root causes & consequential cost of rework - xl...
TRANSCRIPT
Robin McDonald, CCM, LEED G.A.
Root Causes & Consequential Cost of Rework
5286
_07/
2015
InsuranceNorth America Construction
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Table of Contents
1. DefinitionofRework ....................................................... 1
2. Introduction .................................................................... 1
3. CostandRootCauseOverview ..................................... 1
4. ProductivityLossandReducedQualityInProjects ...... 2
5. ExaminationofDesign-InducedRework ....................... 3
6. TheEffectofReworkonConstruction CostPerformance .......................................................... 5 OwnerReportedProjects .............................................. 7 ContractorReportedProjects ....................................... 7
7. ReworkCostsInBuildingConstruction. ........................ 8
8. ReworkCostsInCivilInfrastructureProjects ............... 9
9. Conclusion ...................................................................... 9
References........................................................................... 11
IllustrationsFigure1.0
CauseandEffectDiagram-ModeloftheRoot CausesofRework (Fayek et al., 2003)............................. 2
Figure2.0 InfluenceDiagramOfDesignErrorInducedRework (Peter E. D. Love, 2008) .................................................... 4
Table1.0 ReworkQuestionnaireIndex ......................................... 6
Figure3.0 FRIScoreChart ............................................................... 6
Table2.0 LargestSourcesofReworkforOwners andContractors (Bon-Gnag Hwang et al, ASCE, March 2009) ................... 7
Table3.0 DirectAndIndirectReworkCostsPerProjectType, (Peter E.D. Love, 2002) .................................................... 8
Figure4.0 ASummaryOfReworkCosts(Bon-Gang Hwang). 10
RootCauses&ConsequentialCostofRework
Robin McDonald, CCM, LEED G.A.
Thispaperevaluatestheimpactofreworkondirectandindirectconstructioncostforprojecttypes,projectindustry,andprojectsizeandprocurementmethodsinvariouscategories.Byrecognizingtheimpactsofreworkanditssources,theconstructionindustrycanreducereworkandeventuallyimproveprojectscheduleandcostperformance.
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Section1 DefinitionofReworkReworkisdefinedasworkmeasuresthathavetobecompletedmorethanonce.BuratiJ.L.etal.(1992)describedreworkasa“non-conformance;”PeterE.D.Love1characterizedreworkasthe“unnecessaryprocessofredoingaworkactivitythatwasincorrectlycarriedoutthefirsttime.”Anotherdefinitionwhichemphasizestheessenceofreworkis“workthatismadetoconformtotheoriginalrequirementsbycompletionorcorrectionatleastoneextratimeduetononconformancewithrequirements.”Reworkisnotcommonlydescribedtoincludemissingscopeofworkchangesandchangeordersbroughtaboutbyendusers/owners,whichare not necessarilyconsiderednon-conformance.Ratherchangessuchastheseinsteadstemfromadesiretochangeduetobudgetconstraintsorotherunrelatedcircumstances.
Section2 IntroductionReworkisamajorcontributortocostandschedule.Inalargecomplexenvironmentthatinvolvesmultiplelevelsoftrades,suppliersandinstallers,andwheremanyactivitiestakeplacesimultaneously,thelikelihoodforerrors,omissionsandpoormanagementpracticesoftencauseneglectthatcanleadtoqualityfailures,whichmustthenbereworked.Errorsaredefinedasunintendeddeviationsfromcorrectandacceptablepracticesandleadtoprojectcostandscheduleoverruns,whicharebothunnecessaryandavoidable.FivemajorareasofreworkhavebeenidentifiedinthepastbytheConstructionIndustryInstitute(1989),PeterE.D.Love(1990),andBuratiJ.L(1992)inwhichtheystatethatdesign,construction,fabricationandtransportationandoperabilitywerethecausesofrework;sourcesofreworkaredescribedinSection3.0.Inadditiontoactivitiesandsourcespreviouslydescribed,theanalysisofsampleempiricalindependentresearchdatafromavarietyofconstructionandengineeringprojectstypicallymeasuresthecostofreworkbasedonprojecttype,projectindustry,projectsizeandbyprocurementmethod.Thesedataanalysesarebasedonbothdirectandindirectcoststhatareattributableintheinfrastructureandbuildingindustries.Section6considerstheseeffects.
1 P.E.D.LoveiswiththecooperativeResearchCenterforconstructionInnovation,DepartmentofConstructionManagement,CuringUniversityofTechnology,PerthAustralia.
