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CHAPTER ONE

INTRODUCTION

1.1 Background of the Study


The construction industry in both developed and developing countries may be viewed as a

sector of the economy which through planning, design, construction, maintenance and

repair, and operations, transforms various resources into constructed facilities (Kheni,

Gibb & Dainty, 2008). The types of public and private facilities produced ranges from

residential and non-residential building to heavy construction and these physical facilities

play a critical and highly visible role in the process of development. The major

participants from the construction industry include the architect, engineers, management

consultants, general contractors, special trade contractors or sub-contractors, quantity

surveyors, builders and other related workers, along with the owners, operators and users

of the construction facility (Isa, Jimoh & Achuenu, 2013).

However, construction industry at present in many countries of the world is facing a lot of

chronic problems especially in the developing countries as cases of poor construction

time performance of construction project mostly is always being reported. As reported in

Saudi Arabia, Assaf and Al-Hijji (2006) found that only 30% of construction project were

completed within the scheduled period. Omoregie and Radford (2006) reported that the

cost of projects in Nigeria escalated by 14% (the minimum average percentage) and the

period of projects in Nigeria escalated by 188% (the minimum average percentage). As

also reported by Endut, Akintoye, & Kelly (2009), only 46.8% of public sector and 37.2%

of private sector projects were found completed within the stipulated budget in Malaysia

while only 20.5% of the public projects 33.35% of the private sector projects were

completed within the time. The findings from various studies, which were conducted in
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different developing countries (Nigeria, Saudi Arabia, Malaysia and Indonesia), had

confirmed that all of the projects currently undertaken in these countries suffer from

significant construction cost and time overruns (Kaming, Olomolaiye, Holt & Harris,

1997; Oko, Aliu & Koleola 2010).

In construction industry a specific set of performance measure was developed as key

performance indicators (KPIs) including measure of time (contract period). Time

predictability (determining of contract period) has been identified as one of the key

performance issues to be addressed in providing best value to construction clients. The

KPIs demonstrate that the industry’s ability to predict the time a building will take to

complete is considerably unreliable than its ability to predict how much it will cost.

So, contract period is the time required for the execution of a contract from inception to

completion or the duration from the date of site possession to the date of practical

completion of that particular project, usually considered in weeks. From initial stage the

client is interested in the time required for the project to be delivered. The constructed

project may not perform as anticipated because the owner may have unrealistic

expectations regarding the delivery time of construction forcing contractors into

unrealistic gambles, corner–cutting or commitments that may not be realistic (Frimpong,

Oluwoye & Crawford, 2003).

The contractor is in the best position of exercising the most direct control over

construction duration. Contractors use network schedules to control project durations,

which are mostly a contract agreement client and contractor. The clients may stipulate

contract duration based on particular function that project must perform at a particular

time or other considerations. The contractor only generates a detailed network schedule

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without considering some factors that affect the contract duration such as adverse

weather, contract variation, and delays due to concrete curing etc, which may lead to

extension of time or time overrun. From the previous research we have seen the various

techniques, methods and tools used for determination of contract duration, which are

inevitable in the construction process leading to time overrun and additional expenses. In

most cases the determination of contract period, based on experience, project size, cost

and ability of the builders.

According to Newcombe, Langford & Fellows (1990 cited in John, Abdullateef &

Abdulganiyu, 2015), there exists global criticism of the construction industry’s failure to

execute projects on time. Chan & Kumaraswamy (2002) are of the view that duration of

construction is of increasing importance due to the fact that it serves as a vital benchmark

for assessing project performance and project organization efficiency. It is therefore

observed that project completion on time is major problem in the construction industry as

whole and adequate process must be involve because there is no scientific equipment

used in determining contract duration, it is pertinent to find out the performance factors

for determination of contract period of a building.

1.2 Statement of the Problem

The case of project completion behind the schedule period has become a recurrent

situation in the construction industry, especially in the developing countries. Clients most

times imposed on the contractor the contract periods which are not realistic. The bases of

the computations of the contract period are mostly based on intuition of the individual

without any relevant fact or figure. In an attempt to win a contract, the contractor assume

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that the conditions given with respect to the completion of the project would enable the

project to be completed as at when due. In most cases, this does not eventuate to the

achievement of project objectives especially in terms of schedule. Arising from this

challenge, the statement of problem of this study is “how can the basis for the

computation of contract period be established in order to enhance the effort of the

building contractors ascertaining project duration in the estimation accuracy of project

duration of their projects.

1.3 Research Question

Based on the objectives of the study, the research questions are thus formulated.

i. What are the factors for determination of contract duration of a building project in

Akwa Ibom State?

ii. What are the methods used in determining building project duration in Akwa Ibom

State?

1.4 Aim and Objectives of the Study

The aim of the research is to find out the key performance factors for determination of

construction contract period of building projects. To achieve this aim, the following

specific objectives will be considered;

i. Examining the factors in determining the construction contract duration of a

building project in Akwa Ibom State.

ii. Assessing the methods of determining building project duration in Akwa Ibom

State.

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1.5 Scope of the Study

The scope of this research is limited to identification of essential factors in determination

of construction contract period of building projects in Akwa Ibom State. The study is

limited to projects within the three towns of Uyo, Ikot Ekpene and Eket all in Akwa Ibom

State. Target respondents for this study are the principal actors in the construction

industry namely: the Consultants and the Contractors.

1.6 Importance of the Study

The significance of the study is to identify the factors responsible for determination of

construction contract period for building projects and methods use by the professional in

achieving construction contract duration of building projects. When these factors are

identified at the end of this study, it will be easy to develop a conceptual framework for

effective planning of construction contract period when further studies are being done.

Though some studies have been conducted in the past in the area of construction contract

period of building project, very little empirical evidence exists on the phenomenon in the

developing countries in general and in the construction industry in particular. This study

is an attempt to contribute to the literature on the critical factors responsible in

determining construction contract period of building project in Akwa Ibom State. The

study will contribute to the understanding of the unique factors in determining of

construction contract period and will help contractors and consultants come up with a

clear plan and strategy before starting a project. Early project planning and scheduling of

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time, equipment and cash, combined with a good bidding strategy, will help to obtain

efficient work within a time frame.

1.7 Structure/Plan of the Study

This study is documented in five chapters. Chapter one presents introduction to the

research topic, chapter two presents the review of related literature on determining of

construction contract duration, chapter three presents the research methodology used,

chapter four discusses the presentation and analysis of data collected and chapter five

summaries, concludes and makes recommendation.

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CHAPTER TWO

LITERATURE REVIEW

2.0.0 Construction Industry

The construction sector is responsible for building new houses, apartments, factories,

offices and schools. It also builds roads, bridges, ports, railroads, sewers and tunnels,

among many other things. In addition, it maintains and repairs all of those structures and

produces the basic materials such as concrete that are used to make them (Competition in

the Construction Industry, 2008). Construction work also includes renovations involving

additions, alterations, or maintenance and repair of buildings or engineering projects such

as highways or utility systems (Michael, 2008). The industry’s significance is due not

only to the fact that it provides the buildings and infrastructure on which virtually every

other sector depends, but to the fact that it is such a sizeable sector in its own right,

construction in any country is a complex sector of the economy, which involves a broad

range of stakeholders and has wide ranging linkages with other areas of activity such as

manufacturing and the use of materials, energy, finance, labour and equipment

(Hillebrandt,1985; Victor, 2013). The construction industry contributes to economic

development including output generation, employment creation and income generation

and re-distribution. It also plays a major role in satisfying basic physical and social needs,

including the production of shelter, infrastructure and consumer goods.

