Dean Kashiwagi

Selecting the best contractor to get performance: On time, on budget, meeting quality expectations

The most important element in construction procurement is contractor selection. Particularly, hiring contractors who are performers. Why then do facility owners continue to select non‐performing contractors? This paper presents a system for contractor selection that has resulted in a 99 per cent success rate for completing facility construction on time, on budget and meeting or even exceeding quality expectations. The Performance Information Procurement System (PIPS), a full information system that discourages non‐performers, identifies the best‐performing contractor for the project and motivates the contractor to improve their performance on the current project. Based on

The cost of ‘best value’ construction

3.5m research and over 300 tests, PIPS has the ability to minimise the owners’ risk (not being on time, on budget, and meeting quality expectations). PIPS allows facility and project managers the ability to control the contractor selection process through the use of performance information, assuring that the right contractor is selected for each project.

The Influence of an Information Environment on Construction Organization's Culture: A Case Study

One of the major objectives of facility owners is to get the ‘best value’ in construction, renovation or maintenance of facilities. Owners are reluctant to pay more for best value if they do not understand what the value is. Research now proposes that the use of best value procurement can actually reduce the first costs of delivering the construction. The research looks at the transaction costs or the first costs of construction. The research uses the procurement of roofing in the State of Hawaii because of the availability of data on both the low‐bid and best value procurements. The State of Hawaii used transaction cost analysis to identify the cost of best value construction. The costs considered were planning and programming, design, procurement, construction management and inspection costs. Owing to the number of projects and the access to budget figures, construction cost figures, design costs and construction times, the State was able to identify the relative transaction costs and performance for both processes. The first costs or transaction costs of the best value procurements were lower than the transaction costs of the traditional design‐bid‐build costs. The actual performances of the roofing systems procured, which included warranty period, performance of the contractor and performance of the roofing systems, were far superior. The result was an increase in value for a lower cost.

Source of construction industry instability and performance problems

Construction professionals have identified public contract law and bureaucratic procurement/contract offices as a source of problems in the construction industry. The culture within the United States Federal Government Acquisitions is based on the Federal Acquisition Regulations (FARs) and its interpretation, often placing organizations/agencies in the price-based environment and continuously resulting in poor performance. The United States Army Medical Command (MEDCOM) (approximately

Risk management system implemented at the US Army Medical Command

100 M in construction renovation awards per year) attempted to overcome this obstacle through a partnership with the Performance-Based Studies Research Group (PBSRG) at Arizona State University. The MEDCOM implemented the information environment portion of the Performance Information Procurement System (PIPS) into Indefinite Delivery Indefinite Quantity (IDIQ) contracts through the specifications. Without controlling the various contract/procurement processes, the developed information environment stimulated an atmosphere of accountability to all parties involved, while reducing the clients internal bureaucratic resistance. The concept has met with preliminary success, minimizing construction management issues by over 50%, raising owner satisfaction by 9%, resulting in 99% of projects ending with no contractor-generated change orders, and assisting MEDCOM leadership in measuring the performance of their infrastructure revitalization program.

The optimizing of design delivery services for facility owners

A ten year study of construction performance has resulted in a conclusion that construction industry performance problems are being caused by the clients delivery process. The hypothesis of the research is that the client has created a price-based environment which forces a technical solution to construction issues. Modeling has been created which deductively shows that the problem is being caused by the clients selection of contractors rather than the type of delivery process (design-bid-build, design-build, or CM@Risk). A solution is proposed in the paper which uses the concepts of outsourcing, quality control (rather than management and inspection), continuous improvement with minimal client control, and a process based upon leadership rather than management principles. One of the major design requirements for the process is that the client must receive best value (best performance at the lowest possible cost) and the contractor must maximize their profit. The deductive design is supported by test results over the past ten years.

Creating organizational change: Minimizing client generated construction inefficiencies at the us army medical command

Purpose – To describe the implementation of the Performance Information Risk Management System (PIRMS) to indefinite delivery indefinite quantity (IDIQ) general contractors in the US Army Medical Command (MEDCOM) 26 sites, 150 projects/year, and

The impact of minimising specifications and management at the University of Hawaii

250m/year maintenance and repair construction program.Design/methodology/approach – To test the hypothesis that facility owner management, control, and decision making is a source of risk, and that the transfer of risk and control to the contractors will minimise the risk.Findings – Include minimising construction management by 33 percent, motivated contractors to regulate their own contracts, minimised unresolved issues by 50 percent, minimised contractor generated change orders by 20 percent, and moving from doing quality control to quality assurance.Research limitations/implications – The authors see no constraints in the implementation of PIRMS in other organisations. This paper reflects the perceptions of the Arizona State University research team, and publi...

Information Measurement Theory (IMT)

Purpose – The quality and efficiency of design and design services is declining. The authors propose that the problem is a systems delivery problem and not a technical competence issue. The purpose of this paper is to use a recently developed best value delivery methodology originally created for contractors to deliver design services. The authors have tested the process resulting in increased performance.Design/methodology/approach – A deductive approach is used. Well documented, published and logical industry structure and the best value delivery model concepts are discussed. The methodology is to identify the deductive logic, and confirm it with test results. The methodology is to take a well‐proven delivery system that worked on construction, modify the existing design delivery model to match the construction model, and test the new model. Owing to the deductive nature of the methodology, the normal reliance on literature of existing practices and inductive exploratory research are not required.Findin...

Statistical comparison of performance based procurement and price based procurement

The United States Army Corps of Engineers (COE) and Army Medical Command (MEDCOM) work in tandem to meet the hospital construction requirements for military bases located across the country. Over the past three years, MEDCOM has partnered with the authors to increase the efficiency of their construction delivery system through the research and testing of a new performance information environment. The objective of the research is to create an organizational structure and performance reporting platform that minimizes the need for decision making by the Director of MEDCOM. If the performance information environment can generate clear, timely, accurate, and dominant information, the need for decisions will be reduced, as the data will drive organizational operations and become self-regulatory. To date, the information has allowed an increase of contract performance from an average of 25% on-time and on-budget, to a current average of 40% on-time and 67% on-budget. This paper documents the hurdles and impacts, based upon a three year research effort, of implementing an automated technology for collecting and tabulating performance metrics, to create and sustain an information environment. Past literature has also shown that some 80% of organization change fails, the key finding of this paper is that performance information can be used to drive organization change and culture adjustment to create a sustained efficiency improvement in a large bureaucratic entity.