Section3 CostandRootCauseOverviewAsearlyas1981,theBuildingResearchEstablishment(BRE)intheUKreferencedthatreworkcanoccurduringdifferentphasesoftheprojectlifecycleandthaterrorsinbuildinghad50%oftheirorigininthedesignstageand40%intheconstructionstage.In1986,O’ConnerandTucker’sIndustrialProjectConstructabilityImprovementpaperidentifiedownerscopechange,specificationchangeinadditiontodesignorprocurementerrorsthatresultfrompoorconstructiontechniqueorpoorconstructionmanagementprocesses.Abdul-Rahman(1995)determinednon-conformancecostsinahighwayprojecttobe5%ofthecontractvalue(excludingmaterialwastageandheadofficeoverhead). Abdul-Rahmanspecificallypointsoutthatnon-conformancecostsmaybesignificantlyhigherwherepoorqualitymanagementpracticeswereimplemented. NylenK.O.(1996)foundthatwhenpoorqualitymanagementpracticeswereusedinrailwayprojectsthequalityfailureswerefoundtobe10%ofthecontractvalue.Furthermore,10%ofthequalityfailuresrepresented90%oftheirtotalcost. Additionalstudiesindicatedthatreworkhasaconsiderableimpactontheindustryasawhole;sourcesofthesestudiesincludedtheAmericanSocietyofCivilEngineers(ASCE),BuratiJ.Letal(1992),CII(2004),PeterE.D.Love(2002,2008&2010)andarecentwhitepaperproducedbyNavigantConstructionForum(2012).Thisresearchisfurthersupportedbyothersurveydatathatsuggestthatthetotalmeanreworkcanbeasmuchas10%ofthecontractvalue.ResearchconductedbytheASCEandCIIfindsthatdirectcostofreworkcontributesanaverageof5%tothetotalconstructioncost(CII,2005),howeverwhereheadofficeoverheadandindirectcostsaretakenintoaccount,thepercentageofreworkcontributingtototalconstructioncostscanexceed7.25%andreachashighas12%.
Figure1.0illustratesthefivemainsourcesofreworkandtheirassociatedrootcauses(Fayeketal.2003).OfthoseidentifiedinFigure1.0,“EngineeringandReviews”hadthehighestmonetaryweightatapproximately60%,accordingtoonesurvey,farandaboveanyothersourceidentifiedinthefigure.Thesecondhighestsourcewas“HumanResourceCapability”at21%andthirdhighestwas“MaterialandEquipmentSupply”at15%,althoughthefrequencyofoccurrencewasfargreaterthantheHumanResourceweighting.“ConstructionPlanningandScheduling”and“LeadershipandCommunications”hadalmostidenticalweighting.
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Section4 ProductivityLossandReducedQualityinProjectsFailuretodeliverprojectneedsontimeandonbudgethasbeenthedownfallofpoliticalparties,governmentsandpublicentitiesaroundtheworld.Wheredelaysinprojectsoccur,theProjectManagerisusuallyforcedtoconsiderthreepossiblesituations:declineinquality,additionalcostsandpossiblerework.Adeclineinqualitywillusuallyleadtorework,whileintroducingadditionalresourcestomeetprojectscheduleconstraintssignificantlyincreasesprojectcosts.Likewise,lossofproductivitymayoccurduetolongerperiodsofovertimeifprojectaccelerationisrequiredtoresolvedelays.Wherethisapproachisadopted,fatiguewillinvariablyincreaseleadingtosub-standardperformancethatmayalsogeneraterework.Ifextraresourcesareimplemented,theoutcomemayleadtolaborovercrowdingandstackingofsubcontracttrades,whichalsohasapotentialtoreduceworkeffectiveness,whichinturncanleadtonon-conformance.
Whileproductivitylossandthechoiceofovertimeworkareimportantandinterestingfactors,itisnotthepurposeofthispapertostudytherelationshipbetweenovertimeworkandproductivity.Thiswhitepaperconcentratesontheeffectofreworkqualityonthecostandschedulefunction.
Key selection of resources that best reduce productivity loss and best resolves delays is carefully scaled by injecting 50% overtime work and 30% additional resource.
AllocationofresourceisfurtherexplainedinSection5.
Fig 1.0 Cause and Effect Diagram - Model of the Root Causes of Rework (Fayek et al. 2003)
Late designer input
Unrealistic schedule
Constructability problems
Insufficient turnover & commissioning resourcing
Contribute to Rework
Human Resource Capability Leadership & Communications
Engineering & ReviewsConstruction Planning & Scheduling
Material & Equipment Supply
Unclear instructions to workers
Excessive overtime
Insufficient skill level
Inadequate supervision
Ineffective management of project team
Lack of safety & QA/QC
Poor communications
Lack of operations (end user)
Late design changes
Scope changes
Error & omissions
Poor document control
Non-compliance with specification
Untimely deliveries
Materials not in right place when needed
Prefab. & construction not to project requirements
