CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK

Most of the construction projects with foreign investment capital have been designed and built by foreign firms but the actual subcontracting work have been performed by Vietnamese contractors.

A STUDY OF FACTORS INFLUENCING QUALITY PERFORMANCE OF MECHANICAL AND ELECTRICAL (M&E) CONSTRUCTION PROJECTS IN

Examination Committee: Dr Do Ba Khang (Chairman)

Prof Himangshu Paul

Dr Fredric William Swierczek

Previous Degree: Bachelor of Engineering

Kiev Polytechnic InstituteKiev, Ukraine

Scholarship Donor: The Government of Switzerland

Asian Institute of TechnologySchool of ManagementBangkok, ThailandApril, 1999

I would like to express my deepest gratitude to my research advisor, Dr Do Ba Khang for his intensive support, valuable suggestions, guidance and encouragement during the course of my study

My sincere thanks are also due to Prof Himangshu Paul and Dr Fredric William Swierczek for their valuable time as the members of the examination committee Their constructive suggestions were of great help for completing this study

I would like to express my sincere gratitude to all of my teachers at SOM-AIT and SAV program for their teaching and guidance during my course

I would like to express my deep appreciation to The Government of Switzerland for providing financial support for my study at AIT

I would like to specially express my thanks to all of my friends at SOM for their support and encouragement

Quality of Mechanical and Electrical (M&E) construction works are one of the major concerns

of Vietnamese contractors as the construction industry grows This research aims to identifyand validate the factors affecting project’s quality performance and their relative contribution.Attempts were made to suggest practical recommendations from M&E contractor viewpoint.This study involved participation of key M&E professionals, who provided objectiveinformation and their perception about various aspects of project quality and its influencingfactors Multivariate statistical techniques-factor analysis and canonical correlation analysis-are employed to account simultaneously for the multi-attribute nature of the project’s qualityperformance and for the multitude of managerial factors

Among the identified factors, those found to be mostly affecting the quality performance, byorder of importance, are: 1) Authority requirement and standard used in the projects; 2)Internal quality assurance system; 3) Project team’s technical competence and communicationamong team members and 4) Parent organization reputation and past experience

Improvement in the aspects of activities specified in these factors make it possible to improveconstruction quality in Vietnam

2.1 Construction Industry and Foreign Direct Investment 4

3 CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK 8

3.1 Mechanical and Electrical (M&E) Construction Work 8

3.2.1 Different systems of standards for M&E work 103.2.2 Development of local M&E contractors and their concerns for quality 113.2.3 M&E project performance and management issues 11

4.3 Determining factors of construction project success 18

5.5.1 Basic concepts of Factor Analysis (FA) and Canonical Correlation Analysis

6 FINDINGS AND DISCUSSION 32

6.4.1 Canonical model, assumption and data examining 406.4.2 Deriving the canonical functions and assess overall fit 42

LIST OF FIGURES

Figure 2.1 Foreign investment the construction industry in period 1989 -1998 4

Figure 6.1 Projects classification by value and completion schedule 35

LIST OF TABLES

Table 2.1 Foreign investment the construction industry by countries and territories 5Table 4.1 List of critical success factors developed in the literature 16Table 4.2 Success criteria for owner, designer and contractor 19Table 6.1 Means and standard deviations of the variables 33

Table 6.4 Canonical Correlation Analysis of Canonical Functions 42Table 6.5 Redundancy Analysis of Dependant and Independent Variates for Both Canonical

Table 6.6 Canonical Weights, Canonical Structure and Cross Loadings of the First Canonical

Chapter 1 INTRODUCTION

The construction industry of Vietnam has contributed a great part to the national economicdevelopment during the last decade Vietnam is in a state of transition from a centrallyplanned-command economy to a market-oriented economy But, the country is in need ofextensive rehabilitation and upgrading of its transportation, communications and utilitysystems In addition, Vietnam certainly needs an appropriate system of social infrastructure,including housing, healthcare, and education facilities

Most of the construction projects with foreign investment capital have been designed and built

by foreign firms but the actual subcontracting work have been performed by Vietnamesecontractors Local competitors are numerous, but are facing long-term difficulties concerninginsufficient capital, technology and equipment, marketing and management expertise Rivalsfrom other countries like Japan, South Korea, Australia and France have solid positions in theVietnamese market owing to their early arrival in the market, their technical and managerialexcellence, and more importantly their home country contribution to the inflows of ODA andForeign Direct Investment into the country

In the modern construction market, quality management is a major management function in aconstruction organization Mechanical and electrical (M&E) works are an integral part of aconstruction project and their quality performance has been greatly affecting the overallproject quality The local M&E contractors face problems with different systems of standardsbeing used and the shortcomings of project management skills The quality of M&E projectstherefore is one of major concerns for managers working in this field

Like many developing countries, Vietnam has been relying completely on the methods andtechniques concerning quality that were initiated and developed from outside These qualitysystems may not be well adapted to suit the economic, political, social and technologicalenvironment of Vietnam Thus, determining the M&E construction industry’s viewpoint onthe factors that would improve construction quality performance is an essential step towardestablishing methods for real improvement of construction quality in Vietnam Understandingthe main factors affecting quality of M&E projects will help M&E companies improve quality

of their work and increase overall competitiveness

1.1 Objectives of the Research

1.1.1 General objectives

The main objective of this research study is to identify and validate the major factors, whichmostly affect the quality performance of M&E works and the relative importance of thesefactors in construction projects The factors being identified would help to improve quality andthe effectiveness of project management in M&E projects

1.1.2 Specific objectives

The following research objectives are to be completed:

 Review of the construction development and FDI construction in Vietnam to have anoverall picture about the industry

 Overview of a construction project and its activities; define the role of M&E work inconstruction projects and relevance of this research

 Determining project quality performance, critical success factors definition and measures

in projects and particularly for construction projects through extensive literature review

