A Study of Factors Influencing Quality Performance of Mechanical and Electrical (m&e) Construction Projects in Vietnam

7/27/2019 A Study of Factors Influencing Quality Performance of Mechanical and Electrical (m&e) Construction Projects in Viet

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A STUDY OF FACTORS INFLUENCING QUALITY PERFORMANCE OF

MECHANICAL AND ELECTRICAL (M&E) CONSTRUCTION PROJECTS IN

VIETNAM

by

Do Ke Chi

A research study submitted in partial fulfillment of the requirements for the degree of Master

of Business Administration

Examination Committee: Dr. Do Ba Khang (Chairman)Prof. Himangshu PaulDr. Fredric William Swierczek

Nationality: VietnamesePrevious Degree: Bachelor of Engineering

Kiev Polytechnic InstituteKiev, Ukraine

Scholarship Donor: The Government of Switzerland

Asian Institute of TechnologySchool of Management

Bangkok, ThailandApril, 1999

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ACKNOWLEDGEMENT

I would like to express my deepest gratitude to my research advisor, Dr. Do Ba Khang for his

intensive support, valuable suggestions, guidance and encouragement during the course of mystudy.

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

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

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

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

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ABSTRACT

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

of Vietnamese contractors as the construction industry grows. This research aims to identifyand validate the factors affecting projects quality performance and their relative contribution.Attempts were made to suggest practical recommendations from M&E contractor viewpoint.

This study involved participation of key M&E professionals, who provided objectiveinformation and their perception about various aspects of project quality and its influencingfactors. Multivariate statistical techniques-factor analysis and canonical correlation analysis-are employed to account simultaneously for the multi-attribute nature of the projects qualityperformance and for the multitude of managerial factors.

Among the identified factors, those found to be mostly affecting the quality performance, byorder of importance, are: 1) Authority requirement and standard used in the projects; 2)

Internal quality assurance system; 3) Project teams technical competence and communicationamong team members and 4) Parent organization reputation and past experience.

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

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TABLE OF CONTENT

Chapter Title Page

TITLE PAGE iACKNOWLEDGEMENT..............................................................................................iiABSTRACT..................................................................................................................iiiTABLE OF CONTENT.................................................................................................ivLIST OF FIGURES.......................................................................................................vi

Chapter 1

INTRODUCTION.......................................................................................................................1

1.1 Objectives of the Research..............................................................................................................................11.1.1 General objectives....................................................................................................................................11.1.2 Specific objectives ................................................................................................................................2

1.2 Scope and Limitations of the Research...........................................................................................................2

1.3 Organisation of the Research..........................................................................................................................2

Chapter 2

OVERVIEW ON CONSTRUCTION INDUSTRY IN VIETNAM............................................4

2.1 Construction Industry and Foreign Direct Investment...................................................................................4

2.2 Vietnamese Contractors and Construction Quality .......................................................................................6

Chapter 3

CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK.............................................8

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

3.2 Relevance of this research.............................................................................................................................10

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

Chapter 4

LITERATURE REVIEW..........................................................................................................13

4.1 Project quality performance..........................................................................................................................13

4.2 Critical success/failure factors in projects....................................................................................................15

4.3 Determining factors of construction project success....................................................................................18

Chapter 5

RESEARCH METHODOLOGY...............................................................................................22

5.1 Research framework......................................................................................................................................22

5.2 Term definitions and measures.....................................................................................................................225.2.1 Quality performance .............................................................................................................................225.2.2 Choice of success variables and measures.............................................................................................24

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5.3 Sample and procedure...................................................................................................................................28

5.4 Questionnaire design and pilot study............................................................................................................285.4.1 Questionnaire design..............................................................................................................................285.4.2 Pilot study..............................................................................................................................................28

5.5 Data analysis procedure...............................................................................................................................29

5.5.1 Basic concepts of Factor Analysis (FA) and Canonical Correlation Analysis (CCA)..........................30

Chapter 6

FINDINGS AND DISCUSSION...............................................................................................32

6.1 General statistics...........................................................................................................................................32

6.2 Sample descriptive statistics and preliminary analysis.................................................................................33

6.3 Data Reduction by FA...................................................................................................................................36

6.3.1 Data examining and assumptions in factor analysis..............................................................................366.3.2 Factor extraction....................................................................................................................................36

6.4 Data analysis with CCA................................................................................................................................406.4.1 Canonical model, assumption and data examining................................................................................40

6.4.2 Deriving the canonical functions and assess overall fit.........................................................................426.4.3 Interpreting the results...........................................................................................................................43

Chapter 7

CONCLUSIONS AND RECOMMENDATIONS....................................................................49

7.1 Conclusions...................................................................................................................................................49

7.2 Recommendations..........................................................................................................................................50

REFERENCE................................................................................................................52APPENDIX...................................................................................................................55