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Section5 ExaminationofDesign-InducedReworkReworkresultingfromclientdesignchangesordesignconsultanterrorhasbeenidentifiedastheprimaryfactorcontributingtotimeandcostoverruns.Design-inducedreworkhasbeenreportedtocontributeasmuchas70%ofthetotalamountofreworkexperiencedinconstructionandengineeringprojects(PeterE.D.Loveetal2008).Inspiteoflessonslearnedfromprojectfailuresanddesignerrors,poordesignandconstructionmanagementpracticescontinuetoplaguetheconstructionindustry.Errorsmadeduringtheearlystagesofaprojectareoftendetectedduringthelaterstagesoftheproject,afterwhatappearstobean“errorfree-undetectedperiod.”DesignerrorsfromarchitecturalandengineeringprofessionalsthatgoundetectedmayleadtoStructural,GeotechnicalandCivilEngineeringorMechanicalfailuresthatcanhavecatastrophicconsequences,asthefollowingexamplesillustrate:
• TayBridge,1879–centralnavigationspanscollapsedintotheFirthofTayatDundee,takingwithitthetrainandsixcarriagesand75people
• TetonDam,1976–collapseoftheEarthDaminIdaho.Geotechnicalanddesigndecisionsledtofailurewithoutbuildingmultiplelayersofredundancyanddefenseagainstfailure
• LondonMillenniumfootbridge,2000–synchronouslateralexcitationcausingsidewayswaymotionsimilartoTacomaNarrowsBridgethatcollapsedin1940
• ParisCharlesDeGaulleAirport,Terminal2E,2004–sixmodulesofthetubularstructure,inadditiontothreefootbridgeswhichlinkedtheboardingareacollapsed
Theprimereasonfortheseissuesisduemainlytoindustrytimelineexpectations,pressuresandclientdemands.Designconsultantsaregenerallytooquicktomoveontothenextbidorarepreparingthenextphaseoftheprojecttofullyunderstandandreflectonthesepastdesignissues,designdefectsandthereviewoftheirprocesses.Theprocurementprocessforpublicbidding,inparticular,canincreasethelikelihoodofrework.Thehandoffofincompletedesignrelateddocumentation,whichisthenrelieduponbycontractorsordesign-buildteamstocompiletenderdocumentationandbudgetscancreatereliabilityproblemsastheseerrorsindocumentationarenotdetecteduntiloperationsbeginonsite.Insomecasesthismaydirectlyaffecttheengineeringandplantoperation,whichwillthenimpactsafety.
Ifwedrilldownintothedesignerrorcauseswecanseemoreelementsthatdriveconsultantstomakeerrors,whichaffecttheirperformanceandfurtherinfluencetheirdecision-makingprocess.
Managementdecision-makingandothersoftvariableshavehadlimitedempiricalresearchandhavenotbeensystematicallystudiedorpresentedandreferencedhere.Conversely,thereviewofManagementandOrganizations,andhowtheseaffecthumanbehavior,iswelldocumented.Thetypesoferrorsthatstemfromthesetypesofcharacteristicsareusuallydefinedasthosearisingfrom(i)poorknowledge,(ii)carelessnessandnegligenceand(iii)intent(duetogreedetc.). Ifweconcentrateon(i)and(ii)above,wefindthatpoorknowledgeisaresultofpoortrainingandeducationcombinedwithalackofexperience.Carelessnessandnegligenceoftenincludeerrorsindetailingandcalculationsandaremostlyduetoalackofduediligenceandthereforemaybemadeatanytimeduringtheproject’slifecycle,asaddressedearlier.
Fig2.0(onpage4)representsaninfluencediagramthatidentifieskeyissuesfromstudiesinthedesignphase(fromconceptualthroughdetaileddesignstages)thatcanaffectadesigner’scognitivereasoning,andthereforethelikelihoodtocommiterrors. Othercausesareineffectiveuseofcomputeraideddesign,lowdesigntaskawareness,lackofteamworkandlackofawarenessinchangesindesignstandards.Aspreviouslystatedabove,workpressuresduetoscheduleconstraintsarealsoakeyindicator. “Designchangeinducedreworkisgenerallyclientinitiatedandinvariablyresultsinmodificationtothecontract”.(PeterE.D.Love2008)Theresultingcostandscheduleimpactareusuallymutuallyagreeduponbytheclientandcontractor.LoveandLi(2000)alsofoundthatchangesduringconstructionwereinitiatedbytheenduser;clientbasedchangeaccountedforupto25%ofreworkcosts. Analternativeexplanationastowhatleadstodesignerrorcanbecategorizedasthoseclientrequirementsthathavenotbeenfullyunderstood,especiallywherethereisindirectcommunicationbetweendesignerandenduserofthefacility.Thistypeofcommunicationcancreatemoredifficultyintherelayingofinformationandcreateamisunderstandingfordesignerand,thus,thetasks.
Schedulepressureandunrealisticclientdemandforearliercompletionofprojectshavebeenreportedtobecontributorstotheworkingofincompleteanderroneousprojectcontractdocumentation.Scheduleconstraintsandclientpressureoftenleadtolackofattentionbymanagementresultinginpoorqualityandrequiringreworkthatcanultimatelyaffectprofitabilityandprojectperformance. Thisisespeciallytruewhenalowdesignfeeforaprojectissubmittedandafixeddurationallocatedforeachdesigntask.Thiscouldleadtoinadequatetimetopreparedocumentsandmaybemoreprofoundifinexperienceddesignstaffwithlimitedtechnicalknowledgeisinvolved,asthiscouldamplifytheincompletenessofthesedocuments.
