Quality Management in Soil Improvement Projects: A Case Study of a Power Plant Project in Vietnam

In Vietnam, the concept and quality management in construction have been used in recent years. Nevertheless, many problems have been exposed because of the lack of managerial skills and competencies as well as the internal capacities of construction organization for satisfying the rapid increase of construction project.

Projects delay happened normally in the majority of development projects due to poor communication, resource mobilization or other factors. According to recent survey, more than 80% of projects have problems with time management and quality project.

Not having a good quality management process has significant on the Client and Contractor as well as to Consultant Client, Sub-contractor. If the performance of the projects is not managed successfully, the parties are likely to fail to meet its goals that they had for the project associated with the quality management. Such failures may include the delay in schedule, cost overruns, quality, and safety and so on.

Quality management is a key to the successful management of quality management in construction project and is a managerial philosophy involving all member of an organization in term of meeting expectation of client. Tran Tuan Binh made a case study which main objective is to develop a framework to access and analyze quality management in order to make decision related to oil, gas and quality management in construction.

     

This study focused on several specific objectives as follow:

1. To identify the quality management in construction

2. To conduct quality management for project construction

The purpose of this research was to study quality management for construction project.

1. To study implementation of PVMPC quality management in construction

2. To state problems that occurred in the execution of quality project.

3. To give out some recommendations to treating principle soil improvement

4. To learn lessons from PVMPC project.

Conclusion

The quality management in construction project is very important and necessary in soil improvement project. Quality management considered in this study is appropriate and applicable in soil improvement of power plant project in Vietnam.

The purpose of project quality management in construction is to manage the quality in order to achieve the objective of the project such as time, cost, quality, safety and environment. In particular, quality management helps people involved as project manager.

Quality management in construction is setting priorities, allocating resources and implementing actions and process to evaluate the risk of project and reduce the cost.

Quality management utilizes knowledge and experienced people to analyze for the better decision making. It supplies better decision for the whole stage of project such as Project conceptual, Project planning, Project execution, Project terminations prevent or avoid risk.

 Management in construction is a very important part of project management process; it is a fundamental to achieve good product.

Concerning with the application of quality management in construction project, this study focused on two main objectives: (1) to identify the quality factor in the construction (2) to conduct a quality management study in soil improvement of power plant.

 

Recommendation

Considering the quality management application in soil improvement of Power Plan project, for the most effective quality management in construction, recommendation for improvement can be as follows:

In Vietnam, the project managers completely have awareness of the importance of quality management in soil improvement and its efficiency for success of the project. However, they find difficulties to conform factor: cost, time, quality with Client’s requirements.

In Author’s opinion, there are some existing main reasons which had to change and improve well if good project management is the goal:

1. Lack of Communication

2. Responsibilities are not assigned clearly enough to all members: client, design      consultancy, project manager, construction.

3. Cost estimate in national norm is not appropriate with actual case.

4. Complex legal procedures.

In conclusion, a good soil improvement quality management for every stages: engineering, procurement, construction, installation, hook up, pre-commissioning and commissioning in hand is very important. However, how to manage and control efficiently and effectively the performance of QMS can lead to success or failure of any projects especially the complicated and big projects in oil & gas governed by soil improvement quality management.

Abstract

In construction project, quality management is a very important sector using particular method to achieve the best practices in the project of company. Quality management is a systematic approach to managing unexpected issues circumstances related to a threat through a sequence of human activities including: Quality identification, Quality classification, and Quality control and Quality improvement

In the organization, there are some ways of quality management such as quality management in construction, quality management in operation and quality management in business.

The purpose of Quality management is to reduce risks. It may refer to numerous types of threats caused by environment, technology, human, and organization and politic. On the other hand it involves all means available for human, or in particularly, for a quality management entity.

The Green Building: Issues, Approach and Implementation

Sustainable development is the new trend in the world due to the need of human’s responsibilities to the environment, and green building in construction industry is also a part of this. However, this area is still a new thing for developing countries as Vietnam. There are many people talking about the green or sustainability but it’s very difficult to understand it thoroughly, what is it really and how to implement in each case.