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LIST OF FIGURES

Figure 2.1. Foreign investment the construction industry in period 1989 -1998 ($USmillion).........................................................................................................................................4

Figure 5.2 Project quality and influencing factors...................................................23Figure 6.3 Projects classification by value (a) and completion schedule (b).................35

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LIST OF TABLES

Table 2.1 Foreign investment the construction industry by countries and territories .....5Table 4.2 List of critical success factors developed in the literature.............................16Table 6.3 Means and standard deviations of the variables .........................................33

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Chapter 1

INTRODUCTION

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

Most of the construction projects with foreign investment capital have been designed and builtby foreign firms but the actual subcontracting work have been performed by Vietnamesecontractors. Local competitors are numerous, but are facing long-term difficulties concerning

insufficient capital, technology and equipment, marketing and management expertise. Rivalsfrom other countries like Japan, South Korea, Australia and France have solid positions in theVietnamese market owing to their early arrival in the market, their technical and managerialexcellence, and more importantly their home country contribution to the inflows of ODA andForeign Direct Investment into the country.

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

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

1.1 Objectives of the Research

1.1.1 General objectives

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

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1.1.2 Specific objectives

The following research objectives are to be completed:

Review of the construction development and FDI construction in Vietnam to have an

overall picture about the industry

Overview of a construction project and its activities; define the role of M&E work in

construction projects and relevance of this research.

Determining project quality performance, critical success factors definition and measures

in projects and particularly for construction projects through extensive literature review

Define the project quality and its measures, factors affecting project quality and their

measures.

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

Derive practical implications of obtained results.

1.2 Scope and Limitations of the Research

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

be from other provinces as well.

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

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

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

M&E projects have specific features therefore the research results might not be applicable

for other types of project.

Local socio-economical conditions and technological level limit the expandability of the

model to other countries.

Performance success has to be considered together with cost and time in an overall context

for project success assessment since they are inter-related.

1.3 Organisation of the Research

This research is organized into seven chapters as outlined below:

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Chapter 1: Introduction

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

Chapter 2: Overview of the Construction Industry in Vietnam

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

Chapter 3: Project Activities and M&E Work.

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

Chapter 4: Literature Review

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

Chapter 5: Research Methodology

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

Chapter 6: Findings of the Study

This chapter presents the findings based on the results of a survey conducted in Ho Chi Minh

City. Statistical analysis is applied to show the relative importance of various factors onproject quality performance.

Chapter 7: Conclusions and Recommendations

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

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Chapter 2

OVERVIEW ON CONSTRUCTION INDUSTRY IN VIETNAM

2.1 Construction Industry and Foreign Direct Investment

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

2.165 16.334 42.323

518.629

3775

930.212

73.859

0

500

1000

1500

2000

2500

3000

3500

4000

Valueinmillion$U

1989 1991 1993 1995 1996 1997 7/1/1998

Year

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

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

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

Table 2.1 Foreign investment the construction industry by countries and territories

Rank by

totalcapital

Country/Territory Number o f

projects

Percentage

(%)

Total capital (in

million USD)

Percentage

(%)

1 Singapore 22 14.57 2,462.66 38.96

2 British Virgin Islands 8 5.30 1,039.64 16.45

3 Taiwan 15 9.93 938.01 14.84

4 Japan 14 9.27 438.24 6.93

5 Switzerland 2 1.32 352.50 5.58

6 South Korea 11 7.28 279.94 4.43

7 Thailand 10 6.62 265.13 4.19

8 Hong Kong 14 9.27 176.00 2.78

9 France 5 3.31 124.51 1.97

10 Malaysia 7 4.64 72.79 1.15

11 Other countries 43 28.48 171.86 2.72

Total 151 100 6,321.28 100

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

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

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

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continuing. The total market size of the construction industry for 1997 was US$ 1.1 billion 1,which is expected to grow at a rate of 12.5% in the next three years. The market can besegmented into five market segments, which include residential buildings, commercialbuildings, building conservation and maintenance, civil engineering, and industrialengineering.

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

2.2 Vietnamese Contractors and Construction Quality

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

Most large private construction companies have been established over the past five or sixyears, having annual turnover ranging from US$0.5 to 5 million. Construction work developedby these companies is widely distributed over many provinces, if not the whole country. Inaddition to difficulty in financing, insufficient equipment and technology is becoming a

problem for this sector. Additionally, there is a general lack of management expertise. There isa need to improve management skills for the private and public local firms, both at thecompany and the site levels.

Some construction companies have made great improvements but they are mainly bigcorporations in Hanoi and Ho Chi Minh City such as Song Da Construction Company, HanoiConstruction Company, Construction Company No 1(COFICO), Vietnam Construction Importand Export Corporation (VINACONEX) etc. But as reported by Thien Huong (1998), only 15-20% of the 419 consulting companies doing construction survey, design and planning have asystem for quality assurance and quality control (QA/QC). None of the local constructioncompanies can meet the requirements of ISO 9000 certificate of quality control. Vietnamese

construction technology is still far behind the world, acknowledged Nguyen Hong Quan,Deputy Minister of Construction [Source: Hai Nam, 1998].