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Cognitivebehaviorandtimepressuresalsohaveanimpact.Adesigner’sknowledgeisgenerallylimitedtohisorherownactivities,whichcancontributetothatdesigner’sinabilitytodetecterrors.Whensubjectedtotimepressures,peoplewilltendtomaintaintheirroutinebehaviorevenwhentheyhavebeeninformedofanalternativewayofassessingaproblem,whichcanproducenegativeresults. Thesamecanbetrueofrectifyingerrors.Ifconsultantsorcontractorsarecheckingfordesignerrorstheycaninvariablymakethesamemistakes.Wheretheprocessbecomescompoundediswhenmultipledisciplinessuchasarchitectural,mechanicalandstructuralengineeringandgeotechnicalengineeringaresubjectedtodegreeofconcurrency,alsoknownasparallelism.Inthe1999article“LimitsofConcurrency”,G.M.Hoedemakernotesthereisalimittothenumberoftasksthatcanbeundertakeninaconcurrentmannerandtheprobabilityofreworkandcostandscheduleoverrunssignificantlyincreasesandbecomesexacerbatedwhentheteamisundertimelinedemandsduetoscheduleslippages. Lowsalariescanalsoactasde-motivators,whichinturncancontributetoerrorsindesign.Ifafirmsubmitsalowdesignfeeforaproject,itmayputhigherpressureondesignerstomeetschedule. Theoccurrenceofreworkwillinvariably
resultincontractorsreevaluatingtheirprojectschedules,asdelayshavethepotentialtoleadtoLiquidatedDamages.
AsnotedintheCausalBehaviorofDesign-InducedReworkpublishedbyIEEE(2008)andwrittenbyPeterE.D.Love,therecanbevastchangesintheoriginalscopeduetodesignerrorsandeventhoughprojectsmaybedeliveredontime,significantcostoverrunscanstilloccur.PeterE.D.Love’spaperidentifiesthatthetotalpercentageofcostreworkattributingtocostoverrunswereinexcessof40%.ThisiscomparabletotheresearchcompletedbyLovein2002,whichstatedthatonaveragereworkcontributedto52%oftheprojects’totalcostoverrun.ThiscomparisonisdiscussedinmoredetailinSection6.
Powell(1997)suggeststhatinsularityandarchitecturalfirms’poormanagementpracticesandaversiontomanagement,ingeneral,areotherfactors.Indeed,architecturalfirmshavebeenidentifiedastheprimarysourceofdesign-relatedreworkinprojects. WiththeexceptionofISO9000,qualitycontrolsliketotalqualitymanagement(TQM),qualitycosting,qualityimprovementteamsandqualityfunctiondeploymentwererarely
Job demands& constraints
Workload planning(task scoping)
Schedule pressure(time to design and
document)
Contracting strategy
Clientrequirements
Client-initiatedchanges
Additional resources
Firm profitability
Productivity
Fees
Education, training& experience of
personnel
Unavailability of staff
Design rework
De-motivation
Detected errors
Staff selection
Stress & fatigue
Time-boxing
Design/engineeringdocumentation
Interaction of participants
Interactionof tools
Design interface management
Design verifications,reviews and audits
Design errors
Figure 2.0 Influence Diagram Of Design Error Induced Rework (Peter E. D. Love 2008)
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employed.ArchitectsshouldcommittoandstrivetofollowastructuredTQMprogram;doingsowillhelpeliminateunnecessaryandavoidablerevisions. Undertakingdesignreviewsandselectingstaffwithcommensurateskilllevelandexperiencetomanagethedesignprocessisthefirststagetoensuringpotentialdesignerrorsareminimized.Afirmthatsupportsinter-organizationalcollaborationwiththeuseofBuildingInformationModeling(BIM)/ProjectInformationModeling(PIM)andclashdetectionandonethatexaminesitsworkpractices(suchasthosedevelopedbyCII)willdowellinreducingrework.Whatisdifficulttominimizeorcontrolisifthedesignerisresponsiblefortheerror.Unlessitisasimpleproblem,thedesignfirmmayneedtoregroupthedesignersresponsible.Thesedesignersmayalreadybeworkingondifferentprojects,groupsorteams;inaworstcasescenario,theymayhaveleftthefirm.Inanyevent,theprocessofrecruitingorinductingdesignersmaywellhavetostartalloveragainanddelaytheprojectorforceahastydecision,anycombinationofwhichmaycausenon-conformance.
Section6 TheEffectofReworkonConstructionCostPerformanceTheCIICapitalProgrambenchmarkingandmetricsprogramcollecteddataforapproximately360projectswheredirectreworkcostsweremeasuredasaportionofactualconstructioncosts.CIIdevelopedaformulatocalculateametricknownasTotalFieldReworkFactor(TFRF),whichisexpressedasTotalDirectCostofFieldReworkovertheTotalConstructionPhaseCostasaleadingindicatorusedforthisgroupdataanalysis.The datasamplesweresplitintotwogroups,oneforOwnersandoneforContractors,withtheresultsbeinganalyzedseparatelyforeachgroup.
