• Korean Journal of Construction Engineering and Management
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• v.8 no.2
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• pp.155-163
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• 2007

Multiple parties-owners, engineering and construction contractors, and suppliers involve the delivery process of capital facility projects in the construction industry, and each party obtains or provides their workforce, material, equipment, or service tied into specific contracts. Considering that construction projects are based on the contracted relationship between the parties and that contract types are one of the significant factors determining project success. it is critical for project stakeholder to select appropriate contract types for successful deliveries of projects. With these considerations, this paper assesses impacts of different contract types on project cost, schedule, safety, change, or rework. Analyzing data from real construction projects, the differences in project performance between two contract types, Cost Reimbursable and Lump Sum are measured and statistically tested to investigate if the differences are significant. For this analysis, performance metrics developed by Benchmarking and Metrics program, the Construction Industry Institute are used.

• Korean Journal of Construction Engineering and Management
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• v.16 no.3
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• pp.152-164
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• 2015

Enhancing clarity and transparency of the pricing guide for technical services for public construction works enables the prediction and reimbursement of the service cost for project owners and bidders, while it would also yield benefits for engineers who carry out the construction tasks. In order to improve the global competitiveness of construction service industry, the government revised its pricing guide for techical services for construction works recently, moving away from its previous percentage-of-construction-cost method towards the Cost Plus a Fee Method. However, since the Cost Plus a Fee Method results in the rise of the service price by 153%~197%, there is the need for a review on the method and basis of the adjustment in order to avoid controversies regarding the application of the revised method. In this context, this paper analysed the 2014 revision of the pricing guide for technical services for public construction works through comparison with foreign cases including those of the US and the UK. The analysis yielded the conclusion that, while the shift towards Cost Plus a Fee Method which is widely used in advanced economies is a very meaningful change in large measure, certain aspects still remain problematic. Unlike in advanced economies, the detailed break-down shows the direct labor cost includes certain indirect expenses. Also, indirec expenses are admitted so comprehensively as to include overhead costs and technology royalties. These problems results in redundant estimation of certain expenses, and obstructs transparency in spending details. This paper proposes various improvement measures to address these issues.

• Korean Journal of Construction Engineering and Management
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• v.25 no.2
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• pp.23-35
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• 2024

This study analyzed the correlation between each of the 12 influencing factors in FAR 16.04 and the decision-making process for construction contract types, using data from a total of 2,406 DoD Construction Acquisitions spanning from 2008 to 2022. The study considered 12 independent variables, grouped into 4 Characteristics with 3 factors each. Meanwhile, all other contract types were categorized into two types: Firm-Fixed-Price (FFP) and Cost-Reimbursement Contract (CRC), which served as the dependent variables. The findings revealed that FFP contracts significantly dominated in terms of acquisition volume. In line with prevailing beliefs, logistic data analysis and Analytical Hierarchy Process (AHP) analysis of Relative Weights from Experts' Survey demonstrated that independent variables like Uncertainty of the Scope of Work and Complexity found out to be increasing the likelihood of selecting CRC. The number of contractors in the market does indeed influence the possibilities of contract decision-making between CRC and FFP. Meanwhile, the p-values of the top 3 influencing factors on CRC from the AHP analysis-namely, Appropriateness of CAS, Project Urgency, and Cost Analysis-exceeded 0.05 in the binominal regression results, rendering it inconclusive whether they significantly influenced the construction contract type decision, particularly with respect to payment methods. This outcome partly results from the fact that a majority of respondents possessed specific experiences related to the USFK relocation project. Furthermore, influencing factors in construction projects behave differently than common beliefs suggest. As a result, it is imperative to consider the 12 influencing factors categorized into 4 Characteristics areas before establishing acquisition strategies for targeted construction projects.

• Journal of the Society of Disaster Information
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• v.12 no.1
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• pp.10-18
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• 2016

This study presented a new NOS model through the following suggestions to apply the construction work planing and management to NOS(Network Operating System). First, This study presented CIMS(construction information classification system) reflected the characteristics of facility classification - functional component classification - functional component classification - work classification - resource classification. Based on this system. this study presented how to establish PMMB(performance measurement management baseline) with proposed master target equation which analyzed the trend of performance measurement management baseline and proposed work target equation which analyzed the execution results. Finally, this study presented NOS model that can be applied to fixed price method and cost plus fee method through the theoretical verification of executive performance analysis method.