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

US Department of State Report, 1998.

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

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

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

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

Provide strategies for local construction companies to remain competitive or increase their

competitiveness in the regional and global engineering and construction arena.

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

projects.

Reduce barriers that cause conflicts, or misunderstanding on international projects

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

In another effort, French experts have been working with Electricity of Vietnam (EVN) for

introduction and translation of recommendations from International ElectrotechnicalCommission (IEC) which is the international standards and conformity assessment body for allfields of electrotechnology.

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

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Chapter 3

CONSTRUCTION PROJECT ACTIVITIES AND M&E WORK

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

The major types of work of a construction project are:

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

related earthwork activities.

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

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

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

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

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

and miscellaneous items.

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

finish carpentry items.

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

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

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

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

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

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

3.1 Mechanical and Electrical (M&E) Construction Work

Detailed scope of M&E work is the following:

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Mechanical: to install and commissioning the following systems:

Basic mechanical materials and installation methods.

Mechanical insulation.

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

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

Fire protection system: auto-fire suppression system, fire pumps, fire extinguishers, and

sprinkler systems.

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

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

water chillers.

HVAC control systems.

Electrical: to install and commissioning the following systems

Basic electrical materials and installation methods.

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

Conductors and wiring devices: wire, cable, control cable, high voltage power cable, pull

boxes, outlet boxes, cabinets.

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

switchboards etc.

Transformer and generator systems: transformer, generator set, uninterrupted power

system (UPS).

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

Special systems: telephone system, public address system, closed-circuit TV (CCTV) and

detection system, sound system, computer and communication system.

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

The M&E works major characteristics are:

M&E works contract value varies in a wide range depending on type of contract.

According to Asian Pacific Construction Costs Handbook (1994), M&E work accounted

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for 5-15% total value of a construction project. However, with the more popular use ofBuilding Automation System (BAS), which controls all the building functions from acentral command computer, the M&E cost inclines to rise.

In term of safety for buildings tenants, M&E work, especially electrical, have to follow

many rigorous requirements laid down by authority to ensure the highest possible safetystandards.

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

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

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

In the process of construction, M&E contractors normally have a constrained set of

feasible tasks, which are highly dependent on the performance of other contractors.Therefore they have to be well coordinated with other contractors to ensure the smoothflow of construction tasks and successful completion of the project.

3.2 Relevance of this research

3.2.1 Different systems of standards for M&E work

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

1. Projects designed according to British Standards (BS): these are projects with investorsfrom Britain or other countries from Commonwealth like Singapore, Hong Kong,Malaysia. The basic requirements for equipment and installation procedures are stipulatedby BS and regulations like Institute of Electrical Engineers (IEE) Regulations for

Electrical Installations, Code of Practice (CP) for Building Services etc. So far this is themost commonly used standard in Vietnam since the investors from this bloc form thelargest part of FDI.

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

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

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

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

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

Foreign contractors currently operating in Vietnam are generally working on major projectswith at least some element of foreign funding. The emphasis to date has been on majorbuilding projects, i.e. office buildings, hotels, tourism developments and residential building

complex. Foreign invested building projects, e.g. hotel and office developments, are mainlyprepared by foreign consultants, often from neighboring Asian countries like Australia,Singapore, Japan or from Europe, e.g. France. Many of the industrial and commercial projectsare still well beyond the capabilities of local companies like design and implementation ofventilation, air-conditioning, plumbing, drainage, lighting, and fire safety, automation systemsetc. for high-rise buildings.

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

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

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

3.2.3 M&E project performance and management issues.

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

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fieldwork and can lead to substantial reduction of quality. Vietnamese project managersusually lack of experience in quality control management functions i.e. managing theimplementation of the project with a certain level conforming to predetermined specifications.

Project management techniques are one of the focus points, as most of the project managershave not received adequate training or education on project management issues. Self-learningand management by trial-and-error are still common things among local constructors.

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

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Chapter 4

LITERATURE REVIEW

4.1 Project quality performance

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

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

Meeting the requirement of the owner as to functional adequacy; completion on time and

within budget; operation and maintenance.

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

of work

Meeting the requirements of the constructors as to provision of contract plans,

specifications.

Meeting the requirements of the regulatory agencies as to public safety and health,

environment protection.

The Manual mentioned nothing about customers satisfaction but gave a very clear-cutdefinition of what quality stands for.

To a further clarification of specification term, Yatseen A.M and El-Marashly A.F (1989)identified three main parameters of project-quality management as system specification,quality control specifications and system quality control and introduced the "quality controlcube" as elaboration of quality-control parameters.

