THE CAPACITY OF EMERGING CIVIL ENGINEERING
CONSTRUCTION CONTRACTORS
BRUCE SABELO MPUMELELO RAMOKOLO
SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MAGISTER
SCIENTIAE IN BUILT ENVIRONMENT IN THE FACULTY
OF ENGINEERING, BUILT ENVIRONMENT AND
INFORMATION TECHNOLOGY AT NELSON MANDELA
METROPOLITAN UNIVERSITY
SUPERVISOR: PROF J.J SMALLWOOD
JANUARY 2009
CORE Metadata, citation and similar papers at core.ac.uk
ABSTRACT
Construction management competencies are essential to realise sound practices among and to realise optimum performance by, inter alia, emerging civil engineering contractors. Such competencies enable a clear focus on the business of construction and the management of projects, with increased efficiency and reduced costs as a benefit. The objective of the MSc (Built Environment) treatise study were to determine the current practices and performance of emerging civil engineering construction contractors operating in the Nelson Mandela Bay Metropole. The descriptive method was adopted in the empirical study.
The salient findings of the study are: most of the emerging civil engineering construction contracting organisations lack construction management competencies; construction resources are inappropriately managed leading to construction failures; most of the emerging civil engineering construction contracting organisations lack adequate supervision resulting to poor workmanship; there is a shortage of skilled labour amongst emerging civil engineering construction contractors; procurement processes are inappropriate leading to under capacitated emerging civil engineering construction contracting organisations being awarded contracts; most emerging civil engineering construction contracting organisations lack the requisite aptitude for construction; there is a lack of capacity at all management levels of emerging civil engineering construction organisations in managing the business of construction and that of projects; the nine functions of organisations are not comprehensively represented, and self-ratings indicate inadequacy relative to the management function of control, and relative to certain activities of the organising function.
Conclusions include that emerging civil engineering construction contracting organisations need to be comprised of technical teams that possess adequate competencies and that use the construction technology to its full use enabling their organisations to stay abreast of their competitors.
Recommendations that can contribute towards improving the status quo include: formal civil engineering and construction management education, resources must be present and training should be promoted throughout the industry at all levels of management to ensure proper supervision and correct use of adequately trained labour, skilled or semi-skilled, incapacitated emerging civil engineering construction contractors should be awarded contracts through appropriately and structured procurement procedures, adequate aptitude in construction should be promoted and enhanced in order to realise conceptualisation and visualisation capabilities, comply with legislation, maintain records and communicate using state of the art technology, optimally manage the finances, have the requisite resources and undertake the work efficiently, interact with the respective publics, and market the organisation to ensure sustainability thereof.
Keywords: emerging civil engineering construction contracting organisations, competencies, management, resources.
DECLARATION BY STUDENT
FULL NAME: BRUCE SABELO MPUMELELO RAMOKOLO
STUDENT NUMBER: 203080904
QUALIFICATION: MSc (Built Environment)
DECLARATION:
In accordance with Rule G4.6.3, I hereby declare that the above-mentioned treatise is my own work and that it has not previously been submitted for assessment to another University or for another qualification.
SIGNATURE:
STATEMENT OF ORIGINALITY
The research for the compilation of this treatise entitled ‘The capacity of emerging civil engineering construction contractors’ has been carried out solely by myself, except for references to acknowledge sources as listed in the references section. The sources of information comprise both primary and secondary data.
This treatise is my own work and has not been submitted to another university.
ACKNOWLEDGEMENTS
I would like to acknowledge and express my gratitude and appreciation to the following persons, who made the completion of this treatise possible:
• My mother, Mrs Lucy Nombulelo Ramokolo – for her unwavering support; • My supervisor, Professor John Julian Smallwood – for his professional
construction management approach;
• My fiancee, Ms Busisiwe Mpongoshe – for her consistent positive attitude; • My best friend, Mr Sthembele Matotie – for his words of encouragement; • My colleague, Ms Vatiswa Nyembezi – for her patience in typing my treatise,
and
• All emerging civil engineering construction contracting contractors, construction project managers, and client bodies’ project managers operating in the Nelson Mandela Bay Municipal jurisdiction area– for their interest and prompt response to this treatise survey study.
CONTENTS OF THE STUDY
In chapter one a brief background of the South African Built Environment is presented. The statement of the problem, and the sub-problems along with the hypotheses that are evolved are presented in chapter one. The method used for collecting the data it is also indicated in chapter one. Further, the delimitations, benefits of the study, its objectives and assumptions are also outlined in chapter one.
Chapter two highlights the significance of construction management competencies in a construction contracting organisation. Also, the importance of construction subject areas is amplified in chapter two. The knowledge of the construction management skills is also stressed in chapter two. Chapter two also stresses the importance of the use of eleven project parameters of construction management. Chapter two also explains the significant use of construction resources. The need to use the nine functions in an organisation are also highlighted in chapter two. The importance of having adequate supervision on a construction site is also emphasised in chapter two. Chapter two further highlights the significance of training courses in construction. The importance of a procurement process that assesses the competency of an incumbent contractor during the adjudication stages in awarding contracts is also highlighted in chapter two. Furthermore, the need to possess aptitude in construction is also stressed in chapter two.
Chapter three outlines the research method and the data collection procedures followed during the research process. Chapter three also mentions how the data was collected and how the sample was selected. Chapter three also highlights how the questionnaire was designed. Further, chapter three indicates how the data was analysed. Furthermore, chapter three then defines the sample stratum of the study.
In chapter four, results collected are presented. The results eminates from the elements of the conceptual framework on which the study is based.
In chapter six the survey results are summarised and the conclusions reached are presented. Recommendations for future research are also made. The questionnaire and cover letter are attached as appendixes.
