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Article
Publication date: 1 March 2009

Bill Davison and Richard J. Sebastian

Guided by a conceptual model developed by Davison and Wright, the research was conducted to determine which types of contract administration problems (e.g., delays) were…

Abstract

Guided by a conceptual model developed by Davison and Wright, the research was conducted to determine which types of contract administration problems (e.g., delays) were perceived as most likely for seven types of contracts (e.g., small supplies and purchases). The survey was sent electronically to all members of the National Institute of Government Purchasing (NIGP). Postcards with the survey URL were also distributed to a random sample of members of the Institute for Supply Management (ISM). Data were obtained from 557 respondents. The results for the perceived relationship of the occurrence of contract administration problems for the various contract types provided partial support for the conceptual model. The results also showed that construction contracts were perceived as having the most problems overall and delay was perceived as the most common contract administration problem. The implications and limitations of the research are discussed.

Details

Journal of Public Procurement, vol. 9 no. 2
Type: Research Article
ISSN: 1535-0118

Open Access
Article
Publication date: 27 April 2020

Murat Gunduz and Hesham Ahmed Elsherbeny

This paper covers the development of a multidimensional contract administration performance model (CAPM) for construction projects. The proposed CAPM is intended to be…

8574

Abstract

Purpose

This paper covers the development of a multidimensional contract administration performance model (CAPM) for construction projects. The proposed CAPM is intended to be used by the industry stakeholders to measure the construction contract administration (CCA) performance and identify the strengths and weaknesses of the CCA system for running or completed projects.

Design/methodology/approach

The research design follows a sequential mixed methodology of qualitative and quantitative data collection and analysis. In the first phase, contract administration indicators were collected from relevant literature. In the second phase, an online questionnaire was prepared, and data were collected and analyzed using the crisp value of fuzzy membership function, and structural equation modeling (SEM). The fuzzy set was chosen for this study due to the presence of uncertainty and fuzziness associated with the importance of several key indicators affecting the CCA performance. Finally, SEM was used to test and analyze interrelationships among constructs of CCA performance.

Findings

The data collected from 336 construction professionals worldwide through an online survey was utilized to develop the fuzzy structural equation model. The goodness-of-fit and reliability tests validated the model. The study concluded a significant correlation between CCA performance, CCA operational indicators, and the process groups.

Originality/value

The contribution of this paper to the existing knowledge is the development of a fuzzy structural equation model that serves as a measurement tool for the contract administration performance. This is the first quantitative structural equation model to capture contract administration performance. The model consists of 93 Construction Contract Administration(CCA) performance indicators categorized into 11 project management process groups namely: project governance and start-up; team management; communication and relationship management; quality and acceptance management; performance monitoring and reporting management; document and record management; financial management; changes and control management; claims and dispute resolution management; contract risk management and contract closeout management.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 6
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 1 March 2011

Bill Davison and Richard J. Sebastian

Guided by a conceptual model developed by Davison and Wright (2004), Davison and Sebastian (2009) surveyed National Institute of Government Purchasing (NIGP) and Institute…

Abstract

Guided by a conceptual model developed by Davison and Wright (2004), Davison and Sebastian (2009) surveyed National Institute of Government Purchasing (NIGP) and Institute of Supply Management (ISM) members to determine empirically which types of contract administration problems (e.g., delays) were perceived as most likely for seven types of contracts (e.g., small supplies and purchases). The mean ratings of the perceived occurrence of the ten problems for each contract problem were reported. The types of contract that had the greatest overall perceived occurrence of problems across all problem types and the types of problem that were perceived to be the most common across all contract types were also reported. This research extends these analyses by examining specifically which types of contract administration problems were perceived to be most common for each of the seven contract types and by examining which contract types were perceived to be most affected by the ten contract administration problems. The implications of the research results for procurement professionals and the limitations of the research are discussed.

Details

Journal of Public Procurement, vol. 11 no. 1
Type: Research Article
ISSN: 1535-0118

Article
Publication date: 1 March 2011

Richard J. Sebastian and Bill Davison

To help procurement professionals identify the root causes of contract administration problems, we present an organizational behavior problem solving conceptual framework…

Abstract

To help procurement professionals identify the root causes of contract administration problems, we present an organizational behavior problem solving conceptual framework which consists of a comprehensive exposition of potential personal (e.g., personality) and environmental (e.g., technology) causes of behavior. We then illustrate how the causal factors from the framework can be mapped to the procurement process and its problems. We expect that procurement professionals will be able to use the framework to identify root causes in post-mortem analyses of contracts or elsewhere in the procurement process to mitigate risks. We also expect that management will use the framework to address the organizational behavior root causes of problems, thereby improving the systems and processes it controls or influences and, in turn, minimizing or eliminating contract administration risks. Future research can evaluate the usefulness of the framework.