Specifications can be broken down into three types of specifications: functional

specifications (FS) which indicates the objective or purpose of any system; structuralspecifications (SS) which describes the components of the systems and their relationshipsand technological specifications (TS) which details the methods and means of conductingthe work

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System intended to be quality controlled is generally composed of three parts: input;

process and output.

Quality control is composed of three successive actions: measuring; comparing (with

referring specifications) and correcting.

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

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

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

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

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

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

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

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

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

Ledbetter W.B. (1994) addressed three key issues of the quality performance managementsystem (QPMS) as quality, cost of quality and quality performance. According to him, qualityhas many meanings, however for project conformance to established requirements hasrelevance and clarity. The requirements are defined as contractually established characteristicsof a product, process or service which otherwise can be termed as specifications. QPMS trackscost in the three main categories: normal work, quality management work (prevention andappraisal) and rework (deviation correction).

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James D.S (1996) defines quality as meeting the requirements of all customers. It involvesbeing proactive in helping customers articulate their requirements so their expectations aremade. Quality measurements include traditional "hard" project success measures such as cost,schedule and safety and additional "soft" measures such as customer satisfaction, leadership,employee involvement, team work, training, flexibility, responsiveness and so forth that may

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

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

4.2 Critical success/failure factors in projects

The literature on critical success factors reveals several definitions of project success andmost of them encompass the importance quality performance. Thus, those factors affectingproject success certainly affect project quality performance as well. Since identifying suchfactors is one of our objectives, we will make a brief review of critical success/failure factorsin projects in general and then in construction projects, in particular.

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

In 1983, Baker, Murphy and Fisher suggested that instead of using time, cost and performanceas measures for project success, perceived performance should be the measure. In thisresearch, a project is considered successful if it meets the technical specification and/ormission to be performed, and if there is a high level of satisfaction concerning project outcomeamong key people in the parent company and key user or clientele of the project effort. Thisfinding may be somewhat difficult for most project personnel to accept.

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

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

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

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Table 4.2 List of critical success factors developed in the literature

Martin

(1976)

Locke

(1984)

Cleland, King

(1983)

Sayles, Chandler

(1971)

Baker, Murphy,

Fisher (1983)

Pinto, Slevin

(1989)

Morris, Hough

(1987)

Belassi, Tuckel

(1996)

Define goals Make projectcommitmentknown

Project summary Project manager'scompetence

Clear goals Top managementsupport

Project objectives Factors related tothe project

Select projectorganizationalphilosophy

Project authorityfrom top

Operational concept Scheduling Goal commitmentof project team

Clientconsultation

Technicaluncertaintyinnovation

Factors related tothe projectmanager andteam members

Generalmanagementsupport

Appointcompetent projectmanager

Top managementsupport

Control systemsandresponsibilities

On-site projectmanager

Personnelrecruitment

Politics Factors related tothe organization

Select projectteam

Set upcommunicationand procedures

Financial support Monitoring andfeedback

Adequate fundingto completion

Technical tasks Communityinvolvement

Factors related tothe externalenvironment

Allocate sufficientresources

Set up controlmechanism

Logisticsrequirements

Continuinginvolvement inthe project

Adequate projectteam capability

Client acceptance Schedule durationurgency

Control andinformationmechanism

Progress meeting Facility support Accurate initialcost estimates

Monitoring andfeedback

Financial contractlegal problems

Require planningand review

Market intelligence Minimum start-up difficulties

Communication Implementproblems

Project schedule Planning andcontroltechniques

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Executivedevelopment andtraining

Tasks ( vs. Socialorientation)

Characteristics ofthe project teamleader

Manpower andorganization

Absence of bureaucracy

Power andpolitics

Acquisition Environmentevents

Information andcommunication

Urgency

Project review

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

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project performance at different phases of implementation. The strategic group includesfactors such as project mission, top management support, and project scheduling whereas thetactical group consists of factors such as client consultation, personnel selection and training.In their follow-up work, Pinto and Slevin (1989) identified success factors and their relativeimportance for each stage of a research and development project life cycle. Finally, in a

similar study by Pinto and Prescott (1990), the relative importance of each group (tactical vs.Strategic) over the project life cycle was analyzed. It was found that the relative importance ofsuccess factors varies at different stages of the project's life cycle, depending on the successmeasures used.

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

Factors related to the project

Factors related to the project manager and team members

Factors related to the organization and

Factors related to the external environment

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

As mentioned in a study by Slevin and Pinto (1988), all of these lists are theoretically based,rather than empirically proved. And while some are general in scope, they address specificpoints of interest. Most of the research in the Table 4.1 include factors related to the projectmanager and the organization the project belongs to and it seems to ignore other factors. Theframework proposed by Belassi and Tuckel gives additional considerations to characteristicsof project, team members and factors external to the project while most of the others listsinclude factors related mainly to project manager and the organization the projects belong to.Therefore the Belassi and Tuckel framework is selected for tentative factors used in thisresearch study and we will come into more details in the following parts.

