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Key Strategic Project Management Processes for Different Project Delivery Systems: A Case Study of Construction Projects in Thailand

Key Strategic Project Management Processes for Different Project Delivery Systems: A Case Study of Construction Projects in Thailand


In Thailand, the numbers of construction project are increased by the investment from both government and private sector. The government invested in infrastructure construction projects such as metropolitan rapid transit projects, roads, government agency buildings, etc. for the purpose of stimulating economics in country. Private sector invested in condominium, house, hotel, department store, factory and etc. for responding the demand of the consumer. During execution and closing these projects, there are many problems happen repetitiously, irrespective of small projects or large projects, for example rework, lack of quality assurance, change scope of work, lack of inspection, a lot of defect work, project delay, cost overrun and etc. The causes of problem are the improper selection and implement project management process in each project which has different characteristic and different project delivery system. Therefore, the study of project management process in construction project of Thailand will benefit the owner, designer, contractor and subcontractor to comprehend the risks of each process and to improve the execution of project more efficiency. Chen et al.     (2009) state that the good project management processes  give the resultant value and benefits such as better project control, better organization reputation, increased efficiency/profitability, greater project transparency, more stakeholder/client satisfaction, and etc.

Mr. Praneet  Prasongnitjakit made a research focused on the project management processes in different project delivery system from design phase to handover the project. The research also aimed to:

1. identify project organization structure for different project delivery system.

2. identify project management process and control for different project delivery system for controlling time, cost, and quality.

3. identify contract administration practices of each project management process for different project delivery system.

4. Analysis benefits and risks of each different project delivery system.

5. Developing model to select properly project delivery system.

Conclusion

1. Project organization structure for different project delivery system

The organization structure directly involves in project management process by providing the eligible personnel to implement process. The organization structure also demonstrates the authority, responsibility of the owner, consultant firm, and the contractor including the relationship between the parties in project. The researcher summarizes the relationship, responsibility and communication the organization structure of each project delivery systems as follow:

A. The organization structure of EPC project delivery system

Key Strategic Project Management Processes for Different Project Delivery Systems: A Case Study of Construction Projects in Thailand

The research finding reveals the relationship, responsibility and communication of project organization structure of EPC project delivery system that the owner contracts with contractor to respond design and engineering work, procurement work, and construction work. The owner contracts the consultant firm to review design drawing and construction documents and inspection during construction. The organization chart is shown in Figure 1.

The communication between the owner and contractor is through the consultant. The responsibility of each party in this organization as follows:

i) The owner approves the effective quality management system, project master schedule, vendor list, payment and change order.

ii) The consultant responds to review design drawing, construction documents, inspection and test.

iii) The contractor responds to management project, develop design drawing and engineering document, procurement all materials, equipment and machinery for construction in accordance with scope of work in contract.

B. The organization structure of PMC project delivery system

The research finding reveals the relationship, responsibility and communication of project organization structure of PMC project delivery system that the owner hires PMC for management project from design until project handover to the owner and hires the design consultant company to design and develop design drawing until finish. The owner hires multiple prime contractors for construction project.

Key Strategic Project Management Processes for Different Project Delivery Systems: A Case Study of Construction Projects in Thailand

The communication between owner and multiple prime contractors is through PMC. The responsibility of each party in this organization as follows:

i) The owner responds to approve payment and change order.

ii) PMC responds to management project from design until the completed project handover to the owner, coordinate with local district officer to request construction permit and building certificate.

iii) The contractor responds to execute construction and purchase all construction material in accordance with scope of work in contract. 

C. The organization structure of DBB project delivery system

Key Strategic Project Management Processes for Different Project Delivery Systems: A Case Study of Construction Projects in Thailand

The research finding reveals the relationship, responsibility and communication of project organization structure of DBB project delivery system that the owner contracts with the consultant firms to design until complete, review the construction document and inspection during construction. The owner contracts qualified bidder with the lowest bid price. The general organization chart is shown in Figure 3.

There is a direct communication between the owner and the contractor. The responsibility of each party in this organization as follows:

i) The owner responds to management project, approve design, arranging bidding process and award contractor, construction management, approve payment, and change order.

ii) The consultant responds to design and engineering documents, preparing bid document, review construction document and inspection.

iii) The contractor responds to execute construction and purchase all construction material in accordance with scope of work in contract.

D. The organization structure of DM project delivery system

The research finding reveals the relationship, responsibility and communication of project organization structure of DM project delivery system that the owner contracts with the consultant firm to design, construction management and construction supervision. The owner contracts with qualified bidders with the highest score from evaluation in bidding. The general contract organization chart is shown in Figure 4.