 Define the project quality and its measures, factors affecting project quality and theirmeasures

 Determining major factors and their relative importance by analyzing data from surveyquestionnaires

 Derive practical implications of obtained results

1.2 Scope and Limitations of the Research

This research focuses on the operational quality of M&E project management team and fromthe prospective of M&E contractors during the construction and maintenance phases ofconstruction projects The survey is conducted among project managers or project engineers ofmajor M&E companies in Ho Chi Minh City but the projects mentioned in the responses may

be from other provinces as well

Due to time and resources constraints, the limitations of this research are:

 Surveyed projects are limited to FDI or with projects with element of foreign funding

 Relatively small list of variables might not account for all effects upon performance

 M&E projects have specific features therefore the research results might not be applicablefor other types of project

 Local socio-economical conditions and technological level limit the expandability of themodel to other countries

 Performance success has to be considered together with cost and time in an overall contextfor project success assessment since they are inter-related

1.3 Organisation of the Research

This research is organized into seven chapters as outlined below:

Chapter 1: Introduction

This chapter explains the rationale, objectives, scope and limitation of the study

Chapter 2: Overview of the Construction Industry in Vietnam

Based on secondary data, this chapter presents an overview of construction industry inVietnam and FDI construction, the need to bring international construction standards toVietnam

Chapter 3: Project Activities and M&E Work

This chapter gives description of typical activities and role, characteristics of M&E work in aconstruction project The relevance of this research is also explained in details

Chapter 4: Literature Review

This chapter presents a literature review of project quality definitions and measures, ways toassess critical success factors of a project in general and a construction project, in particular.Chapter 5: Research Methodology

Based on literature review, a method will be developed to assess the factors that influence thequality performance of M&E construction projects Basic concepts of statistical tools to beused are also explained in this chapter

Chapter 6: Findings of the Study

This chapter presents the findings based on the results of a survey conducted in Ho Chi MinhCity Statistical analysis is applied to show the relative importance of various factors onproject quality performance

Chapter 7: Conclusions and Recommendations

Based on the findings, this chapter will present some conclusions and recommendationsthought to be of importance to M&E project management tasks

Chapter 2 OVERVIEW ON CONSTRUCTION INDUSTRY IN VIETNAM

2.1 Construction Industry and Foreign Direct Investment

Since the “open door” policy began in Vietnam in 1987, the flux of foreign investment hashelped development of various sectors of Vietnam economy According to the statistics fromthe Ministry of Planning and Investment (MPI), there have been 54 countries and territoriesinvesting in Vietnam with a total investment capital of US$ 35.4 billion, of which, 1,775projects still remain active valued at US$ 32.2 billion Figure 2.1 presents the capitalinvestments by foreign investors in the construction sector alone

Figure 2.1 Foreign investment the construction industry in period 1989 -1998 ($US million)

[Source: Ministry of Planning and Investment (1998)]

Table 2.1 shows the ten nations making the largest investment (in term of total investmentcapital) in the construction industry as the following:

Table 2.1 Foreign investment the construction industry by countries and territories

Total capital (in million USD)

Percentage (%)

[Source: Ministry of Planning and Investment (1998)]

According to Ministry of Construction summary report, Foreign Direct Investment (FDI) inthe field of construction represents only a small part of total FDI capital as per MPIclassification However, FDI capital has cast a great impact on local construction industrydevelopment Experiences by project administrators show that a large segment of FDI capitalgoes to construction activities (about 40-50%), including expenses for communications andpublic works constructions The FDI in the construction industry has boosted the capabilities

of Vietnamese constructors and consulting services, suppliers and contractors

The construction industry in Vietnam was booming during the period from 1990 to 1996,resulting in projects being completed for the next two years (1997-1998) However, the recentAsian financial crisis has brought the entire commercial construction industry to a virtual haltalthough through Official Development Assistance (ODA), infrastructure projects are

continuing The total market size of the construction industry for 1997 was US$ 1.1 billion1,which is expected to grow at a rate of 12.5% in the next three years The market can besegmented into five market segments, which include residential buildings, commercialbuildings, building conservation and maintenance, civil engineering, and industrialengineering

Ho Chi Minh City and Hanoi are the two locations that have attracted the most foreigninvestment in due to their strategic locality, relatively favorable investment climate, developedinfrastructure and availability of skilled workers Out of 151 FDI construction projects beingapproved until July 1, 1998, Hanoi accounted for 27 projects with total capital of 2,456.27million $US and Ho Chi Minh City – 45 projects totaled 1,696.56 million $US

2.2 Vietnamese Contractors and Construction Quality

In the recent past, the construction industry in Vietnam was dominated by state-ownedconstruction companies belonging to ministries such as Ministries of Construction, ofTransport & Communications, of Industry, of Agricultural & Development, of Trade, and ofDefense, etc The main advantages of state-owned contractors are their scale, experience,access to bank finance, knowledge and contacts with public clients, an extremely importantsource of construction orders Their disadvantages lay in the poor management, marketingactivities, bureaucratic practices and procedures, under-utilized labor force, outdatedequipment, limited know-how of construction technology, and lack of experience in contracttendering

Most large private construction companies have been established over the past five or sixyears, having annual turnover ranging from US$0.5 to 5 million Construction work developed

by these companies is widely distributed over many provinces, if not the whole country Inaddition to difficulty in financing, insufficient equipment and technology is becoming aproblem for this sector Additionally, there is a general lack of management expertise There is

a need to improve management skills for the private and public local firms, both at thecompany and the site levels

Some construction companies have made great improvements but they are mainly bigcorporations in Hanoi and Ho Chi Minh City such as Song Da Construction Company, HanoiConstruction Company, Construction Company No 1(COFICO), Vietnam Construction Importand Export Corporation (VINACONEX) etc But as reported by Thien Huong (1998), only 15-20% of the 419 consulting companies doing construction survey, design and planning have asystem for quality assurance and quality control (QA/QC) None of the local constructioncompanies can meet the requirements of ISO 9000 certificate of quality control “Vietnameseconstruction technology is still far behind the world”, acknowledged Nguyen Hong Quan,Deputy Minister of Construction [Source: Hai Nam, 1998]

1 Industry Sector Analysis: Vietnam-Architectural/Construction/Eng US Foreign Commercial Service and

US Department of State Report, 1998.

