Interface analysis and management of project contracting mode: an effective way to improve project value?

Due to many internal and external interference factors, the project has great uncertainty, which is reflected in the control objectives such as project cost, construction period and quality and many factors affecting them. Uncertainty is the main factor affecting the project objectives, and it is also the main challenge faced by the project manager. Reducing uncertainty is the basic task of the project manager. The uncertainty of engineering is influenced by many factors such as politics, economy, technology and nature, but its occurrence and expansion are often intrinsically related to the interface of engineering, which is the weak link of quality, and the quality problems of engineering are easy to occur at the interface. For example, in the case of "China Construction Industry Claim 1", the quality problems of eight heat exchangers caused by the "Red Water Incident" of Beijing New Wanshou Hotel were due to the unclear interfaces between supply, construction and supervision, and the unclear responsibilities of these interfaces. For another example, a provincial museum invested 300 million yuan by a province in China had just been put into use when a serious accident happened on the top. The designer said that the responsibility lies with the construction party, and the construction party said that the responsibility lies with the designer. The problem lies in the key interface between design, construction and supply. It can be seen that ignoring the interface management of the project will lead to the occurrence and expansion of uncertainty and greatly reduce the value of the project. The above cases are all organized according to the traditional construction mode. In the traditional construction mode, owners and contractors often manage the project from their own interests, ignoring the overall benefit and investment value of the project. In this regard, this article will make further analysis.

In the field of construction engineering, interface problems are common. Welling and Gibb (200 1) found that 60% of the quality problems of building walls are caused by interfaces. Ganah(2000) found through industry investigation that the interface problems of electrical installation, mechanical installation and pipe fitting installation (interface between sub-projects) reached 67%, 64% and 82% respectively. With the rapid development of world economy, science and technology, the systems involved in construction engineering are becoming more and more huge and complex, and the uncertainty of construction products and their production processes is increasing. In order to reduce the uncertainty of the project, we should pay attention to the interface management of the project in the early planning and design stage of the project. Interface management should run through the whole process of project construction, but the focus should be on the early planning stage of the project. Project planning must consider the impact of interfaces, minimize interfaces, clarify the responsibilities of interfaces, and avoid blind spots and gaps in management. Unfortunately, interface management in project implementation is often neglected, which is the main source of risk in organization and coordination. Interface problems are complex in structure, involving many factors such as design, construction, technology, economy, organization and so on. This paper focuses on how to reduce, control and manage the project interface by using the project procurement path to improve the potential value of the project.

2 interface analysis

2. 1 interface (if)

Interfaces are universal in the real world. From a physical point of view, under certain conditions, a substance can change from one form to another (between solid, liquid and gas) or from one state of motion to another after passing through a critical interface. From the viewpoint of system theory, there is an interface between the system and the external environment, an interface between the micro-world and the macro-world. In a complex large-scale system, there are many subsystems, and the interface between subsystems is not only the separation of different parts within the system, but also the connection of these different parts. From the point of view of organization theory, there are horizontal interfaces and vertical interfaces in organizational structure, which affect the efficiency of organizational process and information flow. There are interfaces between different departments, so it is necessary to clarify the division of tasks and management functions of different departments, and at the same time communicate, coordinate and exchange information through the interfaces. If the organizational structure is set improperly, it will affect the transmission efficiency of organizational processes, resulting in the stagnation and distortion of information flow within the system, which is particularly prominent for complex open systems. Therefore, interface management is not only an important source of efficiency, but also an important guarantee to achieve management goals.

Interface is not only the interface formed by substances, entities, systems and processes according to certain characteristics, but also the combination surface of different parts and processes. These interfaces can be called entity interface, system interface and process interface respectively. These interfaces reflect the characteristics of the system and the objective world in a certain way, which is the starting point for people to carry out systematic research, because interfaces can reflect the combined state of two substances and explain the connection relationship between elements. Various interfaces in nature are determined by objective laws, and people can only understand, recognize and use these interfaces. Different from natural interfaces, people can actively influence the interfaces involved in management from the perspective of scientific management, improve the interface structure and reduce the number of interfaces, thus effectively controlling and managing the interfaces and improving the value of the project. This paper mainly studies the interface involved in building management.

2. 1 construction project interface analysis

In recent years, many scholars at home and abroad began to pay attention to the research of project interface. France (1993) believes that it is necessary to describe the cooperation between organizations in the process of project design, production and construction, and interface management is necessary in many fields, including technical design, procurement, planning and supply of materials and equipment. Identifying and managing these interfaces is of great significance to the success of the project. In the early planning and design stage of the project, we should pay attention to the interface, because the interface is an indispensable part of the whole design. As a system consisting of people flow, logistics, capital flow and information flow, the construction project has a very complicated interface due to the diversity of its subjects, the complexity and multiplicity of internal and external environment, the complexity of technology and the long construction period. In order to facilitate the analysis, the interfaces of construction projects can be divided into three types: entity interfaces, organization interfaces and contract interfaces.