4.3 Determining factors of construction project success

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

1) What critical factors are valid for building construction since construction projects formeda minority of projects studied?

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

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

In the literature, several authors identified, explained and discussed the factors that are criticalto the success of a construction project. Success criteria or a persons definition of success as itrelates to a construction project changes from project to project depending on participant

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

Table 4.2 Success criteria for owner, designer and contractor

Owner Designer Contractor

On schedule; onbudget; function forintended use; quality(workmanship,products); return oninvestment; buildingbust bemarketable(imageand finance);minimumaggravation on the

building

Satisfied client (potential for repeatwork); quality architectural product;met design fee and profit goal;professional fulfillment (skills,experience); meet project budget andschedule; marketable product/process(reputation); minimal constructionproblem (easy to operate,constructability); no liabilities claims(building functions as intended);socially accepted; well defined scope of

work (contract and compensationmatch)

Meet schedule (construction);profit; under budget (savings forowner/contractor); qualityspecification met or exceeded; noclaim (owner/subcontractors);safety; client satisfaction; goodsubcontractor buyout; good directcommunication (expectations of allparties clearly defined); minimalvariation and surprise duringproject

Ireland (1985), in a research conducted among 21 proprietors, 8 contractors and 17 architectsof high-rise commercial building identified variables and their effects on cost, time and qualityas follows:

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

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

Psychosocial effects: numbers of days lost through industrial disputes

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

The multiple regression analysis showed the strength of relationships between variables,especially the relative effects of the particular managerial actions on the achievement of thefollowing objectives: to reduce the cost of the building; to reduce the time of construction andto increase the architectural quality. The inhomogeneous background of respondents could

lead to different answers depending on individual perception.

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

1) Management, organization and communication

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2) Scope and planning

3) Controls

4) Environmental, economic, political and social

5) Technical

Direct cause-effect relationships were found to exist between factors and success criteria andthe strongest relationships are summarized below

Factors Success criteria

Planning efforts

PM technical capabilities

Technical uncertainty

PM administrative capabilities

Legal political environment

Functionality

End user satisfaction

End user satisfaction

Budget

Follow-on work

Sanvidor V. et al. (1992) proposed the theoretical basis for the factors. A process model, theintegrated building process model (IBPM) had been developed to identify all major functions

required to provide a facility and information that produced and utilized by each function. TheIBPM identifies elements of information and physical entities that must flow between themanage, plan, design, construct and operate functions. The results of the research indicatedthat there were seven success factors and four of them were found to be critical

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

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

3. Experience in management, planning, design, construction and operation of similar

facilities and

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

These factors have been examined from owners perspective so they have little meaning withother parties.

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

(9.2%); improving the accuracy of estimating and tendering( 8.38%)

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

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Chapter 5

RESEARCH METHODOLOGY

5.1 Research framework

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

Factor related to the project

Factor related to the project manager and team members

Factor related to the organization and

Factor related to the external environment

In this research we focus on objective quality i.e. we try to get the objective answers. Howevercertain subjective questions also take place. Subjective questions relate to personal experienceor individual perception of the respondents while objective question relate to factual ortangible information that exist. The quality performance dimensions and tentative factors arealso presented in Figure 5.1

5.2 Term definitions and measures

5.2.1 Quality performance

Definition:

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

Installed system has met required specifications - Technical task

Successful testing and commissioning - Functional task

Smooth operation during warranty period (usually 12 months) - Maintenance task

These capture the major definitions of quality performance and follow the timeflow of aconstruction project. Usually owner representative/consultant is satisfied once these conditionsare met.

Measures:

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PROJECTQUALITY

Conformance to

specifications

Successful testing

& commissioning

Operation

reliability

Project related factors

Project characteristics:Completion scheduleDesign complexityWork variationsUrgency of the projectUniqueness of the project

Team related factors

PM technical competencePM managerial skillsPM co-ordination andcommunication skillsTeam sizeTeam members skillsTeam communication andcommitmentInternal quality controlResource utilization

Organization related factors

Top management supportFunctional supportRelative importance of project

mentionedResources availabilityProject initial estimatesOrganization reputation andpast experience

External factors

Foreign specificationSub contractors skillsConsultant/owner acceptance

Authority regulationsCompetitionIndustry stateSocio-economic conditions

Figure 5.2 Project quality and influencing factors

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

specified equipment from recommended manufacturers or equivalent equipment that meetthe same system standards but the later case requires written approval. For example,

transformer from ABB is recommended but the contractor can propose a localmanufacturer instead if there is cost saving. The percentage of installed

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

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

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

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

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

5.2.2 Choice of success variables and measures

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

A combination of literature review and conversation with M&E managers leads to selection ofthe critical variables listed below. Some of them reflect local specific conditions e.g. variousstandards and code of practice like British Standard (BS), National Electrical Code (NEC) orSingapore Code of Practice (CP) etc. have significantly affected quality of work done.Communication language, in particular English, might critically relate to performance as well.In addition, many variables are inter-related and being affected by other factors variables too.For example, urgency of project schedule may cause labor and material shortage and as aresult, work performed in rush exposes a lot of defects.