The quality of construction projects can only be assured if the local standards are upgraded tointernational level

Yates J.K and Aniftos S (1997) showed the benefits that increasing cooperation with theinternational standard setting community would lead to as the following:

 Increase the efficiency of developing, adopting and maintaining international standards

 Influence the standards that recognize the need for the local construction industry

 Provide strategies for local construction companies to remain competitive or increase theircompetitiveness in the regional and global engineering and construction arena

 Provide a service to assist in the more efficient delivery of international constructionprojects

 Reduce barriers that cause conflicts, or misunderstanding on international projects

Recognizing the need to match Vietnam’s rapid development of construction industry withappropriate technical standards, the Ministry of Construction has consistently worked with theinfrastructure committee of the American Chamber of Commerce on issue of constructionmanagement The focus of this cooperation has been the areas of quality assurance and qualitycontrol (QA/QC) and several conferences have been hold in this direction The purpose ofthese conferences were to discuss the idea of why construction industry should operate with auniform standard system and introduce technical manuals from American Society of Testingand Material (ASTM)

In another effort, French experts have been working with Electricity of Vietnam (EVN) forintroduction and translation of recommendations from International ElectrotechnicalCommission (IEC) which is the international standards and conformity assessment body for allfields of electrotechnology

With Vietnam’s intention to join APEC and WTO, a uniform system of standards forconstruction industry is vital since they also represent the core of the World TradeOrganization’s Agreement on Technical Barriers to Trade (TBT), whose 100-plus centralgovernment members explicitly recognize that international standards play a critical role inimproving industrial efficiency and developing world trade

Chapter 3 CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK

A typical construction project consists of various activities that are performed by differentcontractors Mechanical and Electrical (M&E) work are an integral part of a constructionproject and normally carried out by separate contractors - M&E contractors- besides civilwork

The major types of work of a construction project are:

 Earthwork The major areas are site work, building excavation, backfilling and other

related earthwork activities

 Concrete construction The main concrete-related items involve formwork, reinforcing

steel, concrete (cast-in-place and precast), finishing, curing and protection

 Masonry Masonry includes a variety of relatively small building units assembled to form

a larger building part such as walls Elements of masonry consist of brick, block, mortarand accessories

 Metals These items include structural steel framing, plates and rods, connections, joints

and miscellaneous items

 Carpentry Carpentry involves floor, ceiling, roof and wall framing, interior and exterior

finish carpentry items

 Specialties and furnishing Included in this category are specialty items such as bathroom

accessories, displays, lockers; architectural equipment such as appliances, kitchenequipment; furnishing like cabinets, seating, tables and special construction such asswimming pool, gardening, etc

 Mechanical and plumbing Mechanical work commonly known as heating, ventilating and

air-conditioning (HVAC) services for a building project Plumbing is the installation of allpiping required to supply fresh water and remove wastewater from the building Specialpiping systems for gas, steam may also required Sometimes plumbing is covered undermechanical work

 Electrical Electrical work includes such items as conduits, wires, circuit breakers, lighting

fixtures, transformers, telephones, telecommunications, computer networking and otherspecial electrical systems

3.1 Mechanical and Electrical (M&E) Construction Work

Detailed scope of M&E work is the following:

Mechanical: to install and commissioning the following systems:

 Basic mechanical materials and installation methods

 Mechanical insulation

 Pipe and fittings: brass, copper, steel pipes and accessories, valves, drains

 Plumbing fixtures: baths, fountains, lavatories, various types of pumps etc

 Fire protection system: auto-fire suppression system, fire pumps, fire extinguishers, andsprinkler systems

 Heating: boiler, heat exchangers, solar energy, fans etc

 Air conditioning and ventilating: cooling towers, fancoil units, duct work, ventilators, andwater chillers

 HVAC control systems

Electrical: to install and commissioning the following systems

 Basic electrical materials and installation methods

 Raceways: cable tray, conduits, underfloor duct, and electrical trench

 Conductors and wiring devices: wire, cable, control cable, high voltage power cable, pullboxes, outlet boxes, cabinets

 Protection and distribution systems: circuit breakers, control stations, panel boards,switchboards etc

 Transformer and generator systems: transformer, generator set, uninterrupted powersystem (UPS)

 Lighting systems: interior lighting systems, exit lights, exterior fixtures

 Special systems: telephone system, public address system, closed-circuit TV (CCTV) anddetection system, sound system, computer and communication system

There are overlapping areas like fire alarm systems where they can be either belong tomechanical or electrical scope of work according to initial contract

The M&E work’s major characteristics are:

 M&E work’s contract value varies in a wide range depending on type of contract.According to Asian Pacific Construction Costs Handbook (1994), M&E work accountedfor 5-15% total value of a construction project However, with the more popular use of

Building Automation System (BAS), which controls all the building functions from acentral command computer, the M&E cost inclines to rise

 In term of safety for building’s tenants, M&E work, especially electrical, have to followmany rigorous requirements laid down by authority to ensure the highest possible safetystandards

 The quality of a construction project after entering service is usually judged by the quality

of M&E work A survey has been performed of 400 office building tenants to assessbuilding and management performance of a variety of functions ( Penz and Beard, 1988).The top five most satisfied functions were: 1) electric power needs; 2) buildingmanagement responsiveness; 3) express mail pick-up/delivery; 4) office lighting level; and5) courier service Also in that survey, the five worst management, operation or designproblems were identified as: 1) heating, ventilating and air-conditioning; 2) elevators; 3)building design; 4) loading docks and 5) indoor air quality