In developing countries the construction of physical facilities makes up more than one

half of gross domestic investment. The Nigeria construction industry is among the largest

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construction market in Africa, which has recorded impressive growth over the years

ranging from 5.8% in 1981 to 15.66% in the first quarter of 2013 (Oluwankiyesi, 2011;

NBS, 2013). This growth is motivated by continued interest of government to reposition

Nigeria’s economy as one of the 20 largest economics in the world. Interestingly the

government is responsible for 75% of infrastructural development in Nigeria (BMPIU,

2005).

Construction industry contributions to employment creation are naturally parallel to its

contribution to output generation. The construction industry is a significant part of our

economy, employing over 8% of all wage earners in United Kingdom. Of the 14 industry-

categories used below, construction industry ranked sixth in the percentage of the total

workers it employed in 2006.

Table 2.1: Employment by Industry: Percent of Total Employed


INDUSTRY 2000 2006
Education & Health Services 19.1 20.7
Retail Trade 11.5 11.6
Manufacturing 14.4 11.3
Professional & Business Services 10 10.3
Leisure & Hospitality 8.2 8.4
CONSTRUCTION 7.3 8.1
Financial activities 6.8 7.3
Transportation & Utilities 5.4 5.2
Government workers 4.5 4.5
Wholesale trade 3.1 3.2
Information 3.0 2.5
Agriculture 1.8 1.5
Mining 0.3 0.5
Others 4.5 4.9
Source: U.S. Census Bureau, Statistical Abstract of the U.S. (2007).

Through the many direct and indirect means by which construction creates employment it

also generates income. It provides entrepreneurial opportunities for small businessmen,

thereby helping to re-distribute income.

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The construction industry play a vital role in economic growth and development, but it is

also important in terms of satisfying basic physical and social needs, the first of which is

shelter. The standard of housing is an important component in a nation’s welfare, and at

least 35% of all construction in a typical developing country is in the form of dwellings.

Closely related to society’s need for shelter is its need for basic infrastructural services

such as water supply, waste disposal, power, transportation, and communications.

Community development also involves establishing various institutional, commercial and

manufacturing services. Since it is the construction industry which creates the physical

facilities required to meet these varied social needs, construction thus has important

impact on social as well as economic growth and development.

The construction industry is a very dangerous in which to work. in 2005 the construction

industry, compared with all other private industries are at risk of injury or illness due to

contact with objects , falls to lower or same level, overexertion an excessive noise

(HMSO, 1994; Workcover, 2001; Victor, 2008). Construction starts with planning,

design, and financing and continues until the project is built and ready for use. Large

scale construction is a feat of human multitasking. A Project manager normally manages

the job, and a construction manager, design engineer, construction engineer or project

architect supervises it. For the successful execution of a project, effective planning is

essential. Those involved with the design and execution of the infrastructure in question

must consider the zoning requirements, the environmental impact of the job, the

successful scheduling, budgeting, construction site safety, availability and transportation

of building materials, logistics, inconvenience to the public caused by construction delays

and bidding, etc.

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2.1.0 The Roles of Construction Actors in Construction Time

There are diverse interests in the construction industry. The principal interest or actors in

the construction industry are: Client, Construction Manager, Designer and Contractor.

2.1.1 The Clients / Owners

This is the individual, the firm, or the organization that funds the construction project and

will own the completed facilities. The owner, perhaps assisted by consultants, specifies

the scope of the construction project. In some instances, the owner may specify the

detailed layout of the facility, the type of materials to be used, and so forth. The owner,

perhaps assisted by some of the parties described below, and depending on the technical

expertise of his or her own staff, may inspect the project work as it is being performed

and on its completion. The golden rule in the construction process is: "He who has the

gold makes the rules." Because the owner controls the purse strings, he or she dictates

the kind of contract that will be used and selects the other parties to the project.

2.1.2 The Construction Manager

He or she is an employee of a professional construction management firm that may be

retained by the owner to perform predesigned planning, to help select the designer, to

help select contractors, and to perform post-contract award functions. The construction

management firm may perform all or some of these functions in return for a fee. When

capitalized, the term Construction Manager (CM) means an employee of such a firm.

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The term construction manager can also be applied to many other management level

personnel within the construction industry.

When an owner contracts the services of a construction manager as his agent, the

construction manager is frequently responsible for overall scheduling and coordination

when multiple trade or multiple prime contracts are used. As a result, the construction

manager has several options schedule development and implementation.

The construction manager may prepare an overall detailed master schedule for the

project. This type of schedule usually be supported by milestone schedules and/or pre-

bid integrated schedules for each of the key multiple prime or trade contracts that are

anticipated to be let with this method of the project delivery.

As trade contractors are let, the construction manager has the option to require each trade

contractor to participate jointly in the development of the trade contract schedule. The

objective is to reflect the trade in the development of the trade contract schedule. The

objective is to reflect the trade contractors’ plans and intentions to execute their work and

to coordinate their dependencies with others.

2.1.3 The Designers

They may be employees of the owner, but are more often the employees of an architect-

engineer (AE) firm. In addition to designing a facility that meets the expressed needs of

the owner and that complies with applicable building codes, the AE may be retained by

the owner to act as his or her representative in inspecting the project work, to review and

approve materials that the contractor proposes to use in the work, to review and

recommend contractor requests for progress payments, and to perform other functions on

behalf of the owner.

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2.1.4 The Contractor and Sub-contractors

These are individuals or firms that undertake to perform required construction work in

return for a contract price. Contractors may be categorized as prime contractors and

subcontractors. Prime contractors have a contractual relationship with the owner,

whereas subcontractors have a contractual relationship with the prime contractor or with

another subcontractor. General contractors are prime contractors who contract to perform

all of the required work, possibly excluding some specialty items such as electrical and

mechanical work that the owners desire to contract directly with the specialty contractors.

Subcontractors are sometimes referred to as first-tier subcontractors, second-tier

subcontractors, and so on. A first-tier subcontractor has a contractual relationship with a

prime contractor. A second-tier subcontractor has a contractual relationship with a first-

tier subcontractor, and so forth. A typical construction contractor, regardless of whether a

prime contractor or a subcontractor, will perform certain functions, either personally or

by use of his staff. These functions include the following:

a. Home Office Functions. These include the selection of potential projects,

estimating the costs of such projects, the preparation of bids or negotiating

construction contracts, the procurement of construction materials, the management

and maintenance of contractor-owned equipment, and personnel and financial

management. The titles of home office contractor staff members might include:

estimators, schedulers, procurement specialists, accountants, counsel, project

managers, fleet managers, safety officer, quality control officer, and others.

b. Field Functions. The contractor's principal field function is project management.

The contractor may have a project manager, a project superintendent, or both as

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his field supervisors at the project site. Other contractor field personnel may

include office engineers, office clerks, time-keepers, clerks, inspectors, and

foremen.

2.2.0 Characteristics of Construction Project

A project is made up of a group of interrelated work activities constrained by a specific

scope, budget and schedule to deliver capital assets needed to achieve the strategic goal of

an agency or organization (Project Management Institute PMI, 2008). However, projects

have become increasingly important as a way to organize work (Knut, 2008). Projects are

used to solve big tasks of public or private utility. They operate across organization, and

are terminated when the planned task is completed. A project means to achieve a goal by

applying a certain amount of resources. Somewhere along the line there might be a need

to undertake an evaluation in order to ascertain whether the project will be or has been

successful. A project shall have its own characteristics set aside so that it can be

completed within budget and time. As cost and time for construction project are

interdependent, these shall be carefully planned, an increase or decrease in construction

project time affects the budget of construction projects.

Projects are defined by their scope, budget, and schedule. For example, an Agency is to

undertake a project to design and build a new maintenance facility for its fleet of buses

(scope), at an estimate of N30 million (preliminary budget) over a three-year period

(schedule). The schedule specifies a defined beginning and end. Projects go through a life

cycle of phases between their beginnings and end that for construction projects are

typically: initiation, planning, design, construction, commissioning, and closeout.