The communication between the owner and all prime contractors is through the consultant. The responsibility of each party in this organization chart as follows:

i) The owner responds to make payment for the contractor, approve the change order for contract time and/or contract price. He also takes responsibility to procure the specific equipment and machinery and provide specification to the consultant for design.

ii) The consultant responds to design, arranging bidding process, construction management, construction supervision, contract administration and coordination with vendors for installation.

iii) The contractor responds to execute all constructions in accordance with scope of work in contract.

2. Project management process and control for different project delivery system for controlling time, cost and quality

The project management process relates with product and process interaction in order to accomplish the product. This research studied the project management process of EPC, PMC, DBB and DM in order to define to feature of project management process for controlling time, cost and quality for different project delivery system in order to select the suitable project delivery system for different type of project.

A. EPC Project delivery system

In this study, EPC project delivery system is selected for power plant which comprise of specific equipment and machinery. The EPC project conducts the phases in parallel rather one series for completed project within COD. EPC contractor arranges project management processes into nine main processes. These processes are used to manage the activities in design and engineering, procurement and construction in order to control time, cost and quality and also, link related activities between Engineering-Procurement, Engineering-Construction and Procurement-Construction to work collaboration.

Time management

EPC project use project master schedule to manage overlapping time between Engineering, Procurement and Construction in order to speed up project. The process of Engineering and Procurement need to work parallel for integration specification of specific material into detailed design. The completed detailed design and specification are transferred to Procurement to issue requisition in purchasing material, and to transfer construction drawing to Construction unit for execution in each stage. The delay in design or procurement has effect on construction schedule directly. Thus, progress of work was monitored by measurement, earned completion percentage of every activities in project against with project master schedule. The activity delay status was monitored every day until it met the schedule.

Quality management

The Quality of works in EPC project are controlled in every phase such as the quality of design drawings are checked by relevant designer of other design group and review by the consultant again. The quality of equipment and machinery are checked by the inspector at the manufacturing and upon its arrival on the construction field by the contractor and consultant. Packaging and transportation also use for product quality control during delivery to construction field. The quality of construction works are inspected and tested, and test plan the quality procedure by quality control unit of the contractor and verified by consultant.

All documents which involve with execution and control quality of work are kept for audit. The process of construction was again inspected to ensure that the quality system is followed up the project quality management system.

Cost management

The EPC project has controlled cost from review concept of design and cost estimate must within the construction budget. The 60% of budget is for procurement work. The project manager together with procurement controller controls the price of every material while the subcontractors compared price between three vendors and recorded the price for the company. Materials are requested by construction department. The Construction manager control waste of material in construction field to control construction cost.

B. PMC project delivery system

PMC project delivery system in this case study is applied to residential condominium which had been specified delivery date to customer. PMC takes responsibility to manage project as project manager of the owner in order to control all process in the project until the completion of project. In order to accomplish the project, the owner developed standard pattern of design and specification standard, hires same multiple prime contractor in every project. The fixed schedule and construction method used controlling time, cost and quality in project. 

Time management

The project master schedule is fixed duration for construction structural, architectural in each floor, thus productivity rate and construction method of main activities in project are monitored and controlled. The coordination between prime contractors to interface activities is control by PMC together with structural and architectural contractor.

Quality management

In PMC project, the process to check quality of design is not established because the project uses standard pattern of design and specification standard. Quality of contractor is evaluated when project was completed by using data from customer recommendation for evaluation. In construction stage, QC is using internal check by the contractors. The contractor has to recheck the quality of predecessor for ensure that it will not effect to his work. PMC takes responsibility as auditor to check quality at random.

Cost management

The costs of construction in previous projects are recorded. Cost estimate of new project is compared with this record to define cost variation. The construction budget is fixed. PMC takes responsibility to control this construction budget. Hence, change order is controlled for balance cost within budget.   

C. DBB project delivery system

The DBB project delivery system is applied for transmission rehabilitation project of state enterprise. The owner decides to use DBB project delivery system because all contractors in Thailand do not have experience for rehabilitation tunnel. Hence, the design drawings need to complete before construction for reduce risk during construction. The owner manage project by himself. He hires the consultant to design follow his concept. Bidding process can be started after the owner ensures that the details design drawings are completed. Also, the construction process can be started after all other organizations agree to the owner for using their area during construction. The project can be delivered to the owner after the owner can use the tunnel for transmit water supply.

Time management

The project master schedule is developed from the recorded document of similar project in the previous. The contractor has to develop construction master schedule and details schedule for using to control project during construction. The project is monitored by measurement productivity rate of main activity compare with required productivity rate in schedule every day. The weekly meeting is arranged to monitoring project status, problem and solution to correct such problem.  

