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DESIGN-BUILD PROJECTS: A COMPARISON OF VIEWS BETWEEN SOUTH AUSTRALIA AND SINGAPORE

Y Y LING1, S LOK1 AND E S M TAN2

1Department of Building, National University of Singapore, Singapore 119260 2PWD Corporation Pte Ltd, Singapore 069110

ABSTRACT

One of the ways to increase productivity is to use the design-build (DB) procurement method. DB is said to foster an integrated approach to construction, and may be able to solve some of the fragmentation problems faced by the construction industry today. In Australia, DB plays a crucial role in increasing efficiency of the construction industry. As such, countries with low construction productivity, such as Singapore, have much to learn from Australia.

A research was undertaken in South Australia to gauge the performance of DB projects with respect to time, cost and quality. Investigation was also carried out on the appropriateness of using DB for projects of different nature and on whether there is any major change in the ’s role in DB projects. Questionnaire surveys were carried out to gather opinions of and contractors in South Australia. Purposive sampling of architects and contractors was adopted.

In depth discussion of the views gathered was undertaken, and the results were compared to previous studies carried out in Singapore. The areas of comparison between the performance of DB projects in Singapore and Australia are: aesthetic quality, workmanship quality, physical construction time, total development time, timeliness of completion and costs. Conclusions were then drawn from the comparison.

Statistical analysis was also undertaken to ascertain the nature of project that is suitable to use the DB procurement method, such as buildings that are simple, complex, innovative, standardized, large, medium and small sized and in new construction or in renovation works. A list of project nature was then produced, so that clients can use it as a checklist, in deciding whether their projects are suitable to make use of the DB procurement route.

Similar statistical analysis was also carried out to ascertain the importance of contractors’ contribution and to investigate any change in the architects’ roles in the design and construction stages in DB projects. Survey results were compared to studies carried out in Singapore and conclusions drawn.

KEYWORDS:

Design-build; Singapore; Australia; Performance; Procurement

INTRODUCTION

In design-build (DB) procurement system, design and construction become the responsibility of one organisation, usually a contractor (Janssens, 1991; Masterman, 1992). This procurement route enables clients to employ one firm that takes sole responsibility for delivering the required building and associated services in accordance with defined standards and conditions (Bennett et al., 1996).

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The first objective of this paper is to investigate the performance of DB projects in South Australia, with respect to time, cost and quality. This is then compared to the performance of DB projects in Singapore.

The next objective is to investigate the types of project characteristics that best suit DB procurement method. In particular, the study investigated whether projects that are simple, complex, innovative, standardized, large, medium and small sized and whether projects that are new construction or renovation works are suitable for DB procurement system.

The final objective of the paper is to investigate whether there is any major change in the architect’s role in DB projects. This is because, unlike the traditional design-bid-build (DBB) arrangement, architects are now engaged by contractors, instead of the project owner, to undertake the design.

The importance of this study is that if it is found that DB projects have good time, cost and quality track records, more projects should be procured based on this method. Secondly, a list of project nature were produced, so that clients can use it as a checklist, in deciding whether their projects could use the DB procurement route. By knowing whether the architects’ roles have changed, architects who are new to DB projects would know what to expect and tailor their services to the new requirements.

PERFORMANCE OF DB PROJECTS

Quality of DB projects A report by Bennett et al. (1996) showed that quality targets for DB projects were lower and less frequently met compared to DBB projects. Akintoye and Fitzgerald (1995) found that architects felt that quality of product and design innovation are sacrificed in the use of DB.

However, a study by the USA Construction Industry Institute (Krizan, 1997) found that there are no significant differences in quality among DB, DBB and management form of contract procurement. The NEDO report (1985) also concluded that though traditional methods of contracting are good, alternative forms, such as DB, produce quicker results at competitive prices and with no resulting loss in quality. Konchar and Savindo (1998) discovered that DB projects achieved equal if not better quality results than other types of projects.

Given these differing views, the fieldwork would investigate Australian architects and contractors’ view

Time performance of DB projects A study by Akintoye and Fitzgerald (1995) showed that 54% of the clients thought that DB offered savings in construction time and 44% estimated the average time saved to be 1 - 15%. In the survey of construction contractors, 54% of respondents claimed that the use of DB can achieve up to 20% reduction in overall project time compared to the traditional approach (Akintoye, 1994). Konchar and Sanvido (1998) found DB to be at least 12% faster than DBB projects. Similarly, in a survey done by Ndekugri and Turner (1994), an overwhelming majority of respondents indicated that DB is generally faster than the traditional method.