TABLE OF CONTENTS ABSTRACT
DECLARATION BY STUDENT STATEMENT OF ORIGINALITY ACKNOWLEDGEMENTS CONTENTS OF THE STUDY TABLE OF CONTENTS i iii iv v vi viii
1 THE PROBLEM AND ITS SETTING
1.1 Introduction 1.2 Research problem
1.2.1 The statement of the problem 1.3 The problem
1.4 Hypotheses 1.5 Method 1.6 Delimitations 1.7 Benefit of this study 1.8 Objectives 1.9 Assumptions 1.10 Acronyms 1 1 4 4 4 4 5 6 6 7 8 8
2. LITERATURE REVIEW
2.1 Introduction2.2 Construction management competencies 2.2.1 Introduction
2.3 Knowledge areas 2.3.1 Introduction
2.3.2 Management systems 2.3.3 Construction building methods 2.3.4 Business management 2.3.5 Dispute resolution 2.3.6 Professional practice 2.3.7 Procurement systems 2.3.8 Remuneration 2.3.9 Insurance
2.3.10 Design of temporary works 2.3.11 Physics
2.3.12 Valuing of a construction business 2.3.13 Property law
2.3.14 Tax 2.3.15 Sociology 2.3.16 Conveyancing
2.3.17 Marine construction methods 2.3.18 Work study 2.3.19 Property development 2.3.20 Industrial psychology 2.3.21 Industrial relations 10 10 11 11 12 12 14 15 15 15 15 16 16 16 17 17 17 18 18 18 18 19 19 19 20 20
2.3.22 Labour law 2.3.23 Commercial law 2.3.24 Productivity 2.3.25 Cost Engineering 2.3.26 Risk management 2.3.27 Customer service 2.3.28 Human resources 2.3.29 Cost control
2.3.30 The use of Information Technology 2.3.31 Benchmarking
2.3.32 Design management 2.3.33 Project management 2.3.34 Procedures
2.3.35 Facilities management 2.3.36 Cash flow forecasting 2.3.37 Total quality management 2.3.38 Value management 2.3.39 International contracting 2.3.40 Research
2.3.41 Financial Management 2.3.42 Life cycle costing 2.3.43 Ethics
2.3.44 Accountancy
2.3.45 Structural principles design knowledge 2.3.46 Worker participation
2.3.47 Codes of practice 2.3.48 Mathematics
2.3.49 Engineering drawing knowledge 2.3.50 Contract administration 2.3.51 Subcontractor management 2.3.52 Property economics 2.3.53 Land surveying 2.3.54 Service management 2.3.55 Reengineering 2.3.56 Materials management 2.3.57 Training in construction 2.3.58 Strategic planning 2.3.59 Programming planning 2.3.60 Estimating 2.3.61 Purchasing 2.3.62 Construction statistics
2.3.63 Civil engineering construction methods 2.3.64 Contract documentation 2.3.65 Marketing 2.3.66 Specifications 2.3.67 Measuring of quantities 2.3.68 Final accounts 2.3.69 Public relations 20 20 21 22 22 23 24 24 25 25 26 27 27 27 28 29 30 30 31 31 32 32 33 33 34 34 34 35 35 35 36 37 37 38 38 39 40 40 41 41 42 42 43 43 43 44 45 45
2.4 Construction management skills 2.4.1 Graphic communication 2.4.2 Oral communication 2.4.3 Written communication 2.4.4 Plan reading 2.4.5 Interpersonal 2.4.6 Motivating 2.4.7 Computer 2.4.8 Technical 2.4.9 Initiating
2.4.10 Negotiating with project managers 2.4.11 Measuring productivity
2.4.12 Report writing
2.4.13 Negotiation with plant hire 2.4.14 Systems development 2.4.15 Negotiation with community 2.4.16 Auditing 2.4.17 Conflict resolutions 2.4.18 Team building 2.4.19 Entrepreneurship 2.4.20 Leadership 2.4.21 Financial 2.4.22 Decision making 2.4.23 Costing
2.4.24 Negotiate with trade unions 2.4.25 Negotiate with material suppliers 2.4.26 Negotiate with clients
2.4.27 Negotiate in subcontracting 2.5 Project parameters 2.5.1 Introduction 2.5.2 Worker satisfaction 2.5.3 Public health and safety 2.5.4 Productivity 2.5.5 Designer satisfaction 2.5.6 Client satisfaction 2.5.7 Contractor satisfaction 2.5.8 Project cost 2.5.9 Project time 2.5.10 Health and Safety 2.5.11 Project quality 2.5.12 Environmental issues 2.6 Construction resources 2.6.1 Introduction 2.6.2 Competencies 2.6.3 Management 2.6.4 Plant and equipment 2.6.5 Construction material 2.6.6 Information 2.6.7 Financial Issues 2.6.8 Innovation in construction 45 48 48 48 48 49 49 49 50 50 50 50 51 51 51 52 52 52 53 53 53 53 53 54 54 54 55 55 56 56 57 58 58 58 58 59 59 59 60 60 61 62 62 62 63 64 64 66 66 67
2.6.9 Co-contractors
2.6.10 Labour utilisation in construction 2.6.11 Technology
2.7 Nine functions in an organisation 2.7.1 Management functions and activities 2.8 Supervision
2.8.1 Introduction
2.8.2 Definition of site supervision 2.8.3 Planning 2.8.4 Leading 2.8.5 Controlling 2.8.6 Organising 2.8.7 Coordinating 2.9 Academic preparedness 2.9.1 Introduction 2.9.2 Marketing course 2.9.3 Supervision course 2.9.4 Maintenance course 2.9.5 Motivation course
2.9.6 Human resource planning course 2.9.7 Leadership course
2.9.8 Budget control course 2.9.9 Communication course 2.9.10 Organisation course 2.9.11 Programming course 2.9.12 Entrepreneurship course 2.9.13 Quality management course 2.9.14 Health and Safety (H & S) course 2.9.15 Technical course
2.9.16 Costing and estimating course 2.9.17 Construction contract course 2.9.18 Management development course 2.9.19 Information Technology (IT) course 2.10 Procurement
2.10.1 Introduction
2.10.2 Quality management system 2.10.3 Construction related experience 2.10.4 Availability of resources
2.10.5 Availability of construction related qualifications 2.10.6 Time management systems
2.10.7 Cost management systems 2.10.8 Health and Safety (H&S) systems 2.10.9 Innovation
2.10.10 Financial status
2.10.11 Human resource management system 2.10.12 Training programmes
2.11 Aptitude for construction
67 68 68 69 69 70 70 70 71 72 73 74 75 75 75 75 76 76 76 77 77 77 78 78 78 79 79 79 79 80 80 80 81 81 81 82 83 83 83 84 84 84 85 85 86 86 86
2.11.1 Introduction
2.11.2 Spatial relations visualisation 2.11.3 Analytical reasoning 2.11.4 Inductive thinking
2.11.5 Three dimensional thinking in construction 2.11.6 Experiential problem solving
86 87 87 87 88 88
3. THE METHODOLOGY AND SAMPLE STRATUM
3.1 Introduction3.2 Methodology 3.2.1 Research method
3.2.2 The Data Collection Procedures 3.2.3 Collecting the data
3.2.4 Sample selection 3.2.4.1 Responses
3.2.4.2 Questionnaire design 3.2.5 Design of the Survey 3.2.6 Analysis of the data 3.2.6.1 Primary data 3.2.6.2 Secondary data 3.2.7 Method of analysis 3.2.8 Measures
3.3 The Sample Stratum 3.3.1 Rationale and Breakdown
89 89 89 89 91 92 92 92 93 95 96 96 96 96 97 97 97
4. RESULTS
100-1625.
TESTING THE HYPOTHESES
Hypothesis 1.1 Hypothesis 1.2 Hypothesis 2.1 Hypothesis 2.2 Hypothesis 3 Hypothesis 4 163 163 164 165 166 166 167 6. CONCLUSIONS AND RECOMMENDATIONS
Conclusions Recommendations Construction management Future studies 168 168 169 169 170 REFERENCES
APPENDIX A
NOTIFICATION LETTER APPENDIX B QUESTIONNAIRE 171-189 190 191 192 193-202CHAPTER 1
THE PROBLEM AND ITS SETTING
1.1 Introduction
South African’s Gross Domestic Product (GDP) grows at between 4%-5% per annum, of which 5.1% is invested in construction. The construction industry employs more than 500 000 people of which only 45% are estimated to be working in the formal sector.