Quality Management

In DBB project, the quality of design is checked by internal process of designer as explanation in design process. Due to the owner has a lot of knowledge in his construction area, thus, the owner review in details design and gives comments to designer.

In construction stage, the quality of work follows up the quality standard which has been specified in specification during design phase. The quality control process is established to control quality standard document which specify in contract. Test and Inspection process are used to control during construction and the quality of readiness work. The owner also hires the consultant to check the step of construction as explanation in construction method statement and quality of work in each step during the contractor execution until completion of such work. The owner randomly checks some activities again as auditor.

Cost management

Cost of project is controlled during develop details design drawing. The consultant estimate cost of work compare details design submit to the owner for consideration. The owner order the consultant corrects drawings when cost estimate higher than his expected cost. The final cost estimate is submitted to JICA for consideration approve loan to the owner as he request. The contract price is controlled within budget during bidding by negotiate with bidder who propose lowest price. Cost of project during construction is controlled within contract price. The owner control cash flow of project against cash flow plan by control progress payment and change order in project.

D. DM project delivery system

DM project delivery system in this case study is applied to construction food factory. The consultant takes responsibility to design, bidding and construction management in project. Design drawings and other engineering documents are developed parallel with the construction until completion. The designers still takes responsibility to provide additional information or additional drawing or both to the project until the construction finish. In bidding process, the consultant provide service to prepare list of prospective contractor to be a bidders, evaluate prequalification proposal to select qualified bidders, prepare bid instruction documents, bid documents, arrange bidding processes, evaluate bid proposal and recommendation and assist the owner during negotiation. During construction phase, the consultant provides service construction management, construction supervision and contract administration in project. The coordination between multiple contractors to interface work is key to control overall schedule of project finish on time as specifying in construction master schedule. The delay of schedule also causes from the change order that effect to the related work to be suspended.

Time management

There are two main schedules that use to control project. Project master schedule uses to control all activities in project from design until handover to the owner. The Construction master schedule use to control all activities during construction. In order to achieve schedule during design and biding, the consultant develop operation plan for design and bidding, designer keeps closely collaboration with the owner, establishing design procedure and bidding procedure and using stock of knowledge in similar project to reduce time for preparation documents.

Combine schedule of each prime contractor for using to coordinate and interface works is key success to complete project with in time frame. The consultant takes responsibility to coordinate all prime contractor including vendors to start working in each area. Percent complete of work in each activities are calculated for monitoring status of project against construction master schedule.

Quality management

The Quality Characteristic and Quality of design are concept to control the quality of design. In order to achieve this concept the process to control quality of design consists of selecting qualified designer, established design procedure, communication within team work, recorded comments in design for review, arranging design review meeting, control of drawing and specification before submit to the owner.

The quality of work during construction requires three processes to control are field construction method, supervision and control and inspection to assure the quality of work. The process to control quality of work in construction field consists of control sequence of work in construction schedule, control construction method statement, develop check list for inspection, and control revision of drawing and specification, control instrument for measurement, supervision and inspection and documentation for review the quality control of project.

Cost management

The application of value management technique to find out the project objective and using value engineering method to eliminate unnecessary costs of project from design. In bidding process, bid price of the bidders are evaluate by compare with cost estimate to find out the differentiation of cost for negotiation. The construction budget is used to control cost during construction, especially control cost of change order and progress payment of contractor. The consultant makes cost report to submit to the owner time by time until the project complete.

3. Contract administration practices of each project management process for different project delivery system

The contract administration in project directly involves with project management process from project commencement until project close out. The activities, which are mention in contract, are administered by the owner or the consultant. The purposes of contract administration of four cases study that reveal in this study are as follows:

i) To inform the contract start working in project.

ii) To control the quality of work, contract price and contract period.

iii) To control and monitoring progress and status of project.

iv) To reduce effect to the owner if the contractor cannot complete project.

v) To specify the condition and process to request the progress payment and final payment of the contractor.

vi) To specify the condition to change in scope of work and claim from such variation order.

vii) To certify the final construction that it conforms to contractual requirement.

The Contract administrations for different project delivery system are similarly in above purposes. However, the process to administer of each project delivery are difference because it is implement simultaneously with project management process which has difference in each project delivery system.

4.  Benefits and risks of each different project delivery system.

Different project delivery systems have difference benefits and risks because of each system are suitable for different condition. In study, the researcher finds the benefits and risks of project delivery system which applied in case study project as follows;

A. EPC Project Delivery System

Benefits

a) Price and time of project have a great degree of certainty.

b) Suitable for project which needs specific technology and time constraint.

c) Single point of responsibility and single point of contact

d) The design is integrated with specification of specific equipment and machineries at outset for constructability more effectively.

e) The owner reduced resources that used to control quality of work.

f) Risk of time constraint and cost constraint are allocated to the contractor.