It is obvious that improvement in quality performance of M&E work will lead to morecustomer satisfaction

 In the process of construction, M&E contractors normally have a constrained set offeasible tasks, which are highly dependent on the performance of other contractors.Therefore they have to be well coordinated with other contractors to ensure the smoothflow of construction tasks and successful completion of the project

3.2 Relevance of this research

3.2.1 Different systems of standards for M&E work

Since the local construction industry has not a uniform standards system, most of foreignprojects in Vietnam are designed and installed according to developers' own standards M&Estandards also reflect this trend Generally, the current M&E practice can be divided into fourgroups as per owners’ original nationals

1 Projects designed according to British Standards (BS): these are projects with investorsfrom Britain or other countries from Commonwealth like Singapore, Hong Kong,Malaysia The basic requirements for equipment and installation procedures are stipulated

by BS and regulations like Institute of Electrical Engineers (IEE) Regulations forElectrical Installations, Code of Practice (CP) for Building Services etc So far this is themost commonly used standard in Vietnam since the investors from this bloc form thelargest part of FDI

2 Projects that are from American investors usually are designed and installed according toAmerican National Standard Institute (ANSI), National Electrical Code (NEC) andInstitute of Electrical and Electronics Engineers (IEEE) recommendations

3 Japanese-invested projects are design according to Japanese Industrial Standards (JIS)

4 Projects with investment capital from other countries like France, Switzerland etc aredesigned according to that specific country’ standards but all claim to be compatible withEuropean Committee for Electrotechnical Standardization (CENELEC) and IECrequirements

Although most of the countries listed above are IEC members and have committed themselves

to IEC standards but their standards are far from similar to each other The presence of thesedifferent standards makes the local contractors extremely difficult to adapt with and ensurethat all of their requirements are met Quality performance of a project also varies according tothe extent that the contractors are familiar with the applied standards

3.2.2 Development of local M&E contractors and their concerns for quality

Foreign contractors currently operating in Vietnam are generally working on major projectswith at least some element of foreign funding The emphasis to date has been on majorbuilding projects, i.e office buildings, hotels, tourism developments and residential buildingcomplex Foreign invested building projects, e.g hotel and office developments, are mainlyprepared by foreign consultants, often from neighboring Asian countries like Australia,Singapore, Japan or from Europe, e.g France Many of the industrial and commercial projectsare still well beyond the capabilities of local companies like design and implementation ofventilation, air-conditioning, plumbing, drainage, lighting, and fire safety, automation systemsetc for high-rise buildings

The M&E local contractors used to be sub-contractors for foreign companies at the first stagebut as they gained experience and expertise, Vietnamese M&E companies become morecompetitive in comparison with foreign counterparts

One distinctive feature is some successful domestic construction companies also have theirown M&E divisions, which carry out the M&E work from the whole construction package.However, as the industry develops and requires more specialist service, separate and qualifiedM&E contractors gradually take place Local companies like Refrigeration EngineeringCorporation (REE), Saigon Engineering Company (SGE), or Seaprodex RefrigerationElectrical Company (SEAREE) already compete successfully against foreign or joint-ventureM&E firms

Besides the advantage of lower labor cost, the quality of projects done and technicalcompetence is the vital factors for winning a bid Quality assurance and quality controlbecome more critical in the period of economic crisis

3.2.3 M&E project performance and management issues

Project performance is one of the basic measures of the project objectives-the other two arecost and time Many things can have their impacts on performance of an M&E projects such asquality of equipment used, technical skills of project teams or contractor/client/consultantcommunication etc In a developing country like Vietnam, sometimes specifications written inforeign language, e.g in English can create serious problems for those who carry out the

fieldwork and can lead to substantial reduction of quality Vietnamese project managersusually lack of experience in quality control management functions i.e managing theimplementation of the project with a certain level conforming to predetermined specifications Project management techniques are one of the focus points, as most of the project managershave not received adequate training or education on project management issues Self-learningand management by trial-and-error are still common things among local constructors

It is important for project managers to be aware of the factors affecting the quality of projectand handle them in an effective manner Therefore, determining the major factors influencingthe project performance in specific conditions of Vietnam has managerial and researchmeaning

Chapter 4 LITERATURE REVIEW

4.1 Project quality performance

One of the primary objectives of any building project will be to obtain a system of qualitystandards, which matches the client's expectations An understanding of what constitutesquality appears the first logical criterion which needs to be satisfied before measures can betaken to achieve it

In the Manual of Professional Practice Quality in the Constructed Projects (1989), issued bythe American Society of Civil Engineers, quality is defined as the totality of features,attributes, and characteristics of a facility, product, process, component, service, orworkmanship that bear on its ability to satisfy a given needs, fitness for purpose It is usuallyreferenced to and measured by the degree of conformance to a predetermined standard ofperformance Also according to this Manual, quality can be characterized as

 Meeting the requirement of the owner as to functional adequacy; completion on time andwithin budget; operation and maintenance

 Meeting the requirements of the design professional as to provision of well-defined scope

 Specifications can be broken down into three types of specifications: functionalspecifications (FS) which indicates the objective or purpose of any system; structuralspecifications (SS) which describes the components of the systems and their relationshipsand technological specifications (TS) which details the methods and means of conductingthe work

 System intended to be quality controlled is generally composed of three parts: input;process and output

 Quality control is composed of three successive actions: measuring; comparing (withreferring specifications) and correcting.