Formula for Total Field Rework Factor:
TFRF=
Totaldirectcostoffieldrework Totalconstructionphasecost
Twostatisticalhypotheseswereestablishedforthisstudy:(1)thesignificantdifferencesintheimpactsofreworkonconstructioncostperformanceforvariousprojectgroups,whichareidentifiedthroughoutthissectionand(2)thestatisticallysignificantdifferenceinrankorderofreworksources.Forhypothesis(1),arank-ordercorrelationwastestedusingaone-wayANOVA,whichisacommonlyusedmethodtocalculatethedifferenceinmeansbetweentwogroups;thistesthasaconfidencelevelof95%.Forhypothesis(2),therankofscores(notthescoresthemselves)wererankorderedusingtheSpearmancorrelationtest,whichconcentratesondifferencesinrankorderofdataratherthantheirmeandifferences. Sourcesofreworkthatwereclassifiedinthestudyareasfollows: • OwnerChange(OC)
• ConstructorError(CE)
• DesignError/Omission(DE)
• DesignChange(DC)
• VendorError/Omission(VE)
• VendorChange(VC)
• ConstructorChange(CC)
• TransportationError(TE)
• Other(OS)
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TheTFRFformulacanbeusedwitheachoftheninesourcesofreworktoidentifythehighestimpactoncostperformance.CII’sresearchteamalsodevelopedafieldreworkquestion-naireindextohelpidentifytheneedforreworkearlyoninprojects,whichservesasaperformanceindicatorwiththeobjectiveofreducingreworkandensuringtheintendedpurposecouldbecompletedbeforethestartofconstruction.
CII’squestionnaireFieldReworkIndex(FRI)andreworkchartarefoundinTable2.0andFig.3.0.Allanswerswitharatingof1receive1point;allratingswitharatingof2receive2points,andsoonthroughtoamaximumof5points.Thescoreforeachquestionisthenaddedtogethertogiveatotalscore;thosewithascorebetween14and70aregroupedaccordingtotheFRIscorecategorizingchart.Thosescoringhigherthan45areclassifiedasbeingwithinaReworkAlertstage.
Fig 3.0 FRI Score Chart
Table 1.0 Rework Questionnaire Index
Questionnaire Answer (option) Score Answer (option) Selected Score
1 Degreeofalignmentbetweenvariouselementsoftheownersorganization(departments,divisions)
Couldnotbebetter
1 2 3 4 5 Couldbeworse
2 Degreetowhichprojectexecutionplanningwasutilized Completely 1 2 3 4 5 Notatall
3 Designfirm’squalificationsforthespecificproject Couldnotbebetter
1 2 3 4 5 Couldnotbeworse
4 Degreetowhichleadersofkeydesigndisciplineshavechanged
Nochangeatall 1 2 3 4 5 Continualchange
5 Qualityoffieldverificationofexistingconditionsbyengineering
Couldnotbebetter
1 2 3 4 5 Couldnotbeworse
6 Qualityofinterdisciplinarydesigncoordination Couldnotbebetter
1 2 3 4 5 Couldnotbeworse
7 Qualityofprequalificationofvendorsfortheproject Couldnotbebetter
1 2 3 4 5 Couldnotbeworse
8 Availabilityofvendorinformationforequipment Couldnotbemoreavailable
1 2 3 4 5 Couldnotbelessavailable
9 Degreetowhichdesignscheduleiscompressed Notcompressedat all
1 2 3 4 5 Couldnotbemorecompressed
10 Levelofovertimeworkedbytheengineeringfirm None 1 2 3 4 5 Veryhighlevel
11 Levelofdesignrework(repeatingdesignwork) Couldnotbelower
1 2 3 4 5 Couldnotbehigher
12 Commitmenttoconstructabilityofthedesignandconstructionteam
Total Commitment
1 2 3 4 5 Totallackofcommitment
13 Expectedavailabilityofskilledcraftworkerstotheproject
Readilyavailable 1 2 3 4 5 Veryscarce
14 Expectedlevelofconstructioncontractorovertime None 1 2 3 4 5 Veryhighlevel
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30 45
70
Approaching Success
NormalVigilance
ReworkAlert
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OWNER-REPORTEDPROJECTSTheowner-reportedprojectresultsrevealedthatthemeanTFRFforlight industrialwasthehighest andthatheavyindustrialwaslowest.Thereforethecostofimpactofreworkinlightindustrialprojectsissignificantlygreaterthan that of buildingsorheavy industrialsources. Reworkinmodernizationprojectscontributedtotheincreaseofactualconstructionphasecosts,almosttwiceasmuchasadd-onprojects.
TheresultsbasedonProjectSizefoundthatthemeanTFRFforprojectsbetween$50Mand$100Mwerethehighest,butasHwangetal(2009)pointsout,thisisbasedonasmallsample,andhaslessstatisticalsignificance. ThelowestmeanTFRFwasrecordedforprojectsoflessthan$15M,butagainthesefindingslackrealsignificancebasedontheirsamplesize.Projectscostinggreaterthan$100MidentifiedthatDesignErrorcontributedthemost.ProjectlocationdidnotrevealanysignificanttrendsinmeanTFRFdifferencestoconstituterealreworkimpacts.
MeanTFRFvaluesperindustrygrouppersourceofreworkwerealsodescribed.TheresultssuggestthatDesignError(DE)andOwnerChange(OC)inbuildingswerehigherthanthoseofanyothersourcesinthatgroup.FromthissampleofanalysiswecanpredictthatDEandOCcontributemoretoconstructionphasecoststhananyothersourceforbuildings.Inthecaseforheavy industrialthemeanTFRFforDEwashigherthananyothersourcebylargemargin.
Forlightindustrial,DEandOCwererankedquitecloselyasthemostcommonsourceofrework.