At present, the demand and force of developing a green building is high.

Basically, the concept and guidelines for green building are very good but there are some reasons and factors that affect the projects which are the following:

1.       The market

2.      Finance

3.      Politics

4.      The resource

5.      The techniques, technologies and system

6.      The real-life experience

           

The aim of the green building is to reduce the negative impact to the environment. In other word, it’s also to conserve the natural resource. In order to achieve this aims, the projects must be designed as well as it can maximize the energy saving and minimize the cost for construction by using less energy & water.

As the result, all stakeholders of the project need to understand thoroughly what the green is and how to implement it during the project life cycle – especially from the concept to design stages that will affect strongly the next stages.

Furthermore, one building can only be called the green once it is certificated by an independent third party with a rating system.

Nguyen Huynh Trung Hai made a case study which objectives were to:

So in this report, the objectives of this study are:

1.       identify what drives green projects

2.      understand the basis of popular green building rating systems – especially the BCA Green Mark system (Singapore)

3.      study barriers and benefits of green building project in Vietnam; and to suggest the solutions for the barriers.

4.      propose a framework to implement green building in Vietnam.

Conclusions

1. The Green building in Vietnam construction industry

Based on all issues and problems, it can be said that green building will be the trend and good strategy for all developers, consultants and others in Vietnam.  The benefits that can get with green buildings are as follows:

1. long-term economic

2. productivity

3. the marketing

Moreover, the biggest benefits are the good supporting for environment and health for people’s working and living.

For BCA Green Mark’s (Singapore) green building assessment, it can be considered as a good and suitable system to apply in Vietnam. In BCA, the main requirements and criteria for the building are:

1. Energy efficiency

2. Water efficiency

3. Environmental protection

4. Indoor environment quality

5. Other green feature

2. The challenges in implementing the Green building

          Aside from the benefits mentioned above, the implementation in every country might have different challenges. In Vietnam, it will become more difficult due to lack of the knowledge in terms of technique and technologies because of no previous green building like this.

           Among the challenges, the key issue is the higher cost for the green project. Moreover, at this time, the economy going down, so this issue is really serious and it’s very difficult to attract the investors and others who want to join in the green building. In general, some main barriers in green building are:

1. Lack of technical and technology

2. Initial cost

3. Real life experience and non-educated green for people    

           Therefore, project management and the whole project team should have good project plans to lead the project based on the owner and market needs.

3. What drives green projects?

From the case study and literature review, there are some main factors that will drive the Green building to success such as: the owner’s project requirements and motivation, use the concept of commission and integrated design process, effective execution.

Recommendations

1. For the green building in this report

After studying the theories and the case study with the problems, issues and how to implement the green building in Vietnam, the recommendations for effective green building are as follows:

i) In the developing country as Vietnam, the green building is the new knowledge for most of people. Moreover, within the economic condition, the higher cost will be the serious barrier to attract the developers and other. So the problem is what the way to solve this issue. The most effective solution is the support from the government and community in term of the money. They can be the good tax and special permit with short time approval to encourage the developers and others.

ii) Vietnamese construction law should have the basic requirements to catch up the environment issues as the global trend.

iii) The government and community have to find the way to popularize the green concept for all residence understanding it basically.

iv) With the tropical weather and environment, Vietnam has a lot of natural material such as bamboo, refined brick… with very cheap price, present everyplace and can be reused to avoid the impact to the environment. So we have to consider this in spite of using the import material.

v) Combine the concept of eco-design – more concern about the aspects of architectural design – and the technique, technologies – concern about the mechanical aspect -  will make the green building more effective.

vi) The developer should select the good project team with the green experience and local condition that will affect the project to avoid, reduce and eliminate the risk for the project.

vii) All participants who want to join in the green building should start to think about the green with the long-term benefits. Especially this will be the key for the developers who understand what they want and invest their money directly into the projects.

viii) All project team should study for their own knowledge of the green building.

Finally, the green building requires high quality. Moreover, with very complicated parties involved, the project management and project team should have a clear, concise organization, roles, duties and responsibilities to avoid confusions and conflicts. Otherwise, the overrun of time and cost will happen.