The need for sustained growth of the construction industry is given impetus by government’s commitment to infrastructure investment to achieve economic growth and to address the infrastructure backlog emanating from apartheid. The performance and capability of the construction industry is pivotal to transport and communication, import and export, industrial development, and to all the logistics of a growing economy that increasingly supports an integrated and economically-active population. It is in the context of these challenges that government has proclaimed the construction industry as a national asset to the developed, maintained and transformed through a range of policy, institutional and practical initiatives. Active promotion of an efficient and effective construction industry that is comprised of adequately qualified and well-trained practitioners, that reduces waste, and that improves the working environment of its people for better employment and greater productivity. Consequently the sustainability of emerging civil engineering construction contractors is complementary to the objectives of government.
Fellows et al. (2002: 6) state that construction management entails the management of the business of construction as well as the management of projects, which in practice are interdependent. The nine recognised functions applicable to all organisations, need to be integrated and are equally important in terms of the functioning and sustainability of an organisation, namely: general management, technical or production, procurement, marketing, financial, human resources, public relations, legal, administration and information technology (Smallwood, 2006: 64).
The general management function in turn, is constituted by the five functions of management work, namely planning, organising, leading, controlling, and coordinating (Allen, 1973: 64). The first four functions of management in turn collectively entail nineteen activities. Planning includes forecasting, developing procedures, and developing policies. Organising includes developing organisation structure, delegating, and developing relationships. Leading includes decision-making, communicating, motivating, selecting people, and developing people, and controlling includes developing performance standards, measuring performance, evaluation performance, and correcting performance.
According to Rwelamila et al. (1997: 369), the inability to manage the business of construction due to poor management accounting, inaccurate estimating, and under pricing, causes insolvency in civil engineering construction contracting organisations. Lack of adequate marketing skills, strategic and operational factors further exacerbates failure in civil engineering construction contracting organisations. Further although it is important to be able to successfully manage projects, the ability to manage the business of construction is critical in terms of sustainability. Furthermore, Hutchings and Christofferson (2001: 265) state that quality workmanship and products, good subcontractors / subcontractor relations, customer communications and relations, teamwork, work ethic / commitment, and effective sales and marketing are success related factors in terms of the management of construction. Good subcontractors employ the bulk of the work force, and they need to produce site supervision and quality workmanship which satisfies the customer.
Jacquet (2002: 6) reinforces the importance of competencies and states that in order for an incumbent to perform in a chosen operating field of expertise, an adequate qualification relative to the field of expertise, and adequate qualification relative to the relevant industry is a pre-requisite. Construction management competencies complemented by adequate resources, yield successful construction results. This includes personnel who possess adequate construction-related qualifications, and the relevant management and technical skills. Furthermore, implementing the right technology is critical to an organisation’s success, and sustaining a skilled, highly educated and
Gamble (2004: 192-193) states that 92% of emerging civil contractors have a low-level of knowledge and skill and he recommends the establishment of an ideal Further Education and Training (FET) curriculum that must make a clear distinction between a low, intermediate and high level of knowledge and skills. This would strengthen intermediate level knowledge and skills and create a platform that will move away from the manner in which emerging civil engineering construction contractors are associated with trade apprenticeships that are characterised by ‘mindless’ doing in response to pre- specified procedures. The current skills development programmes are not structured to cater for this notion. Given the low-level of knowledge and skills attributed to emerging civil engineering construction contractors, it is notable that training is receiving much attention from contemporary business as an important career satisfaction, and enhances rapid growth of individuals within the organisational structure. However, the current training programmes available do not strive to achieve construction-related strategic objectives, and do not focus on addressing sustainable construction. Chileshe et al. (2005: 18) support this by stating that Higher Education Institutions (HEIs) need to form a collaborative endeavour jointly with the business world of construction with the aim of formulating a holistic construction curriculum that will serve the needs of the contracting environment.
Li et al. (2007: 40) emphasise the importance of an appropriate procurement system in awarding contracts as it is a crucial decision making process that selects potential bidders and ensures the success of construction projects. Appropriate procurement criteria investigate the incumbents’ management capability which includes project management structure, human resources and quality management. Competent emerging civil engineering construction contractors need to showcase their delivery capabilities and experience which includes adequate construction methods, plant ownership, current and completed contracts. A sound financial status based on net assets, earnings and several financial ratios including debt to equity, current ratio and ability to carry construction losses needs to be assessed and analysed prior to awarding a contract to an emerging civil engineering construction contractor.
Aubrey (2005: 33) states that an aptitude for construction provides a reasoning framework upon which an individual can build both strategic and
connection among vision, visualisation and individual reasoning processes. An aptitude for construction is central to the analysts’ task of applying human judgements to reach conclusions from a combination of evidence and assumptions. Given the poor performance of emerging civil engineering construction contractors and the abandonment of projects in cases, which results in cost overruns to clients as a result of the projects having to be completed by other contractors, a study was conducted to determine the capacity and causes of failure of such contractors. The following constitute the hypotheses which were evolved for testing.
1.2 Research problem
1.2.1 The statement of the problem
High rates of failure, particularly amongst emerging civil engineering
construction contracting organisations is a serious concern within the industry. The aim of this research is to obtain feedback from emerging civil engineering construction contracting organisations on the competencies required by contracting organisations.
1.3 The problem 1.3.1 The sub-problems
The study will investigate the following sub-problems:
1.3.1.1 Emerging civil engineering construction contracting organisations either do not complete projects or complete them late;
1.3.1.2 Emerging civil engineering construction contracting organisations do not meet quality standards;
1.3.1.3 Clients experience cost overruns due to late completion and rectification of defective work, and
1.3.1.4 Emerging civil engineering construction contracting organisations are not compatible with construction.
1.4 Hypotheses
The following hypotheses will be tested:
1.4.1.1 Emerging civil engineering construction contracting organisations lack construction management competencies;
1.4.2.1 Emerging civil engineering construction contracting organisations lack adequate supervision;
1.4.2.2 Emerging civil engineering construction contracting organisations lack the necessary skilled labour;
1.4.3 Procurement processes are inappropriate, and
1.4.4 Emerging civil engineering construction contracting organisations lack the requisite aptitude for construction.
1.5 Method
The term emerging civil engineering construction contractor individuals will include civil engineering and construction manager in the research. The interview method was used in the research. A preliminary research approach comprising of a qualitative method of data production was conducted from emerging civil engineering construction contracting organisations who at the time the research was undertaken were engaged in construction activities in Port Elizabeth.