Overall, for each category, Design Error was the highest in all Industry groups except Infrastructure and Modernization. The Hwang et al study suggests that $0.018M per $1M actual construction costs contributed to Design Error.
InallgroupscategorizedbyProjectNature,themeanTFRFforDEandOCwerehigherthanthoseforothersourcesincludingDesignChange,VendorChangeandTransportationError.
CONTRACTORREPORTEDPROJECTSDesignerrorhadthegreatestimpactonheavyindustrialprojects,butthetruecauseofimpacttoreworkoninfrastructureprojectswasnotclearlydefined(sourcewascategorizedasOther).InallgroupscategorizedbyProjectNature,categoryDEandOCwererankedfirstandsecondhighestbycostimpact.Infact,DE,OCandDCforadd-on,grassrootsandmodernizationprojectsweresignificantlydifferenttothoseofCC,VCandTE.
Table 2.0 Largest Sources of Rework for Owners and Contractors (Bon-Gang Hwang et al, March 2009)
Project CharacteristicsOwner Contractor
First Second Third First Second Third
IndustryGroup Buildings DE OC OS CE CE VE
HeavyIndustrial DE OS OC DE OC VE
Infrastructure OC CE DE OS DC DE
LightIndustrial DE OC OS DC OC DE
ProjectNature Add-on DE OC OS DE OC DC
GrassRoots DE OC CC DE OC DC
Modernization OC DE OS DE OC DC
ProjectSize <USD15Million OC DE OS DE OC DC
USD15-50Million DE OC OS DE VE OC
USD50-100Million OC DE OS OC DE CE
>USD100Million DE CE VE DE VE OC
ProjectLocation Domestic DE OC OS DE OC DC
International DE OC CE DC DE OS
WorkType* ConstructOnly -- -- -- DE DC OC
DesignandConstruct -- -- -- DE OC VE
KEY:OC=ownerchange;DE=designerror/omission;DC=designchange;VE=vendorerror/omission;VC=vendorchange; CE=constructorerror/omission;CC=constructorchange;TE=transportationerror;OS=other*Contractor-reportedprojectsonly
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IntermsofrankingbyProjectSize,DEhadthehighestmeanTFRFandallrankingcorrelationsweresignificant,exceptwhereprojectcostswerebetween$50Mand$100M,andinthiscaseDEandOCsharedthesameTFRF.Table2.0(onpreviouspage)summarizesthelargestsourcesofreworkforbothownerandcontractors.
Section7 ReworkCostsinBuildingConstruction.
AccordingtoPeterE.D.Love(2002)costgrowthfor161AustralianconstructionprojectssurveyedfoundthatReworkasaPercentageoftheTotalCostGrowthcouldbeupto52%,andfactorssuchasweather,client/end-userchangeorderscontributedtotheremaining48%. Asurprisingfindingoftheprojectdatarevealedthat27%ofprojectsweredeliveredontimedespiteexperiencingcostincreasesduetorework. Asstatedinsection4above,projectscanbeacceleratedandresourcesallocatedtocompensateforanydelays,whichwillinevatablyincreaseprojectcosts.
Key Predictors:• Changesmadeattherequestoftheclientoroccupierwhenaproductorprocesshasbeencompleted
• Valuemanagementanditsusetoreducerework• Ineffectiveuseofinformationtechnology• Designscopefreezing
Whilelookingintoreworkcostsandprocurementmethods,therewerenosignificantdifferencesbetweentheProcurementMethodcategoryfordirectandindirectreworkcosts.Inthissurveyitwasalsonotedthattherewasnosignificantdifferencebetweenthetotalcostofrework
usingdifferentprocurementmethodsandtheresultoftheone-wayANOVAtest.Refurbishmentandrenovationprojectsareconsideredhigherreworkcoststhanthosefornewbuildingprojects.Usingtheone-wayANOVAtesttherewerenosignificantdifferencesbetweenProjectTypeanddirectandindirectreworkcosts.Table3.0belowlooksattheProjectTypevs.directandindirectcosts;themeanvalueforeachdoesnotdrawsignificantdifferencesbyprojecttype.Itisthoughtthatthehighertheuncertaintyandcomplexityofworkthehigherthereworkcost,butagainthisisnotnecessarilysupportedbytheresultsofthissurvey. Thisis,however,backedupbyseveralreportsandfindingsofrootcausesofrework.
Lastly,theallocationofresourcesandplanningduringthedocumentationprocessareimportantpointsthatneedtoberaisedifreworkistobereduced.NoteworthyisthatdesignconsultantsreworkestimatesarealmosttwiceasmuchasPM’s,whereascontractorshaveabetterunderstandingofactualreworkcosts,becausetheyareintegratedwithintheconsultants’designandconstructionactivities,especiallywheredesign-buildprojectsareconcerned.