Various aspects of project quality management can be based on interaction of theseparameters

Low Sui Pheng (1993) noted that there was no consensus on a single definition of quality of aconstruction project Five different schools of thought was listed to mean quality as:

1 Fitness for purpose: the facility is constructed for intended purpose as living space,research institute etc

2 Conformation to specifications: work is executed according to pre-determinedrequirements

3 Fitness for purpose and conformation to specifications: the combination of both first andsecond perception

4 System approach-technical rationality: objective approach when quality can beadministered through distinct, formal and extensively documented procedures

5 System approach- socio-technical rationality (Low,1987): quality is being seen in thecontext of socio-political effects and technical safeguards as well

He proposed that two tendencies exist to represents the last two concepts The first tendencyadopts more objective approach and there is an inclination towards specifications, drawingsand bills of quantities, etc where checklists can be compiled and the quality is strictly withinthe boundaries of written rules In contrast, the second tendency recognizes that most qualityissues in construction are not as simple and definitive as the first tendency concerns Acomplex socio-political cum technical perspective is postulated in the second tendency

The author acknowledged that in the long term, it would be strategic for the industry to movetowards the first tendency where clear guidelines on construction quality may be obtained.Nevertheless, practitioners should also recognize the effects of other irrational andindeterministic factors of the second tendency when quality standards may be "negotiated" andits interpretation is a matter for judgement

Ledbetter W.B (1994) addressed three key issues of the quality performance managementsystem (QPMS) as quality, cost of quality and quality performance According to him, qualityhas many meanings, however for project conformance to established requirements hasrelevance and clarity The requirements are defined as contractually established characteristics

of a product, process or service which otherwise can be termed as specifications QPMS trackscost in the three main categories: normal work, quality management work (prevention andappraisal) and rework (deviation correction)

James D.S (1996) defines quality as meeting the requirements of all customers It involvesbeing proactive in helping customers articulate their requirements so their expectations aremade Quality measurements include traditional "hard" project success measures such as cost,

schedule and safety and additional "soft" measures such as customer satisfaction, leadership,employee involvement, team work, training, flexibility, responsiveness and so forth that may

be interpreted in unfamiliar ways A "Blueprint"- a guideline was designed to facilitate andaccelerate implementation of the measurement process

Most of the literature sources converge to the point that quality generally means meeting determined specifications Perceived performance by customers is importance but in fact, fromthe point of view of M&E contractors, objective quality performance is more preferable andeasier to manage In a construction project, quality have to be tracked and controlled duringconstruction phase and after hand-over, i.e maintenance period

pre-4.2 Critical success/failure factors in projects

The literature on critical success factors reveals several definitions of “project success” andmost of them encompass the importance quality performance Thus, those factors affectingproject success certainly affect project quality performance as well Since identifying suchfactors is one of our objectives, we will make a brief review of critical success/failure factors

in projects in general and then in construction projects, in particular

The success and failure factors were first introduced by Robin and Seeling in 1967 Theyinvestigated the impact of a project manager's experience on the project's success or failure.Technical performance was used as a measure of success Avots (1969) identified reasons forproject failure and concluded that the wrong choice of project managers, the unplanned projecttermination an unsuportive top management were the main reason for the project failure

In 1983, Baker, Murphy and Fisher suggested that instead of using time, cost and performance

as measures for project success, perceived performance should be the measure In thisresearch, a project is considered successful if it meets the technical specification and/ormission to be performed, and if there is a high level of satisfaction concerning project outcomeamong key people in the parent company and key user or clientele of the project effort Thisfinding may be somewhat difficult for most project personnel to accept

Hughes (1986) conducted a survey to identify the factors that affect project performance Hisconclusions were that projects fail because of improper basic managerial principles and thelack of communications of goals

Morris and Hough (1987) studied eight large complex projects, which had great potentialeconomic impact but were poorly managed and generally failed The identified the success andfailure factors for each of them Based on this experience, they suggested seven dimensions ofproject success (see Table 4.2) Although the analysis of success factors was aimed at largecomplex projects but they also relevant to project in general

One of the first efforts to classify critical factors was carried out by Schultz, Slevin and Pinto(1987) They classified factors as strategic or tactical These two groups of factors affect

Table 4.2 List of critical success factors developed in the literature

Martin

(1976)

Locke (1984)

Cleland, King (1983)

Sayles, Chandler (1971)

Baker, Murphy, Fisher (1983)

Pinto, Slevin (1989)

Morris, Hough (1987)

Belassi, Tuckel (1996)

Define goals Make project

commitment known

Project summary Project manager's

Operational concept Scheduling Goal commitment

of project team

Client consultation

Technical uncertainty innovation

Factors related to the project manager and team members General

management

support

Appoint competent project manager

Top management support Control systemsand

responsibilities

On-site project manager Personnelrecruitment Politics Factors related tothe organization

Select project

team Setcommunicationup

and procedures

Financial support Monitoring and

feedback Adequate fundingto completion Technical tasks Communityinvolvement Factors related tothe external

environment Allocate sufficient

resources

Set up control mechanism

Logistics requirements

Continuing involvement in the project

Adequate project team capability

Client acceptance Schedule duration

urgency

Control and

information

mechanism

Progress meeting Facility support Accurate initial

cost estimates Monitoring andfeedback Financial contractlegal problems

Trouble shooting

Executive development and training

Tasks ( vs Social orientation) Characteristics ofthe project team

leader Manpower and

organization Absencebureaucracy of Powerpolitics and

events Information and

Project review

[Source: Adapted from Belassi and Tuckel (1996)]

project performance at different phases of implementation The strategic group includesfactors such as project mission, top management support, and project scheduling whereas thetactical group consists of factors such as client consultation, personnel selection and training.