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Scope: Each project is unique and must have a written requirements document that takes

into consideration operational needs, level of service, regulatory requirements and quality

of deliverables. The scope evolves as new information becomes available through the

project life cycle. The project must be specific. Being specific includes detailing out the

project’s structure, goals, benefits, milestones and costs. All these requires careful

planning and inputs from the project team members involved and if necessary the external

consultants or experts. Detailed reporting and planning including command structure,

personnel list, communication avenues, Gantt chart and the project’s costing should be

drawn up to detail out the project’s responsibilities, timeline, costs and work to be

performed by the respective parties. Periodic project meetings should also be scheduled to

discuss relevant matters pertaining to the project and any issues arising therefrom.

Schedule: All projects must have a definite beginning and end. The Agency’s usually

provides approximate dates for the beginning of a project and the end date when it is due

to go into operation. Once there is a well-defined scope, the Agency needs to determine

the time it will take to complete the project by developing the project schedule.

Developing the schedule involves breaking down the work into manageable activities

needed to accomplish the scope of each deliverable, estimating the duration of each

activity, and placing them in a logical sequence. The result is a project schedule that tells

you the expected duration of the project and the logical relationships between the

activities, including activities on the “critical path,” that controls the end date.

Budget: All projects are constrained by limited monetary funding resources.

Consequently, every project needs a budget to initially define its funding requirement.

The project manager develops the budget based on the cost estimates at the beginning of

each project phase and refines it once there is better information defining the scope.

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Refining the budget occurs through studies and analysis in the design development

process through the preliminary construction phase.

According to Malaysia Institute of Certified Public Accountants, (2008) developed five

characteristics of a clearly defined project, called SMART (Specific, Measurable,

Achievable, Relevant, Time bound).

Studies have shown that project characteristic of a building projects varies such as

Complexity of project (e.g. special ground conditions or technology requirements), Size

of project (e.g. value; number of stories; floor area; km of road), effects of relevant

political, legal and economic systems, including market conditions, importance for the

project to be completed on time, type of project (e.g. housing estate, road, dam, office

building refurbishment),form of contract (functional grouping of contract: separated or

integrated) and the division of responsibilities and liabilities, specific location, special

weather and environmental concerns, level of technological advancement, project life

span / lifecycle, value of a project, quality of a project, type of client (e.g.

public/private/mixed; experienced/one-off/project staff caliber and their strengths,

weaknesses and management style), any other special conditions, project funding, level of

specialization required of contractors, contractual arrangement, type of procurement etc.

This project characteristic is used as the basis for the determination of contract period.

2.3.0 Types of Construction Projects

In planning for various types of construction, the methods of procuring professional

services, awarding construction contracts, and financing the constructed facility can be

quite different (Emad, 2009). The broad spectrum of constructed facilities may be

classified into two major categories of construction: buildings construction and

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engineering construction. Building construction is usually further divided into residential

and non-residential (commercial/institutional). Engineering construction is further

divided into civil engineering and heavy engineering. It includes large public works,

dams, bridges, highways, water/wastewater and utility distribution for the civil

engineering and heavy engineering includes refineries, process chemical, power

generation, mills and manufacturing plants. There are other ways to break the industry

into sectors or markets, each with its own characteristics.

2.3.1 Buildings Construction

Building construction is the process of adding structure to real property or construction of

buildings. The vast majority of building construction jobs is small renovations, such as

addition of a room, or renovation of a bathroom. Often, the owner of the property acts as

laborer, paymaster, and design team for the entire project. However, all building

construction projects include some elements in common – design, financial, estimating

and legal considerations. Many projects of varying sizes reach undesirable end results,

such as structural collapse, cost overruns, and/or litigation. For this reason, those with

experience in the field make detailed plans and maintain careful oversight during the

project to ensure a positive outcome. For the purpose of this research we talk about the

two main types of building construction with their characteristics.

Residential Construction: Residential, represented by projects such as single and

multiple family homes; condominiums; multiunit town houses; low rise, garden-type

apartments; and high rise apartments. During the development and construction of such

projects, the developers usually serve as surrogate owners and take charge, making

necessary contractual agreements for design and construction, and arranging the financing

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and sale of the completed structures. Residential housing designs are usually performed

by architects and engineers, and the construction executed by builders who hire

subcontractors for the structural, mechanical, electrical and other specialty work (Emad,

2009).

Figure 2.1: Level of influence vs. project duration


Source: Major Type of Construction; Emad Elbeltagi; 2002

Residential construction practices, technologies, and resources must conform to local

building authority regulations and codes of practice. Materials readily available in the

area generally dictate the construction materials used (e.g. brick versus stone, versus

timber). Cost of construction on a per square meter (or per square foot) basis for houses

can vary dramatically based on site conditions, local regulations, economies of scale

(custom designed homes are often more expensive to build) and the availability of skilled

tradespeople. As residential construction (as well as all other types of construction) can

generate a lot of waste, careful planning again is needed here. Residential construction

has been reported by Clough to account for 30 to 35 percent of the annual construction

industry volume. These projects tend to be labor intensive and their contract duration can

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be varied tremendously. Typically though, residential construction tends to be of short

duration usually lasting only one to five months. Because of that, little contract planning

is done on the part of the builder. The contract duration for a private owner is generally

determined by the architect or engineer, if there is one. As such most architects use their

experience with similar sized projects as a guide to determining the contract duration. The

same can be said for most developers.

Non- Residential Construction (Institutional and Commercial Building

Construction): Institutional and commercial building encompasses a great variety of

project types and sizes, such as schools and universities, medical centers and hospitals,

sports facilities, shopping centers, warehouses and light manufacturing plants, and

skyscrapers for offices and hotels. The owners of such buildings may or may not be

familiar with construction industry practices, but they usually are able to select competent

professional consultants and arrange the financing of the constructed facilities

themselves. Specialty architects and engineers are often engaged for designing a specific

type of building, while the builders or general contractors undertaking such projects may

also be specialized in only that type of building. This category of project accounts for 35

to 40 percent of the annual total new construction. In any event, projects in this category

need considerable planning in order to control their cost and duration.

Because of the higher costs and greater sophistication of institutional and commercial

buildings in comparison with residential housing, this market segment is shared by fewer

competitors. Since the construction of some of these buildings is a long process which

once started will take some time to proceed until completion, the demand is less sensitive

to general economic conditions than that for housing construction.

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2.3.2 Engineering Construction:

This category accounts for 20 to 25% of the construction volume annually. These are

generally public financed and owned, either designed by the owner's staff or by architect-

engineer firms under contract. It is sufficient to 4 say that engineering construction

projects are generally large to super in dollar volume and can take over two years to

complete. In these contracts accurate planning can be highly beneficial.

Civil Engineering: Includes projects such as highways, tunnels, bridges, pipelines,

drainage systems and sewage treatment plants. Most of these projects are publicly owned

and therefore financed either through bonds or taxes. This category of construction is

characterized by a high degree of mechanization, which has gradually replaced some

labor intensive operations. The engineers and builders engaged in infrastructure

construction are usually highly specialized since each segment of the market requires

different types of skills. However, demands for different segments of infrastructure and

heavy construction may shift with saturation in some segments. For example, as the

available highway construction projects are declining, some heavy construction

contractors quickly move their work force and equipment into the field of mining where

jobs are available.

Heavy Engineering: Specialized industrial construction usually involves very large scale

projects with a high degree of technological complexity, such as oil refineries, steel mills,

chemical processing plants and coal-fired or nuclear power plants. The owners usually are

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deeply involved in the development of a project, and prefer to work with designers-

builders such that the total time for the completion of the project can be shortened. They

also want to pick a team of designers and builders with whom the owner has developed

good working relations over the years. Although the initiation of such projects is also

affected by the state of the economy, long range demand forecasting is the most important

factor since such projects are capitals intensive and require considerable amount of

planning and construction time. Governmental regulation such as environmental

protection can also influence decisions on these projects.