The client bodies were divided into two, namely the Nelson Mandela Bay Municipality and the Coega Development Corporation. The reason as to why these two client bodies were chosen is because they were the only two client bodies at the time the research was conducted who had public contracts that attracted emerging civil engineering construction contractors. Further, the above respective client bodies’ project managers responsible to monitor the said projects were interviewed. On the other hand, the on going infrastructural development at the Coega site had a series of emerging civil engineering construction contractors who were working. Again responsible project managers of the Coega Development Corporation were interviewed. In order to make a comparison to the findings, all civil engineering consulting practices who had on site construction project managers on both the abovementioned Municipal and the Coega projects were interviewed. The input gathered from these individuals will prove to be invaluable for future prospects of the built environment.
1.6 Delimitations
The study includes emerging civil engineering construction contracting organisations, client bodies’ project managers of the Nelson Mandela Bay Municipalty (NMBM) and the Coega Development Corporation (CDC), and practicing construction project managers based in the Nelson Mandela Bay Metropole which includes Port Elizabeth, Despatch and Uitenhage, which were undertaking, or had undertaken construction work for the Nelson Mandela Bay Municipality.
1.7 Benefits of this study
A study of capacity of emerging civil engineering construction contractors may yield the following benefits:
• A wide diversity of scales of economic activity ranging from the small one-person businesses to large employers;
• A rich array of economic participation opportunities for local residents, not only as employees but also as owners in local enterprises;
• A fully multi-sectoral local economy including construction, manufacturing, service industrial, and retail services;
• Realisation of emerging civil engineering construction delivery capability for South Africa’s economic and social growth, and
• To achieve a proudly South African emerging civil engineering construction industry that delivers to globally competitive standards.
Benefits to civil engineering construction industry development, including:
• A business of construction process of ‘development’ which is self-sustaining in the long run, and
• The very process of ‘development’ which must be initiated by the ‘contracting organisations’ themselves.
Benefits to government:
• Create employment opportunities; • Promote community involvements;
• Impact technical skills to the unskilled and semi-skilled contracting members, and
• Develop civil engineering construction contracting contractors to be claimed entrepreneurs.
1.8 Objectives
The study may contribute to the engendering of the sustainability of emerging civil engineering construction contractors as a result of:
• The realisation that construction management competencies in the form of knowledge and skills are necessary to manage emerging civil engineering construction contracting organisations;
• The development and implementation of appropriate emerging civil engineering construction contractor development programmes;
• The nurturing of competitiveness among emerging contractors within the civil engineering construction sector;
• Ensuring that emerging civil engineering construction contracting contractors are held accountable for any possible defects that may occur due to a lack of competencies;
• The creation of a clear knowledge of contractual obligations among emerging civil engineering construction contracting contractors;
• The realisation of a code of conduct for emerging civil engineering contractors;
• The improvement of the image of the civil engineering construction industry and its promotion as a career destination;
• The realisation of a positive attitude towards customer care and efficient service delivery;
• The enhancement of worker satisfaction by enhancing emerging civil engineering construction contracting contractors’ practises;
• The stimulation of production and construction management skills amongst emerging civil engineering construction contracting contractors; • Lifting the skills base of emerging civil engineering construction
contracting contractors by empowering them to access and utilise economic opportunities, and
• Starting the economic investment ball rolling with a series of ice-breaking civil engineering construction projects, whilst ensuring that these projects are replicable by the private sector.
1.9 Assumptions
It is assumed that the interviewed emerging civil engineering construction contracting organisations are comprised of a permanently employed workforce in all levels of management. It is also assumed that all the interviewed emerging civil engineering construction contracting organisations have individuals who are responsible for purchasing materials, employ labour, and hire or buy plant and equipment.
1.10 Acronyms
• AutoCAD: Automatic Computer Aided Design; • CDC: Coega Development Corporation; • CE: Civil Engineering
• CETA: Construction Education and Training Authority; • CIDB: Construction Industry Development Board; • CPM: Construction Project Managers;
• CSI: Cost Schedule Integration; • DDA: Data Development Analysis; • DPW: Department of Public Works; • EMS: Environmental Management System; • FET: Further Education and Training; • GDP: Gross Domestic Product; • HR: Human Resources; • H&S: Health and Safety;
• ISO 9001: International Organisation for Standardisation; • IT: Information Technology;
• LCC: Life Cycle Costing; • LCCA: Life Cycle Cost Analysis;
• LEAP: Leadership Evaluation and Awareness Process; • MSDS: Material Safety Data Sheet
• MSs: Mean Scores;
• NMBM: Nelson Mandela Bay Municipality • NQF: National Qualification Framework;
• OHSAS 18001: Occupational Health and Safety Assessment Series; • PPP: Purchasing Power Parity;
• R&D: Research and Development;
• SADC: South African Developing Community;
• SAFCEC: South African Federation of Civil Engineering Contractors; • SAICE: South African Institution of Civil Engineers;
• SAQA: South African Qualification Authority; • SARS: South African Revenue Service; • VAT: Value Added Tax;
• VMP: Value Management Process; • WBS: Work Breakdown Structure, and
•
3D: Three dimensional.CHAPTER 2
LITERATURE REVIEW
2.1 Introduction
In this first chapter previous studies which are inter-related to this study are outlined. These studies indicate challenges facing emerging civil engineering construction contractors in South Africa and in the Southern African Developing Community (SADC). Egbu (1999: 31) argues that construction management competency is an underlying characteristic of a manager which results in the achievement of acceptable performance. It entails wisdom and facts which managers acquire through experience, theory and practice. The acquisition of such talents gives construction managers an ability to understand the construction processes.
Rwelamila (2002: 5) states that lack of construction related resources in local emerging civil engineering construction contracting organisations results in an unhealthy dependence on established contracting organisations. There is no transfer of skills taking place because once the project has been completed the established contractor departs taking his skilled personnel with him. Ngowi and Ofori (2001: 20) agrees with this in that they state that the situation facing the South African emerging civil engineering construction contracting organisations is problematic because of factors that relate to financial factors. These factors include high overhead costs in general, the administrative cost of extending small loans to emerging civil engineering construction contracting organisations, the high risk of business failure, an exaggerated risk perception of emerging civil engineering construction contracting organisations on the part of bankers and institutional investors, and returns on emerging civil engineering construction investments that are considered low relative to the risk and cost of conducting business. Proverbs and Holt (2000: 658) mention the use of inadequate supervision personnel by emerging civil engineering construction contracting organisations at a construction site as the main contributory factor to failure in construction.
Incompetent supervision does not know how to plan, lead, control and organise construction site activities. Such incompetency leads to quality that is compromised due to non conformance with specification by inadequately trained supervisory staff (Ncwadi and Dangalazana, 2006: 192-193). Service delivery becomes stifled due to costly rework that results in infrastructural backlogs. The Construction Sector Council (CSC) (2003: 5) argues that insufficiently skilled labour on a construction site reduces the production rate due to rework. As a result thereof emerging civil engineering construction contracting organisations incur financial loses. The CIDB, CETA and DPW collaborating report (2005: 1-12) is of the view that the current construction procurement processes are fragmented between different authorities and different spheres of the public sector. Such inconsistency results in the awarding of contracts to contractors based on the principles of the lowest price instead of the best value that ensures conformance to good quality standards in a cost and time effective manner (CIDB, 2004: 41).