Abstract

Nowadays, the sustainable development is the necessary and urgent trend for the global environment. Acting as one of the main parts of economic, construction industry also take part in responsibility for protecting the environment through the building designed with low-impact to environment. With the green building, there are many benefits to the environment and as the result; it’s also good for human working and living in life. Because of  the limitation of time and scope, this report only try to explore the main issues in the implementation of green building assessment system – especially the BCA Green Mark – in construction environment in Vietnam. Maybe the BCA Green Mark implemented for the case in this study is not popular in the world as other such as LEED, BREEAM, CASBEE… but at least it can explore the typical issues in the green building. From that case, we can learn some helpful lessons and use them as the historical data and references for other green buildings.

Project Materials Management for Telecom Steel Towers Vietnam

As Vietnam economy grows, the telecommunication industry also has develop to satisfy the demands for using the internet, voice, fax, data, multimedia, and entertainment of individual, community, and company etc. One of the important things in the telecommunication industry is infrastructure which has difficulty in erection for self support steel towers. Several problems have to consider. However, we need to analyze carefully the real cases for erecting the self support steel towers for telecom based on conditions in Vietnam which two main problems are:

1. Difficult geographical and topography conditions to access the construction sites to deliver materials.

2. Difficulties of fabricating the steel on site

These problems are different for each project because every project has particular geography and topography. The problems not only happen for purchasing and managing materials but also transporting materials to site. Nguyen Huu Phuc made a research to find out an effective project materials management for erecting self support steel towers for telecom based on real conditions in Vietnam.

Conclusions

The project material management is a major function in construction to assure quality, cost and schedule of project. The contractors can reduce project cost and can make more profit from project if he is good in project material management.

An effective material management is not only good in techniques for planning, monitoring and control of processes, materials and products at the site, office and factory but also is  good function to avoid the most frequently occurring problem and the most frequently occurring place or step of problems.

The planning is the first step to do the project material management. It is a blueprint to set up sound basis for project life cycle. Due to data of planning, the activities for processes behind the planning were determined. Thus, planning is major figures to get the success of project. If the actual work does not meet the requirement of the planning for schedule or budget, the project will fail.

The appropriate organization in construction for each project and for the success depends on personal skills of members and their geographical location in the department or on the site. The skills of members in organization are very important to do their tasks.

One more thing, the purchasing in the project must connect between planning for requirement and ordering of demand for material and equipment on the site. The purchasing ensures that materials and equipment are supplied with competitive price, on work schedule and has good quality. In purchasing, the relationship with suppliers and performance of suppliers are keys to have the effective material management.

For the transportation, the company can save the cost throughout the negotiated agreements or special agreement such as special scope of transportation work or special duty of transporters or special for handling and packaging. In addition, the survey for conditions of transportation also has the main role to eliminate the risk in the traffic.

The activities for monitoring and controlling of estimation, ordering, checking of the performance and surplus on the site are supported by requirement planning and actual work on the site. It affects project productivity and other factors in the project. Solving procedures for improving the site monitoring and controlling are requirements that the project manager must be consider.

According to the contract, the quality is always the most important provision. It involves all material management cycle and affects all project phase. Accordingly, quality assurance and control related with all responsible of contractor, suppliers and owner.

Recommendations

In order to improve actions and processes for project management in the future, from this study, some proposals are given to correct activities and reduce cost for materials in construction such as:

1. A plan for short interval planning, monthly planning and project planning should be written down and communicated to the related people. In planning for material management, the material that it has the high value, when comparison with project cost, must be cared first. The information for planning must be detailed and must comply with the scope. Besides, historical data and job review should be collected to help us to learn from past successes and failure. It is a tool to plan with accurate data to implement the work on site.

2. Top leader must support the organization for project material management and have the members with appropriate skill based on the scope of work. The individual must know his responsibility and his role in the organization.

3. The evaluated suppliers must be checked carefully not only with their history but also their performance in the present. The price, quantity, quality, delivery time, the rights and penalties must be defined clearly in the contract with suppliers.