In their follow-up work, Pinto and Slevin (1989) identified success factors and their relativeimportance for each stage of a research and development project life cycle Finally, in asimilar study by Pinto and Prescott (1990), the relative importance of each group (tactical vs.Strategic) over the project life cycle was analyzed It was found that the relative importance ofsuccess factors varies at different stages of the project's life cycle, depending on the successmeasures used

Belassi and Tuckel (1996) grouped the factors into four areas

Factors related to the project

Factors related to the project manager and team members

Factors related to the organization and

Factors related to the external environment

Table 4.1 represents the list of critical success factors developed in the literature

As mentioned in a study by Slevin and Pinto (1988), all of these lists are theoretically based,rather than empirically proved And while some are general in scope, they address specificpoints of interest Most of the research in the Table 4.1 include factors related to the projectmanager and the organization the project belongs to and it seems to ignore other factors Theframework proposed by Belassi and Tuckel gives additional considerations to characteristics

of project, team members and factors external to the project while most of the others listsinclude factors related mainly to project manager and the organization the projects belong to.Therefore the Belassi and Tuckel framework is selected for tentative factors used in thisresearch study and we will come into more details in the following parts

4.3 Determining factors of construction project success

The factors listed in the previous section represent the critical success factors for projects ingeneral, however examples of issues that not yet adequately resolved are:

1) What critical factors are valid for building construction since construction projects formed

a minority of projects studied?

2) Are the same or different factors important for various types of buildings?

3) How do different parties consider if a project is success?

In the literature, several authors identified, explained and discussed the factors that are critical

to the success of a construction project Success criteria or a person’s definition of success as itrelates to a construction project changes from project to project depending on participant

A list of success criteria for owner, designer and contractor is developed as below (LandinA.M and Person M.H., 1998):

Table 4.2 Success criteria for owner, designer and contractor

On schedule; on

budget; function for

intended use; quality

met design fee and profit goal;

professional fulfillment (skills, experience); meet project budget and schedule; marketable product/process (reputation); minimal construction problem (easy to operate,

constructability); no liabilities claims (building functions as intended);

socially accepted; well defined scope of work (contract and compensation match)

Meet schedule (construction); profit; under budget (savings for owner/contractor); quality specification met or exceeded; no claim (owner/subcontractors); safety; client satisfaction; good subcontractor buyout; good direct communication (expectations of all parties clearly defined); minimal variation and surprise during project

Ireland (1985), in a research conducted among 21 proprietors, 8 contractors and 17 architects

of high-rise commercial building identified variables and their effects on cost, time and quality

as follows:

 Technological effects: complexity of form of construction, variations to the contracts etc

 Structural effects: construction co-ordination, quality control on site, use of projectmanagers etc

 Psychosocial effects: numbers of days lost through industrial disputes

 Managerial effects: competition at tender, construction planning during design etc

The multiple regression analysis showed the strength of relationships between variables,especially the relative effects of the particular managerial actions on the achievement of thefollowing objectives: to reduce the cost of the building; to reduce the time of construction and

to increase the architectural quality The inhomogeneous background of respondents couldlead to different answers depending on individual perception

Asley D.B et.al (1987) provided insight into potential factors that influence constructionproject effectiveness A list of approximately 2000 factors was compile largely supplied byconstruction project personnel This long list of factors was subsequently reduced to 46 andgrouped into five major areas

1) Management, organization and communication

2) Scope and planning

Follow-on work

Sanvidor V et al (1992) proposed the theoretical basis for the factors A process model, theintegrated building process model (IBPM) had been developed to identify all major functionsrequired to provide a facility and information that produced and utilized by each function TheIBPM identifies elements of information and physical entities that must flow between themanage, plan, design, construct and operate functions The results of the research indicatedthat there were seven success factors and four of them were found to be critical

1 A well-organized, cohesive facility team to manage, plan, design, construct and operate thefacility

2 A series of contracts that allows and encourages various specialists to behave as a teamswithout conflicts

3 Experience in management, planning, design, construction and operation of similarfacilities and

4 Timely, valuable optimization from the owner, designer, contractor and operator in theplanning and design phases of the facilities

These factors have been examined from owner’s perspective so they have little meaning withother parties

Abdel-Razek R.H (1998) studied factors affecting construction quality in Egypt and theirrelative importance by Delphi method among contractors and designers The factors and theirrelative importance in term of percentage contribution from survey questionnaire are:improving design and planning during pre-construction phase (16.67%); developing andimproving quality control and assurance system (10.52%); improving the financial level(9.2%); improving the accuracy of estimating and tendering( 8.38%)

These findings considered the effect of factors separately emphasized on significant effect ofeconomical and technological backgrounds in determining ways of improving constructionquality

Chapter 5 RESEARCH METHODOLOGY

The research framework is presented in the Figure 5.1 This is adapted from Belassi andTuckel (1996) work where project quality performance consists of three dimensions andfactors affecting project quality performance are grouped into four major areas

Factor related to the project

Factor related to the project manager and team members

Factor related to the organization and

Factor related to the external environment

In this research we focus on objective quality i.e we try to get the objective answers Howevercertain subjective questions also take place Subjective questions relate to personal experience

or individual perception of the respondents while objective question relate to factual ortangible information that exist The quality performance dimensions and tentative factors arealso presented in Figure 5.1

5.2 Term definitions and measures

5.2.1 Quality performance

Definition:

From literature review and taking into account M&E contractors perspective, a project isconsidered successful in quality performance when the following conditions exist:

 Installed system has met required specifications - Technical task

 Successful testing and commissioning - Functional task

 Smooth operation during warranty period (usually 12 months) - Maintenance task These capture the major definitions of quality performance and follow the timeflow of aconstruction project Usually owner representative/consultant is satisfied once these conditionsare met

Measures:

PROJECT QUALITY

Conformance to specifications

Successful testing

& commissioning

Operation reliability

Project related factors

Project characteristics:

Completion schedule

Design complexity

Work variations

Urgency of the project

Uniqueness of the project

Team related factors

PM technical competence

PM managerial skills

PM co-ordination and communication skills Team size

Team members skills Team communication and commitment

Internal quality control Resource utilization

Organization related factors

Top management support

Functional support

Relative importance of project

mentioned

Resources availability

Project initial estimates

Organization reputation and

past experience

External factors

Foreign specification Sub contractors skills Consultant/owner acceptance Authority regulations