Other types of construction can be defined as describing the physical nature of the project

to be built. This involves the terms new construction, renovation, horizontal, or vertical.

New construction is the building of a facility on any site where there previously was no

other facility. This will include demolition and removal of a previous facility if there is no

plan to reuse any portion of that facility. Renovation on the other hand, is the reuse of

previous facilities after modification, repair, or alteration. Horizontal construction is

typically associated with the building of roads, highways, pipelines, and other such

facilities that have their predominate dimension in the horizontal plane. Vertical

construction encompasses buildings and other facilities where, generally, the construction

is above ground.

2.4.0 Performance Measurement

The word performance is widely used in all areas of management. According to Neely

(1999), performance. (i) Measured by a number or an expression that allows

communication (in management, performance is a concept multi-person). (ii) Accomplish

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something with specific intent (planned or the purpose that accompanies a plan). (iii) The

result of an action (the value created, the content measured). (iv) The ability to achieve or

enhance the creation of an outcome. (v) Comparing a result, internally or externally with

some reference standard. (vi) A demonstration that includes actions and operations, as

well as the observation of the performers by employer. A performance measurement

system can be a set of metrics used to quantify or is the common method to collect and

report the information related to the inputs, efficiency and effectiveness of a construction

project (Roshana & Akintola, 2002). It provides a sense of where we are and importantly,

where we are going (rose, 1995). Further, the importance’s of performance measurement

in the construction industry are crucial for tracking, forecasting and controlling the

important variable (cost, time, quality) in the end to ensure the success of projects and

also indicate status and direction of a project. Performance measurement of an

organization is a way to make an assessment and comparison with other projects (Behn

2003).

In other words, to accurately identify performance identify performance indicators

associated with the determination of construction contract period, a base line must be

determined. A historical base line defines an average of past performance. Knowledge of

past performance gives a reference point to benchmark against which to measure future

performance. Benchmarking aim at comparing the performance of firms relative to each

other allowing these firm to recognize their weakness and strength and by finding

examples of superior performance, can adjust their policies and practices to improve their

performance (Mohammad, Minchin & O’Brien, 2007). This is also applicable to projects

and a base line can be complications of years of historical data collected on previous

projects or a quick measurement of current project.

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2.5.0 Project Performance in the Construction Industry

The success of a construction project can be measured by project performance. The

performance of a project will be dependent on various factors including project

complexity, contractual arrangements, relationships between participants in the project,

competency of project manager and abilities of the key member in project (Tiong,

Norhayati, Muhamad, Mohd & Choy, 2014). Project performance was narrowly defined

as meeting cost and time objectives, and adhering to a product specification (Bryde,

2003). Project success has led to common agreement that project success is multi-

dimensional and that different people measure project success or performance in different

ways and at different times (Ugwu & Haupt 2007; Lam et al. 2008; Hyun et al. 2008;

Dubem et al. 2012). This therefore, gave rise to different way of measuring project

performance. Key performance indicators are set of result of the comparative analysis of

a performance measurement outcome to a corresponding performance goal. According to

cox et al., (2003) are compilation of data measures used to assess the performance of a

construction operation.

Generally, it has been widely accepted that time, cost and quality are the major concerned

factors in the performance measurement of a project (Barkely & Saylor, 1994). Atkinson

(1999) noted that these three components of project performance as the ‘iron triangle’. On

the other hand, there are other criteria that have been suggested to be considered in a

project (Kumaraswamy & Thorpe, 1999; Mamman & Omozokpia 2014). Those criteria

include meeting the budget, schedule, quality of workmanship, stakeholder’s satisfaction,

safety and health and transfer of technology. At the same time, some researchers also

noted that there are other various key components such as design performance, safety and

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health, performance of environmental management, expectation or satisfaction of the end

user, client satisfaction and commercial value that are used in project performance

measurement (Chan & Tam, 2000). Hence, there are five major variables that have been

identified to measure project performance. There are cost performance, time performance,

quality performance, safety and health and client’s satisfaction.

2.5.1 Cost performance

Cost is defined as the degree to which the general condition promotes the completion of a

project within the estimated budget (Bubshait & Almohawis, 1994). The cost variance is

the technique usually used for design performance measurement of a project in

construction industry (Salter & Torbett, 2003). Moreover, cost variance technique is not

only limited to the calculation of tender sum but also include the overall costing that

incurs in a project from inception to completion, which include any cost arising from the

legal claims such as litigation and arbitration. Cost variance is measured in term of unit

cost (unit cost is a measure of relative cost and is defined as the final cost sum divided by

the gross floor area), percentage net variance over final cost (Chan & Tam, 2000).

Besides, cost variance has been used in a research as the measurement for project

performance in a construction project which has problems of defective design (Andi &

Minato, 2003).

Georgy, Chang & Zhang, (2005) suggested the element of cost to measure the

performance of engineering projects. Besides cost variance, cost performance index (CPI)

also has been used to measure performance of a project for the reliability and the

confidence of results. The formula of the element and indication are show as follows;

23
Cost variance

CV = BCWP – ACWP ----------------------------------------- (1)

Where BCWP is the budgeted cost of work performed and ACWP is the actual cost

performed. The project is theoretically on budget when the value of CV is equal to zero.

When the CV value is greater than zero, which means the earning of project has more

value than zero, which means the earning of project has less value than the planned

earning. Hence it is over budget (cost overrun).

Cost performance index (CPI)

CPI = BCWP/ACWP ------------------------------------------- (2)

The project is theoretically on budget when the value of CPI is equal to one. When the

CPI value is less than one that means the project is over budget. When the CPI value is

greater than one, that means the project is under budget. A project with good performance

must maintain its CPI value as near to one as possible. Construction cost, affects

investment decision making and wastes the national finance might result in corruption or

offence (Ali& Kamaruzzamani, 2010).

2.5.2 Time Performance


One of the primary requirement particularly of commercial clients but also equally

important for public sector agencies is to be able to predict the time for completion with

some degree of reliability (Ugwu & Hapt 2007). Buildings form very large parts of any

client’s investment in his business and the use of a building is usually critical to the

success of the client’s continuing function. It therefore suffices to say that the business of

project execution is definite about time. The on time completion Indicator has three
24
variations. According to Chan & Chan (2004) cited in Dubem, Akaninyene, Achuenu &

Michael (2012), they are: Construction time is the absolute time and is calculated as the

number of days/weeks from start on site to practical completion of project.

CT = Practical completion date – Project commencement date ---------- (3)

Speed of construction is the relative time which is defined as gross floor area divided by

construction time.

Speed of Construction =Ground Floor Area/Construction Time

(days/weeks).................................. (4)

Salter & Torett (2003) and odeh & Battaineh (2002) mentioned that time variance is one

of the techniques for assessing project performance in construction projects. The element

of time can give awareness for project manager to be aware that the project is not running

as well as scheduled. Moreover, delivery of project on time has been suggested as one of

the main requirements of clients in the construction contracts (Lathan 1994; Tiong et al.

2014). The formula for time variance is shown as below:

Time Variance

TV = BTWP – ATWP -------------------------------------- (5)

Where BTWP is the budgeted time of work performed and ATWP is the actual time of

work performed.

The construction time of a building is usually specified before the commencement of

construction. Construction time can be also be deduced from the client’s brief or derived

by the construction planner from available project information. On time milestone

completion determine if construction is proceeding according to schedule. Acceptable

25
productivity is measured solely on basis of time spent with respect to the overall schedule

duration.

