Probabilistic procedure for analyzing construction pay adjustment systems

Sofia Margarita Vidalis, Peter A. Kopac, Fazil T. Najafi

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

Abstract

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.

Original languageEnglish (US)
Title of host publicationConstruction 2006
PublisherNational Research Council
Pages55-62
Number of pages8
Edition1946
ISBN (Print)0309099544, 9780309099547
DOIs
StatePublished - Jan 1 2006

Publication series

NameTransportation Research Record
Number1946
ISSN (Print)0361-1981

Fingerprint

Contractors
Quality assurance
Specifications
Profitability
Computer program listings

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Mechanical Engineering

Cite this

Vidalis, S. M., Kopac, P. A., & Najafi, F. T. (2006). Probabilistic procedure for analyzing construction pay adjustment systems. In Construction 2006 (1946 ed., pp. 55-62). (Transportation Research Record; No. 1946). National Research Council. https://doi.org/10.3141/1946-07
Vidalis, Sofia Margarita ; Kopac, Peter A. ; Najafi, Fazil T. / Probabilistic procedure for analyzing construction pay adjustment systems. Construction 2006. 1946. ed. National Research Council, 2006. pp. 55-62 (Transportation Research Record; 1946).
@inproceedings{38f61a46b7f34c6db6aac45d1b69ea2f,
title = "Probabilistic procedure for analyzing construction pay adjustment systems",
abstract = "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.",
author = "Vidalis, {Sofia Margarita} and Kopac, {Peter A.} and Najafi, {Fazil T.}",
year = "2006",
month = "1",
day = "1",
doi = "10.3141/1946-07",
language = "English (US)",
isbn = "0309099544",
series = "Transportation Research Record",
publisher = "National Research Council",
number = "1946",
pages = "55--62",
booktitle = "Construction 2006",
edition = "1946",

}

Vidalis, SM, Kopac, PA & Najafi, FT 2006, Probabilistic procedure for analyzing construction pay adjustment systems. in Construction 2006. 1946 edn, Transportation Research Record, no. 1946, National Research Council, pp. 55-62. https://doi.org/10.3141/1946-07

Probabilistic procedure for analyzing construction pay adjustment systems. / Vidalis, Sofia Margarita; Kopac, Peter A.; Najafi, Fazil T.

Construction 2006. 1946. ed. National Research Council, 2006. p. 55-62 (Transportation Research Record; No. 1946).

Research output: Chapter in Book/Report/Conference proceedingConference contribution

TY - GEN

T1 - Probabilistic procedure for analyzing construction pay adjustment systems

AU - Vidalis, Sofia Margarita

AU - Kopac, Peter A.

AU - Najafi, Fazil T.

PY - 2006/1/1

Y1 - 2006/1/1

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=33749553603&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33749553603&partnerID=8YFLogxK

U2 - 10.3141/1946-07

DO - 10.3141/1946-07

M3 - Conference contribution

SN - 0309099544

SN - 9780309099547

T3 - Transportation Research Record

SP - 55

EP - 62

BT - Construction 2006

PB - National Research Council

ER -

Vidalis SM, Kopac PA, Najafi FT. Probabilistic procedure for analyzing construction pay adjustment systems. In Construction 2006. 1946 ed. National Research Council. 2006. p. 55-62. (Transportation Research Record; 1946). https://doi.org/10.3141/1946-07