Risks

a) Risk of less competition of EPC contractor in market that increasing price of construction.

b) Risk of less control of owner has possibility to get non-conformity product.

c) Risk from the contractor may neglect to control quality of work.

d) Risk from tasks across engineering, procurement and construction lack of management.

B. PMC Project Delivery System

Benefits

a) Project is coordinated continually from project start until delivery to the owner by single unit.

b) PMC provides properly cost management method in order to control cost more effectively.

c) PMC provides properly time management method to ensure that project is delivered on time.

d) Mitigation risk of project which may lead to be risk of business.

e) PMC Provide One Stop Service during Executing Project.

Risks

a) Risk from less capability of PMC lead to make a mess in project.

b) Risk from less control of PMC has possibility to get non-conformity product and schedule delay.

c) Risk from the owner interfere project management process.

d) Risk from PMC select project management process is not proper to project characteristic and external environment factor that effect on project delay, low quality and cost overrun.

C. DBB Project Delivery System

Benefits

a) The owner able to have direct influence, in design process in order to control quality in the design.

b) The completion of the design in advance of the bidding process allows for greater certainty for the owner in budgeting the project.

c) Suitable for the public expenditure or audit demands are rigid as it is transparent and based upon competition

d) Change are reasonably easy to arrange and value where the design needs vary due to changes in the owner demand, or technology.

e) The quality standard is specified completely in design for control contract price during bidding and control required quality of work during project implementation.

Risks

a) The owner takes risk from design error after design complete.

b) The overall project duration maybe longer than project master plan due to construction cannot commence prior to the completion of design.

c) Risk of conflict to take responsibility of non-conformity work between design company and contractor.

d) Risk from disruption in bidding process of unqualified bidder.

e) The owner want to speed up the process by producing bidding documents from an incomplete design, this can result in less cost and time certainty.

D. DM Project Delivery System

Benefits

a) Suitable for the project that want to speed up the process by producing bidding documents from an incomplete design.

b) The cost benefits from controlling the development of the design at the outset until design complete for the best practice and innovation in construction.

c) Management cost collaboration from concept of design until control cost during construction.

d) The owner benefit from single point contact.

e) Better coordination and delivery of design information from design teams to main contractor.

Risks

a) The owner’s requirements cannot be settled in design development effect on project completion delay and cost incur.

b) Unqualified consultant makes risk on project disruption, or delay, or cost overrun.

c) Risk from designer may hide design error.

d) Risk from designer intend to make high criteria to select contractor.

e) Uncertainty about the cost of the complete works at the start of construction.

5. Selection Project Delivery System of Construction

The indicators from four categories, namely project characteristic, project objective, characteristic of the owner & contractor and external environment are used to identified the properly project delivery system. The benefits and risks are help the owner and engineer to decide the properly project delivery system which provide maximum benefits and minimize risks to the owner. However, it does not fix to select single project delivery system for the project. The project can be divided into many phases and select different project delivery system for suitable to each phase.

His thesis abstract is copied below. 

Abstract

The construction industry environment is becoming highly complex because of both internal and external factors. Internally, construction project are more integrated and complicated. Moreover, technology-driven projects with limited resource availability have become common. For the external perspective, the business climate is highly competitive and involves numerous project stakeholders with single project. The project management process considerably increased importance to implement the objective under uncertainty of this environment. The root cause are usually due to improper selection and implementing project management process in each project, which has different characteristic and different project delivery system. Qualitative Approach and Case Study method is selected in this research. Using mixed data collection approach, case studies were developed utilizing a combination of observation, surveys and interviews. The data from the documents and data from the collected from the key actors of the interview are interpreted into the information by mapping. The research finding reveals that the authority, responsibility and role of each party in project are difference for each project delivery system. Project management process in order to control time, cost and quality of each project depending on project characteristic, internal factors, the constraints of external environment and project delivery system. The contract administration is implemented simultaneously with the project management process to ensure that the contractual requirement is responded completely. The features of the project management process provides the value and benefits such as better control, increased efficiency/profitability, greater project transparency, more client satisfaction.

Keywords : Project Management Process, Project delivery system, Engineering Procurement and Construction, Design Bid and Build, Project Management Consulting, Design and Manage


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Key Strategic Project Management Processes for Different Project Delivery Systems: A Case Study of Construction Projects in Thailand

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