In Singapore, a study by the Construction Industry Development Board (CIDB, 1994) showed that three quarters of the respondents surveyed achieved time saving of 5 to 30 % by using DB. Case studies of the ISK Warehouse and Kranji Secondary School in Singapore also showed that DB helped the projects to be completed within a short time span (CIDB, 1994).

From the various views of researchers on the time performance of DB projects, it can be concluded that one of the main advantages of DB is time saving. The validity of this is investigated in the fieldwork.

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Cost performance of DB projects Ndekugri and Turner (1994) noted that the DB approach is amenable to the stipulation of a maximum guaranteed price and hence for a client with an overriding concern on costs, the DB approach provides better protection than traditional system. Pain and Bennett (1988) concluded from case studies that cost of DB projects may be the same as DBB projects, and may be even lower. The surveys by Akintoye & Fitzgerald (1995) and Akintoye (1994) found that 53% of architects and 76% of contractors claimed that DB could achieve savings in construction cost. Konchar and Sanvido (1998) discovered from their studies that DB projects to be at least 6.1% cheaper than DBB projects.

A study by the USA CII (Krizan, 1997) showed that DB projects had significantly less cost growth than DBB projects and somewhat less cost growth than projects utilising approach. Songer and Molenaar (1996) attributed the cost reduction to the shortening of project duration and the introduction of the contractor’s construction knowledge in the design.

However, there are studies that showed that DB projects may not be cheaper than DBB projects. The largest industrial client in Singapore, the Jurong Town Corporation, found that their DB projects were slightly more expensive as compared to conventional projects (Chong, 1998). A majority of architects in Akintoye and Fitzgerald’s (1995) study attributed the cost savings to reduced standards and lower professional fees.

The fieldwork would study the professionals’ views on cost aspects of DB projects.

PROJECT CHARACTERISTICS SUITABLE FOR DB

Bennett and Flanagan (1983) suggested that DB is only suitable for ‘simple well defined or standard buildings’. Many authors have given suggestions on the types of projects that are suitable for DB (NEDO, 1983; Franks, 1990; Naoum, 1991).

The studies generally showed that there is no one ‘best’ procurement system for building projects and the correct arrangement depends on the particular set of project circumstances, type of owners, their time and cost requirements and the characteristics of the projects (Nahapiet and Nahapiet, 1985). In view of the different opinions encountered, it is difficult to conclude what types of projects are suitable for DB procurement system. As such, the fieldwork to investigate this aspect of DB was mounted.

ROLE CHANGE IN DB PROJECTS

In the traditional DBB arrangement, two separate groups are involved; the design group and the construction group (Mohsini and Davidson, 1992). In DB projects however, the contractors are now involved very early in the design.

The contractor’s early involvement allows truly collaborative decision-making which fosters innovative solutions (Yates, 1995). Innovation is encouraged in DB projects because contractors have control over the design (Pain, 1993), can reap financial rewards from the use of innovative products and processes (Pain, 1993), and have the opportunity to improve quality and provide more cost- effective solutions (Songer et al., 1994). With the increasing complexity of buildings, potentially appropriate techniques can be mobilised by suppliers and specialist contractors and DB provides access to this knowledge during the design stage (Kluenker, 1996). In the fieldwork, the importance of the contractors’ contribution and the frequency of accepting their contributions are investigated.

The roles of architects are also expected to change in DB projects. In DBB projects, architects are generally the leader of the team. In DB projects however, the line of authority may be reversed. A study by Hardcastle and Howell (1996) showed that contractors should always provide leadership to

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DB teams. However, it is expected that architects would resist contractors’ leadership position (Faulkner and Day, 1986; Franks, 1993).

Architects may also resist contractors’ leadership indirectly because they are against DB as a contractual arrangement. Studies have shown that many architects do not welcome this approach (Akintoye and Fitzgerald, 1995; Thompson, 1996). Puddicombe’s (1997) study showed that architects prefer the traditional arm’s length relationship in the contracts.

In DB projects, architects take on a new role which emphasises detailed working drawings, fuller specifications and attention to the method of construction, instead of design aesthetics (Crinson and Lubbock, 1994). Architects also cannot insist on their design but can only present their case to DB contractors, who then determine how design and construction should be integrated (Dulaimi et al., 1995). In the fieldwork, the roles of architects in design and construction stages of DB projects are investigated.