• Korean Journal of Construction Engineering and Management
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• v.11 no.2
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• pp.3-14
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• 2010

A high degree of management skills and functions is essential to the success of construction projects. While the various construction management delivery methods have been realized as the solutions, Korean government is planning to introduce 'CM at Risk Method' to the public construction projects. However, even if its effect has been verified successful in the international market, it must be considered before legally adapting the method that it would be suitable to our public sector, In this respect, the purpose of this study is to evaluate and analyze feasibility of 'CM at Risk Method'. In order to do that, 15 attributes of construction projects were found, which were suitable to 'CM at Risk Method' in general, 'CM at Risk-GMP Method', and 'CM at Risk-Cost Reimbursable Method' and suitability of each attribute to each of 9 categories of public construction facilities was evaluated by questionnaire survey to CM specialists. Results showed that 'CM at Risk Method' might not bring improper effect to the industry but due to the characteristic of public sector, the effect would be very limited.

• Journal of the Korea Institute of Building Construction
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• v.15 no.2
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• pp.237-247
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• 2015

The project management information system (PMIS) has recently been developed by using the information technology(IT) in order to implement advanced information management technology to construction industry in Korea. The PMIS has been applied not only to domestic construction projects, but also to some overseas projects executed by Korean construction companies. This study was performed to develop the PMIS that is tailored to the US construction IT market. It has been monopolized by the US-based IT companies, but other companies are recently emerging with competitive technology and market strategy. As a preceding study, existing commercially available systems were analyzed, and the required features of the PMIS were identified by analyzing the core elements of contract, process and cost management about construction projects in the US. Then, the PMIS was developed based on the aforementioned analysis results. The system includes the document management module with an internal electronic approval system, the cost-plus-based automatic labor cost calculation module, and the progress management module to support the integrated project cost management. In addition, the functionality of the developed system was verified by experts about construction management in the US via questionnaire survey. The developed PMIS, in this study, is expected to be applied not only to the US construction IT market as a system specialized for the US construction industry, but also to other oversea markets in the future.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.35 no.6
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• pp.1421-1429
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• 2015

During the six years from 2006 to 2011, based on a study of projects with an area equivalent to or less than $2,700m^2$ located in Jeju self-governing province, it was shown, through comparison with the pre-existing calculation methods, that there were many problems with the application of the standard cost. Accounting for the uniqueness of Jeju province, the study suggested an alternative method for applying the standard cost, basing it on property usage of either urban area or non-urban area pursuant to the National Land Planning and Utilization Act rather than land type of either mountain area or non-mountain area, with the utilization of T-test and ANOVA raising the reliability of this study.

• Korean Journal of Construction Engineering and Management
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• v.22 no.3
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• pp.79-90
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• 2021

In domestic public construction, disputes are increasing due to differences among stakeholders regarding contract price adjustment. In particular, the actual cost-plus fee for overhead costs due to the schedule extension cannot be agreed upon at the administrative phase, and most of them seek judicial judgment. Thus, this study aims to propose a 'sufficiently satisfactory' alternative to reach an agreement before disputes in order to minimize disputes related to the calculation of additional overhead costs. To this end, this study proposes three alternatives based on the rate method. Firstly, when calculating additional overhead costs, it is not calculated as an actual cost-plus-fee method, but as a rate compared to direct labor costs among net direct costs. Secondly, the calculated indirect labor costs are compensated for up to the legal maximum of legal limit costs such as general management costs, profits and so on. Thirdly, it reflects overhead costs increased or decreased due to change orders. Risks were analyzed by collecting expert opinions on the proposed methods and applying actual cases. Finally, as a result of investigating the level of consensus for each stakeholder, it was confirmed that all stakeholders could agree regardless of the size of the company. The result of this study is expected to as a useful tool among stakeholders in the construction fields that can be able to easily agreed upon.

• Korean Journal of Construction Engineering and Management
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• v.18 no.2
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• pp.99-107
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• 2017

In recent years, Korean engineering companies are actively entering into the international business. Although international engineering project is known to have lower risk rather that EPC construction project, Korean engineering companies' international sales profit is not as good. Therefore, this study analyzes the risks that are predicted before bid and actually occurred after award. In addition, this study shows the difference of risk depending on lump sum contract and cost reimburse contract. Finally, this study analyzes the difference of risk according to civil engineering and building engineering. This study provides industry to analyze risk more practically and helps academics to focus on risk to be studied more in the future.