Interaction in the implementation of construction projects

1. Preamble

This report is part of the CONCEPT program and is the first of a total of three reports we have found on interactions.

In the report, the report writers describe findings they have made after studying 30 different building or construction projects.

The overall aim of the study was to describe the forms of interaction that had been used.

Secondly, the aim was to clarify whether interaction had any effect with respect to the achievement of the individual project's performance objectives or also long-term effects.

Common to all the projects was that they had state builders.

It is clear from the report that they used literature studies on 24 of the projects, and document analyses and in-depth interviews on six of the projects.

The report consists of 7 chapters and a total of 43 pages. It is thus substantially smaller than the two subsequent Concept Reports (Nos. 61 and 74) which have also been written about.

In this note, we have tried to retrieve what has the greatest informational value in practical life. Our main focus is information that is relevant to the person making a decision on whether interaction should be used, and of relevance when an interaction has been initiated.

2. About the term “interaction”

In paragraph 1 of the report “Background” The first paragraph states that interaction is “a form of cooperation (...) characterized by open cooperation, closer integration (...) than” traditional modes of implementation, and that interaction has been introduced increasingly in the last 20 years.

Furthermore, it is stated in paragraph 1 of the report. “Background”, third paragraph that it “is great variation in what is put in the term “interaction” in the 30 projects that underpinned the study. This is despite the fact that the projects had the same builder, which was the State.

Of point 3 “Literature Study” and 3.1 “The concept of “interaction” it appears that the term “interaction” shortcomings “an unambiguous definition” and “the definitions are relatively general and little specific”.

This despite the fact that “interaction” has been “frequently used within the BA industry since the 1990s”.

One considers this unfortunate all the time this “may offer misunderstandings by which one may believe all mean the same thing and expect everyone to know what the term encompasses”.

“Common to many definitions is that they emphasize the importance of the parties having common goals, actively interacting and building on trust”. With that said, the report's authors point out that, nevertheless, “lacks a clear and unified definition that unambiguously specifies key elements. This reflects the fact that the projects that use interaction are often of a different nature, have different approaches and include different elements of interaction”.

In addition, the report writers point out that most definitions mention improvement and desired effects of interaction, but that one uses “general twists and turns, rarely specifying which effects and improvements are central”.

3. Prerequisites and problems of interaction

In pages 15 and 16 of the report, success factors and problems of interaction have been described, respectively.

As special success factors present in “almost all successful interaction relationships” The following three elements are highlighted:

• “A leadership that continues to support ideals of cooperation through doubt and uncertainty”

• “Recognition of each other's ways of working and with incentives based on collaborative performance”

• “Belief in win-win results of cooperation with willingness to seek common gains”

In a comprehensive 2015 study, researchers (Walker and Lloyd-Walker) had identified 16 conditions that were designated as success factors, namely

1. Motivation and Context — Defining the Circumstances of Interaction

2. Shared governance structure

3. Integrated Risk Management Strategy

4. Joint Communication Strategy

5. Significant degree of collocation

6. Confidence-building management

7. Balance between trust and control

8. Commitment to be innovative

9. Common “mindset”/culture “for the good of the project”

10. Non-blaming culture

11. Consensus-Oriented Decision-Making

12. Focus on learning and continuous improvement

13. Incentive schemes

14. Pragmatic learning-in-practice

15. Transparency and Open Book

16. Joint dependence and responsibility

Concerning problems in interaction, one writes on page 15 that “(F) ravary of these assumptions can create problems. Examples of such are:”

1. Lack of knowledge allocation

2. Lack of, or poor, communication

3. Conflicts and lack of trust

4. Unfortunate risk-sharing

5. The external social context does not facilitate interaction

6. lack of knowledge of interaction

7. no clear and precise definition of interaction that can help guide expectations and implementation

It was also highlighted that commercial relationships can negatively affect interaction in that the individual participant wants “to create the most profit possible for your own organization versus the community”.

4th. Elements of interaction and effects of interaction

These two topics are dealt with in paragraphs 3.3 and 3.4 of the report.

Here we focus on the effects of interaction, and then we return to the interaction elements in paragraph 5 where we deal with Chapter 5 of the report.

In terms of effects, what we perceive as most central is highlighted from pages 19-20 of the report.