Factors related to the project

1) Project size. Project size defines the amount of resources to be managed. Large projectsare more complex in term or technical and management issues than the small ones. Projectsize can be measured by the contract value (in million $US)

2) Completion schedule. The longer a project lasts, the more possible that the contractor haveto mobilize resources to meet the demand and quality may be affected. Completion

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schedule is measured the time stipulated in the contract from first site -inspection tocompletion (in months)

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

4) Work variations: The extent of deviation from original design is seriously affecting M&Ework. For instance, in a building project, all the wiring must be concealed in the wall orcast-in concrete. Any change in structural and interior design, which frequently happens,will have electrical work change and result in inferior quality. Work variations aremeasured by cost of change order over original value ( in percent )

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

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

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

Factors related to the project team

1) Project manager technical skills. It is obvious that educational background, pastexperience of the project manager have much influence on performance of the project.This is measured by is measured by five point scale with constructed score (from verygood to not good at all)

2) Project manager managerial skills: Ability to supervise, plan, lead and control the projectteam to achieve necessary performance. This is measured by is measured by five pointscale with constructed score (from very good to not good at all).

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

4) Team size. The larger the size of the team, the more difficult to monitor the quality ofsmall teams job. Unlike other contractors, M&E contractor(s) has to conduct various typeof work at the same time. For example, piping work in parallel with equipment fixing or

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cabling in one area and testing in another. Project team has to be broken down into smallergroups to carry out the jobs according to specialized background and skills. The number ofstaff working on a project varies greatly during construction period. Team size is measuredby average manday over construction period.

5) Team members technical skills. The competence of the team members is found to be acritical factor. No matter how competent the project manager is, his subordinates is the keyelement to quality performance achievement. This factor is measured by five-point scalewith constructed score (from very good to not good at all).

6) Team communication, motivation and commitment. Within the project team, there must begood interpersonal relations and open communication. Th motivation is also identified ashaving strong overall influence on project success. This factor is measured by five-pointscale with constructed score (from very good to not good at all).

7) Internal quality control system. Each M&E contractor has its own quality assurancesystem and only a fraction of them have ISO 9000certificates. Many M&E contractors do

not consider quality control as a process but mostly rely on after-installation testing touncover defects. The quality can be seriously affected by this practice. Quality controlsystem is measured by five-point scale with constructed score (from very good to not goodat all).

8) Resources utilization. Extent of technology, tools and material used by the project team.Modern techniques like 3D-CAD shop-drawings help to improve coordination betweendifferent M&E services and lead to greater efficiency and less defects. Resourcesutilization is measured by five-point scale with constructed score (from very good to notgood at all).

Factors related to the organization

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

2) Functional support. The level of support provided by functional manager is usuallydetermined by level of top management support. However, if the project belongs to onefunctional department, then the availability of resources will not be a problem, otherwise it

can be a difficult job. Hence functional support is a factor has to be considered. Functionalsupport is measured by five-point scale with constructed score (from very good to notgood at all)

3) Relative importance of this project toward the whole organization. A M&E companyusually has many projects at the same time. The importance of the project under studytoward the whole organization will decide the level of support it will receive. It ismeasured by five-point scale with constructed score (from very important to not importantat all).

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

5) Project preliminary estimates. Tendering and project execution teams are not necessarilythe same therefore the accuracy of cost, schedule, scope of work is vital in the constructionphase. The accuracy is measured by level of difference from estimates and actual workdone (in percent)

6) Organization past experience and reputation. An well-known and successful M&Ecompany is likely to ensure the strictest procedures for quality assurance. Organizationpast experience and reputation is measured by five-point scale with constructed score(from very good to not good at all)

Factors related to the external environments

Project-environment

1) Unfamiliar foreign system of standards. As mentioned before, a project with totallydifferent system of standard will strongly affect the quality performance. It is measured bythe extent of difference of the system of standards being used and prevailing practice inVietnam (TCVN) on five-point scale with constructed score (from very similar to notsimilar at all)

2) Sub-contractors skills. Quality of work carried out by subcontractor is dependant uponboth M&E supervision and sub contractor skills. Sub-contractors skill is measured by

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

3) Consultant/owner representative acceptance. The client final acceptance can be measuredby degree of strictness on five-point scale with constructed score (from very strict to notstrict at all)

Macro environment

4) Local authority requirement. Safety, environmental and technical requirements from localauthorities sometimes may have not been foreseen in the original design made by foreigndesigners. Mandatory adherence to environment and safety regulations can complicateM&E work and ultimately affects quality. Local authority requirement is measured by

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

5) Level of competition. If the level of competition is high, it is more likely that the currentM&E contractor has to be aware of quality as a competitive weapon. Level of competitionin the same industry requirement is on five-point scale with constructed score (from veryhigh to not high at all)

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6) Industry development state. The construction industry development level will help fosterquality though experience and expertise gained. It is measured on five-point scale withconstructed score (from very good to not good at all)

7) Socio-economic condition. The current situation development of the country is measuredon five-point scale with constructed score (from very favorable to not favorable at all)

5.3 Sample and procedure

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

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

5.4 Questionnaire design and pilot study

5.4.1 Questionnaire design

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

Section A: General information

Section B: Project quality dimensions.

