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Suggested Citation:"4 Use of Best Practices in Construction." National Research Council. 2007. Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report. Washington, DC: The National Academies Press. doi: 10.17226/11846.
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4
Use of Best Practices in Construction

Summary of a Presentation by Hans Van Winkle

Director, Construction Industry Institute


The Construction Industry Institute (CII) is a consortium of leading owners, contractors, suppliers, and academia interested in improving the constructed project and the capital investment process. CII’s mission is to improve the business effectiveness of the capital facilities lifecycle, including safety, quality, schedule, cost, security, reliability and operability. CII meets its mission by gathering owners, contractors, the supply chain, and the best minds in the academic world to solve problems in the construction industry, including dispute resolution.

CII defines a best practice as a process or method that, when executed effectively, leads to enhanced project performance. To qualify, a practice must be sufficiently proven through extensive industry use and/or validation.

Traditional tactics will not solve the disputes of modern business. In the construction industry, organizations have begun adopting best practices, including dispute resolution, with good results. Furthermore, industry data indicate that those who use best practices reduce the potential for conflict, improve safety and business practices, and develop better project relationships. Approaches such as partnering, dispute resolution boards, and mediation are more relevant and thus part of the CII philosophy.

In pursuing its mission, CII has developed many best practices, including:

  • Pre-project planning,

  • Alignment,

  • Constructability,

  • Design effectiveness,

  • Materials management,

  • Team building,

  • Planning for start-up,

  • Partnering,

  • Quality management,

  • Change management,

  • Disputes resolution,

  • Zero accidents techniques,

  • Implementation of products,

  • Benchmarking, and

  • Project delivery method and contracting strategy.

If a project is conceived from the beginning with these best practices in mind, then the need for dispute resolution may be minimized or avoided altogether. The most valuable best practices are those that prevent or resolve disputes as early as possible at the project level and under the control of those directly involved.

Suggested Citation:"4 Use of Best Practices in Construction." National Research Council. 2007. Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report. Washington, DC: The National Academies Press. doi: 10.17226/11846.
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CII’s best practices have had beneficial results for CII members and others in terms of safety, cost, and schedule. Indeed, safety has been a signature issue for CII. Safety on the jobsite is important in and of itself but also because it affects other areas such as project performance, workforce development and acquisition. CII member companies that use best practice approaches for safety fare almost seven times better than non-member companies.

Project schedule data are less conclusive and more difficult to define. The CII database indicates that best practices produce fewer results for project schedule than for other parameters. This is an issue because schedule is becoming increasingly important. Companies are under increasing pressure to produce new products, modify existing ones, and develop new processes faster than ever, all of which affect project schedules.

Saudi Aramco is a good model for how best practices produce good results. The company claims to have saved more than $500 million in 2002 at their Herod Gas Plant by incorporating best practices. They achieved such results by dedicating staff to explore the best practices of CII and other organizations and by adapting these to their industry.

It is important to educate the construction industry about the benefits of best practices. To this end, CII has an active program to help members deal with issues such as risk allocation, contracting strategy, and benchmarking. Also, good pre-project planning and good procedures and processes will diminish opportunities for disputes.

RESOURCES

Construction Industry Institute (CII). Available online at www.construction-institute.org.

CII. Disputes Potential Index, Special Publication 23-3, CII, Austin, Texas, 1995.

CII. Benchmarking and Metrics Implementation Toolkit. Available online at www.ciibenchmarking.org/toolkit.

Dispute Prevention and Resolution Research Team, Dispute Prevention and Resolution Techniques in the Construction Industry, Research Summary 23-1, University of Texas at Austin, Construction Industry Institute, Austin, Texas, 1995.

Suggested Citation:"4 Use of Best Practices in Construction." National Research Council. 2007. Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report. Washington, DC: The National Academies Press. doi: 10.17226/11846.
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Page 19
Suggested Citation:"4 Use of Best Practices in Construction." National Research Council. 2007. Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report. Washington, DC: The National Academies Press. doi: 10.17226/11846.
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The National Academy of Construction (NAC) has determined that disputes, and their accompanying inefficiencies and costs, constitute a significant problem for the industry. In 2002, the NAC assessed the industry's progress in attacking this problem and determined that although the tools, techniques, and processes for preventing and efficiently resolving disputes are already in place, they are not being widely used. In 2003, the NAC helped to persuade the Center for Construction Industry Studies (CCIS) at the University of Texas and the Alfred P. Sloan Foundation to finance and conduct empirical research to develop accurate information about the relative transaction costs of various forms of dispute resolution.

In 2004 the NAC teamed with the Federal Facilities Council (FFC) of the National Research Council to sponsor the "Government/Industry Forum on Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners." The forum was held on September 23, 2004, at the National Academy of Sciences in Washington, D.C. Speakers and panelists at the forum addressed several topics.

Reducing Construction Costs addresses topics such as the root causes of disputes and the impact of disputes on project costs and the economics of the construction industry. A second topic addressed was dispute resolution tools and techniques for preventing, managing, and resolving construction- related disputes. This report documents examples of successful uses of dispute resolution tools and techniques on some high-profile projects, and also provides ways to encourage greater use of dispute resolution tools throughout the industry. This report addresses steps that owners of construction projects (who have the greatest ability to influence how their projects are conducted) should take in order to make their projects more successful.

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