Details

Journal of Public Procurement, vol. 11 no. 2
Type: Research Article
ISSN: 1535-0118

Article
Publication date: 27 September 2011

Heap Yih Chong, Balakrishnan Balamuralithara and Siong Choy Chong

The purpose of this paper is to propose a conceptual model which is aimed at assisting end‐users, i.e. construction practitioners who are without a proper legal background…

3177

Abstract

Purpose

The purpose of this paper is to propose a conceptual model which is aimed at assisting end‐users, i.e. construction practitioners who are without a proper legal background for effective administration of construction contracts, to enable them to make correct interpretations and decisions in dealing with vast amount of legal information.

Design/methodology/approach

This study proposes the application of data warehouse technology in the contract administration process of the construction industry. Upon identification of a comprehensive list of problems associated with construction contracts based on the feedback from 12 reputed experts in the construction industry, a conceptual model is developed using data flow diagram.

Findings

The results show that data warehouse technology is feasible and practical to the construction practitioners in the contract administration process.

Research limitations/implications

This research focuses only on the development of a conceptual model and thus the practicability aspect of the model is a major concern. As such, the resulting practical implications are limited and are constrained only to the construction industry in Malaysia, raising the question of generalizability of the proposed model, as well as across different industries and countries.

Practical implications

It is posited that the proposed conceptual model, when implemented, would enable construction practitioners to administer construction contracts with better clarity and accuracy, so that interpretation errors and disputes can be mitigated. This will facilitate the development of harmonious working relationships.

Originality/value

The application of data warehouse technology in contract administration is rather new in the construction industry. The conceptual model thus offers a more effective and proactive approach in construction contract administration towards dispute resolution and/or prevention.

Article
Publication date: 16 March 2015

Mohammed Rajeh, John E. Tookey and James Olabode Bamidele Rotimi

Within construction procurement, transaction cost economics offers a mechanism to understand “unseen” costs associated with the pre- and post-contract work. Pre-contract

1882

Abstract

Purpose

Within construction procurement, transaction cost economics offers a mechanism to understand “unseen” costs associated with the pre- and post-contract work. Pre-contract, these include costs related to information gathering and procurement. Post-contract they include activities of contract administration and enforcement. The purpose of this paper is to estimate the magnitude of transaction costs (TCs) for different procurement systems used in construction projects in New Zealand. Specifically estimating the relative values of TCs for Traditional and Design-Build delivery systems for the purpose of comparison.

Design/methodology/approach

This study develops a conceptual model for the relationship between procurement systems and TC. The model was operationalized and developed into a questionnaire. A cross-sectional sample approach was deployed, involving pilot and survey questionnaires, and results verification through “real world” cases. Data were sought from construction professionals in management, design and operations (i.e. project managers, architects, engineers, quantity surveyors, and procurement officers). TCs were measured using time-spent conducting procurement-related activities as a surrogate for cost. Professionals evaluate their time-spent in procurement activities using a Likert scale 1-5, comparing the Traditional and Design-Build delivery systems. Data were triangulated with “real world” cases to test and explain the developed model. The test included validity and reliability, path analysis, regression analysis, factor analysis, and structural equation modelling (SEM). The primary analytical technique used was SEM to yield information on goodness-of-fit, model development and comparison, and confirmatory strategies. SPSS Amos 21 statistical software was used for data analysis and model development.

Findings

The results suggest that procurement systems have indirect impact on TCs. The relationship between procurement system and TCs is fully mediated by costs of information, procurement, administration, and enforcement. Applying the developed models (the Traditional and Design-Build) to “real world” cases, it was found that TCs in the Traditional system amounts to 18.5 percent of the annual salary cost of a project manager (as an indicator quantum), while in the Design-Build system, it amounts to 14.5 percent of the annual salary cost of a project manager. TCs were calculated using regression equations based on factor loadings in the Traditional and Design-Build models.

Practical implications

This study applies new theoretical model for the link between procurement system and TCs, investigating and empirically demonstrating the influence of procurement system on TCs in construction. It also offers a new plausible explanation for the factors influencing TCs in procurement. The study emphasizes “in-house” TCs from the perspective of the professionals. The findings have practical implications on construction business practice due to their robust empirical nature and theoretical framework, which might enhance the performance of the construction industry.

Originality/value

This study contributes to the procurement selection in construction, by introducing a new conceptual model for the link between procurement system and TCs. It has extended the current practices for procurement selection by estimating TCs for the Traditional and Design-Build systems for comparison.