Table 3.0 Direct And Indirect Rework Costs Per Project Type, (Peter E.D. Love 2002)
Direct Rework Costs Indirect Rework Costs
Project Type N Mean Standard Deviation
Standard Error Minimum Maximum Mean Standard
DeviationStandard
Error Minimum Maximum
Newbuild 90 6.10 7.18 0.75 0.10 35.00 5.69 7.70 0.81 0.00 50.00
Refurbishment/Renovation
43 7.29 9.73 1.48 0.50 50.00 5.60 6.43 0.98 0.00 30.00
Fit-out 14 7.78 7.70 2.06 1.00 30.00 6.10 7.90 2.11 0.00 30.00
Newbuild/refurbish 11 4.95 4.67 1.41 0.50 15.00 5.81 5.92 1.78 0.00 20.00
Combinationofall 3 3.33 1.52 0.88 2.00 5.00 0.66 0.57 0.33 0.00 1.00
TOTAL 161 6.44 7.78 0.61 0.10 50.00 5.62 7.18 0.56 0.00 50.00
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Section8 ReworkCostsinCivilInfrastructureProjectsPeterE.D.Loveetal(2010)notedthatfrom115civilinfrastructureprojectssurveyed,meanreworkcostswerelowerthanthepreviouslyreportedmeanreworkcostsforbuildingconstructionprojects.Theresultsthatinfluencedirectreworkcostsoncostgrowthforcivilinfrastructureprojectswerealsoconsiderablylessthaninbuildingconstruction:12%comparedto26%respectively,morethanhalfofwhatwasreportedinbuildingconstruction.
Key Predictors:• Ineffectiveuseofinformationtechnologies• Workingproceduresandcommunicationslinesnotclearlydefined
• Excessiveclientinvolvementintheproject• Changesmadeattherequestoftheclient• Insufficientchangesinitiatedbytheclientcontractortoimprovequality
Again,whilelookingintoreworkcostsandprocurementmethods,itcanbeconcludedthattherewerenosignificantvariancesamongprocurementmethodcategoriesfordirectandindirectreworkcosts,norwerethereanysignificantdifferencesrevealedfortheprojecttype(railwayinfrastructurewasnotincludedamongtheprojecttypessampled).
Itwasnotedalsothatthereisadifferenceofunderlyingpredictorsofreworkbetweenbuildingconstructionandinfrastructureprojects,thoughinefficientuseofinformationtechnologiesbydesignteammembersiscommontoboth.AsnotedbyLove(2009)whenprojectsaresubjecttotightdesignschedules,designteammembersoftenreusestandarddetailsandspecificationstominimizetheirtaskloading.Togetherwithinteroperabilityissuesandinformationtechnologyapplications,thiscanleadtotentativedesigninformation.
Section9 ConclusionForowner-reportedprojects,heavyindustrialworkhadthelowestreportedTFRF.Conversely,heavyindustrialprojectswerethemostaffectedamongcontractors.CircumstanceswheretheTFRFresultsdidmatchbetweenownerandcontractorwereduetotheeffectofreworkcostincreasesformodernizationandprojectsforwhichthecostrangewasbetween$50Mand$100M.Surprisingly,thetrendshowedthatreworkdidnotgreatlyinfluencecostincreaseswhereprojectvaluesaregreaterthan$100M,althoughthesamplesizewasnotsignificant.Therearetwomainassumptionsthatmaysuggestwhyreworkisnotsodisruptivewithprojectvaluesgreaterthan$100M.Theseareeitherduetothesuccessfulexecutionofbestpractices,suchasCIIPerformanceImprovementandAssesment,andtheuseofBIM,oritcouldmeanthattheseprojectsmaybelesssensitivefromacoststandpointandperhapsthevaliditymaybeinquestion.
ThereisnotenoughthoroughreworkresearchdatatosuggestthatBIMdiminishespotentialrework,buttheprocessofpreparingtheBIMworkflowandmodelinginacollaborativeeffortdoesdecreaseopportunitiesforrework.
Whatisclearfromstudiesisthatthecostofreworkforownersistwiceashighasforcontractors,althoughtheownerisgenerallyincontrolofthewholeprojectasopposedtoasectionoftheprojectgiventoacontractor.Consequentlytheownerbearsasignificantlylargerproportionoffinancialresponsibility.Themostsusceptibleprojectsaffectedbyreworkarelightindustrial,heavyindustrial,railwayprojectsandmodernizationprojectsandprojectsforwhichcostrangeisbetween$50Mand$100M.Seefigure4.0whichsummarizesthesemostsensitiveprojecttypes.
Forowners,OCandDEweremostfrequentlyrankedamongstallcategories.CEwasalsofoundonownerscategoriessuchasprojectscostingmorethan$100Mandinfrastructureprojects.Forcontractors,OC,DE,DCandVEweremostfrequentlyrankedasthemostprevalentsourcesofrework.DCwasoneofthehighercostofreworkcategoriesforthecontractorbutwaslesssoforowners.CEwashighlyrankedontheownerssidebutlesssoforcontractorsreworkimpactdata.Thereisanongoingtrendforcontractorstoassignreworktodesignerrorandomission;theownersattributethecostofreworktoconstructorerrorandomission.
