Probabilistic Procedure for Analyzing Construction Pay Adjustment Systems
Statistical quality assurance specifications containing pay adjustment provisions for quality let the contractor decide what levels of quality to target during construction. A procedure and accompanying computer program have been developed to address the optimization of target quality levels. This dual-purpose procedure will help contractors intelligently set target quality levels and help highway agencies validate their quality assurance specifications and pay adjustment provisions. By using the proposed procedure, a contractor can answer the question, “What target quality levels will lead to maximum profit in my specific situation?” The informal procedure contractors currently use does not consider probability and risk. Also, by following the same proposed procedure by using its own data, an agency can answer the question, “What quality levels are the specifications forcing our contractors to deliver?” This important question must be properly answered for the agency to determine the impact of its pay adjustment provisions on contractors. An exercise is presented to compare the current and proposed procedures. The two procedures may identify different optimal target values, leading to sizeable differences in a contractor’s profit.
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- Summary URL:
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Availability:
- Find a library where document is available. Order URL: http://www.trb.org/Main/Public/Blurbs/158001.aspx
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Authors:
- Vidalis, Sofia Margarita
- Kopac, Peter A
- Najafi, Fazil Tawab
- Publication Date: 2006
Language
- English
Media Info
- Media Type: Print
- Features: Figures; References; Tables;
- Pagination: pp 55-62
- Monograph Title: Construction 2006
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Serial:
- Transportation Research Record: Journal of the Transportation Research Board
- Issue Number: 1946
- Publisher: Transportation Research Board
- ISSN: 0361-1981
Subject/Index Terms
- TRT Terms: Adjustment factors; Computer programs; Construction projects; Contractors; Optimization; Pay; Quality assurance; Salaries; Statistical quality control
- Uncontrolled Terms: Pay adjustments; Probabilistic methods; Quality levels
- Subject Areas: Administration and Management; Construction; Highways; I10: Economics and Administration; I50: Construction and Supervision of Construction;
Filing Info
- Accession Number: 01025769
- Record Type: Publication
- ISBN: 0309099544
- Files: PRP, TRIS, TRB
- Created Date: Jun 19 2006 11:17AM