Details

Engineering, Construction and Architectural Management, vol. 22 no. 2
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 5 October 2015

Rene G. Rendon

The purpose of this paper is to present the results of contract management process maturity assessments in the US Navy using a process capability maturity model. The…

2097

Abstract

Purpose

The purpose of this paper is to present the results of contract management process maturity assessments in the US Navy using a process capability maturity model. The maturity model is used to benchmark an organization’s contract management process maturity and to use the assessment results to develop a road map for implementing process improvement as well as knowledge-sharing initiatives.

Design/methodology/approach

This is survey-based research on benchmarking contract management processes in the US Navy. A web-based assessment tool was deployed to US Navy contracting officers located at aeronautical systems, sea systems, and logistics support contracting agencies. The assessment tool consists of survey items related to the use of contracting best practices. The survey responses are then used to calculate the agency’s contract management process maturity level.

Findings

The benchmarking results reflected higher maturity levels in the pre-award contracting processes (Procurement Planning, Solicitation Planning, and Source Selection), while lower maturity levels were reflected in the post-award contracting processes (Contract Administration and Contract Closeout). The research findings related to process capability enablers also reflected higher mean scores for the pre-award processes and lower mean scores for the post-award processes. These maturity levels and process capability enabler scores reflect the extent of the implementation of contracting best practices within the Navy contracting agencies.

Research limitations/implications

This research uses a purposeful sampling approach designed to acquire data on organizational contract management processes. The assessment survey was administered only to qualified Navy contracting officers. The Navy contracting agencies are responsible for procuring billions of dollars in supplies and services in support of the Navy mission. Although the assessed contracting agencies procure different types of systems, supplies, and services, the contract management processes used are common to all Navy, Army, Air Force, and other US federal government agencies. The conclusions based on the analysis of these benchmarking assessments may be applicable to Department of Defense (DoD) and other government agencies.

Practical implications

The findings suggest that benchmarking can be effective in measuring and improving contracting process capability within the Navy. Benchmarking contracting processes can have far-reaching effects throughout the DoD. The Under Secretary of Defense’s has mandated initiatives related to improving both pre- and post-award contracting processes. The use of these benchmarking assessments can be instrumental in tracking the achievements of these process improvement initiatives. Additionally, the US Congress is leading the push for auditability in procurement operations. By benchmarking and improving its contracting processes, the DoD will be winning the battle toward integrity, accountability, and transparency of its financial operations.

Social implications

Benchmarking contracting processes can also have far-reaching effects in society. Many governments are focussing on integrity, accountability, and transparency in public procurement. International organizations such as Transparency International (TI) have identified process capability and process integrity as key for reducing the potential for procurement-related fraud, waste, and abuse. Additionally, NATO member countries and partner nations are focussing on the value of assessing and improving procurement processes for strengthening transparency and accountability. The value of benchmarking and improving contracting processes is gaining much attention in global public procurement agencies as they strive for accountability, integrity, and transparency in their governance processes.

Originality/value

There are multiple reports on deficiencies in DoD’s contract management processes, identifying poor contract planning, and Contract Administration as just some of the critically deficient areas. In response, the DoD is increasing its emphasis on developing its workforce competence through education initiatives. However, very little attention is being paid to benchmarking contract management processes. This research reflects the value of benchmarking DoD’s contract management process maturity and using the results for implementing process improvement initiatives. Using process benchmarking data, agencies can identify process improvement initiatives that will ensure government tax dollars are spent in the most effective and efficient ways.

Details

Benchmarking: An International Journal, vol. 22 no. 7
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 6 June 2016

Juanita M. Rendon and Rene G. Rendon

This paper aims to explore selected real-world procurement fraud incidents in the US Department of Defense (DoD) and the implications of these incidents to the DoD’s…

2526

Abstract

Purpose

This paper aims to explore selected real-world procurement fraud incidents in the US Department of Defense (DoD) and the implications of these incidents to the DoD’s contracting processes and internal controls.

Design/methodology/approach

This paper analyzes actual procurement fraud incidents and identifies in which phase of the contract management process the fraud occurred and which internal control component was associated with the fraud scheme.

Findings

The fraud incidents generally occurred during the source selection and the contract administration phases and involved the control activities, monitoring and control environment components of internal control.

Research limitations/implications

The fraud incidents are analyzed using contract management and internal control frameworks adopted by the US Government. Recommendations are developed for improving contracting processes and internal controls as an approach to deterring and detecting procurement fraud and may be applicable to other international public procurement bodies.

Practical implications

Governments are ensuring auditability in public procurement as a means of improving agency governance. The research findings suggest that an emphasis on capable contracting processes and effective internal controls should be adopted for fighting procurement fraud.

Social implications

Ensuring auditability in public procurement has a far-reaching effect in society. The value of capable processes and effective internal controls is gaining much attention in public agencies, as they strive for accountability, integrity and transparency in their governance processes.