Entity interfaces exist in a large number of different projects, including interfaces in the process of project implementation, such as interfaces in different design stages (interface between scheme design and preliminary design). ), the interface between different processes in the construction process, the interface between equipment installation and engineering entities, etc. The number and complexity of these interfaces depend not only on the detailed design of the project, but also on the project management mode of the owner.

Organizational interface refers to the relationship between the parties involved in the project. Organizational interfaces can be divided into two types: contractual (such as the interface between the owner and the contractor) and non-contractual (such as the interface between the supervisor and the contractor). These two organizational interfaces exist in different project management modes, such as traditional construction mode and design/construction mode, and have different attributes and characteristics in different project management modes. Therefore, the project management mode determines the organizational interface of the project.

Contract interface refers to the interface between different contracts, such as the interface between design and construction contracts, the interface between design and supply contracts, the interface between construction and supply contracts, and the interface between subcontracts. Different project management modes have different contract interface structures.

Although the above three interfaces have certain internal relations, they are different in nature and need to be managed in different ways. For the physical interface of the project, an effective management method is to use TQM (Total Quality Management) for process management, so as to ensure that different subprojects, different majors and different workflows are coordinated and unified in technical standards and specifications. TQM is applicable to all project entity interfaces. Limited by space, this article will not discuss it further. Different from the physical interface of the project, the organizational interface and contract interface of the project are mainly related to the construction mode of the project, which is the main work in the early planning stage of the project. For the convenience of analysis, the main interface of the project cycle is shown in figure 1.

DR (design ready): design preparation

D (design): design

CR (construction preparation): construction preparation.

CM (Building Management): Building Management

Or (operational readiness): preparation before use.

OM (operation management): operation management

PM (Property Management): Property Management

D/B/B (design/bidding/construction): design/bidding/construction (traditional procurement method)

Design/Build: Design/Build

PC = project control: project control

PP = project plan: project plan

PM =PP+PC: project management

Main interface: IF 1: project decision;

IF6: Project utilization (interface between project and enterprise or property);

IF2: Interface between design preparation and design (interface between project planning and design);

IF3: Interface between design and construction preparation (including interface between design and supply);

IF4: Interface between construction preparation and construction (including interface between construction and supply);

IF5: Interface between construction and preparation before use.

3 interface analysis of project contracting mode

3. Interface analysis of1traditional construction mode (design-bidding-construction, namely D/B/B mode)

/kloc-the traditional construction mode formed at the beginning of the 0/9th century is called D/B/B mode abroad. D/B/B mode is a widely used project construction mode in China's construction industry. In D/B/B mode, the owner purchases the design and construction separately, and selects the general contractor through bidding according to the design documents (construction details). The Owner shall be responsible for the management of all interfaces (IF 1, IF2, IF3, IFS and IF6) except interface IF4, and the Contractor shall only be responsible for the management of interface IF4. D/B/B mode can only carry out project construction according to the path of design-bidding-construction. Before bidding, the designer is responsible for the whole design process, and the constructor has no right to participate. Therefore, an obvious interface is formed between design and construction, which is the main interface of project construction. This interface may lead to poor communication between the parties, and often lead to engineering changes, disputes and claims. These difficulties are particularly prominent in the construction of large and complex projects. The owner can also purchase various professional contractors according to the design documents, which further increases the number of interfaces that the owner is responsible for and increases the difficulty of interface management. In the traditional construction mode, when encountering problems, the project parties often pass the buck to each other instead of working together to solve the problems, which is easy to cause contract disputes. A design error will lead to a delay of several months or even longer, and the organizational structure of the project needs to be redesigned to adapt to the information exchange between all parties. Therefore, the interface management under the traditional construction mode is a severe challenge for the owners.

3.2 Interface analysis of general contracting mode

All kinds of general contracting modes in the world are based on design/build mode (D/B mode) for project construction. Therefore, the integration of design and construction is the core of general contracting. Under the D/B mode, the owner selects the D/B contractor through public bidding, and is responsible for the design and construction of the project according to the fixed contract price. The owner has a direct business relationship with the contractor, and the contractor is responsible for the cost of the whole project on the premise of meeting the requirements of the owner's project. In the D/B mode, the D/B contractor undertakes the management responsibility of the main interfaces IF3 and IF4, and the owner undertakes the management responsibility of other interfaces (IF 1, IF2, IFS and IF6). Because of the integration of design and construction, this main interface between design and construction has been broken. Designers should not only consider the construction scheme but also the construction technology in the design. Designers and constructors can seek more suitable materials and construction methods, and comprehensively consider the budget and construction period. Different from the traditional construction mode, D/B mode is more inclined to prevent unclear responsibilities and claims that may occur in the future, rather than completing the project at the lowest possible cost. At the same time, D/B contractors bear greater engineering risks than D/B/B contractors, including interface risks, but also gain more profit space, which can mobilize contractors to make full use of their skills and experience in technology, economy and management, and strive to improve the potential value of the project.