2.5.3 Quality Performance

In the construction industry, quality is defined as the totalities of features required by a

product or service of satisfy a given need, fitness for purpose (Parfitt & Sanvido 1993;

Zulu & Chileshe 2008; Ali & Rahmat 2010; Tiong et al. 2014). In other words quality in

construction industry emphasizes the capability to establish requirements with

conformance to the quality standard. Requirements are the established characteristics of a

product, process or services as specified in the contractual agreement and a characteristic

is any specification or property that defines the nature of those products, processes or

services, which are determined initially by the client. In order to achieve a completed

project that meet owner’s quality expectations, all parties to a project must acquire an

understanding of those expectations, incorporate them into the contract price and other

contract document such bills of quantities, specification etc, to the extent possible and

commit in good faith to carry them out (Ganaway, 2006).

In construction industry according to Yasamis, Arditi & Mohammad, (2003),

specification is a compilation of workmanship guideline provided to contractors by

clients or client’s representatives at the commencement of project execution. The meeting

of specification is one way to measure quality in constructed project. Moreover, quality

performance can be determined by taking client’s satisfaction into consideration.

26
2.5.4 Safety and Health

Safety is a major concern for every construction company, regardless of the type of work

performed. Safety and health is stated as the degree to which general conditions promote

the completion of project without major fatalities or injuries (Bubshait & Almohawis,

1994). Safety is measured qualitatively through incidence rates and Experience

Modification Ratings (EMRs). The objective of a safety program is to eliminate losses

due to the poor working practices that could impact negatively on the well-being of the

workforce (Harris & Mccarffi, 2006). Construction works are well known as one of the

most dangerous and risky activities throughout the world because the large amount of

people are being killed and injured every year. The finding of research indicates that

construction workers has three times more higher chances of dying and two times higher

chances of getting injured compared to the workers involved in other economic activities

(Sousa& Teixeria 2004). Safety may be used for performance reporting by measuring the

change in the number of accident or safety related problems on the job site. Poor safety

can have a detrimental impact on the job. In the area of the job, worker morale may drop,

and productivity will decline. Tracking job performance using safety allows an

organization to see benefits and correlation between worker training on safety issues and

company’s productivity (Ojo, Adeyemi & Ikpo, 2006).

2.5.5 Client Satisfaction

Satisfaction is regarded as function of comparison between an individual’s perception of

an outcome and its expectation for the outcome. In the construction industry, client’s

satisfaction has remained an elusive and challenging issue for some considerable time.

Dissatisfaction is widely experienced by clients of the construction sector and may be

caused by many aspects but is largely attributable to overrunning project cost, delayed,

27
inferior quality and incompetent service provider including contractors and consultants

(Contract Journal 2004).

Research finding by BSRIA (2003) have suggested that it is five times more expensive to

develop a new construction client than to maintain an existing one and companies could

increase their profits by almost 100% by retaining just 5% more of the clients.

Client’s satisfaction is therefore a fundamental issue for construction participants, who

must constantly seek to improve their performance if they are to survive in global market

place. In the construction industry, the measurement of client’s satisfaction is often

associated with quality performance assessment in the context of products or services

received by the client (Parasuraman, Zeithaml & Berry, 1988; Soctanto & Proverbs,

2004; Ali & Rahmat, 2010). Usually the client’s requirement are to get construction needs

translated into design that specifies characteristics, performance criteria and conformance

to specifications, besides to get the facilities built within cost and time (Ahmed &

Kangari, 1995; Ali & Rahmat, 2010).

2.5.6 Motivation

The most difficult indicator to measure is worker motivation. According to Enshassi, Al-

Najjar & Kumaraswamy (2009), motivation is defined as the worker’s attitude towards

the job and the environment created on the job site. The definition can be taken one step

further to mean the willingness of employees to perform the task at hand to the

management’s satisfaction. In other words, motivating workers affects the overall

performance of a construction process.

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2.6.0 Construction Duration

Construction duration in a project can be achieved by many means and depends on the

stage of construction planning. Construction duration informs the project owner to allow

the contractor to complete the work within given time. On the other hand, the contractor

could prepare realistic and practical detailed schedule at the minimum costs within the

limited time frame.

Definitions of construction duration: Construction duration can be defined as one or a

combination of the following:

1. The construction duration arising from critical path in which duration for items of

work or activity in sequence cannot be reduced further (Barrie & Paulson, 1992).

2. Duration means the time required to complete a specified task or activity. And,

construction duration is the time determined by the owner’s needs to occupy,

utilize, or rent the completed space of the project (Callahan, Quackenbush &

Rowings, 1992).

3. Construction duration is a duration resulting from an examination of one or more

methods of carrying out the works on the basis of minimum cost; it is usually

estimated in the first instance for normal condition (Pilcher, 1992).

4. Construction duration refers to a given time to execute and complete item(s) of

work using all project information and resources within an estimated or predicted

cost.

29
5. Construction time can be defined as the elapsed period from the commencement of

site works to the completion time of building to the client. It is usually specified

prior to the commencement of construction (Nkado, 1995).

In this research, construction duration is defined as the time frame given by the owner for

the contractor to complete the project under normal work conditions, normal practice of

construction, and based on the minimum costs. It starts when the contractor receives the

instruction to proceed and ends at the completion of construction works on site.

2.7.0 Method for the Determining Construction Contract Duration

This research will consider methods of determining contract duration in the detailed

discussion. In reality, the methods available are as different as the owner's differing goals.

However, there are four methods are widely accepted and practiced. These are: Project

management techniques, production rates, parameters, engineering judgment and

experience.

2.7.1 Project Management Techniques

A project is usually one time effort. Although similar work may have been done

previously, every project has its own features and therefore is of non-repetitive nature. In

order to complete the project tasks efficiently, the project manager must plan and

schedule largely on the basis of his experience with similar projects (Alex & Stephen

2013). Project manager has to assure that project completion is within the budget and on

30
time to satisfy the owner’s requirements. This involves the use of modern technology,

plant and equipment and scientific methods of exercising control on all activities of the

project. The main feature of this area is to use of CPM, PERT, LOB, and bar charts to

developed a time period for the execution or determine the duration of the construction

project.

2.7.2 Production Rates

A method common to repetitive type work involves the use of production rates. This

method utilizes known work productivity rates and known quantities of work effort

required to determine durations. The productivity rate is defined as the quantity of work

performed for a unit of time. In order to find duration, the total work quantity is divided

by the productivity rate for that type of work. An example of this is to find the duration of

earth work required to move 10,000 cubic yards of fill a certain distance. A planner

would determine the production rate; say 100 cubic yards per hour. Then the duration of

the activity is 10,000 cy/100 cy/hour = 100 hours.

Two immediate problems arise from this method. First, the productivity rate is difficult to

measure or determine. It is the key to the problem, yet very little data has been collected

on it. As can quickly be seen, productivity rates will vary depending on many reasons

such as type of work, size of crew, weather, location, time of day, skill of the crew, etc.

In order to solve this problem, the planner has several choices. He can observe a similar

operation to measure its productivity, he can assume a "reasonable" productivity based on

his experience, or he can utilize any number of planning and estimating books. These

books are only averages of reported productivity and can be erroneous if the situations

that they apply to are not the same as those in the activity. However, they can provide an
31
average productivity rate that should only be used as a guide. Secondly, productivity rates

do not take into account the concurrency of many construction activities. The calculations

provide the raw data for durations but they do not show sequencing dependencies, and

overlapping of activities. Thus, production rates are only part of the solution to durations.

Productivity rates can be combined with a networking technique to establish duration for

the project. Again, this is not contract duration since other elements such as any

administrative requirements that are included in the contract must be accounted for in the

duration stated in a contract.

