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Open Access
Article
Publication date: 4 July 2022

Shiyu Wan, Yisheng Liu, Grace Ding, Goran Runeson and Michael Er

This article aims to establish a dynamic Energy Performance Contract (EPC) risk allocation model for commercial buildings based on the theory of Incomplete Contract. The purpose…

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Abstract

Purpose

This article aims to establish a dynamic Energy Performance Contract (EPC) risk allocation model for commercial buildings based on the theory of Incomplete Contract. The purpose is to fill the policy vacuum and allow stakeholders to manage risks in energy conservation management by EPCs to better adapt to climate change in the building sector.

Design/methodology/approach

The article chooses a qualitative research approach to depict the whole risk allocation picture of EPC projects and establish a dynamic EPC risk allocation model for commercial buildings in China. It starts with a comprehensive literature review on risks of EPCs. By modifying the theory of Incomplete Contract and adopting the so-called bow-tie model, a theoretical EPC risk allocation model is developed and verified by interview results. By discussing its application in the commercial building sector in China, an operational EPC three-stage risk allocation model is developed.

Findings

This study points out the contract incompleteness of the risk allocation for EPC projects and offered an operational method to guide practice. The reasonable risk allocation between building owners and Energy Service Companies can realize their bilateral targets on commercial building energy-saving benefits, which makes EPC more attractive for energy conservation.

Originality/value

Existing research focused mainly on static risk allocation. Less research was directed to the phased and dynamic risk allocation. This study developed a theoretical three-stage EPC risk allocation model, which provided the theoretical support for dynamic EPC risk allocation of EPC projects. By addressing the contract incompleteness of the risk allocation, an operational method is developed. This is a new approach to allocate risks for EPC projects in a dynamic and staged way.

Details

International Journal of Climate Change Strategies and Management, vol. 15 no. 4
Type: Research Article
ISSN: 1756-8692

Keywords

Article
Publication date: 13 June 2022

Bee Lan Oo, Benson Teck-Heng Lim and Goran Runeson

With the aim to provide a global view of factors affecting mark-up size on construction projects, this study performs a meta-analytical review of the relevant studies over the…

Abstract

Purpose

With the aim to provide a global view of factors affecting mark-up size on construction projects, this study performs a meta-analytical review of the relevant studies over the past 20 years.

Design/methodology/approach

The analytical process involved the identification and evaluation of the importance of critical factors affecting mark-up size on construction projects, and the assessment of the generalisability of findings of the meta-analysis. A random-effects model was adopted in the statistical meta-analysis.

Findings

The results show that there are 23 critical factors, and the top five factors are: (1) competitiveness of other bidders; (2) number of bidders; (3) relationship and past experience with client; (4) experience on similar project; and (5) project size. A heterogeneity test further shows that there is no statistically significant heterogeneity across the studies, reinforcing the generalisability of the findings to a global context.

Research limitations/implications

The list of critical factors from a global perspective should form a good basis for future efforts in bidding model development.

Practical implications

The research findings have practical implications to both construction clients and contractors in formulating their contracting practices and strategies.

Originality/value

This is the first meta-analysis of a sizeable collection of replicated studies on factors affecting mark-up size on construction projects in the literature.

Details

Engineering, Construction and Architectural Management, vol. 30 no. 9
Type: Research Article
ISSN: 0969-9988

Keywords

Content available
Article
Publication date: 11 September 2019

John Dadzie, Goran Runeson and Grace Ding

Estimates show that close to 90% of the buildings we will need in 2050 are already built and occupied. The increase in the existing building stock has affected energy consumption…

Abstract

Purpose

Estimates show that close to 90% of the buildings we will need in 2050 are already built and occupied. The increase in the existing building stock has affected energy consumption thereby negatively impacting the environment. The purpose of this paper is to assess determinants of sustainable upgrade of existing buildings through the adoption and application of sustainable technologies. The study also ranks sustainable technologies adopted by the professionals who participated in the survey with an in-built case study.

Design/methodology/approach

As part of the overall methodology, a detailed literature review on the nature and characteristics of sustainable upgrade and the sustainable technologies adopted was undertaken. A survey questionnaire with an in-built case study was designed to examine all the sustainable technologies adopted to improve energy consumption in Australia. The survey was administered to sustainability consultants, architects, quantity surveyors, facility managers and engineers in Australia.

Findings

The results show a total of 24 technologies which are mostly adopted to improve energy consumption in existing buildings. A factor analysis shows the main components as: lighting and automation, heating, ventilation and air conditioning (HAVC) systems and equipment, envelope, renewable energy and passive technologies.

Originality/value

The findings bridge the gap in the literature on the adoption and application of sustainable technologies to upgrade existing buildings. The technologies can be adopted to reduce the excessive energy consumption patterns in existing buildings.

Details

Journal of Engineering, Design and Technology , vol. 18 no. 1
Type: Research Article
ISSN: 1726-0531

Keywords

Article
Publication date: 11 September 2009

Graham Brewer and Goran Runeson

The purpose of this paper is to report upon a doctoral thesis within the context of temporary project organisations that was driven by the question: “what really influences…

Abstract

Purpose

The purpose of this paper is to report upon a doctoral thesis within the context of temporary project organisations that was driven by the question: “what really influences decision makers when considering whether or not to adopt an innovation?” This paper describes the philosophy, methodology and findings of the study, and illustrates the usefulness of the findings for application in construction and other project‐driven industries.

