Performance Based Studies Research Group

-Abstract-

There are two ways to analyze the problem of construction nonperformance (not on time, not meeting the quality expectations of the owner, and not having cost increase change orders). The first is a project-specific approach, which assumes that the problems are being caused by the uniqueness of each project. This approach stresses: finding solutions in better trained personnel and craftspeople, more standards, construction management, and inspection. The other is a process approach, which assumes that the problems are being caused by the process. Performance-based procurement uses the process approach.

It hypothesizes that the current price-based design-bid-build procurement process is inefficient, supports an adversarial environment, is devoid of performance information, is highly inefficient, maximizes management and inspection instead of quality control, and treats highly differential construction products and services as commodities. The Performance Information Procurement System (PIPS) was created to resolve these issues causing construction nonperformance. The results of 380 tests of construction procurement will be assessed in terms of performance. Using case studies from a variety of large clients, the results of performance will be analyzed in terms of on-time, on budget, and meeting customer expectations. Lessons will be drawn on the cost of performance, the minimization of client management and inspection, and the creation of a "win-win" relationship of best value for the owner while concurrently maximizing the contractor profit.

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-Abstract-

The Performance Information Procurement System (PIPS) is an information based best value system that minimizes risk using best business practices. Best business practices include the minimization of management and control, the use of performance information to pick the most qualified contractor(s), and forcing contractors to minimize risk. The authors propose that the cause of construction nonperformance is the lack of understanding by the client’s professional representatives.

The paper proposes that there is a lack of construction management educators/researchers to teach the industry. Educators/researchers lack first hand experience, education, and research funding to support best value education. This paper highlights the difficulty using a case study of a CM who is introduced to PIPS during a 14 week masters level construction class. One of the class assignments was to implement the concepts on an actual project. The CM selected a large scale bridge project. The bridge project entails replacing the existing movable span of a Railroad Bridge with a new vertical lift span and considers the ability of a CM to overcome the traditional roadblocks to a successful project outcome. This paper analyzes the difficulties faced by the CM in implementing the concepts after a semester of education. Additionally a professor familiar with performance-based concepts had difficulty seeing the incorrect implementation by the student.

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-Abstract-

Performance based procurement is a relatively new directive for contractor selection. Performance based procurement considers the value of the contractor’s services in the award of the contract in addition to the submitted bid price. This study utilizes a statistical analysis comparing the abilities of the performance based and price based (lump sum low-bid) procurement processes to deliver project performance, to minimize the risks of the schedule, to minimize the risks of the budget, and in not meeting the client’s expectations.

The study also uses the results of statistical tests to identify the relative first costs of the processes and the client’s management and control responsibilities. The results of the study show that a performance based procurement process delivers higher performance, minimizes subjective decision making, minimizes risk, and that cost and performance may have no direct relationship.

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-Abstract-

Two major technological thrusts have been developed in the delivery of construction over the past five years: the information-based Performance Information Procurement System (PIPS), and knowledge management systems. This research analyzes the relationship and the synergistic use of the two technologies to increase the performance and value of construction services for the owner.

The thrust of knowledge management has been to increase the use of information technology in the delivery of construction. The result of the analysis is that if knowledge management is successful in raising the level of construction performance and value, it must meet the requirements of PIPS and must minimize the management of information, the passing of information, and the access to construction information.

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-Abstract-

Designers have been selected predominately by a process called the Qualification Based System (QBS). This selection process is based on a subjective judgment of qualifications of past performance. Because the process is not a price-based process, some have called it a performance-based process.

However, the QBS process has sometimes resulted in low design performance that has not met the user’s expectation. The user has had difficulty correlating the expected design performance with the actual procured design performance. The information-based PIPS process was tested to determine if an information-based process could deliver the best available value for design services. Differences between the two processes are examined. The PIPS’ information-based process minimizes the user’s decision-making, work, and risk. The PIPS uses not only past performance, but also the designers’ capability to identify and minimize the user’s risk, and measures the designer’s relative ability to add value to the design. PIPS places the designer at risk to perform, and requires the designers to assign a value to their performance, forcing competition based upon performance and price. This case study involves a hospital selecting a designer for a medical research laboratory facility. The study also includes lessons learned and recommendations.

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