2.7.3 Parameters

The name given this method is actually a series of methods that have been grouped

together. A parameter is a constant value applied to some aspect of the project to produce

a quantity of the duration. This multiplier can be related to the physical aspects or the cost

value of the project. An example of a physical parameter would be the building type,

construction materials used, square footage, or volume enclosed. Logically, one would

expect a hospital to take longer to build than an office or warehouse. Thus, for the given

size (square foot, or volume of air space enclosed), the factor would determine duration

of construction.

Another, yet related, approach to this method is to determine (estimate) duration based on

a cost factor. This method assumes that for a given type of project, the contractor can

complete a certain number of costs of work per unit of time. The most common unit of

time is the day. Similar to a productivity rate, the cost parameter would take the estimated

cost of the project times the cost factor per day to yield duration. By careful estimation,

the cost factor must roughly account for many variables such as building type, weather,

32
construction materials, location, and the other factors which affect duration. Thus, this

method will only yield a rough estimate for the project duration. When combined with a

CPM or another form of analysis, it could produce duration closer to the optimum

available for the project. There is one significant problem with a cost parameter to

determine duration. It is inflation dependent. The planner who uses this method must

keep the data current with the industry in order to make the calculations meaningful.

Unless the parameters are updated regularly, they become inaccurate. Thus, the planner

must update the information he uses in order to accurately solve the duration problem.

2.7.4 Engineering Judgment and Experience

Many of the difficulties with the previous methods can be roughly quantified in an

approach involving the designers’ judgment. This method involves the use of the

"expertise" of those familiar with the project. Design engineers and architects who have

created the design for the project are expected to use their judgment and experience to

determine the contract duration. Logically it makes sense that those most familiar with

the project should specify the contract duration. This assumption is based on the belief

that most designers are knowledgeable about construction and the methods currently

being used in the industry. That is, however, untrue. Most designers are unaware of how

the construction would be accomplished and are unable to adequately plan for it. The

danger of this method is that it relies on the experience of someone unfamiliar with the

construction procedures that will be used to produce the facility. However, a designer will

often utilize the duration of a similar project as a guide. The duration is then determined

based on how the designer sees the project proceeding. This has some major problems.

33
First, if the building is "one of a kind" or the first ever built, then perhaps the engineer has

no experience to draw upon. Secondly, just because he has numerous years of

"experience" does not mean that it is correct or is even applicable to the project he is

considering. However, many owners believe that they must rely on the experience of

designers. Designers also believe in their experience with similar projects. Unfortunately,

this reasoning entirely misses the point about determining contract durations. Experience

only provides information about what has worked in the past. It does not tell the owner

what is the optimum duration for his project or analyze the project for those items which

could be changed to reduce the duration.

2.8.0 Construction Contract Duration Determination Techniques

Contract time determination techniques generally fall into the categories of bar charts,

critical path and PERT techniques. These techniques are described below

2.8.1 Bar Charts

Bar charts are the oldest, most commonly used tools in nearly all projects and are

presented in a bar chart form (Kaming, Olomolaiye, Holt & Harris, 1997; Alex & Stephen

2013). Bar charts or Gantt charts are graphical representations of projects with specific

completion dates and activities. Bars or lines are drawn proportional to the planned

duration of each activity. A brief description of the procedure used to develop a bar chart

to determine contract time is as follows:

a. The first step in developing a bar chart is to break a project down into separate

activities or operations necessary for project completion.

34
b. Once all the activities necessary to complete a project have been listed, the

duration and completion date of each activity needs to be determined based on

production rates.

c. With this data established, the bar chart can be prepared. A line or bar is drawn on

the chart showing the time when work will be performed for each activity. The

resulting diagram will represent a project, showing when each activity will be

undertaken and completed.

d. With bar charts, the progress of a project may be monitored for each activity by

drawing a bar or line below the original scheduled performance to show the actual

duration for each activity as it is completed.

Bar charts are advantageous in that they are simple to develop and easy to understand,

and they offer a good method of determining contract duration. Some disadvantages are

that they do not show the interrelationship and inter-dependency among the various

phases of work. Bar charts are difficult to properly evaluate when construction changes

occur. Also, controlling items are shown in the same manner as minor items, thus making

it more difficult to determine which items actually control the overall time progress of the

project.

2.8.2 The critical path methods (CPM)

This involves the logical connection of activities into a network to show their

construction sequencing and dependencies. Many names have been associated with

critical path networks such as arrow diagrams, precedence diagrams and advanced

35
precedence diagrams. All of these techniques mentioned are derived from the same desire

to logically illustrate the conduct of the construction work and to determine the minimum

or optimum amount of time necessary to perform all of the work required. CPM and the

other similar networking techniques have the flexibility to solve many other scheduling

problems. However this discussion will be limited to construction problems. Originally,

networking such as CPM came about as a desire to solve scheduling problems.

Since CPM was invented to solve the scheduling problems that arose after award or start

of construction, the next logical thing was to predict the duration of a project prior to

awarding the contract. In order to use a CPM technique, arrow, precedence, or advanced

precedence, the "planner" (either the owner or the owner's agent, i.e. designer or

engineer) must break the project down into smaller activities. Some planners call these

"master activities" or major tasks. Generally, they are large sections of the work such as

masonry, concrete, electrical, site work, etc. The size of the project and the planner's

desire for detail will determine the number of master activities. Once the number of

master activities and their logical arrangement is determined, the question of how to

determine each activity’s individual duration must be addressed. This is the basic problem

with CPM. While it allows the planner great flexibility in executing the logic of the

construction, the duration of each individual activity is still unknown. This technique is

only as good as the input data. This is why it is only a scheduling technique and not

necessarily accurate as a method of determining duration. Many planners combine CPM

with some other technique such as production rates or engineering judgment and

experience to determine the activity duration.

Once each of the activity duration is known, the overall critical path can be determined by

either manually performing a forward and backward pass through the network, or

36
utilizing a computer to perform those calculations. This involves the summing of the

earliest start and finish times for each activity according to the predetermined dependency

logic. The critical path is the chain of activities with the shortest total time to complete

the project. Some problems exist with this technique. First, it is only a partial solution to

the dilemma. That is, it shows the duration only after the individual activities' duration is

known. It does nothing to help determine their duration. Secondly, the logic used by the

planner may not be the logic the successful contractor will use. Most owners leave the

actual planning and scheduling of the work to the contractor in order to utilize his

expertise with men and equipment. Thirdly, the CPM diagram will only give the planner

the number of work days required to complete the work as planned. This number may not

be (and often is not) the actual contract duration. Some method is required to convert

workdays into calendar days in order to determine the contract duration. Additionally,

unless an activity is included represent the administrative requirements of the contract; no

time will be accounted for in duration.

As can be seen from those shortcomings, CPM techniques do not necessarily make it

easy. However, they do perform a vital task of forcing the planner to consider the

elements of work in the contract. Given that framework, CPM goes a long way in

deriving a "reasonable" duration.

Advantages of using the CPM include:

 It is an accurate technique for determining contract time and verifying that the project

can be constructed as designed and with identified construction sequences;

37
 It is a useful tool for project managers in monitoring a project, especially when

dealing with relationships of work items with respect to time; and

 Activities responsible for delays can be identified and corrective measures to keep a

project on schedule can be determined.

Disadvantages of using the CPM include:

 The CPM requires experienced and knowledgeable staff to be used effectively;

 They require regular updates to assure that the contractor's operation is accurately

represented.

2.8.3 The program Evaluation Review Technique (PERT)

Complex project require a series of activities, some of which must be performed

sequentially and others that can be performed in parallel with other. This collection of

series parallel task can be modeled as network. The Program Evaluation and Review

Technique (PERT) is a network model that allows for randomness in activity completion

times. PERT was developed in the late 1950's for the U.S. Navy's Polaris project having

thousands of contractors. It has the potential to reduce both the time and cost required to

complete a project. The Network Diagram In a project, an activity is a task that must be

performed and an event is a milestone marking the completion of one or more activities.