Originality/value

By emphasizing capable processes and effective internal controls, governments can apply a strategic approach to detecting and deterring fraud and thus ensure that government monies are spent in the most effective and efficient ways.

Details

Managerial Auditing Journal, vol. 31 no. 6/7
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 17 July 2007

M.M. Tuuli, B.K. Baiden and E. Badu

The enforcement of liquidated and ascertained damages (LADs) can be problematic when the amounts are poorly assessed and there are lapses in the administration of contracts

2379

Abstract

Purpose

The enforcement of liquidated and ascertained damages (LADs) can be problematic when the amounts are poorly assessed and there are lapses in the administration of contracts. This paper seeks to investigate the relevance of LAD clauses in construction contracts in Ghana, as well as the methods employed in their assessment and enforcement.

Design/methodology/approach

A parallel survey method was adopted. Three sets of similar questionnaires (slightly modified) were administered to professionals in client, consultant and contractor organisations in contract administration roles, to explore their experiences in the assessment and enforcement of LADs.

Findings

LADs are not serving their purpose in construction contracts in Ghana. Clients have created situations that render LADs unenforceable. LAD amounts are also not genuine pre‐estimates of expected loss to be incurred, as assumptions and guesses rather than genuine calculations on a case‐by‐case basis are adopted in their assessment.

Originality/value

This research indicates that the enforcement of LADs can be enhanced if clients become more diligent in their contractual, mostly financial, obligations. Since a purposive sampling procedure was adopted, the findings and conclusions of this research are only tentative, but nevertheless raise serious issues regarding contract administration practices in Ghana.

Details

Structural Survey, vol. 25 no. 3/4
Type: Research Article
ISSN: 0263-080X

Keywords

Article
Publication date: 4 April 2008

Robert A. Marshall, Philippe Ruiz and Christophe N. Bredillet

The purpose of this paper is to summarise a successfully defended doctoral thesis. The main purpose of this paper is to provide a summary of the scope, and main issues…

2589

Abstract

Purpose

The purpose of this paper is to summarise a successfully defended doctoral thesis. The main purpose of this paper is to provide a summary of the scope, and main issues raised in the thesis so that readers undertaking studies in the same or connected areas may be aware of current contributions to the topic. The secondary aims are to frame the completed thesis in the context of doctoral‐level research in project management as well as offer ideas for further investigation which would serve to extend scientific knowledge on the topic.

Design/methodology/approach

Research reported in this paper is based on a quantitative study using inferential statistics aimed at better understanding the actual and potential usage of earned value management (EVM) as applied to external projects under contract. Theories uncovered during the literature review were hypothesized and tested using experiential data collected from 145 EVM practitioners with direct experience on one or more external projects under contract that applied the methodology.

Findings

The results of this research suggest that EVM is an effective project management methodology. The principles of EVM were shown to be significant positive predictors of project success on contracted efforts and to be a relatively greater positive predictor of project success when using fixed‐price versus cost‐plus (CP) type contracts. Moreover, EVM's work‐breakdown structure (WBS) utility was shown to positively contribute to the formation of project contracts. The contribution was not significantly different between fixed‐price and CP contracted projects, with exceptions in the areas of schedule planning and payment planning. EVM's “S” curve benefited the administration of project contracts. The contribution of the S‐curve was not significantly different between fixed‐price and CP contracted projects. Furthermore, EVM metrics were shown to also be important contributors to the administration of project contracts. The relative contribution of EVM metrics to projects under fixed‐price versus CP contracts was not significantly different, with one exception in the area of evaluating and processing payment requests.

Practical implications

These results have important implications for project practitioners, EVM advocates, as well as corporate and governmental policy makers. EVM should be considered for all projects – not only for its positive contribution to project contract development and administration, for its contribution to project success as well, regardless of contract type. Contract type should not be the sole determining factor in the decision whether or not to use EVM. More particularly, the more fixed the contracted project cost, the more the principles of EVM explain the success of the project. The use of EVM mechanics should also be used in all projects regardless of contract type. Payment planning using a WBS should be emphasized in fixed‐price contracts using EVM in order to help mitigate performance risk. Schedule planning using a WBS should be emphasized in CP contracts using EVM in order to help mitigate financial risk. Similarly, EVM metrics should be emphasized in fixed‐price contracts in evaluating and processing payment requests.

Originality/value

This paper provides a summary of cutting‐edge research work and a link to the published thesis that researchers can use to help them understand how the research methodology was applied as well as how it can be extended.

Details

International Journal of Managing Projects in Business, vol. 1 no. 2
Type: Research Article
ISSN: 1753-8378

Keywords

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