Performance Based Studies Research Group

-Abstract-

The University of Minnesota has been implementing the best value Performance Information Procurement System (PIPS) for the last four years. PIPS uses a new project management model which transfers risk and control to the vendor, and minimizes the client’s PM activities. The performance of the vendors has increased and the number of transactions has been minimized, however, many of the project managers have resisted the new PM model. The resistance of the PMs has resulted in the analysis of the strategic plan to implement the new project management model. The result of the analysis is that the strategic plan must concentrate on the development of the core team of visionaries and not on the implementation of the new PM model.

The tactical plan on the mechanics of the new PM model is also required, but is not as important as nurturing the core team of visionaries who are leading the change. The strategic plan ensures the sustainability of the new PM model.

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-Abstract-

Misunderstanding of how the construction industry structure works can lead to unseen costs, inefficiencies, higher construction costs, poor results from training programs, and lower value. A deductive based Construction Industry Structure (CIS) analysis was first introduced in 1992. Continual testing of the model in the best value environment and past industry performance in the low bid environment has given deductive validation of the CIS model. Misunderstanding of the CIS may have led to the failure of construction management (CM) research to correct industry issues. CM education/research has become isolated from the construction industry. CM proposes solutions that are management based (control, direction, and inspection). The deductive logic of the CIS identifies the traditional management approach as reactive, inefficient and ineffective in the more developed manufacturing sectors. Traditional CM claims the construction industry is different from all other industries in complexity and uniqueness of construction projects. The assumption is based on observation and inductive logic, and is almost impossible to validate through inductive testing. The traditional inductive logic/testing procedure of validating a theory from observations through testing has not been accomplished. The authors propose that the inductive testing and data requirement is unsupportable by the industry. The authors propose that researchers go back to basic deductive logic, common sense, dominant simplistic models, and deductive testing to increase the efficiency of the construction industry. CIS identifies the construction industry problem as a structural misalignment and a systems issue, and not a unique technical issue. The authors use logic, deductive test results, and results from other industries to validate the proposal.

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-Abstract-

This is a case study testing the hypothesis that the best value PIPS process is a sustainable process/structure. The best value PIPS process has been tested 450 times over 13 years. However, the process/structure has not been sustainable. It has been resisted because it minimizes the need for construction management, simplifies the delivery process and transfers both risk and control to the contractors. This hypothesis was denied by the National Science Foundation, even though Harvard University proposed to match funding to test/implement the process at Harvard University.

The University of Minnesota approached the Performance Based Studies Research Group (PBSRG) to test and implement the process. Unlike other research clients, they agreed to meet the requirements for sustainability: implementing a strategic plan, using a core team, running tests before full implementation, and implementing continuous education to both client professionals and contractors. This study shows the results of the hypothesis testing.

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-Abstract-

An information environment uses non-technical performance measurements to provide data that indicates relative efficiency and effectiveness of all key participants in a system. The movement from a traditional environment, which relies upon technical information, high levels of management and control, and large amounts of information transfer, to an information environment, which relies upon non-technical information, minimal levels of management and control, and minimizes information and communications, is difficult. In construction and facilities, the industry is predominately traditional in its characteristics and the transition to an information environment often is converse to standard practices and thinking.

This paper presents research conducted at the University of Minnesota (UMN) Capital Planning and Project Management group and their movement from a traditional organization to an information environment. The UMN’s traditional management and system structure is presented along with the intermediary steps taken in the transformation to a performance information-driven system. In the transition, the UMN began with using performance measurements in small maintenance and repair requirements (specifically mechanical, electrical, and roofing services) on vendors and contractors. The system was then expanded to consider larger providers of services and some internal assessment of department performance. As the environment evolved, the performance measurements were directed inwards, with an initial examination and tracking of project managers, designers, facility managers, etc. The resultant environment is presented along with the most recent performance results of the research.

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-Abstract-

Poor construction performance has resulted in researching procurement process efficiency and overall delivery environment. This paper identifies the maximization of the passing of information as one of the root causes of the poor performance. The hypothesis is validated using several approaches: using deductive logic and the analysis by the Kashiwagi Solution Model (KSM), by associating the relationship between the client’s professionals and contractors with the process of outsourcing, quality control, measurement, and the construction industry structure, and ongoing research tests with the US Army Corps of Engineers and US Medical Command (MEDCOM).

� The hypothesis proposes that as communications between the client’s professionals and the contractors increases, the level of accountability, transfer of risk, and the minimization of risk by the contractor decreases. The hypothesis proposes that the amount of information that is being passed, the client’s documentation, and the management of the contractor by the client’s professionals should be minimized. Furthermore, the hypothesis proposes that this will lead to an increase in the contractor’s ability and interests to modify their behavior to perform, to preplan, and to measure their performance. The paper proposes that conventional "best practices" of increasing communications, meetings, extensive client representative documentation, and client construction management and inspection are inefficient, results in less accountability, and lead to an environment with a lack of performance information (measurement of value, customer satisfaction, on-time, on-budget, overall costs, and continuous improvement).

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