Before an activity can begin, all of its predecessor activities must be completed. Project

network models represent activities and milestones by arcs and nodes. PERT originally

was an activity on arc network, in which the activities are represented on the lines and

38
milestones on the nodes. Over time, some people began to use PERT as an activity on

node network.

According to Sean (2002), Estimate the time required for each activity. Weeks are a

commonly used unit of time for activity completion, but any consistent unit of time can

be used. A distinguishing feature of PERT is its ability to deal with uncertainty in activity

completion times. For each activity, the model usually includes three time estimates:

 Optimistic time - the shortest time in which the activity can be completed.

 Most likely time - the completion time having the highest probability.

 Pessimistic time - the longest time that an activity may take.

From this, the expected time for each activity can be calculated using the following

weighted average:

Expected Time = (Optimistic + 4 x Most Likely + Pessimistic) / 6 …….. (6)

This helps to bias time estimates away from the unrealistically short timescales normally

assumed. An example of a PERT chart is provided below:

Figure 2.2 Network Diagram

Source: NetMBA.com, (2002)

39
2.9.0 Previous Predictive Studies on Construction Duration

Table 2.2: presents the results of previous predictive studies undertaken by several

researchers in different parts of the world.

Table 2.2: Predictive model equations


Ogunsemi & Jagboro (2006: 257)
Country of study: Nigeria
Predictive Equation: Predictive Equation: T = 118.563 – 0.401c (c > 408) or T = 603.427 *
0.610c (c >408) R2 = 0.765 (high predictive power)
Where: C is in millions of naira.
Love, Tse & Edwards (2005: 192)
Country of study: Australia
Predictive model: Log (t) = 3017.8 + 0.274 log (GFA) + o.142 log (floor)
Where: t = completion time; GFA = gross floor area, and floor = number of
floors.
Moselhi, Assam & El-Rayes (2005: 356)
Country of study: Canada and USA
Model equation: TPi = HCOi/Phi
Where: TPi = time impact of change or a period, HCOi = actual change order
hours during period i, Phi = planned hours during period i, and i =
period when change order occurs, i = 1-5.
Al-Moumani (2000: 55)
Country of study: Jordan
Model equation: Y = 82.87 + 1.0016x
Where: Y = number of days of actual construction, and X = number of days
specified in the contract.
Chan (2001: 226)
Country of study: Malaysia
Model equation: Y = 269C0.32
Where: T = time of completion, and C = project estimated cost.
Stoy, Dreier & Schacher (2007: 79)
Country of study: Germany
Model equation: Ln(y) = 4.753 + 0.0002x1 – 0.001x2

40
Where: y = construction speed (m2 gross external floor area/month); x1 =
absolute size (m2 gross external floor area), andnx2 = project standard
(building construction cost/m2 gross external floor area)
Ling, Chan, Chong & Ee (2004: 180)
Country of study: Singapore
Predictive model: Y = 145 + 0.017 Gross floor area + 133 Contractors design
capability (1) R2 = 0.93 (very high predictive power) Y = 3.462 + 0.024
gross floor area – 464 Project scope definition completion when bids are
invited – 443 Extent to which the contract period is allowed to vary
during bid evaluation – 180 Design completion when budget is fixed.(2)
R2 = 0.90 (very high predictive power).
Xiao & Proverb (2003: 326)
Country of study: Japan; UK, and USA
Model equation: Y = 5.458 + (-6.403E – 02)DELAYEDT + 0.489LIFEEMP2 +
0.172CSTIME + 0.415PSUBCON2 + (-2003E – 03)DCARATI R2 =
0.52 (good predictive power)
Where: DELAYEDT represents the typical delay on similar projects as
percentage of the original contract time; LIFEEMP2 is a dummy
variable for a commitment towards lifetime employment (one for “yes”
and zero for “no”); CSTIME represents the importance contractors
allocate to construction time to satisfy clients (on a scale of one to ten,
where one represents totally unimportant and ten very important);
PSUBCOW2 is a dummy variable for the partnering with subcontractors
(one for “yes” and zero for ”no”), and DVARIATI represents the typical
number of design Variations during construction.
Proverbs & Holt (2000: 663)
Country of study: UK
Model equation: Y = 14.439 = 13.377 (“concrete pump” transportation method) + -4.125
(“property” types of formwork) + -3.609 (productivity of erecting
formwork to floor slabs) + 1.690 (number of supervisions). R2 = 0.473
(average predictive power).
Source: Ogunsemi & Jagboro, (2006)
It is observed from Table 2.2 that researchers in each country have a distinctive predictive

model for the estimation of final completion time of projects. This cannot be separated

from the following: the construction business environment for each country differs;

sociopolitical conditions and policy of each country differ; the prevailing weather and

geo-physical conditions of regions differ, and the technological developments of

countries are different (Ayodeji, John & Winston, 2012). These key construction

performance factors have associated sub factors that influence each main factor, with a

41
consequential result on project delivery time. As a result, a particular model developed in

a country cannot be used for the estimation of project completion time in other countries

based on the foregoing argument.

2.10 Factors Determining Contract Duration of a Building Project

Sanvido et al. (1992) cited in Rohaniyati (2009), defined the success of construction

projects as the degree to which project goal and expectation are met. A building project is

completed through a combination of many events, taking place simultaneously and they

are interdependent on each other. Successful completion of a contract is not something

that can happen automatically, project management is very essential; vis-à-vis, planning,

organizing, communication, coordinating, directing, controlling and monitoring. Contract

duration means the time required completing a specified task or activity and, it is

determined by the urgency of the project (that is, the allowable time for the contractor to

complete the work). This portion of the report will examine those critical factors for

determination of contract duration.

Many researchers have given some insight into elements or factors to consider when

determining project duration. Estimating project duration require knowledge of

construction and understanding of uncertainties associated with a project (Barton, James

and Lansford 2006). From the studies reviewed as shown in Table 2, it was observed that

factors were repetitive among these authors, however, this paper further extracted and re-

casted those factors and came up with a list of twenty (36) factors for this study which

include project size, complexity of the project, project type, nature of the project,

42
construction season, political situation, legal implication, economic situation, site

condition, site accessibility, labour availability, communication channel, conflict

resolution procedures, traffic consideration, project location, adequate existing

infrastructures, work space, imposition of completion by the client, inclement weather,

permit and other regulation, availability of material locally, type of client, contractual

arrangement, foreign resource availability, previous performance of intending of

contractor, type of sub- contractor, distance between labour residence and project site,

availability of accommodation at project location, familiarity with project environment,

existing relationship between contractor and consultant, plant source, labour union, youth

unrest, contractor’s cash flow, project funding, availability of foreign workers.