4. The materials for the project must be tested to meet the standard on the sources before using on the site. When the site manager receives these materials, they must check again to ensure the quality of material that they use for work. In addition, the procedure work must be inspected and review to ensure the quality of products.

5. The communication for the organization and other parties must set up with appropriate ways to connect all related people. With good communication processes, the contacts of related people will be come easily to avoid the refusing actions.

6. For further study, the study should research deeply on material cost variance and behaviors of workers when they use the materials on the site to get more effective material management.

Abstract

The reported project relate materials management in construction and applications for erecting of steel towers based on real conditions of Viet Nam to identify an effective process of the project materials management for erecting steel towers in Viet Nam.

With using qualitative approach, the report explains more detail about project materials management when using the single case study to maintain the real conditions of materials management in the project to analyse the situations to find the problems and solution for it.

In this report, the documents will summarize the knowledge for the project materials management in project materials planning, in project materials logistic management, in supplier management, in project materials monitoring and controlling and focus on some problems in erecting of steel towers in Viet Nam.

Based on the knowledge for the project materials management and the case study, what are the advantages for the project materials management and the disadvantages are faced in erecting the steel towers in Viet Nam. For example: location, scope, size, transportation....

Besides, the analyses also provide some figures to prove the knowledge for the materials management in a logical and discuss about some effective materials management to find the conclusions. And then, the recommendations are established for the effective process in the future.

AIT Seminar Invitation: Managing Megaprojects in Developing Countries

Delays in Construction Projects in Vietnam

Delays in construction almost happen in all projects in Vietnam especially those state-funded and which contractors are domestic. On the other hand, projects which were carried out by international contractors are less likely to suffer delay.

The responsibility for delay was not clearly defined; therefore, whenever delay happens, no one has to be blamed. Because of this, the owner often give contractors extended time to finish the project without any penalty. In very few cases, contractors were given more time but had to pay a penalty.

However, in general, delay and cost overrun are the biggest problems in bombing construction field in Vietnam. Truong Quang Dien made a case study which focused on the construction stage of the projects and the factors affecting it. The objectives of his paper were:

1. Recognizing frequency causes of delay

2. Defining effects of delay in progress of projects

3. Solutions to delay problem and how to deal with delay when it happens

Conclusion

The discussion about the delay in construction projects in Vietnam focused on frequency, severity and importance of the causes of delay, effects of delay and how the delay was solved.

The frequency and severity causes of delay were identified through previous research, present issues, and widespread contributions of construction field in Vietnam. The construction participants accorded inexact time, slow site clearance, slow issuance of government permits, poor site management and supervision, financial difficulties, incompetent subcontractor, and unforeseen factors, etc.

Slow acquisition was frequent cause of delay in almost construction projects in Vietnam, which affected to whole schedule of the project. In the Owner’s point of view the causes of delay were related to the responsibilities of both contractor and subcontractor.

This paper showed that owners and consultants realized that contract awarding to the lowest bidder was the frequent causes of delay. However, the contractors considered that the severe causes of delay were related to owners and consultants like: unclear responsibilities, owners’ slow decision making bout some changed works during construction.

One common cause of delay was Change Order initiated by owner during construction. Besides, there were many causes between two parties, such as progress payment delay from Owner, ineffective scheduling, poor site management and supervision, shortage of labors and difficulties in financing from contractor.

All parties agreed that the following causes rarely occurred and were less important: changes in government regulations, restrictions at site, effect of social and cultural factors.

In general, there were certain interrelationships among the problems. The top-ranked problems including occurrence were grouped under some major factors: site related issues, incompetent designers and contractors, poor estimation, poor site management and supervision, poor contract management, price fluctuations, and improper techniques. It was noted that the findings confirmed previous studies that most of the problems in construction projects were related to human behavior and management problems, and not technical in nature.

In order to mitigate delays in construction industry in Vietnam, all engineers should be required for competency training in terms of technical, and safety. Therefore, there was no more gap in planning, managing and organizing and safety; project feasibility study must receive a serious attention and must be done carefully especially on government funded projects.  In addition, contract management work should be the focus. Although Vietnamese government has regulated many decrees or circulars which ruled this work and published contract template, it always needs experienced parties to do contract work and suit template to real project conditions.