Increased productivity are drawn by different authors, but with somewhat different focus. As examples are mentioned

• “better predictability in terms of cost and time”

• “sharing knowledge, ideas, innovation and best practices as well as improved decision-making”

• “reduced level of conflict and financial demands, leads to increased profits for participants and timely completion of high-quality projects”

• “better interaction contributes to better control over time, cost and quality, as a consequence of sharing risk and gain”

• “reduced risk of budget overruns as a result of better cost control”

Cooperation, work environment and conflicts is positively influenced when/ if you interact with “open communication”, “improved collaborative climate” and “mutual trust”.

Increased innovation was highlighted as a consequence of interaction when/ if one establishes “fairer risk-and-gain sharing arrangements that can provide incentives for suppliers to contribute innovations”.

Whether interaction has better long term effects than other forms of implementation it was “several fewer sources that actually” discussed.

5. Findings obtained from 30 construction or construction project w/government BH

Chapter 4 of the report is preceded by the lack of “a more concrete and unambiguous description” of the content of the concept of interaction. Consequently, an attempt was made to identify various interaction elements that the 30 construction projects contained.

The various items were entered in Table 4 (p. 23 of the report).

In the table, 30 different elements are included in the x-axis, while the 30 projects are given each column in the Y axis. Thus, you can see how the various elements were distributed on the projects.

It is clear from paragraph 4.1 of the report that 1/3 of the items (10 out of 30) were 'Used relatively frequently'. The 10 contained 15 items that were similar. It also appears that “overall picture is that the eight most commonly used elements relate specifically to contract and process”.

Process elements:

‍ ¹⁾ Start-up seminars and ²⁾ Continuous workshops.

Contract elements:

‍⁽³⁾ interaction based on a turnkey contract, ^4th) early contracting, ⁵⁾ target price with sharing bonus/ malus, ^6th) open book economics, ^7th) function description and ⁸⁾ contractually fixed right to exchange persons.

One would think that the projects that were carried out as a turnkey contract also had function descriptions, but the table shows that this only applied to 18 out of 23 projects.

Likewise, one would think that interaction projects with a target sum required an open book, and that an open book was only interesting when one had a target sum. However, Table 4 shows that there are deviations from this in 6 out of 20 projects. In three projects, the target sum was used without an open book, while the opposite was the case in three others.

Table 4 also shows that there are some items that were very little used. For example, it was only in 1-2 projects that actors other than the builder and the general contractor were involved in the contract or in the target sum with bonus/malus.

Finally, it is mentioned that the subcontractors were included in interaction phase 1 in 9 out of 30 projects.

6. Closing Remark

Chapter 6 of the report”Discussion” contains a more general account of the discoveries that were made.

Regarding the part of the report that concerned possible common denominators, it was noted that there is a great variation in what is put into the concept of interaction. The results could indicate that “there is no one element that is pass-through for everyone”. With that said, it also says that they “the four elements that are most characteristic or frequently used are the start-up seminar, meetings during the project, the contractual right to replace people, and the use of function descriptions”.

Moreover, the projects seem “to a small extent to incorporate (...) the subcontractor, advisers or architect in the bonus/malus agreement or in the contract”.

It is clear from page 37 that it was difficult to obtain any unambiguous answer about the possible long-term effects of interaction.

However, for five of the six projects that were particularly thoroughly evaluated, the conclusion was that “the effects are largely positive in terms of goal attainment for users, and intended and unintended impacts for different audiences. For most of the cases, the plant has worked well, there have been few complaints and repairs, in addition to the fact that the maintenance has mostly worked fine. Success factors highlighted are user participation, involvement of operations in the project phase, good documentation of what has been done, as well as the fact that the parties have found good solutions together”.

The sixth project (Oslo District Court), on the other hand, was a “horror example due to the fact that the interaction contract did not work. The project did not achieve goals related to time, cost or quality. It is pointed out that there was little willingness on the part of the entrepreneur to share the bonus and that several of the parties went bankrupt. Reasons given are inadequate project management and information along the way, as well as lack of participation from operational staff”.

In addition, in retrospect it was “It is necessary to correct many defects and shortcomings both in terms of the quality of the building and the fact that one struggles with poor ventilation and poorly thought-out solutions for maintenance”.