Performance Based Studies Research Group

-Abstract-

The Dutch construction industry experienced a problem with collusion for five years ending in 2003. Innovative Dutch visionaries perceived a potential relationship between an inefficient, transaction laden, over-regulated low price award environment and supplier collusion. Kashiwagi and the Performance Based Studies Research Group (PBSRG) introduced the Construction Industry Structure (CIS) and best value Performance Information Procurement System to the Netherlands in 2004. Heijmans (third largest Dutch contractor) and the Rijkswaterstaat brought the PIPS technology into the Netherlands by signing licenses in 2006, Santema and Scenter/Delft University of Technology followed later in 2006, and became the first successful research group to build a PBSRG type research platform. In 2009, the Rijkswaterstaat utilized Scenter’s expertise to deliver $800M of fast track infrastructure construction utilizing the best value PIPS concepts. The preliminary test results included the following: collusion problems may be caused by client delivery system, problem with construction industry performance is a process issue and not a technical issue, best value PIPS can solve Dutch construction problem issues and is a paradigm shift more than a legal issue, validation of the PBSRG model of simultaneous basic theoretical research, prototype testing, and implementation using industry funding may be the quickest way to change industry practices.

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-Abstract-

Building an academic research program that can proactively lead and impact the construction industry in a developing country has proven to be difficult.  This paper uses Malaysia as a case study to test alternative methodologies.  The Malaysian universities have not been successful in bridging the gap between the industry and academic research.  The performance of the academic research units has not produced dominant measureable results for the Malaysian construction industry.  The result from existing efforts has been a gulf between the construction industry and academic research organizations in Malaysia in terms of credibility.

A couple of methodologies will be tested in Malaysia.  A major contractor developer Brunsfield has proposed to build research capability and be a primary research organization and then support a university of their choice to participate as an academic partner.  The University of Science Malaysia, the top rated research institute in Malyasia has proposed on building a research capability copying a successful model from the United States and partner with other research groups and the industry to build a research capability to attempt to bridge the current gap.  The planning for both efforts will be documented in this case study.

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-Abstract-

The Performance Information Procurement System (PIPS) was developed at Arizona State University (ASU). PIPS is used to deliver services. PIPS minimizes the client's risk/project management transactions by up to 90%, can increase vendor profit up to 100% at no additional cost to the buyer, and delivers projects on time, no cost deviations, with high customer satisfaction at a 98% rate. PIPS has been tested in the construction industry and has been adopted by ASU as the model for the delivery of services.

The implementation of the model has increased ASU's vendor's cash investments to $100M over the next ten years.

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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-

In the spring of 2008 a large planned community in Anthem, Arizona approached the Performance Based Studies Research Group (PBSRG) at Arizona State University (ASU) to increase efficiency within the community’s procurement process. The PBSRG are forerunners in the area of best value procurement and utilize the Performance Information Procurement System (PIPS), which was created using principals from Information Measurement Theory (IMT).

The Anthem community council board of directors implemented the PIPS process to rate competing property management services vendors based upon their primary financial and performance information. The PIPS rating system that was implemented identified the top two vendors to be nearly identical, which demonstrated the need for a human decision making model to be utilized to converge upon the true best value vendor. This model focused on the inherent risks to the project as well as further investigation of cost and performance information in order to properly compare the value offered by each vendor. This is the first test application of the Performance Information Procurement System in property management services.

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