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A Closer Look into the Best Value (BV) Approach to RFP Contract Negotiation

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With the help of some Information Measurement Theory (IMT), Kashiwagi Solutions Model (KSM), and deductive logic background, supply chain managers can start utilizing a new way to effectively and efficiently negotiate contracts. Developed by Dr. Dean Kashiwagi, the Best Value

With the help of some Information Measurement Theory (IMT), Kashiwagi Solutions Model (KSM), and deductive logic background, supply chain managers can start utilizing a new way to effectively and efficiently negotiate contracts. Developed by Dr. Dean Kashiwagi, the Best Value Approach has been 98% successful with over 1,800 projects for the past 20 years. The process gives vendors/suppliers the power to use their expertise. In return for not having to follow the rules set by the client/buyer, the vendor must show documentation and plans of risk management, value added processes, and metrics.

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2016-05

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Impact of a non-traditional research approach

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Construction Management research has not been successful in changing the practices of the construction industry. The method of receiving grants and the peer review paper system that academics rely on to achieve promotion, does not align to academic researchers becoming

Construction Management research has not been successful in changing the practices of the construction industry. The method of receiving grants and the peer review paper system that academics rely on to achieve promotion, does not align to academic researchers becoming experts who can bring change to industry practices. Poor construction industry performance has been documented for the past 25 years in the international construction management field. However, after 25 years of billions of dollars of research investment, the solution remains elusive. Research has shown that very few researchers have a hypothesis, run cycles of research tests in the industry, and result in changing industry practices.

The most impactful research identified in this thesis, has led to conclusions that pre-planning is critical, hiring contractors who have expertise will result in better performance, and risk is mitigated when the supply chain partners work together and expertise is utilized at the beginning of projects.

The problems with construction non-performance have persisted. Legal contract issues have become more important. Traditional research approaches have not identified the severity and the source of construction non-performance. The problem seems to be as complex as ever. The construction industry practices and the academic research community remain in silos. This research proposes that the problem may be in the traditional construction management research structure and methodology. The research

has identified a unique non-traditional research program that has documented over 1700 industry tests, which has resulted in a decrease in client management by up to 79%, contractors adding value by up to 38%, increased customer satisfaction by up to 140%, reduced change order rates as low as -0.6%, and decreased cost of services by up to 31%.

The purpose of this thesis is to document the performance of the non-traditional research program around the above identified results. The documentation of such an effort will shed more light on what is required for a sustainable, industry impacting, and academic expert based research program.

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Date Created
2014

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Identification of risk factors, success practices, and feasibility of the best value approach application to improve construction performance in Vietnam and other developing countries

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The Vietnam Construction Industry (VCI) has been facing risks that cause delays, budget overrun, and low customer satisfaction that required continuously research efforts to manage them. This research assesses the current conditions of the VCI in terms of performance, common

The Vietnam Construction Industry (VCI) has been facing risks that cause delays, budget overrun, and low customer satisfaction that required continuously research efforts to manage them. This research assesses the current conditions of the VCI in terms of performance, common risks, and success factors; and explores the potential of using the Best Value Approach (BVA), an innovative procurement and project management technology, to improve overall VCI performance. VCI risk factors were presented in an analysis of the data collected from a survey that include the 23 common risk factors that cause non-performance in construction projects in developing countries. The factors were consolidated from an extensive literature reviews, and inputs were solicited from 103 construction practitioners in Vietnam. The study reveals the top five risk factors as the bureaucratic administrative system, financial difficulties of owner, slow payment of completed works, poor contractor performance, financial difficulties of contractor. Factor analysis explored the correlations among the risks and yielded four outcomes – Lack of Site and Legal Information, Lack of Capable Managers, Poor Deliverables Quality, and Owner’s Financial Incapability. VCI success factors were revealed from a survey that is adopted from 23 Critical Success Factors (CSFs) related to common construction risks, found through extensive literature reviews, and inputs were solicited from 101 VCI participants. The experts ranked those CSFs with respect to impact to project success. The study reveals the top impactful CSFs such as all project parties clearly understand their responsibilities, more serious consideration during contractor selection stage, test contractors’ experience and competency through successful projects in the past. Factor analysis was conducted to explore the principal success factor groupings and yielded four outcomes – Improving Management Capability, Adequate Pre-Planning, Stakeholders’ Management, and Performance-based Procurement. An analysis from six industry experts determined how current VCI conditions, namely risk and success factors, are related to BVA. Sixteen BVA success principles were identified and ranked based on their perceived impact to project performance by an industry survey with 98 VCI practitioners. The results show high agreement rate with all sixteen BVA principles. The majority of participants agreed that BVA would improve project performance and were interested in learning more about BVA. The results encourage further BVA testing and education in the VCI.

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Date Created
2019