From the above causes, the effects of delay were cost overrun and party’s damages. Third parties were people who would get profit from operating or using the project.

Recommendations

To reduce delays, all parties should consider the following important factors:

1. Separate site clearance (acquisition) work from construction work and it must be finished before estimating cost and schedule for construction phrase and bidding work.

2. Make clear responsibilities among parties in the contract document and use CPM (Critical Path Management) to manage schedule during construction.

3. Make Planning and scheduling: they are continuing processes during construction and match with the resources and time to develop the work to avoid cost overrun and disputes.

Besides the three most above mentioned causes, the following points can be recommended by all parties in order to minimize and control delays in construction projects.

For the Owners

1. Progress payment should be made on time; otherwise, it impairs the contractor’s ability to finance the work.

2. Change orders should be minimized as much as practical during construction to avoid delays.

3. Avoid delay in reviewing and approving of design documents than the anticipated.

4. Check for all resources and capabilities, before awarding the contract to the lowest bidder.

For the Contractors

1. Shortage and low productivity of labor: enough number of labors should be assigned and be motivated to improve productivity.

2. Financial and cash flow problems: contractor should manage his financial resources, plan cash flow by utilizing progress payment and ensure financial during construction.

3. Site management and supervision: administrative and technical state should be assigned as soon as project is awarded to make arrangements to achieve completion within specified time with the required quality, and estimated cost.

4. Subcontractors and suppliers: selecting Subcontractors and suppliers with competence and experience and have also enough financial resources. Contractors should not select Subcontractors and suppliers with low bidding price.

5. Planning and scheduling: they are continuing processes during construction and match with the resources and time to develop the work to avoid cost overrun and disputes.

For the Consultants

Reviewing and approving design documents: any delay caused by the consultant engineer in checking, reviewing and approving the design submittals prior to construction phase, could delay the progress of the work. Inflexibility: Consultants should be flexible in evaluating contractor works. Compromising between the cost and high quality should be considered.

Abstract

In construction project management, delay means the finish date of the project is beyond the date stated in contract. When delay happens, cost often increases because of inflation or other factors. Most construction projects in developing countries, including Vietnam, are suffering two problems: delay and cost overrun.

For the owner, delay means cost more for capital and loss of income from operating the outcome of the project. For constructors, delay means cost more for construction work because spending on materials, labors and vehicles will increase.

Completing project on time and within in-plan cost is an indicator of efficiency in project management. However, construction progress is often changed and affected by unforeseen factors such as: contractor-related problems: Poor site management and supervision, Financial difficulties, Incompetence subcontractors; owner-related problems, design-related and slow site clearance, etc.

This report will try to find out which reasons are main reasons for delay in Vietnam based on previous researches and personal experience of author. Also, solutions for this problem will be mentioned in chapter IV as a suggestion of author.

Contract Clauses in the EPC Contract

Normally, for building a polyester plant, the Owner will sign an EPC (Engineering, Procurement and Construction included pre – Commissioning and Commissioning and training) contract with the EPC contractor. In the petrochemical and polyester industry, there is no any EPC Contractor in Vietnam who can execute a full EPC project. Therefore the EPC contractor is selected and awarded by the international bidding. The major factors for executing an EPC project are the contract clauses which are normally stipulated too generally with unclear understanding and interpretation when having disputes between the contractor and the owner. Therefore, studying the method to develop the effective clauses in the EPC contract is necessary to simplify and make involved parties to understand and interpret clearly during the contract negotiation prior to the EPC contract signing and commencement. The understandable and applicable contract clauses properly will help an EPC project to be executed smoothly and effectively.