Fig 4.0 A Summary Of Rework Costs (Bon-Gang Hwang)
10
Itcanbesaidthatalthoughthecostimpactofreworkisdifferentamonggroups,thegreatestcostimpactsourcesingroupswerehighlycorrelated,forexampleDEandOC arethetwomostfrequentlyrankedsourcesbycostimpactandcanbeconsideredtobethemostimportantrootcauseforbothcontractorandowner.ItcanalsobenotedthatCEforownerreportedprojectsandDCforcontractorreportedprojectsarealsogreatcontributorstorework.IneffectiveuseofITbydesignteammemberswastheprimaryfactorcontributingtoDE. Toreducerework,firmsshouldimplementqualityoperationssuchaspre-projectplanning,benchmarkingprocesses,projectchangemanagementandconstructabilityanddesigneffectiveness.Furthermore,firmsshouldimprovemanagementofdesignanddocumentationprocessesandcommunicationamongowner,designersandconstructorstocreateaguidingcoalition,andasharedobjectiveandmutualtrust.Overallchangerequiresleadershipandmanagement;thelargerthechangethemoreleadershipisrequired.ProjectManagersshouldanalyze,thinkaheadandchangebytakingtheleadtodevelopandimplementsystemsfortrackingandcontrollingconstructorerrorandomissionforowners,designchangeforcontractors,ownerchange,anddesignerrorforbothcontractorsandownerstotrytoreducereworkbythesesources.TheunderlyingmessageistoremovecomplacencyandaddresspastfailuresandlearnfromthembyimplementingCIIbestpractices,whileimprovinglearningcapabilitiesandstimulatingorganizationallearning.
14%
12%
10%
8%
6%
4%
2%
0%
All types 1
Commercial
Industrial 2
Residential 3
Highway 4
Heavy Eng./
Industrial 5
Railway 6
1 CII (2005)
2 Josephson and Hammarlund (1999)
3 Love and Li (2000)
4 Abdul-Rahman (1995)
5 Burati et al. (1992)
6 Nylen (1996)
5%2-6%
3.15%
5%
12.4%
10%
Cos
t of
rew
ork
(% o
f tot
al p
roje
ct c
ost)
11
ReferencesAbdul-Rahman,H,The Cost of Non-Conformance During a Highway Project(1995)BuratiJ.L.Causes of Quality Deviations in Design and Construction(1992)ConstructionIndustryInstitute(CII)CausesandEffectsofFieldreworkresearchteam,TheUniversityofTexasatAustin(2004&2005)Nylen,K.O.Cost of Failure in a Major Civil Engineering Project (1995)Fayek,A.R.etel.Measuring and Classifying Construction Field Rework: A Pilot Study(2003)Hoedemaker,G.M.Limits to Concurrency(1999)Hwang,Bon-Gang,etel.Measuring the Impact of Rework on Construction Cost Performance(2009)Love,P.E.D.Forensic Project Management: An Exploratory Examination of the Causal Behavior of Design-Induced Rework(2008)Love,P.E.D.Influence of Project Type and Procurement Method on Rework Costs in Building Construction Projects (2002)Love,P.E.D.Determining the Causal Structure of Rework Influences in Construction(2010)Love,P.E.D.&HengLi,Quantifying the Causes and Cost of Rework in Construction,ConstructionManagementandEconomics(2000)NavigantConstructionForum.The Impact of Rework on Construction & Some Practical Remedies(2012)Powell,Christopher.Responding to Marginalisation,ArchitecturalResearchQuarterly,Volume2,issue3(1997)
AbouttheAuthorRobin McDonaldRisk Engineering ConsultantRobinMcDonaldistheLeadRiskEngineeringConsultantforXLCatlin’sConstructionProfessionalLiabilitypractice.PreviouslyheservedasaConstructionManagerwithParsonsCorporation,leadingRiskandCostManagementfortheWTCRedevelopmentProgram.
Withabroadrangeofengineeringconsultingexperiencespanningfourcountriesandsixteenyears,Robinhashadexposuretobusinessdevelopment,design,pre-constructionanalysisandprojectmanagementon“Mega”BuildingandInfrastructureProjects.Hisbackgroundinconstructionandengineeringisdiverse,derivedfromyearsofexperiencewithreputablefirmswhichbeganintheUKandcontinuedoverseas;includingChannelTunnelRailLink(UK),theNewJerseyNetsSportsArena(NY), 12-MonthmanagementofamultidisciplinedSiteSatelliteOfficeinWestIndies,Jamaica,HaitiandrecentlywiththeWorldTradeCenterRedevelopmentProgram(NYC).RobinalsohasEarthquakeRapidResponseexperienceinsearchandrecovery,whichincludesmanagementofoperationalsupport,forensicdemolitionandsiteoversight,andqualitycontrol.
RobinisaCertifiedConstructionManager(CCM)andMemberoftheConstructionManagementAssociationofAmerica(CMAA)andisaLEEDAccreditedProfessional.HeisarecentgraduateoftheCleantechExecutiveProgramatNYU-Poly,whichisaffiliatedwiththeNewYorkCityCleanandRenewableEconomy(NYCACRE)programthatfocusesonenvironmentalsustainabilityandsmarttechnologygrowth. HereceivedaB.Eng(Hons)inCivil,StructuralandEnvironmentalEngineeringfromUniversityCollegeLondon(UCL)intheUKandalsoholdsaPostGraduateAdvancedEngineeringManagementDegreeatBathandBristolUniversity(UK).
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