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Article
Publication date: 5 May 2020

Douglas Alleman and Eul-Bum Lee

The publication presents an analysis of the cost and schedule performance of incentive/disincentive projects and case studies toward developing a systematic disincentive valuation…

270

Abstract

Purpose

The publication presents an analysis of the cost and schedule performance of incentive/disincentive projects and case studies toward developing a systematic disincentive valuation process, with Construction Analysis for Pavement Rehabilitation Strategies (CA4PRS) software integration that aids agencies in minimizing the likelihood of court challenges of disincentives.

Design/methodology/approach

From a California transportation database, the authors performed cost and schedule analyses of 43 incentive/disincentive (I/D) projects and case studies on four of those I/D projects. Interviewees included subject matter experts from transportation organizations to ensure applicability and maximum value-adding, and the process was implemented on ten California transportation projects and monitored for performance.

Findings

The presented process mitigates the contractor's ability to claim disincentives as penalties in a court of law through the following: (1) all calculations are performed using project-specific bases, backed by estimations of actual incurred costs; (2) the CA4PRS software allows for estimation transparency and (3) the clarity of cost inclusions reduces any chances of “double-dipping” between disincentives and liquidated damages.

Practical implications

Transportation agencies have historically faced legal challenges to their enforcements of disincentives. As agencies continue to apply disincentives on more megaprojects, contractors will likely attempt to pursue legal challenges more frequently. The presented process mitigates the likelihood of these challenges going to court and increases the accuracy and efficiency of disincentives.

Originality/value

While there have been publications that discuss the legal challenges of imposing disincentives, they mainly provide guidelines and lack applicable processes. Existing literature that does present incentive/disincentive valuation process focuses on incentive valuations and neglects the disincentives' legal challenges. The following publication fills this gap by presenting an applicable disincentive valuation process for transportation projects which incorporates the guidelines for legal mitigation.

Article
Publication date: 18 May 2020

Jan Emblemsvåg

Project-based industries seem ignored in the quality management literature. These industries have some peculiarities that warrant attention, and the purpose of this paper is to…

1302

Abstract

Purpose

Project-based industries seem ignored in the quality management literature. These industries have some peculiarities that warrant attention, and the purpose of this paper is to discuss some of the critical aspects of project-based industries concerning quality management and particularly Quality 4.0.

Design/methodology/approach

The approach is based on reviewing the literature and then developing the paper using basic definitions, literature, logic and experience. It should be noted that the type of literature review is so-called “integrative” due to the fact that the topic of this paper is new. Furthermore, for this paper, as for integrative literature reviews in general, the purpose is to create initial and preliminary conceptualizations and theoretical models, rather than review old models. Creative collection of data is therefore key to combine perspectives and insights from different sources. This paper is therefore more a discussion piece rather than a paper presenting results per se. The relevant literature is only a starting point from which the argument is developed.

Findings

The paper demonstrates that quality management in project-based industries is outdated, driven by adversarial and legalistic interpretations of contracts, which results in manual work and reactive quality management. Initially, this can be a stumbling block for Quality 4.0. However, the greater credibility and transparency of Quality 4.0 technologies can enable relational contracting such as partnering. This will subsequently result in major improvements in total quality.

Research limitations/implications

The research was initially triggered by industry experience over years. The empirical aspect of the paper is therefore related to the construction, shipbuilding and the oil and gas industry. Because contracting regimes are similar across these industries, the findings are arguably applicable to other project-based industries. However, this is not demonstrated. Furthermore, as the topic is new to both literature and practice it is likely that the paper has not covered all relevant aspects that will emerge as the ideas are implemented.

Practical implications

The paper supports the argument for developing the contracting into a relational approach away from the adversarial and legalistic approach of today. It is illustrated how Quality 4.0 technologies can help in this transition. Therefore, the practical implications can become substantial in how industry works and the research about it.

Social implications

If the ideas were implemented, they could change contract management in project-based industries from the adversarial approach of today to genuine cooperation. It would therefore be relevant for teaching future contract managers. The project outcomes would also result in improved quality and reduce the loss to society.