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

1. Take time to make the bidding, clarification and finalization before contract signing;

2. Wrong understanding and interpreting of stipulated clauses in the contract;

3. Conflict between contractor and the Owner during project execution.

An EPC contract is generally applied for developing a polyester project, in case of problems or disputes happen during the project execution, then these problems and disputes shall be resolved in accordance with stipulated clauses in the signed contract. Therefore, Vu Dinh Duy made a case study which focused on the following issues related to EPC contract:

1. To study EPC contract process and management from literature review;

2. To study the contract clauses in EPC polyester project;

3. To study the implementations of the contract clauses and their performance with reference to project advantages and problems.

Conclusion

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

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

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

Advantages of EPC Contract

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

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

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

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

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

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

Disadvantages of EPC Contract:

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

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

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

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

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

Abstract

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

Therefore, valuable arguments for the implementation of a Polyester fiber project:

1. Saving of foreign currency due to substitution of imported Polyester staple fiber and filament;

2. Creation of new employment for qualified labor;

3. Further strengthening of the textile industry in Vietnam as a second largest export earner after crude oil; 

4. Establishment of the whole polyester esterification, polycondensation, spinning and fiber drawing process through introduction and transfer of state-of-the-art technology;

5. First step in the Vietnamese synthetic fiber industry to extend the business into the upstream petrochemical industry, e.g. production of PTA;

6. Stable and long term local supply of staple fiber to the domestic downstream textile industry including the improvement of quality due to close cooperation between domestic companies.

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

The sensitive clauses in the EPC contract are also needed to focus in order to minimize the conflicts and risks between the EPC contractor and the Owner. This study will also discuss on point of view and how to managing the EPC contract of Dinh Vu Polyester project and focus on the following issues related to EPC contract:

i. To study EPC contract process and management from literature review;

ii. To study the contract clauses in EPC polyester project;

iii. To study the actual Dinh Vu polyester project Contract implementation.

Subcontractor Management in LPG Truck Loading Projects

Even though a large portion of a construction project is usually performed by subcontractors, the issues concerning about the subcontracting practice are rarely acceptable (acknowledged) and the ways to improve subcontracting practice are seldom debated.

Project delays are due to many reasons such as poor communication, lack of resources and other factors. Most of vast projects usually have problem with time and cost control. Vu Van Ngu made a case study which main objective was to find out “How main contractors manage subcontractors including procurement, cost, quality, scheduling and safety aspects?”

Conclusion

In this case, it was found out that there are many factors that influence subcontractor management such as tender preparation, subcontractor selection, and contract with subcontractor, and subcontractor scheduling management etc. In this case, the most important factor is tender document preparation. The tender document was prepared but it was insufficient and unclear because of poor design and inexperienced person was assigned to prepare tender document. Due to these reasons, the subcontractor evaluation and subcontractor selection were influenced and consequence of further sequences occurred.    

The main contractor and subcontractor have responsibility in management of project scheduling, project quality, project cost, and project safety. However, the role of subcontractor is most important. If the selected subcontractor have past experience for the project, have good management system, have enough capability to carry out the project such as equipment, tools, labor, they can complete the project by themselves. The main contractor only supports the subcontractor; it can’t replace management of subcontractor. The main contractor subcontract because of its not capable to carry out the project, or it is not specialized in the subcontracted field.

 

Recommendation

Based on the problems, it can be said that the management of subcontracting firm almost depended on the Main contractor organization such us their capabilities, their experience, their management system. If their people don’t have experience and capability, these problems normally happened:

1. They can’t properly prepare the tender document which leads to difficulty in subcontractor evaluation.

2. They can’t select the right subcontractor especially that some people base their decision on their and not base on the actual requirement written in the tender documents and biding submitted by the bidder. The subcontractor selection actually is a sensitive issue.

3. They can’t prepare sufficient contract in which all risks have been considered, possible events mentioned together with solving solution.

4. They can’t manage the subcontractor’s schedule because they don’t know how to control their schedule.

5. They can’t monitor and control the quality of the project because they don’t know exactly the quality requirements applied for the project.

6. They can’t control the cost and safety.

 

In tender document for tender:

1. The tender document is very important for bidders in preparation of document for submission. The main contractor should assign competent person to carry out this works and all tender documents should be reviewed carefully before issuance. If Main contractor do not have people who have enough experience, the main contractor should hire expert from outside.