Aubrey (2005: 4) states that lack of aptitude for construction inhibits the insight and an ability to conceptualise construction methods in a contracting environment. This lack of aptitude for construction indicates inadequate knowledge in applying various construction stages in their series. Aubrey (2005: 5) further states that aptitude for construction complements effective workplace communication. Effective workplace communication enhances the understanding and assimilation of construction information.
2.4 Construction management competencies 2.2.1 Introduction
Fellow, Langford, Newcombe and Urry (2002: 6) define construction management as the management of the business of construction as well as the management of projects, which in practice are interdependent. Construction management in emerging civil engineering construction requires employees of contracting organisations to acquire appropriate education and training as management competency enables managers to undertake and accomplish given desired outcomes.
2.5 Subject areas 2.3.1 Introduction
Smallwood (2006: 13) reinforces the importance of subject areas in construction as they are project performance measures and parameters. Subject areas describe the procedures for performing construction according to environment, safety and health requirements.
In a study conducted by Smallwood (2006: 13), respondents were requested to respond regarding the importance of subject areas based on the frequency of use of related subject areas (Table 1). Given that cost, quality and time are the traditional project performance measures and parameters, it is significant that cost control, quality management, subcontractor management productivity and materials are ranked in the top ten subject areas for operational middle management, with the exception of productivity for middle management. It is notable, that relative to the ,‘all’ levels of management, there are only nine subject areas for which the IIs are above the midpoint value of 3.00, namely mathematics, building construction methods and business management, customer service and entrepreneurship at top management, only mathematics at middle management.
Table 1 (Part A): Mean frequency of use of subject areas for all levels of management .
Subject area
Levels of management
Operational Middle Top Mean
II Rank II Rank II Rank II Rank
Mathematics 3.28 1= 3.07 1 3.24 1 3.19 1
Building Methods (Construction) 3.28 1= 2.98 2 2.58 9= 2.94 2
Materials 3.08 3 2.65 5 2.28 19 2.67 3 Customer service 1.92 21 2.53 7= 3.21 2 2.55 4 Subcontractor management 2.96 4 2.63 6 2.03 25 2.54 5 Cost control 2.52 9 2.73 4 2.36 15 2.53 6= Quality management 2.79 8 2.53 7= 2.27 20 2.53 6= Contract administration 2.14 16 2.77 3 2.48 12 2.46 8 Productivity 2.91 5 2.34 14= 2.08 23= 2.44 9 Ethics 1.93 20 2.44 10= 2.91 5 2.42 10= Materials management 2.85 6 2.42 12 2.00 27 2.42 10= Programming planning 2.49 10= 2.32 16= 2.32 17 2.37 12 Measuring (Quantities) 2.81 7 2.31 18 1.80 34 2.30 13
Table 1 (Part B): Mean frequency of use of subject areas for all levels of management .
Subject area
Levels of management
Operational Middle Top Mean
II Rank II Rank II Rank II Rank Management systems e.g. Quality 1.96 19 2.32 16= 2.49 11 2.25 14
Contract documentation 2.06 18 2.48 9 2.16 22 2.23 15
Negotiating 1.55 31 2.26 19 2.87 7 2.22 16=
Purchasing 2.18 14 2.41 13 2.08 23= 2.22 16=
Health and safety 2.49 10= 2.07 22 2.02 26 2.19 18
Information technology 1.62 24 2.34 14= 2.44 13 2.13 19
Project management 1.57 27= 2.44 10= 2.36 16 2.12 20
Estimating 1.47 33 2.25 20 2.38 14 2.03 21
Human resources 1.71 23 1.93 25 2.30 18 1.98 22
Civil Methods (Construction) 2.20 13 2.05 23 1.50 46= 1.91 23
Management (Business) 0.91 49= 1.67 32 3.11 3 1.89 24
Specifications 2.29 12 2.08 21 1.92 31= 1.85 25
Plant and equipment
management 2.17 15 1.88 26 1.43 52 1.82 26=
Procedures 1.76 22 1.98 24 1.74 36 1.82 26=
Financial management 0.89 51 1.86 27 2.70 8 1.81 28
Public relations 1.18 38 1.66 33= 2.58 9= 1.80 29
Property economics 0.27 70= 0.79 71 1.30 59 1.78 30
Total Quality Management (TQM) 1.60 25= 1.74 29 1.95 30 1.76 31
Marketing 0.72 55 1.60 36= 2.88 6 1.73 32 Codes of practice 1.60 25= 1.69 30 1.78 35 1.69 33= Worker participation 2.13 17 1.62 35 1.34 56 1.69 33= Entrepreneurship 0.57 65= 1.27 51= 3.07 4 1.63 35 Environment 1.30 35 1.60 36= 1.98 28= 1.62 36 Cost engineering 1.51 32 1.81 28 1.49 48= 1.60 37 Dispute resolution 1.57 27= 1.50 42 1.60 42 1.55 38 Professional practice 1.05 43 1.55 40 1.98 28= 1.52 39 Strategic planning 1.02 45= 1.60 36= 1.92 31= 1.51 40 Accountancy 0.70 56 1.60 36= 2.17 21 1.49 41 Training 1.38 34 1.68 31 1.32 57 1.46 42 Procurement systems 1.09 41 1.66 33= 1.50 46= 1.41 43 Remuneration 0.91 49= 1.53 41 1.72 37 1.38 44 Risk management 1.07 42 1.33 46= 1.66 39 1.35 45 Industrial relations 1.23 36 1.31 48 1.39 54 1.31 46 Environmental issues 1.04 44 1.29 50 1.56 43 1.29 47
Cash flow forecasting 0.60 63 1.35 44 1.81 33 1.25 48=
Final accounts 0.85 52 1.39 43 1.53 45 1.25 48=
Labour law 1.11 40 1.24 54= 1.40 53 1.25 48=
Statistics 1.02 45= 1.30 49 1.31 58 1.21 51
Drawing (Engineering /
Table 1 (Part C): Mean frequency of use of subject areas for all levels of management .