METHODOLOGY

To gather information about the performance of DB projects in Australia, the project characteristics that are suitable for DB, and role changes, a questionnaire was designed. The first section comprised demographic questions and also asked architects and contractors their experience and knowledge of DB. In the second section, various statements describing the performance of DB projects were stated. Respondents were asked to indicate on a 5-point Likert scale whether DB projects’ performance is far below that of DBB projects (rating = 1), same as that of DBB projects (rating = 3) or far exceeded that of DBB (rating = 5). In the third section of the questionnaire, several statements describing project characteristics were given. Respondents were asked to indicate on a 5-point Likert scale whether a certain project characteristic makes DB usage ‘not suitable at all’ (rating = 1), ‘neutral’ (rating = 3) or ‘very suitable’ (rating = 5). In the fourth section of the questionnaire, six statements relating to the changes in roles in DB projects were put forth. Architects were asked whether they agreed with these statements, on a 5-point Likert scale, where 1 meant ‘absolutely disagree’, 3 for ‘neutral’ and 5 for ‘agree fully’.

Using the questionnaire, the views of Australian architects and contractors regarding DB were sought. Due to time constraint, data were only collected from South Australian architects and contractors, as the third author spent several months in Adelaide.

A total of 100 questionnaires were sent to architects and contractors. For the architects, random sampling was done to select 50 architects who are registered with the Royal Australian Institute of Architects (RAIA). 50 contractors were also randomly selected, and survey forms were sent to them.

Where applicable, the results were compared and contrasted with similar studies conducted on architects (Lim, 1996; Leong, 1999) and contractors (Khee, 1997) in Singapore.

RESULTS

Out of the 100 questionnaires sent, 19 architects and 14 contractors responded, indicating response rates of 38% and 28% for architects and contractors respectively. After scrutinizing all returned replies, 18 and 13 returned questionnaires from architects and contractors respectively were usable.

All the architect-respondents have heard of DB and 88% of them have been involved in DB projects. 88% of respondents expressed very good personal understanding of DB. 72% of the architect respondents were partners or senior partners. Majority of the respondents (89%) have more than 10 years of experience as an architect and this increases the credibility of the replies obtained.

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92% of the contractor-respondents expressed very good personal understanding of DB. 75% of the respondents are construction managers, contracts managers and directors. All respondents indicated that their firms have been involved in DB projects.

Mean ratings were calculated for performance of DB as compared to DBB (see Table 1), nature of projects that are suitable for DB (see Table 2) and role changes in DB projects (see Table 3). The mean ratings were calculated for different categories of respondents (architects and contractors).

Statistical t-tests of the mean were carried out to check whether the population would agree with the issues raised or otherwise. For each issue, the null hypothesis that the issue was unimportant or not agreeable, and the alternative hypothesis that the issue was important or agreeable are set out below.

To test the null hypothesis Ho: µ ≤ µo against the alternative hypothesis H1: µ > µo, where µ is the population mean. µo is the critical rating above which the issue was considered important/agreeable. In this study, µo was fixed at 3 because by definition given in the rating scale, ratings above 3 (i.e. 4 and 5) represented ‘important/agreeable’ and ‘very important/very agreeable’.

Analyses of variance (ANOVA) were undertaken to test equality of different population means. First, the mean ratings of South Australian and Singapore architects were compared. Second, the mean ratings of South Australian and Singapore contractors were compared. The null hypothesis H0 states that the two population means are equal, and the alternative hypothesis, H1 is that the two means are not equal. Using the Statistical Package for Social Sciences (SPSS), the F ratios in the analyses of variance and the significance level were calculated (see Table 1).

The significance level, α for this study was set at 0.01 (1%). This means that there was a 99% certainty that the result was not due to chance and that the finding was significant at the 0.01 level.

Table 1 Performance of DB projects

AU = South Australian respondents. SIN = Singapore respondents No Performance Mean Sig Mean Sig ANOVA attributes Rating (1-tail) rating (1-tail) Sig. (AU (AU) (AU) (SIN) (SIN) & SIN) 1 Aesthetic quality Architects 2.11 0.998* 3.00 0.500* 0.024 Contractors 2.92 0.603* 4.15 0.000 0.000# 2 Workmanship Architects 2.78 0.851* 3.13 0.291* 0.265 quality Contractors 3.08 0.337* 4.10 0.000 0.004# 3 Physical construction Architects 4.00 0.000 3.53 0.044* 0.153 time Contractors 4.00 0.001 3.58 0.001 0.184 4 Total development Architects 4.22 0.000 3.53 0.014* 0.029 time Contractors 4.54 0.000 3.95 0.000 0.056 5 Completion on time Architects 3.89 0.002 3.60 0.004 0.250 Contractors 4.00 0.000 3.58 0.001 0.201 6 Construction cost Architects 3.67 0.001 3.47 0.024* 0.479 Contractors 3.85 0.003 3.70 0.001 0.702 * Respondents did not agree with the performance attribute at 1% significance level. # Different groups of respondents did not rate in the same manner at 1% significance level.