2. When preparing the scope of work, main contractor have to check and totally understand all contents of the detailed design, any missing content or unclear content/ differences should be explained, added in tender document or request subcontractor to check and propose their solution/ methodology in submitted documents as option.

3. Evaluation form is very important for evaluation. It should be reviewed carefully by well-experienced people. It should indicate key factors based on which we can evaluate exactly in order to choose the right subcontractor.

4. In order to use for further reference, those document should be stored in systematic manner.

 

In subcontractor selection

1. Members of evaluation team should be carefully selected. They have to read and understand configuration of project and all its requirements. He/ she should know what major factors influence to project, what are minor factors which can be discussed, clarified, adjusted in negotiation step. 

2. In addition, members of the evaluation team have to understand the requirements in the legal documents such as law, decree…

3. Members of the evaluation team should have negotiation skill, should be flexible, shouldn’t be rigid during negotiation, should know how to ask subcontractor to understand capabilities and past experience of subcontractor which we intend to select.

4. Members of the evaluation team should have equitable behavior.

 

In Subcontractor contract

1. During negotiation, all responsibilities of each party should be detailed and clear.

2. The scope of work should be cleared; any ambiguous issues shall be raised and discussed until both parties understand the same meaning.

3. Payment term, milestone should be defined in details; any documents which are necessary for payment should be specified.

4. Main contractor, subcontractor should predict situations for impact cost, impact schedule and set out feasible rules for implementation.

5. Main contractor should assign a person to manage the contract ensuring that it is controlled according to commitment between parties.

 

In subcontractor scheduling management

1. The main contractor should assign personnel to control project schedule (Project schedule controller), update and report to project manager every week or when necessary. Base on report of inspector, project schedule controller should calculate achieved schedule and comparison with targeted schedule. The calculation result will serve as evidence for giving necessary solution.

2. The inspector of main contractor should go to the site regularly to inspect and record the exact quantity done by subcontractor.

3. The main contractor should carefully review the schedule of subcontractor, make sure it is feasible and includes any possible risks.

4. A solution to settle delaying schedule of subcontractor should be given in the contract. The main contractor can take over subcontractor’s responsibility to recover project schedule when the subcontractor is not able to catch schedule.

In subcontractor quality management

1. The main contractor shall assign experience inspectors to control quality of project.

2. The design document provided by client should be detailed, sufficient, indicated the criteria, and the standard applied. The design document of subcontractor should be reviewed and approved by main contractor when necessary.

3. Main contractor should check and approve construction procedures, especially inspection and test plan (ITP) content in the procedures.

4. Main contractor should require subcontractor set up quality team and control quality by themselves.

 

In subcontractor cost management

1. The payment should be based on completed quantity; this quantity should be strictly controlled.

2. Any impact cost should be checked, approved, and controlled strictly.

 

In subcontractor safety management

1. The safety should be emphasized at the start of the project and maintain through the project.

2. The safety should be reminded regularly.

3. The risk assessment is always useful.

4. The permit to work should be applied for hazardous work.

Abstract

Because of the increased project complexity and the highly competitive nature of the construction industry, a construction project often is executed by several subcontractors. Hence, effectively managing the numerous subcontractors involved in a construction project becomes a crucial challenge for the general contractor in ensuring timely project completion with acceptable quality.

Managing subcontractors does not simply involve asking them to allocate resources (labor, material, and machinery/equipment) into the jobsite whenever an activity is scheduled, and then pushing them to speed up the work without a clear consciousness of schedule risk. Factors (or uncertainties) such as weather, labor, site conditions, material delivery, and equipment breakdown can influence the time performance of subcontractors, affecting total project duration.

But almost General Contractor is leak of management sub-contractor and it caused many difficulties and conflicts during performance, management of projects.

The most difficulty of sub-contractor management is deviation scope of work between sub-contractors, controlling schedule and interfacing between subcontractors.

In managing project subcontractors, a general contractor must determine the items of work to be subcontracted, select subcontractors, set subcontract agreements, and control the subcontractors during construction.