The design-procurement-construction model, namely EPC (Engineering Program Construction) project, is a special turnkey project. EPC mode is mainly suitable for construction projects with strong professionalism, high technology content, complex structure and technology, and large one-time investment, such as chemical projects and energy projects. In the development and construction of this kind of project, the selection and purchase of equipment is the key factor to determine the success or failure of the project and plays an important role in the project construction. The technical design of the project needs to be completed through repeated calculation and scheme comparison. General project contracting not only refers to the design of the project, but also includes the overall planning and organizational planning of the whole construction project. In EPC mode, EPC contractor is responsible for the management of interfaces IF3, IF4, IF5 and IF6, while the owner is only responsible for the management of interfaces IF 1 and IF2. EPC adopts fixed lump sum contract, and the total contract price will not be adjusted. The contractor shall bear all risks of design, construction, equipment selection, installation, commissioning and operation preparation. Therefore, large-scale construction projects require EPC contractors to have high professional technical level and rich management experience. From the point of view of interface management, EPC general contractor must have the ability to effectively manage the interface, give full play to the leading role of design in the construction process, overcome the contradiction between design and procurement, design and construction, procurement and construction, constantly optimize the construction scheme of the project, and realize the control objectives and potential value of the project. Otherwise, it will increase the risk of implementing general contracting, leading to disputes and disputes, such as the EPC general contracting contract dispute of a thermal power plant project in Changzhou, Jiangsu Province. The case shows that EPC contractors must have the contracting ability of EPC projects, especially the strong interface management ability, and the ability to integrate knowledge and experience in technology, economy, management and regulations, and carry out project management according to the construction path and organization mode of FIDIC Bank, which is the basis and premise of implementing EPC projects. If the owner's procurement scope is further expanded, from the procurement project itself to the functions and services of the whole life cycle of the procurement project, that is, the project adopts bot mode, the project company will assume the management responsibility of all interfaces of the project. The interface management responsibilities of traditional construction mode and general contracting mode can be qualitatively summarized as shown in Figure 2.

4 project procurement methods and interface management

Different project management modes have their corresponding organizational structure and contract structure, and only the owner has the right to decide which project management mode to choose. Internationally, the process of owners choosing project management mode is called Project Procurement Path (PPR). PPR can be understood as the transaction mode of buyers and sellers in the construction market or the path adopted by owners to purchase construction products. The connotation of PPR is the basic mode of organizing project construction, which determines the basic path and overall framework of project construction, is the key factor for the success of the owner and the project, and solves the construction speed, cost, project quality and contract management mode of the project to a great extent. Sir Michel Latham (1994), an authority on British building management, called PPR the cornerstone of successful project management. PPR has become an important content and international common term in the early decision-making of project construction. PPR is the basis of contract strategy, which largely determines the organizational model and contract structure of the project. From the perspective of interface management, choosing PPR means choosing a specific organizational structure and contract structure. For different PPR, the number of interfaces in the project is different, and the responsibilities of the interfaces are also different. In this sense, the cause of the project interface can be understood as: PPR determines the organizational interface and contract interface of the project, and the organizational interface and contract interface determine the entity interface. Therefore, different project management modes have their corresponding organizational modes and contract structures, such as traditional construction mode and design/construction mode. In order to actively control and manage the interface, we must start with the pre-planning of the project, make full use of the contract strategy, and choose the most suitable PPR, which is the basis of project interface management.

From the analysis of project management objectives, we can't simply claim that some PPR is better than others, let alone enforce some PPR. Each PPR has developed into an organizational model suitable for the special needs of a project. The selection of PPR should be mainly based on the characteristics of the project, the construction environment, the risk structure and the business ability and experience of the owner. The most important of all these factors is the owner, and only the owner has the right to decide which PPR to adopt. Different PPR projects have different relationships, different contract conditions and different interface structures. It is impossible for an experienced engineer to use the same PPR on different construction projects. Before adopting PPR, it should be evaluated. Many foreign scholars, such as Skitmore, Singh and Flanks, put forward the evaluation criteria of PPR, and the main factors of evaluation include: the technical complexity of the project; Aesthetic requirements; Economy; Duration; Owner's requirements; Project valuation; Adaptability of project change.

Main references

Yan Changjun. Procurement mode of general contracting projects and related issues [J]. Building Economy, 2004, (1 1), 26-30.

[2] Yan Changjun. BOT mode and the reform of construction project procurement mode [J]. China Soft Science, 200 1, (1 1), 62-67.

Bunni, N.G., FIDIC Contract Format [M]. Blackwell Scientific Publications, 1997. 386-389.

[4] James Franks, Building Procurement System [J], Longman, Malaysia, TCP. 1998. 10-29.

[5] latham. M., Building a Team, Final Report of Joint Government/Industry Review on UK Construction Procurement and Contract Arrangement [M], HMSO, Publishing Center, London, 1998, 36-38.

[6] France G. Building team spirit. Go on. London, 60, Construction Group, Construction [M ], 1993.

[7]Ganah A et al., Using visualization technology to convey design information to the construction site [J], Congressman ARCOM, Glasgow, UK. 2000,833-842.

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