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Table 2 Nature of projects that are suitable to use DB procurement method

AU Architects AU Contractors No Project attributes Mean t test Mean t test Rating Sig. (1-tail) Rating Sig. (1-tail) 1 Simple project 4.00 0.004 4.15 0.004 2 Standard project 3.50 0.072* 3.69 0.022* 3 Complex project 3.67 0.021* 3.92 0.008 4 Large sized project 3.06 0.421* 4.69 0.000 5 Medium sized project 3.28 0.132* 4.31 0.000 6 Small sized project 3.00 0.500* 4.08 0.005 7 New project 3.83 0.001 4.46 0.000 8 Renovation project 2.72 0.818* 2.85 0.664* 9 Innovative project 2.56 0.933* 3.15 0.373* 10 Change orders during construction 3.22 0.248* 4.38 0.000 * Respondents did not agree with the project attribute at 1% significance level.

Table 3 Changes in architect and contractor’s roles in DB projects

AU Architects SIN Architects No Role Change Mean t test Mean t test Rating Sig. (1-tail) Rating Sig. (1-tail) 1 Contractor’s contribution during the 3.72 0.002 4.15 0.000 design stage is very important 2 Contractor’s contribution during the 3.39 0.045* 3.69 0.000 design stage is always accepted 3 Architect is no longer the leader of 3.94 0.001 3.47 0.102* the team 4 Architect’s role is diminished in the 3.00 0.500* no previous - design stage study 5 Architect is only involved in the 1.83 1.000* no previous - design stage study 6 Architect’s role is diminished in the 3.78 0.022* 2.87 0.651* construction stage * Respondents did not agree with the role change at 1% significance level.

DISCUSSION

Project performance Table 1 shows the results of the survey of South Australian architects and contractors’ views relating to DB project performance. The results are compared to Leong’s (1999) Singapore study of architects and discussed with respect to literature found on this aspect. Based on the t-tests, it can be concluded that architects and contractors in South Australia feel that DB projects have good time and cost performance, compared to DBB projects.

The respondents felt that DB projects have shorter physical construction time and total development time. The shorter physical construction time comes about because contractors are able to incorporate buildable features into the design (Franks, 1990; Songer and Molenaar, 1996). The shorter total development time comes about due in part to shorter construction time and also due to better communication among project participants. Contractors’ early involvement in DB projects also

CIB World Building Congress, April 2001, Wellington, New Zealand Page 7 of 11 Paper: CLI 36 ensures smoother progress of work on site because problems are identified early and problems are solved before work commences (CIDB, 1995).

The survey also showed that DB projects are more likely to be completed on time, compared to DBB projects. This finding is consistent with findings elsewhere e.g. USA (Krizan, 1997) and UK (Bennett et al. 1996). This certainty of completion on time may be because contractors are involved early in the design process and likely construction problems are averted. Furthermore, adversarial relationships are less likely to occur compared to DBB projects because of better team spirit and communication in DB projects.

Respondents also agreed that construction costs are lower in DB projects compared to DBB projects. The reasons for lower costs of DB projects include the following: • reduction in construction time (Smith, 1994) • cost effective design due to higher buildability (Akintoye, 1994; Songer and Molenaar, 1996) • cost effective materials and construction methods (Neo, 1997) • effective use of contractors’ plant and equipment (Neo, 1997).

The results of the ANOVA showed that South Australian and Singapore architects (Leong, 1999) and contractors (Khee, 1997) had rated in a similar manner with regard to time and cost issues of DB projects. It can thus be concluded that DB project time and cost performance in Australia and Singapore is not significantly different.

Table 1 shows that South Australian architects and contractors felt that aesthetic quality and workmanship quality of DB projects are lower than DBB projects. This is consistent with Holt et al.’s (1995) study which showed that quality may be compromised in DB projects. However, it does not agree with other studies conducted by CII (Krizan, 1997) and Bennett et al. (1996). Two factors affect design development in DB projects (Hogg and Morledge, 1995). The first is to design to meet the owner's requirements. The second is to design so as to reduce a contractor's cost. The second factor causes a financial pressure which leads to a reduction in quality (Chevin, 1992). Designs are based on expediency of the contractor (Rowlinson, 1987). DB projects fail to achieve a consistently high standard of design because of the contractor's single-minded aim to reduce cost (Murray, 1995) by producing cheap solutions (Akintoye and Fitzgerald, 1995). Contractors are known to lower quality to submit the lowest bid (Lunch, 1992) or achieve more savings and increase profits (Hogg and Morledge, 1995). Smith et al. (1992) suggested that it may be difficult for contractors to represent owners’ interest and their own interest at the same time because profitability may take precedence over the design.