Subject area
Levels of management
Operational Middle Top Mean
II Rank II Rank II Rank II Rank
Benchmarking 0.73 54 1.27 51= 1.49 48= 1.16 54=
Service management 0.69 57= 1.34 45 1.46 50 1.16 54=
Structural principles / design 1.17 39 1.33 46= 0.91 67 1.13 56
Economics 0.57 65= 1.16 57 1.64 40 1.12 57=
Insurance 0.69 57= 1.24 54= 1.45 51 1.12 57=
Facilities management 0.57 65= 1.25 53 1.35 55 1.05 59
Design (Temporary works) 1.19 37 1.07 62 0.75 72 1.00 60=
Design management 0.59 64 1.12 60 1.29 60= 1.00 60= Industrial psychology 0.80 53 0.95 65 1.21 63 0.98 62 Physics 1.02 45= 1.09 61 0.72 73 0.94 63= Value management/engineering 0.64 62 1.13 59 1.05 64 0.94 63= Company law 0.27 70= 0.90 68 1.62 41 0.93 65 Surveying (Land) 1.57 27= 0.80 69= 0.31 77 0.89 66 Work study 1.00 48 0.93 66 0.71 74 0.88 67 Property development 0.20 75 0.88 69= 1.54 44 0.87 68 Valuing 0.65 60= 1.00 63= 0.93 66 0.86 69 Re-engineering 0.65 60= 0.92 67 0.84 69 0.80 70= Research 0.44 68 1.00 63= 0.97 65 0.80 70= Property law 0.23 73= 0.77 72 1.29 60= 0.76 72 Tax 0.12 76 0.67 73 1.25 62 0.68 73
Life cycle costing 0.33 69 0.66 74 0.82 70 0.60 74
Sociology 0.24 72 0.58 75 0.64 76 0.48 75
International contracting 0.05 78 0.36 77 0.76 71 0.39 76
Conveyancing 0.07 77 0.44 76 0.65 75 0.38 77
Marine Methods (Construction) 0.23 73= 0.17 78 0.23 78 0.21 78 Source: Smallwood (2006: 13)
2.3.2 Management systems
Koehn and Datta (2003: 562) stress the need for management systems in contracting organisations as they ensure that the output produced conforms to customer satisfaction without violating any environmental, health and safety rules and regulations. An effective management system not only assures a quality product, but also reduce costs, and enhances productivity. Emerging civil engineering construction contracting organisations’ management need to motivate all their personnel to accept the process.
These include explanation and clarification of quality, environmental, and safety performances expected. Employees need to be involved in decision-making and problem solving.
2.3.3 Construction building methods
Spence (1999: 5) reinforce the importance of construction building methods as they provide information on the entire process of construction. Emerging civil engineering construction contracting organisation individuals need to ensure that the constructed works are accurately located on the site, in accordance with design levels and specifications.
2.3.4 Business management
Ganaway (2007: 109) amplifies the importance of business management in construction as it provides organisations with knowledge on how to organise and control their site operations. Also, business management describes how a business starts up, and also indicates how it can be financed. Emerging civil engineering construction contracting organisations need to know business management as it covers estimating, cost keeping systems, labour relations, equipment, safety, and insurance.
2.3.5 Dispute resolution
Murdoch and Hughes (2000: 347) mention the need of knowledge in dispute resolution in construction contracting organisations in order to embark on a speedy and inexpensive procedure should there be a dispute that arises under a construction contract. This procedure is adjudication. Adjudication has traditional mechanisms of arbitration and litigation that considers in particular the merits of dispute as means of achieving a final solution. Emerging civil engineering construction organisations’ management individuals need to follow procedural adjudication reforms which are designed to produce decision, which is at least, binding on the parties.
2.3.6 Professional practice
Dunlop (2003: 12) amplifies the need to have professional practice in construction contracting organisations as it entails creative work that requires engineering education, training, and experience.
This includes the application of special knowledge of the mathematical, physical and engineering science. Emerging civil engineering construction contracting organisations need to have individuals who can investigate, evaluate, plan and supervise construction for the purpose of assuring compliance with the specifications and design, in conjunction with structures, buildings, equipment, and processes.
2.3.7 Procurement systems
According to Rowlinson and McDermott (1999: 29), elements such as contract strategy and client organisation are functional parts of the procurement system. Individuals of emerging civil engineering construction contracting organisations need to formulate a contract strategy which is appropriate to the intended client, its own organisation and to the project itself. This contract strategy needs to be flexible in order to devise appropriate procedures for choosing contract documents, selection procedures and payment procedures.
2.3.8 Remuneration
Kazaz and Ulubeyli (2007: 2 138) state that construction contracting organisations need to have an employee remuneration policy which is based on performance, professionalism and potential. Remuneration reflects the employee’s skills and performance. This includes variable remuneration which is based on economic and managerial objectives of the contracting organisation. When offered, variable remuneration represent between 10 and 50% of the annual remuneration. Emerging civil engineering construction contracting organisations need to endeavour to pay extra remuneration such as travel allowances to employees who are above a certain level.
2.3.9 Insurance
Levy (2006: 68) emphasises the need for construction contracting organisations to have insurance at it provides payment on behalf of the contractor for damages resulting from bodily injury to that of property damaged. These damages may arise out of use where construction operations are taking place. Emerging civil
engineering construction contracting organisations need to have insurance which covers damage or loss to the structure incurred during construction. Also, they need to have a worker’s compensation insurance which takes care of workers on job injuries.
2.3.10 Design of temporary works
Richardson (1986: 157) mentions the need for construction contracting organisations’ individuals to have knowledge in the design of temporary works as they take full responsibility for the adequacy, stability and safety of all site operations and methods of construction. This means that if any temporary works design by the contractor is inadequate, the deficiency must be remedied by the contractor. Emerging civil engineering construction contracting organisations need to have individuals who have knowledge pertaining to the design of structures.
2.3.11 Physics
Bertelsen et al. (2007: 38) stress the importance of physics in construction as it provides the use of flow, variability and queuing theory disciplines to rationally and mathematically model the understanding the flow of mass production processes. Mass production is based upon the mass production’s ordered laminar flow. Emerging civil engineering construction contracting organisations need to be comprised of production systems that are the same for all the product variations.
2.3.12 Valuing of a construction business
Palmer et al. (2004: 589) indicate the importance of valuing a construction business in order to determine its secondary position with respect to a specific extension of credit. Valuing depends on what assets can be sold or used as collateral to obtain funds to finish a specific job or pay a specific loan. Emerging civil engineering construction contracting organisations need to have individuals who can perform valuing in order to assess the impact of risks and also analyse acceptable business valuation approaches and methods. Such information will form a match between valuation methodology with the standard and premises of value.
2.3.13 Property law
Macmillan and Bowrey (2007: 198) indicate the importance of the need for property law in construction as it draws upon a dominant mechanism by which to achieve a solution for the protection of construction knowledge. This implies a consensus that issues are first and foremost issues of intellectual property law which impinge upon the potential to privatise knowledge through intellectual property law. Emerging civil engineering construction contracting organisations need to have individuals who know property law as it is an inquiry into a variety of socially defined relationships and morally conditioned obligations.
2.3.14 Tax
Amusa (2004: 118) amplifies the need for construction contracting organisations to pay tax rate estimates as they are required to develop quantitative analysis and applications of theories related to taxation, thereby helping in the transformation of the theory into an adequate policy making tool. The construction of reliable tax rate estimates are necessary for macroeconomic modelling, especially in the assessment of implications of significant fiscal policy changes such as tax harmonisation in economic blocs, fiscal deficit reduction and allocation of government expenditures aimed at developing socio economic reforms. Emerging civil engineering construction contracting organisations need to pay their due equitable tax as it is a legal requirement that foresees government spending takes place in service delivery related matters.