Design/methodology/approach

The attitude of decision makers is discernible in their behaviour, which is an observable phenomenon. It has been observed from outside using a Delphi study of “experts”, providing an etic perspective, and reported upon first‐hand through multiple in‐depth interviews with “experienced practitioners”, thereby providing an emic counterpoint. Both perspectives have been further abstracted to develop a synthesised model of the attitudinal profile of information and communication technology (ICT) decision makers in the construction industry.

Findings

The adoption of innovative ICT‐driven business practices by a firm is determined in large part by the attitude of the decision maker, which changes over time, in response to technological push and cultural pull. Moreover, attitudes can be mapped against three exogenous issues: human, business process and technological. At the heart of these lies a domain of endogenous issues that are personal and, therefore, unique to the individual decision maker. All of these issues have an intra‐firm and inter‐organisational dimension, and these vary in response to the context within which they are considered.

Practical implications

Successful use of ICT in a temporary project organisation context requires consideration and accommodation of the attitudes of the various project team members. This may entail preparatory auditing of trading partners using an appropriate diagnostic tool.

Originality/value

The attitude of decision makers has not previously been mapped in relation to ICT innovation adoption. Moreover, it is likely that with innovation‐specific modification the model will be applicable to other innovations deployed in a similar context.

Details

International Journal of Managing Projects in Business, vol. 2 no. 4
Type: Research Article
ISSN: 1753-8378

Keywords

Article
Publication date: 1 May 1998

John Raftery and Goran Runeson

Money illusion is a bias in the assessment of the real value of economic transactions, induced by their nominal evaluation. By definition, money illusion may only be manifested in…

785

Abstract

Money illusion is a bias in the assessment of the real value of economic transactions, induced by their nominal evaluation. By definition, money illusion may only be manifested in the presence of inflation. This paper presents the results of an experiment which shows that the actual behaviour of subjects departed from theoretical expectations and that the subjects failed to recognize the underlying real values and instead made nominal evaluations. The evidence has the further implication that, in the absence of some house price escalation, there may be a tendency for vendor’s asking prices to be “sticky”. Thus, in these circumstances the asking price of the property will tend to function less well as a signal of relative scarcity in the marketplace.

Details

Journal of Property Valuation and Investment, vol. 16 no. 2
Type: Research Article
ISSN: 0960-2712

Keywords

Article
Publication date: 1 April 2001

DAYNE MAY, OWEN WILSON and MARTIN SKITMORE

The nature, status and role of bid cutting in construction bidding are examined from economic, legal, ethical and management perspectives. Some possible means of countering its…

Abstract

The nature, status and role of bid cutting in construction bidding are examined from economic, legal, ethical and management perspectives. Some possible means of countering its negative effects are considered including prohibition by legislation, the use of bid depositories, earlier formalization of subcontracts, withdrawal of subcontract prices and through alternative procurement methods. An empirical survey of bid cutting practice is described involving a sample of main contractors (MCs) and subcontractors (SCs) in Southeast Queensland. The practice of bid cutting was found to be widespread. All the MCs considered the practice to be ethical and all the SCs considered it to be unethical. In some cases, MCs awarded contracts elsewhere, even after telling SCs they had the job. Most of the SCs had tried individually to counteract bid cutting but were unable to continue this while others were complying with MC bid cutting attempts. SC bid withdrawals are very rare and litigation is never applied by either MCs or SCs. Mainly as a result of incomplete project documentation, MCs disliked the idea of making the subcontract binding at the time of main contract bid subject to its success, although it was generally recognized that it would reduce bid cutting by the MC‐a view that was also shared by half the SCs. Most respondents thought the construction management procurement option might reduce bid cutting but none had sufficient direct experience to be sure.

Details

Engineering, Construction and Architectural Management, vol. 8 no. 4
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 1 February 2002

MARTIN SKITMORE and H.P. LO

Construction contract auctions are characterized by (1) a heavy emphasis on the lowest bid as it is that which usually determines the winner of the auction, (2) anticipated high…

Abstract

Construction contract auctions are characterized by (1) a heavy emphasis on the lowest bid as it is that which usually determines the winner of the auction, (2) anticipated high outliers because of the presence of non‐competitive bids, (3) very small samples, and (4) uncertainty of the appropriate underlying density function model of the bids. This paper describes a method for simultaneously identifying outliers and density function by systematically identifying and removing candidate (high) outliers and examining the composite goodness‐of‐fit of the resulting reduced samples with censored normal and lognormal density function. The special importance of the lowest bid value in this context is utilized in the goodness‐of‐fit test by the probability of the lowest bid recorded for each auction as a lowest order statistic. Six different identification strategies are tested empirically by application, both independently and in pooled form, to eight sets of auction data gathered from around the world. The results indicate the most conservative identification strategy to be a multiple of the auction standard deviation assuming a lognormal composite density. Surprisingly, the normal density alternative was the second most conservative solution. The method is also used to evaluate some methods used in practice and to identify potential improvements.

Details

Engineering, Construction and Architectural Management, vol. 9 no. 2
Type: Research Article
ISSN: 0969-9988

Keywords

Content available
Article
Publication date: 11 September 2009

Derek H.T. Walker

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Abstract

Details

International Journal of Managing Projects in Business, vol. 2 no. 4
Type: Research Article
ISSN: 1753-8378

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