The ANOVA results showed that for quality aspect of DB projects, Singapore architects rated in the same manner as Australian architects, i.e. both agree that aesthetic and workmanship quality of DB projects is below DBB projects. However, Singapore contractors felt that quality of DB projects are higher than DBB projects. This result is not surprising, as Singapore contractors may not readily admit their own failures. What is interesting is that Australian contractors are willing to admit that the quality of DB projects are lower than DBB projects.

Nature of projects The next part of the study investigated the characteristics that make a project suitable for the DB procurement system. There was no previous study carried out in Singapore for comparisons to be made. The results of the t-test showed that Australian contractors felt that the following types of projects are suitable to use DB (see Table 2): • simple or complex projects • large, medium or small sized projects • new construction projects • projects in which clients would make changes

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The listing above showed that DB could be used for new projects that are of any size. In addition, the projects can be simple or complex. It is interesting to note that contractors felt that projects in which clients will order changes are still suitable for DB. This may be because there is opportunity for them to earn additional profits for the variations ordered.

On the other hand, architects showed signs that they do not favour DB. This is because they indicated that only simple projects and new construction are suitable for DB. They rejected all other types of projects to be based on DB procurement method. Some architects may dislike the DB arrangement because these projects might be a challenge to their conventional way of administering contracts (Akintoye and Fitzgerald, 1995).

It is interesting to note that both contractors and architects felt that standard projects should not be based on DB. This may be because standard projects already have standard specifications and designs, and hence, resources should not be wasted by procuring based on DB method. As expected, respondents felt that renovation, addition and alteration projects should not be based on DB. This is because there are many ‘spot’ and ‘hidden’ items, which are difficult to price, and pose higher risks to contractors. Respondents also indicated that innovative projects should not be based on DB. This may be because a complete Client’s Brief/Requirement is difficult to prepare, given the many unknowns in the innovative project.

Role change Table 3 shows the results of the survey of South Australian architects and contactors’ views on changes in architect and contractor’s roles in DB projects. Some of the results are compared to Leong’s (1999) limited study of Singapore architects in this area. The survey results showed that both Australian and Singapore architects agreed that contractors’ contribution during the design stage is very important. However, Australian architects indicated that their contributions, while important, are not always accepted. On the other hand, Singapore architects would always accept the contractors’ contribution. This may be the difference in how both nationalities of architects perceive their positions in DB projects. In Australia, the architects may adopt the 'we know best' syndrome which is unsuitable for DB projects (Turner, 1995). It may be difficult for a contractor to influence consultants because of their specialised knowledge and expertise, which give them professional power and authority (Male, 1990). They also develop a high degree of autonomy. Blau (1993) discovered that if contractors have strong control over consultants, this may lead to more compliant performance on the part of the latter. In Singapore, the architects may have to always accept the contractor’s contribution because they felt that their fees are paid by the contractors.

Australian architects agreed that they are no longer the leader of the team. However, Singapore architects seemed to be oblivious to the organisational structure of DB projects, and disagreed that they are no more the leader of the team (see Table 3).

Australian architects disagreed that their roles are diminished in the design stage, as the design still needs to be done, whether the project is based on DB or not. Australian architects also disagreed that they are only involved in the design stage. This may be because in Australia, contractors would still engage them to supervise construction work on site.

Both Australian and Singapore architects disagreed that their roles are diminished in the construction stage. This is surprising, as their contract administration role, as supervising officers or contract administrators in DBB projects, are definitely not present in DB projects. This may be because they do not want to give up the leadership role which they are used to assuming.

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CONCLUSION

The conclusion of this study is that in Australia and Singapore, DB projects have good time and cost performance as compared to DBB projects. Australia and Singapore architects and Australian contractors also felt that aesthetic quality and workmanship quality of DB projects are lower than DBB projects.

With regard to the nature of projects, it is concluded that DB procurement method is suitable for new and simple projects. Standard projects and/or innovative projects should steer clear of the DB method. In addition, non-new works, eg. renovation and retrofitting works should not use DB procurement system.

This study showed that contractor’s contribution during the design stage is very important and that the Australian architects felt that they are no longer the leader of the team. The study also showed that the architect’s role is not diminished in the design stage and construction stage and their involvement in both stages are as important.

The implication of the research findings is that more new and simple projects, which are found to be suitable for DB, should be procured based on DB method in Australia and Singapore since this procurement method have better time and cost performance than DBB projects. As architect’s role is not found to be diminished in DB projects, architects who are new to DB would be able to provide and tailor their services in DB projects easily.

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