaster, labor cost, material cost, etc.

Contract administration is very important, especially with the owner. With contract administration process, owner can control the project well and finish the project in good quality, with time and budget as desired. This report focuses on payment, variation, schedule management process of owner. Through case study of a high school in District 11, Ho Chi Minh City, problems in some management processes which affect to the project will be investigated and analyzed. Some recommendation will propose to improve contract management process.