Section C: Factors related to the project.

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

Section E: Factors related to the organization

Section F: Factors related to the external environment

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

at all.

The sample of questionnaire is in Appendix A

5.4.2 Pilot study

Before planning for the survey a pilot study was carried out with two objectives. One was toexplore and compare the theoretically compiled factors and practical opinions of site managers

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

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

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

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

5.5 Data analysis procedure

The objective is to identify and validate the set of managerial variables that have a significanteffect on the quality performance of M&E projects. Twenty-seven original variables are usedas input data. They are further being grouped to several factors, which form the set of multipleindependent managerial variables. Quality performance, in its turn, is evaluated according to aset of three measures. Thus we want to find the largest possible overall correlation(connection) between the set of managerial variables and the set of quality performancemeasures and to identify such variables that contribute the most to this correlation.

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

Factor analysis is to be used first to reduce the initial number of variables (27) to smallergroups which contribute for the majority of variance of original variables. The purpose of thisexercise is instead of dealing with a large number of variables, we will deal with a smallernumber of factors while ensuring the minimal loss of information. The underlying assumptionof factor analysis is that there exists a number of unobserved latent variables (or "factors") thataccount for the correlations among observed variables.

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

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

(CCA)

Factor analysis

Factor analysis is a generic term for a family of statistical techniques concerned with thereduction of a set of observable variables in terms of a small number of latent factors. It hasbeen developed primarily for analyzing relationships among a number of measurable entities(such as survey items or test scores).

Each observed variable (y) can be expressed as a weighted composite of a set of latentvariables (f's) such that

yi = ai1 f1 + ai2 f2 + ... + aik fk + ei

where (yi) is the ith observed variable on the factors, and (e i) is the residual of (yi) on the

factors. Given the assumption that the residuals are uncorrelated across the observed variables,the correlations among the observed variables are accounted for by the factors. In principalcomponent FA, the objective is to account for the maximum portion of the variance present inthe original set of variables with a minimum number of composite variables called principalcomponents.

There are several criteria for the number of factors to be extracted and analysts seldom use asingle criterion to decide on the number of factors to extract. Some of the most commonlyused guidelines are the Kaiser-Guttman rule, percentage of variance, the scree test.

Once the number of factors to be extracted was decided, the next step is to determine themethod of rotation. The meaning of the rotation is that factors inferred from the variables are

significantly loaded on their factors. Once all significant loadings are identified, the analystattempts to assign some meaning to the factors based on the patterns of the factor loadings. Ingeneral, the larger the absolute size of the factor loading for a variable, the more important thevariable is in interpreting the factor.

Canonical correlation analysis

Suppose we wish to study the relationship between a set of variables x 1, x2, , xPand anotherset y1 , y2,, yQ. The basic idea of canonical correlation analysis begins with finding one linearcombination of the ys, say

U1 = a1 y1 + a2 y2 + + aQ yQ

and one linear combination of the xs, say

V1 = b1 x1 + b2 x2 + + bP xP

For any particular choice of the coefficients, the as and bs, we can compute values of U 1 andV1 for each individual in the sample. From the N individuals in the sample we can then

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compute the simple correlation between the N pairs of U1 and V1 values. The resultingcorrelation depends on the choice of the as and bs.

In CCA, we select values of a and b coefficients so as to maximize the correlation between U 1and V1. With this particular choice, the resulting linear combination U1 is called the firstcanonical variable of the ys and V1 is called thefirst canonical variable of the xs. Both U1and V1 have a mean of zero. The resulting correlation between U1 and V1 is called the firstcanonical correlation and thus, represents the maximum linear correlation between the set of xvariables and the set of y variables (Afifi A.A, 1984).

The canonical correlations can be squared to compute the proportion of variance shared by thesum scores (canonical variates) in each set. Multiplying this proportion by the proportion ofvariance extracted, we will arrive at a measure of redundancy, that is, how redundant one setof variables is, given the other set of variables

In equation form, the redundancy may be expressed as:

Redundancy left = { (loadings left2)/P}*Rc2

Redundancy right = { (loadings right2)/Q}*Rc2

In these equations, P denotes the number of variables in the first set (left) of variables and Q the number of variables in the second (right) set of variables. Rc2 is the respective squaredcanonical correlation.