2.3.15 Sociology
Giddens (2006: 152) states the importance of sociology in construction as it is the creation of social interaction of individuals and groups. Sociology in construction documents and analyses processes and is not simply concerned with the concept of social reality they give rise to. Emerging civil engineering construction contracting organisations need to have personnel who know social construction as it is an important influence on the post modern school of thought in sociology.
2.3.16 Conveyancing
Casey and Brennan (2008: 1) stress the need of conveyancing in construction as it describes property transactions and also outlines procedures to be followed in title
deeds registration. Emerging civil engineering construction contracting organisations need to understand how conveyancing is conducted in order to know principal impacts of land registrations.
2.3.17 Marine construction methods
Agerschou et al. (2004: 152) indicates the importance of marine construction methods in order to produce construction techniques that are cost effective and that adhere to prescribed timeframes. Examples of this include dumping of core material in the breakwater to form berms. Emerging civil engineering construction contracting organisations need to have individuals who are capable of undertaking such techniques.
2.3.18 Work study
Kumaraswamy (2002: 3) reinforces the importance of work study in construction as it provides a management service based on techniques, particular method study and work measurement, which are used in examining human work. Work study leads to a systematic investigation of all the resources and factors affecting the efficiency and economy of the situation being reviewed, in order to effect improvement. Emerging civil engineering construction contracting organisations individuals need to be conversant with work study as it provides a systematic examination of the methods used in carrying out activities that improve the effective use of resources.
2.3.19 Property development
Clark (1982: 171) stresses the need of property development in construction as it is a mechanism that assumes that the net product of annual construction and sales will be more or less a reflection of collective social needs. The property development system is regulated at various points. Finance capital institutions are subject to control by the banks which establishes rules of conduct, liquidity levels and interest rates. Emerging civil engineering construction contracting organisations need to have individuals who understand property development as it involves changing of land to produce buildings for occupation.
2.3.20 Industrial psychology
Vinchur (2008: 123) emphasises the need for construction contracting organisations to apply industrial psychology in their businesses as it reduces needless effort and litigation and increases interest and attention throughout the workers in the industry. ndustrial psychology deals with psychology relations between the labour and management, posture and movement of the workers, training and selection of the worker, the physical environment of the worker, and the distribution of periods of rest and work. Emerging civil engineering construction contracting organisations’ management needs to make arrangements of the worker’s working environment and the nature of the implements with which they work.
2.3.21 Industrial relations
Lillie (2007: 552) states that the employer, the construction industry associations, unions, contractors, subcontractors and suppliers need to comply with industrial relations standards of behaviour. This they need to do by adopting and promoting a cooperative approach to industrial relations. This includes honest and open communication with other industry participants. Emerging civil engineering construction contracting organisations’ management needs to provide their employees equal employment opportunity regardless of sex, race, colour, national origin and age.
2.3.22 Labour law
Sciarra (2001: 9) stresses the need for construction contracting organisations to adhere to labour law as it refers to all acts and regulations on matters pertaining to labour issues. These labour issues promote peace between the employer and the employee as they ensure that labour practices are consistent with the bill of rights. Emerging civil engineering construction contracting organisations’ management needs to ensure that principles of fairness, equity and transparency are withheld at all times in their businesses.
2.3.23 Commercial law
Bradgate (2007: 5) amplify the need for knowledge of commercial law in construction as it provides a clear framework to govern a particular commercial
transaction or relationship for the client. This includes formulation of legally binding agreements, which have uncertainties. Emerging civil engineering construction contracting organisations should avoid uncertainties as disputes can arise if the law on a particular subject is unclear.
2.3.24 Productivity
Productivity is very important to emerging civil engineering construction contracting organisations that have a large workforce or a large investment in heavy equipment (Ellis and Lee, 2006: 314). Productivity requires efficient reporting in order to identify problems for corrective action. This includes the conversation process of the input resources that results in output quantities using the conversion technology. The conversion technology process of the input resources becomes efficient if each resource is provided in the proper proportion and at the proper time. The availability of productivity reporting makes the surety’s analysis easier in that forensic productivity analysis becomes enhanced. Surety analysis entails a comparison of estimated work hours per work unit to actual values. It also produces cumulative work hours and a percentage of completed works compared to the estimated values. Surety analysis compares the estimated production to actual values and it measures the overtime impact on work units performed. Productivity indicates the total construction output per worker. It clearly outlines the amount of time taken to complete a unit area of various construction activities. Emerging civil engineering construction contracting organisations need to aim at transferring the non productive activities to productive activities in order to produce significant cost savings on the project. Da Silva (2006: 10) states that the average working time of a carpentry workforce is 61% for falsework and 56% for formwork and Hewage and Ruwanpura (2006: 1 080) mention that the average working time of an individual carpenter and helpers is 51%. The implication is that there is a need to redistribute non working time activities to supporting time, and waiting time activities to working time. In order for emerging civil engineering construction contracting organisations to achieve high levels of productivity, they need to have the capacity to perform the work, information and instructions and an input / output channel. These need to be in balance within an atmosphere of cooperation, coordination, communication and community.
2.3.25 Cost Engineering
Cost engineering is the ability to track and measure performance of the contract (Heath, 2004: 20). It is a tool that an emerging civil engineering construction contracting organisation needs to perform. This function includes cost, productivity / production, and project scheduling reporting. Emerging civil engineering construction contracting organisations need to have cost reporting mechanism that entails a budget from which a baseline can be established. This budget contains quantity and cost inputs that are derived from a construction contracting organisation’s cost estimate of the project. This cost estimate includes the unit price and the lump sum. If there are productivity budgets established, the cost reporting indicates that the emerging civil engineering construction contracting organisation employs sound procedures with respect to the quantitative management of the projects. However, if there are no budgets to start with, it indicates that the emerging civil engineering construction contracting organisation does not have a grasp of the situation and surety’s investigation will be more difficult to accomplish. Tracking cost is a crucial element in the day to day operations of the emerging civil engineering construction contracting organisations as it tracks elements of the work with regards to conformance with budget. However, for cost engineering to succeed there should be quantity data and cost data. The quantity data entails the budgeted, actual, projected and the variance, while the cost data includes labour, materials, subcontractors and plant and equipment.
2.3.26 Risk management
Ali (2005: 20) states that risk management has been developed to enable emerging civil engineering construction contracting organisations to combat an ever increasing exposure to risk. It is used to denote methods which aim to develop a comprehensive understanding and awareness of the risk associated with a particular variable of interest in determining strategic decisions. Risk management accomplishes project success criteria through project cost, project schedule, project performance and the net present value, or return on investment.
Turnbaugh (2005: 275) mentions three major processes of project risk management as:
• Risk identification; • Risk quantification, and
• Risk response development and control.
Risk identification determines risks that are likely to affect a project and document the scope of each element, while risk quantification evaluates the risk and interacts with the risk to assess the range of possible project impacts. On the other hand, the risk response development and control defines opportunities for enhancements and managing changes in risk across the project life cycle.