Competition Industry state Socio-economic conditions

Figure 5.2 Project quality and influencing factors

 Specifications conformance M&E specifications usually give contractors a choice between

specified equipment from recommended manufacturers or equivalent equipment that meetthe same system standards but the later case requires written approval For example,transformer from ABB is recommended but the contractor can propose a localmanufacturer instead if there is cost saving The percentage of installed

equipment meeting original specifications (from 50 to 100%) can be the measure forspecifications conformance

 Successful testing and commissioning A system with equipment conformed to required

specifications does not guarantee successful testing and commissioning Other factors likeworkmanship, rigorous quality control during installation phase also contribute their part.Therefore, a system has to be reworked before it is accepted We use the degree of rework(from major rework to no rework at all) to measure this aspect of quality

 Operation reliability The maintenance period for M&E projects normally lasts 12 months.

During this period, the contractors have to carry out all the correction work to ensure thatthe installed systems work properly The degree of smooth operation (from systembreakdown to no interruption) is a good measure for operation reliability

5.2.2 Choice of success variables and measures

One obvious advantage of Belassi and Tuckel framework is it helps to identify whether qualityperformance is related to project managers and/or to the project and/or external factors andthen project managers would have a clear understanding of which aspects might be critical fortheir successful completion

A combination of literature review and conversation with M&E managers leads to selection ofthe critical variables listed below Some of them reflect local specific conditions e.g variousstandards and code of practice like British Standard (BS), National Electrical Code (NEC) orSingapore Code of Practice (CP) etc have significantly affected quality of work done.Communication language, in particular English, might critically relate to performance as well

In addition, many variables are inter-related and being affected by other factors’ variables too.For example, urgency of project schedule may cause labor and material shortage and as aresult, work performed in rush exposes a lot of defects

 Factors related to the project

1) Project size Project size defines the amount of resources to be managed Large projects

are more complex in term or technical and management issues than the small ones Projectsize can be measured by the contract value (in million $US)

2) Completion schedule The longer a project lasts, the more possible that the contractor have

to mobilize resources to meet the demand and quality may be affected Completionschedule is measured the time stipulated in the contract from first site -inspection tocompletion (in months)

3) Design complexity The extent of design complexity usually associates with more

automation Extensive use of Building Management System (BAS) with computer controlwill complicated the installation job and obviously affect the quality, especially post-installation phase The design complexity is measured by perceived assessment ofrespondents on a five point scale with constructed score(from very complex to notcomplex)

4) Work variations: The extent of deviation from original design is seriously affecting M&E

work For instance, in a building project, all the wiring must be concealed in the wall orcast-in concrete Any change in structural and interior design, which frequently happens,will have electrical work change and result in inferior quality Work variations aremeasured by cost of change order over original value ( in percent )

5) Urgency of the project This is the need to implement the project as soon as possible In

many cases, project performance can not be met because of the urgency of the project Theurgency of the project is measured by five point scale with constructed score (from veryurgent to not urgent)

6) Uniqueness of the project The more standard activities the project has, the easier it is for

project managers to plan, schedule and manage their projects In the M&E work, cableused to be the means of electricity transmission Sometimes designers prefer busduct-solidinsulated copper or aluminum duct- in lieu of normal cable and that need careful planingand execution The uniqueness of the project is measured by five point scale withconstructed score (from very unique to not unique at all)

 Factors related to the project team

1) Project manager technical skills It is obvious that educational background, past

experience of the project manager have much influence on performance of the project.This is measured by is measured by five point scale with constructed score (from verygood to not good at all)

2) Project manager managerial skills: Ability to supervise, plan, lead and control the project

team to achieve necessary performance This is measured by is measured by five pointscale with constructed score (from very good to not good at all)

3) Project manager co-ordination and communication skills Well-established

communication channels and proper coordination with owner representative, consultant,subcontractors or other contractors are extremely necessary to ensure the good outcome ofthe project This is measured by is measured by five point scale with constructed score(from very good to not good at all)

4) Team size The larger the size of the team, the more difficult to monitor the quality of

small teams’ job Unlike other contractors, M&E contractor(s) has to conduct various type

of work at the same time For example, piping work in parallel with equipment fixing orcabling in one area and testing in another Project team has to be broken down into smallergroups to carry out the jobs according to specialized background and skills The number of

staff working on a project varies greatly during construction period Team size is measured

by average manday over construction period

5) Team members technical skills The competence of the team members is found to be a

critical factor No matter how competent the project manager is, his subordinates is the keyelement to quality performance achievement This factor is measured by five-point scalewith constructed score (from very good to not good at all)

6) Team communication, motivation and commitment Within the project team, there must be

good interpersonal relations and open communication Th motivation is also identified ashaving strong overall influence on project success This factor is measured by five-pointscale with constructed score (from very good to not good at all)

7) Internal quality control system Each M&E contractor has its own quality assurance

system and only a fraction of them have ISO 9000certificates Many M&E contractors donot consider quality control as a process but mostly rely on after-installation testing touncover defects The quality can be seriously affected by this practice Quality controlsystem is measured by five-point scale with constructed score (from very good to not good

at all)

8) Resources utilization Extent of technology, tools and material used by the project team.