The subsequent stages of data analysis are mainly derived from Multivariate Data Analysiswith Readings by Joseph F.H, Jr. et al (1994).

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Chapter 6

FINDINGS AND DISCUSSION

6.1 General statistics

Questionnaires were mailed and directly handed to 120 potential respondents from 30 largeM&E contractors or M&E departments of construction companies in the Ho Chi Minh Cityarea. Sixty-seven usable questionnaires were returned for a response rate at 55.8%. From the67 respondents, 21 were project managers, 45 were project engineers and one was assistanceproject manager assistant at the time projects were executed. The number of projects beingquoted was 56 due to the fact that one project might be mentioned by several persons.

From the general information, the distribution of project type in the sample is:

Project type Frequency Percent (%)

Commercial building 27 40.3

Housing complex 11 16.4

Infrastructure project 1 1.5

Industrial plant 25 37.3

Other 3 4.5

Total 67 100.0

The location of projects mentioned is distributed as follows:

Project location Frequency Percent (%)HCMC 44 65.7

Ha Noi 6 9

Other provinces 17 25.3

Total 67 100.0

The most popular type of contract was lump-sum, followed by unit-price and a small fractionof others.

Contract type Frequency Percent (%)

Lump-sum 47 70.1

Unit-price 17 25.4

Other 3 4.5

Total 67 100.0

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Most of projects are commercial buildings or industrial plants (combined to 77.63% ofprojects) in the form of lump-sum contract (70.1%) and located in HoChiMinh City (65.7%).

6.2 Sample descriptive statistics and preliminary analysis

Table 6.3 Means and standard deviations of the variables

2

N Minimum Maximum Mean Standard deviation

SPEC 67 1.00 5.00 3.7612 .7994

TESTING 67 2.00 5.00 3.7761 .7552

OPERATIO 67 1.00 5.00 3.9552 .8779

VALUE 67 1.00 5.00 2.3881 .9685

SCHEDULE 67 1.00 5.00 3.4925 .9750

COMPLEX 67 1.00 5.00 2.7164 1.0844

VARIATIO 67 2.00 5.00 3.8209 .9033

URGENCY 67 1.00 5.00 3.5672 1.1312

UNIQUE 67 1.00 5.00 2.8507 1.0906

PMTECH 67 2.00 5.00 3.8806 .6858

PMMANAGE 67 1.00 5.00 3.5672 .9083

PMCOM 67 1.00 5.00 3.7463 .8763

TEAMSIZE 67 1.00 5.00 2.8358 .9470

TEAMTECH 67 2.00 5.00 3.6866 .7428

TEAMCOM 67 2.00 5.00 3.5224 .8413

QUALCTRL 67 1.00 5.00 3.4776 .8591

RESORUSE 67 2.00 5.00 3.4328 .7632

MSUPPORT 67 2.00 5.00 4.0896 .8480

FSUPPORT 67 1.00 5.00 3.6866 .9568

IMPORTAN 67 1.00 5.00 3.5075 1.2232

RESAVAIL 67 1.00 5.00 3.4776 .8766

2 See Appendix B for variable notation

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ESTIMATE 67 2.00 5.00 3.7313 .7703

PASTEXPE 67 2.00 5.00 4.0000 .7785

STANDARD 67 1.00 5.00 3.1642 1.1494

SUBCON 67 2.00 5.00 3.7313 .7897

REQRMENT 67 2.00 5.00 4.2388 .7196

AUTHORTY 67 1.00 5.00 3.2687 1.0813

COMPETE 67 2.00 5.00 3.8955 .9713

INDUSTRY 67 1.00 5.00 3.4478 .8031

SOCIOECO 67 2.00 5.00 3.3134 .8565

Valid N (listwise) 67

Table 6.1 shows means and standard deviations of the variables and Figure 6.1provides thedetails of project value and completion schedule. By examining the initial data, we can cometo some quantitative findings as below:

A typical M&E project has contract value between $US 0.5 to 5 million and completionschedule from 6 month to 2 years. The original design is of average complexity and doesnot change much during the course of installation process.

Project team has from 10 to under 60 persons with good technical skills and open

communication. Project manager is good in term of technical competence andcommunication skills but his management capability is just above average. Internal qualitycontrol system is at acceptable level though not the highest.

The project is considered not very important toward parent organization as a whole but it

still receive strong support of top management. However, functional support and

subsequently material supply are not very good. Companys reputation and experiencemake initial estimations reasonably accurate.

System of standards used in project design is moderately different from prevailing practice

(TCVN). In a highly competitive market like M&E contracting, competent sub-contractorsare needed to meet the strict requirements from consultant/owner representative. Theindustrial and socio-economic conditions fairl

Documents

A Study of Factors Influencing Quality Performance of Mechanical and Electrical (m&e) Construction Projects in Vietnam