Risk management refers to the assessment of and reaction to the risk and uncertainty that will inevitably be associated with a project. In order to constructively manage an emerging civil engineering construction contracting organisation effectively, quality and safety systems need to be employed in order to meet the objectives of the organisation. The quality and health and safety system needs to be structured in a manner that optimises the control of project risks, costs and benefits, with the aim of satisfying customers.
2.3.27 Customer service
Sims and Anderson (2003: 31) argue that an emerging civil engineering construction contracting organisation needs to meet the customer’s expectation by quantifying the customer’s expectation. This includes prioritising health and safety, quality, budget and schedule. The project resources need to support the expectations. These include project cost and the quality of the people to be used to execute the work. Emerging civil engineering construction contracting organisations need to strive to become more efficient. This can be achieved by adhering to the quality standards of the work.
Effective customer services include provisions of plan by the emerging civil engineering construction contracting organisation that outlines goals to be achieved. These goals should be zero injuries, meet health requirements, conform to quality, satisfy specified timeframes and must be within allocated
budget. The goals must be measurable and uncomplicated.
2.3.28 Human resources
Brandenburg et al. (2006: 89) stress the importance of human resources in emerging civil engineering construction contracting organisations as it is an emergent rather than a deliberate process. Emerging civil engineering construction contracting organisations need to embark on human resource development in their organisations in order to produce comprehensive workforce management strategies in the industry. Such will improve the effectiveness and productivity on their workforce through effective supervision and project management. The concepts of the strategy of the emerging civil engineering construction contracting organisation serves as building blocks for more complex and extensive structured workforce development programmes in the industry.
According to Ofori (2001: 46), education and training numbers of personnel at all levels is an important component of construction industry development programmes. It is an advantage to an emerging civil engineering construction contracting organisation that has personnel that is comprised of qualified professionals and technicians. It is also an added advantage if the latter are specialists in their categories as they lead the emerging civil engineering construction contracting organisation through the use of their tried and tested competencies.
2.3.29 Cost control
Perera and Imriyas (2003: 2) argue that inadequate labour productivity, inadequate plant productivity, excess wastage of material, shortage of material, rework, loss of material, natural disaster, and inadequate site coordination results in overruns of cost and time activities on construction sites. The overrun of cost and time of a construction activity is predictable. This enables the formulation of mitigating measures to be taken by the personnel of emerging civil engineering construction contracting organisations in order to minimise or avoid cost overruns.
The quantification of cost overruns is very difficult as it is subjective and complex as it involves uncertain and unknown factors.
2.3.30 The use of Information Technology
Jaafar et al. (2007: 182) state that Information Technology (IT) is useful in that it assists organisations in making better decisions and enhances communication. The application of IT in emerging civil engineering construction contracting organisations includes project programming, cost estimation, document management, project websites, material and equipment inventories. The use of an intranet as a communication tool allows project participants to interact with each other to the benefit of the emerging civil engineering construction contracting organisation. IT prevents the loss of information. Ramayah et al. (2003: 480) state that for IT to be effective, a degree level of education is a prerequisite. This means that emerging civil engineering construction contracting organisations need to be comprised of a knowledgeable workforce in order to be more competitive in the industry. The effective use of new technology and information in emerging civil engineering construction contracting organisations improves the productivity of the sector. An example of this is indicated by innovation in construction procurement operations which require emerging civil engineering construction contracting organisations to equip themselves with knowledge on new technologies. Given that the emerging civil engineering construction contracting industry is highly fragmented, with significant problems like low productivity, cost and time overruns, conflicts and disputes resulting in claims and time consuming litigations. The use of an appropriate IT application reduces confusion, which might be created by fragmentation.
2.3.31 Benchmarking
Benchmarking as a tool for continuous improvement offers great promise for improving performance of the capital project delivery system and thus, performance of the civil engineering construction contracting industry in general (Lee et al., 2005: 790). A lack of a systematic framework to follow results in difficulty to apply benchmarking in the emerging civil engineering construction contracting sector due to the nature of the industry which is project based activities executed in different locations.
There is a need to develop a benchmarking system for continuous improvement feasible for emerging civil engineering construction projects regardless of their location or size. Such a system would provide emerging civil engineering construction contracting organisations with tools for self analysis. This will enable them to measure the level of use of selected best practices. Benchmarking also facilitates the development and sharing of knowledge within the construction industry. This provides emerging civil engineering construction contracting organisations with access to a database that is efficient in terms of resources required for analysis, and the reporting of findings. According to Costa et al. (2006: 158), benchmarking in the emerging civil engineering construction contracting sector creates a fertile ground for ideas, but only in a receptive environment. Emerging civil engineering construction contracting organisations need to share good practices and compare their performances against each other.
2.3.32 Design management
Pulaski and Horman (2005: 911) emphasise the need for emerging civil engineering construction contracting organisations to have significant design management expertise in order to be able to contribute to the design process of projects. To utilise this expertise most effectively, construction drawings and information needs to be made available to the emerging civil engineering construction contracting organisations at a proper point in time and at an appropriate level of detail. It is at this point that a knowledgeable civil engineer can study the construction drawings. At this point of time he assesses the constructability of the design. This includes constructability input tools such as checklists which are used to help systematise the process. Constructability information of design enables decisions to be made right at the start. This includes the detection of drawing information, which might be inadequate. When this occurs, constructability knowledge becomes effectively utilised and this results in efficiency being achieved in the construction process. Adequate knowledge of design in the emerging civil engineering construction contracting sector provides techniques, tools, and principles involved in production of precision technical plans, drawings, and models.
2.3.33 Project management
Fischer et al. (2005: 903) stress the need for emerging civil engineering construction contracting organisations to possess project management technology in order to control project budgets and schedules. Such acquisitions stimulate the development of better project management methods and supporting tools for the emerging civil engineering construction industry. However, there is a need for emerging civil engineering construction contracting organisations to enhance their success, especially when it comes to managing construction projects. Adequate project management in emerging civil engineering construction contracting organisations needs to focus on the improvement of planning and execution of capital construction programmes. This includes the project manager’s goal commitment, experience, project planning efforts, teambuilding and scope definition (Fischer et al., 2005: 904).
2.3.34 Procedures
Maheswari et al. (2006: 483) emphasise the need for emerging civil engineering construction contracting organisations to have structured procedures in order to achieve the demand for shortened project durations. Emerging civil engineering construction contracting organisations need to identify a list of site activities and the corresponding dependency relationships to form an activity dependency structure matrix. This will enable them to determine the blocks and the overall sequence of executing site activities. They also need to choose the dependencies for ratings. The rating of selected information dependency needs to be done by assuming the criticality of the occurrence of the activities. The information which has lowest value of criticality assumption is the one to be selected. Project durations need to be calculated using the critical path method based on estimated activity durations for the sequence defined by the remaining information dependency relationship.
2.3.35 Facilities management
East and Liu (2006: 1 298) reinforce the need for managing many different types of small, geographically dispersed construction projects through facilities management by individuals of emerging civil engineering construction contracting organisations.