Originality/value

The combination of Quality 4.0, new contracting regimes and project-based industries is according to the knowledge of this author, an original contribution that can help people improve the management of quality in project-based industries. With these industries constituting a large and growing share of an economy, the value can also become significant once practical issues concerning implementation are sorted out.

Details

The TQM Journal, vol. 32 no. 4
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 1 August 2005

David Greenwood, Keith Hogg and Stanley Kan

The normal way of dealing with damages for delay in a construction contract is to use a Liquidated and Ascertained Damages clause. Such clauses specify a preset sum to be due to…

1217

Abstract

The normal way of dealing with damages for delay in a construction contract is to use a Liquidated and Ascertained Damages clause. Such clauses specify a preset sum to be due to the client for every day, week or month by which the contractor fails to meet the works completion date. However, the greater part of the value of construction work is actually carried out by subcontractors, and there is little or no published evidence as to how their contractual responsibilities for delays are determined and pursued. Theoretically, there are a number of possibilities (none of which is entirely satisfactory to both parties) and the logic and implications of each is discussed. A survey was conducted to discover the methods that are actually used, their incidence, and whether it was possible to relate the different approaches to the attributes of particular subcontractors or to specific situations. The most commonly encountered approach was for subcontract damages to be based upon a proportion of those set under the main contract. Interestingly, this is neither the approach incorporated within industry‐standard subcontract conditions, nor is it the one preferred by subcontractors. Furthermore, this method places considerable risks on the main contractor due to the possibilities of under‐recovery and the creation of secondary risks. This method, indeed all the methods that were encountered, seems to be the result of a rather uneasy compromise between the parties, the outcome of which may be related to their relative bargaining power.

Details

Journal of Financial Management of Property and Construction, vol. 10 no. 2
Type: Research Article
ISSN: 1366-4387

Keywords

Article
Publication date: 1 January 1978

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act…

1374

Abstract

The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:

Details

Managerial Law, vol. 21 no. 1
Type: Research Article
ISSN: 0309-0558

Article
Publication date: 1 June 1971

At each New Year we stand at the threshold of fresh scenes and hopes, of opportunities and pastures new. It is the time for casting off shackles and burdens that have weighed us…

Abstract

At each New Year we stand at the threshold of fresh scenes and hopes, of opportunities and pastures new. It is the time for casting off shackles and burdens that have weighed us down in the old year; almost a new chapter of life. We scan the prevailing scene for signs that will chart the year's unrolling and beyond, and hope profoundly for a smooth passage. The present is largely the product of the past, but of the future, who knows? Man therefore forever seems to be entering upon something new—a change, a challenge, events of great portent. This, of course, is what life is all about. Trends usually precede events, often by a decade or more, yet it is a paradox that so many are taken by surprise when they occur. Trends there have been and well marked; signs, too, for the discerning. In fields particular, they portend overall progress; in general, not a few bode ill.

Details

British Food Journal, vol. 73 no. 6
Type: Research Article
ISSN: 0007-070X

Article
Publication date: 1 May 2001

ADEKUNLE SABITU OYEGOKE

This study provides a framework for comparing construction management contracts in the UK and the US construction practices. It starts by reviewing previous studies on UK and US…

1685

Abstract

This study provides a framework for comparing construction management contracts in the UK and the US construction practices. It starts by reviewing previous studies on UK and US contracting practices and explores the main delivery methods, inform of comparison with construction management contracting systems. It examines construction management contracting types, processes and procedures and interaction between the construction manager and other stakeholders. This study was based on a literature review and the result shows the similarities and differences between the American and British CM systems within each practice and between both practices; the distribution of responsibilities and risks both in pre‐construction and during the construction stages; and allocation of responsibility in both practices.

Details

Engineering, Construction and Architectural Management, vol. 8 no. 5/6
Type: Research Article
ISSN: 0969-9988

Keywords

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