Modern techniques like 3D-CAD shop-drawings help to improve coordination between

different M&E services and lead to greater efficiency and less defects Resources

utilization is measured by five-point scale with constructed score (from very good to notgood at all)

 Factors related to the organization

1) Top management support Top management support was cited by almost all of the authors

as one of the most important factors Project management not only depends upon topmanagement for authority, direction but also allocations of sufficient resources (financial,time, material, labor) Top management support is measured by five-point scale withconstructed score (from very good to not good at all)

2) Functional support The level of support provided by functional manager is usually

determined by level of top management support However, if the project belongs to onefunctional department, then the availability of resources will not be a problem, otherwise itcan be a difficult job Hence functional support is a factor has to be considered Functional

support is measured by five-point scale with constructed score (from very good to not

good at all)

3) Relative importance of this project toward the whole organization A M&E company

usually has many projects at the same time The importance of the project under studytoward the whole organization will decide the level of support it will receive It ismeasured by five-point scale with constructed score (from very important to not important

at all)

4) Availability of resources Material and labor resources availability is an important factor

since M&E work has to keep up with project schedule while maintaining properrequirement This does not completely depend on the organization itself but promptexpedition by parent company is critical Availability of resources is measured by five-point scale with constructed score (from very good to not good at all)

5) Project preliminary estimates Tendering and project execution teams are not necessarily

the same therefore the accuracy of cost, schedule, scope of work is vital in the constructionphase The accuracy is measured by level of difference from estimates and actual workdone (in percent)

6) Organization past experience and reputation An well-known and successful M&E

company is likely to ensure the strictest procedures for quality assurance Organizationpast experience and reputation is measured by five-point scale with constructed score(from very good to not good at all)

 Factors related to the external environments

Project-environment

1) Unfamiliar foreign system of standards As mentioned before, a project with totally

different system of standard will strongly affect the quality performance It is measured bythe extent of difference of the system of standards being used and prevailing practice inVietnam (TCVN) on five-point scale with constructed score (from very similar to notsimilar at all)

2) Sub-contractors skills Quality of work carried out by subcontractor is dependant upon

both M&E supervision and sub contractor skills Sub-contractors skill is measured byfive-point scale with constructed score (from very good to not good at all)

3) Consultant/owner representative acceptance The client final acceptance can be measured

by degree of strictness on five-point scale with constructed score (from very strict to notstrict at all)

Macro environment

4) Local authority requirement Safety, environmental and technical requirements from local

authorities sometimes may have not been foreseen in the original design made by foreigndesigners Mandatory adherence to environment and safety regulations can complicate

M&E work and ultimately affects quality Local authority requirement is measured by

degree of strictness on five-point scale with constructed score (from very strict to not strict

at all)

5) Level of competition If the level of competition is high, it is more likely that the current

M&E contractor has to be aware of quality as a competitive weapon Level of competition

in the same industry requirement is on five-point scale with constructed score (from veryhigh to not high at all)

6) Industry development state The construction industry development level will help foster

quality though experience and expertise gained It is measured on five-point scale withconstructed score (from very good to not good at all)

7) Socio-economic condition The current situation development of the country is measured

on five-point scale with constructed score (from very favorable to not favorable at all)

5.3 Sample and procedure

Data are collected from a sample size consisting of about 100-120 questionnaires sent to keypersons of project management team: either project managers or project engineers who havepast experience or are currently involved in the M&E projects This helps to ensure thehomogeneity of the surveyed pool

A 5-point scale is developed to assess the perception of interviewees of each variable onobjective quality, which is aggregately defined by its three success dimensions

5.4 Questionnaire design and pilot study

5.4.1 Questionnaire design

A questionnaire consisting of five sections was designed and consists of six sections:

Section A: General information

Section B: Project quality dimensions

Section C: Factors related to the project

Section D: Factors related to the project manager and its team

Section E: Factors related to the organization

Section F: Factors related to the external environment

The objective of Section A is to gather information on project name, location, type of project,company’s role and type of contract In the sections B, respondents are asked to giveassessment of quality dimensions of completed projects In the sections C to F, respondentsindicate their perception on extent of factors being listed, usually from very good to not good

and engineers The second was to refine draft questionnaire and come up with final versionand preparation for field survey.

A draft questionnaire was designed and issued to key persons of five M& E companies in HoChi Minh City, namely Kurihara Thanglong Joint Venture, Phuong Nam Electrical Company(SEC), Refrigeration Electrical Engineering Corporation (REE), Saigon Engineering (SGE)and Rosaco Company There were 9 respondents out of 14 questionnaires issued

Apart from questionnaire responses, follow-up interviews were conducted to clarify any vaguequestions in the survey forms and to obtain the realistic picture from on-site operation.Confusions aroused from translation into Vietnamese and certain terms that are not familiar topractitioners need to be clarified Therefore, proper modifications were made into originaldraft and explanation was given to each factor to avoid confusion Attention also was directedtoward translation work

The results of pilot study were encouraging and supportive cooperation was promised for theupcoming survey

5.5 Data analysis procedure

The objective is to identify and validate the set of managerial variables that have a significanteffect on the quality performance of M&E projects Twenty-seven original variables are used

as input data They are further being grouped to several factors, which form the set of multipleindependent managerial variables Quality performance, in its turn, is evaluated according to aset of three measures Thus we want to find the largest possible overall correlation(connection) between the set of managerial variables and the set of quality performancemeasures and to identify such variables that contribute the most to this correlation

Muiltivariate statistical tools will be used for analyzing the multi-attribute nature of theperformance success and for the multitude of the factor variables The main statisticaltechniques are factor analysis and canonical correlation analysis

Factor analysis is to be used first to reduce the initial number of variables (27) to smallergroups which contribute for the majority of variance of original variables The purpose of thisexercise is instead of dealing with a large number of variables, we will deal with a smallernumber of factors while ensuring the minimal loss of information The underlying assumption

of factor analysis is that there exists a number of unobserved latent variables (or "factors") thataccount for the correlations among observed variables

Canonical correlation analysis is the principal method that we use to identify critical variablesthat affect quality performance CCA is an appropriate multivariate analysis tool to be usedbecause unlike Multiple Regression that allows one to assess the relationship between adependent variable and a set of independent variables, CCA allow us to investigatesimultaneously the relationships between two sets of variables We will use canonical analysis

to test the relationship between the extracted factors as sets of predictors and the qualityperformance measures as a set of criterion variables