Table 2.3: Factors determining contract duration


S/N Author Year Country Top Rated Factors
1 Justin 2009 Malaysia The nature of project, complexity of the project, size of the project, Technical
capability, Commitment of all parties, communication system, Identifying
critical activities, Availability of resources, Human resource training,
Monitoring and feedback by client, Project completion date specified but not
yet planned, Conflicts among team members.
2 Gondy & 2007 Virginia Effects of maintenance of traffic requirements on scheduling and the sequence
Hildreth of operations, Curing time and waiting periods between successive paving
courses or between concrete placement operations, as well as specified
embankment settlement periods, Seasonal limitations for certain items when
determining both the number of days the contractor will be able to work as well
as production rates, Conflicting operations of adjacent projects, both public and
private; Minimize annoyances in residential areas, Minimize traffic disruption
and delay in high traffic areas, Political sensitivity and public awareness,
Coordination with adjoining projects to provide usable roadway sections to
avoid conflicting operations, Inclement weather conditions, project location,
permit application processes and submittal review time, material acquisition,
utility relocation, Time of the year of the letting as well as duration of the
project.
3 Martin, 2006 United Site conditions, site access, market constraints or opportunities, complexity,
Burrows, & Kingdom availability of resource, availability of finance, design, phasing.
Pegg.
4 Barton, 2006 USA Geophysical; weather, location, environmental, Construction Operations;
James, & mobilization, materials, utility relocation, conflicting operations, traffic,
Lansford. night/weekend work, Project Characteristics; project type, dominant operations,
Economic/Legal; budget, letting time, permits, Miscellaneous; project size,
operation overlays, project urgency, community events.
5 KCA & 2003 USA Appropriate work force, is an accelerated schedule(s) appropriate, what about
KCE time restraints, incentive and disincentive clauses, time of year, weather
considerations, length of duration of project considerations, delivery of all

43
required materials or equipment and their impact on the project, owner's
completion schedule, owner's individual project requirements, site conditions,
traffic control, existing utilities, liquidated damages considerations, complexity
of the project, right of Way acquisition and work space, quality of the
construction contract documents, effectiveness of project communication
between the parties, quality of the personnel assigned to the project by the
parties, impact of environmental factors such as wetlands, cultural sites, quality
of subcontractors, ability of the parties to manage multiple construction
contracts smoothly with effective on-site cooperation, conflict resolution
procedures.
6 East, Amr 1992 USA Type of structural frame, Owner's schedule, Subsurface conditions, Type of
& John exterior cladding, Number of floors, Month construction begins, Availability of
labour, Type of foundation, volume of cut/fill, Total floor area, Quality of
labour, Location, city, Supported floor area, Exterior wall area, length of
parameter, Story height, Shape of floor plan, General quality of building, Type
of HVAC, Building volume, Finished floor area, Labour: union/non-union.
Source: Researcher Survey

These factors were ranked based on each author top rated factors and the top cited

seventeen (17) factors determine contract duration of building project by scholars with

their score are shown in table 2.4 below. This will form the basis for research design of

the study.

44
Table 2.4: Factors for Determination of Contract Duration
S/No Source Factors Determine Contract Duration

SystemEffect of Political, Legal, and Economic

Type of Contractual Arrangement


Complexity of the Project

Communication Channel

Site condition and access


Availability of resources
Availability of Labour
Date of work required

Quality of contractor
Nature of the Project
Construction Season

Inclement Weather
Type of the Project
Size of the Project

conflict resolution
Project location
Type of Client
1 Chunn (2009)
2 Gondy & Hildreth (2007)
3 Martin et al. (2006)
4 Barton et al. (2006)
5 Justin (2003)
6 East et al. (1992)
Total score 3 4 1 3 2 3 1 2 3 2 0 1 2 2 4 3 3
Source: Researcher Survey

From a ranking perspective, the factors identified by scholars as shown the important

element needed to consider for determination of contract duration.

45
CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

The success, reliability and validity of this research will be determined by the collection

and interpretation of data. This chapter explains the approaches which were adopted both

in collection, assembling and analyzing of data collected.

3.1 Area of the Study

The study covers the major areas in Akwa Ibom state, where construction industries are

more concentrated. Akwa Ibom is located in the coastal southern part of Nigeria, lying

between latitudes 4o32’E and 5o33’N and longitudes 7o25’E and 8o25’E. The state is

bordered on the east by Cross River state, on the west by Rivers state and Abia state, and

on the south by the Atlantic Ocean. It population is over 5 million people. These

concentrated areas include Uyo, Ikot Ekpene, Eket and Oron, and even a little survey in

Ikot Abasi. It covered a land area of 7,081km 2.This area is inclined by activities such as

residential, commercial, recreational etc. activities. This where our population of the

study was drawn.

3.2 Research Design

The research design refers to the overall strategy that you choose to integrate the different

components of the study in a coherent and logical way, thereby, ensuring you will

effectively address the research problem; it constitutes the blueprint for the collection,

measurement, and analysis of date. (DeVaus, 2001; Trochim, 2006).

46
This study of the research was based on a well-structured questionnaire administered to

members of the population of study. This was done in order to obtain information from

respondents for analysis purpose(s). The descriptive and analytical research method was

use in the presentation, analyzing and interpreting data collected.

3.3 Source of Data

They are basically two sources of data used for this research work and they include

primary and secondary source of data.

3.3.1 Primary Source of Data

When an investigator decided to collect the information by firsthand, then the data so

obtained are called primary data. This happens where there is no existing reliable

information. If data are collected for specific purpose and used for that purpose, then they

are primary data. These data were gotten through questionnaire, interview and personal

observation.

3.3.2 Secondary Source of Data

The secondary (documentary) source of data used during the research work includes

various written materials of related study. These materials form theoretical backbone of

the research and provide necessary information which served as guide during the course

of the research. The secondary source of data include information gotten from library,

government ministries etc. they include textbooks, periodical government gazettes,

journals and seminar papers etc.

47
3.4 Population of the Study

The population of the study consist of professionals in the construction industry both

private and public sectors. The professional are Architects, Quantity surveyors, Engineers

(Structural, Electrical, and Mechanical) and Builders. From graduate members to senior

professionals in Uyo, Akwa Ibom State. The lists of practicing consultants within the

study area were obtained from their respective professional institutions as shown below.

Table 3.1 Population Frame


NAME NIA NSE NIQS NIOB TOTAL
Nr 105 80 45 50 280
Source: Field Survey, 2015.

3.5 Sampling Size

In data collection it is often very difficult to observe the entire population especially a

large one; instead it is pertinent to interview a small portion of the entire population

which will now form the sample, in estimating the sample size a percentage of 22% out of

the population of 280. This was drawn from the list of registered members of the various

professionals in the construction industry. The simple random sampling was adopted in

the selection of respondents based on population of the study. A structured questionnaire

was used for data collection and analyzed by descriptive and analytical method. A total

sample size of sixty two (62) was used for the study.

3.6 Data Collection Instrument and Tools

The materials and information for this study were collected from both primary and

secondary data sources. The primary data collection tool used for this research was

48
questionnaire. The primary data are responses on the field while the secondary data

source used are published and unpublished literature. This information is gotten from the

reviewed literature.

Data used for the study were collected through structured questionnaire with multiple

choice scaled questions as shown in appendix ‘A’ which consist of two sections. Section

‘A’ dealt with professional’s personal profile such as academic qualification, professional

qualification, work experience in construction project et al. section ‘B’ of the

questionnaire would relate to the objectives of the study.

3.7 Method of Data Analysis

Data was analyzed from the interpretation of information obtained from the structured

questionnaire. These were used to assess the effect, degree and specified response.

Question asked required qualitative answer with rating interval of 5 – 1 e.g 5-Extremely

Significant, 4- Very Significant, 3-Moderately Significant, 2- Slightly Significant, 1-Not

Significant and 5- Very often, 4- Often, 3-Occasionally, 2- Rarely, 1- Not at all.

The factors were assessed based on the data obtained from the respondents. Method of

data analysis used was: frequency and percentage (the help in rating a number of factors

according to the degree of occurrence) and relative importance index.

3.7.1 Relative Importance Index

This index determines the relative importance of attribution of client’s organization,

which may influence project consultant’s performance. The five point scale mentioned

earlier was transformed to relative index for each factor using the ranks of different

factors and procedures. These ranking made it possible to cross-compare the relative

49
importance of these factors as perceived by the respondents. The higher the value of RII

indicates that the more important was the factor to the construction industry. Relative

Importance Index (RII) for each individual factor, using the following formula, as

adopted by Kumaraswany and Chan (1997, 1998), Assaf et al (1995) & Iyer & Jha

(2005);

Relative importance index (RII) = W ÷ (H x N) …. … …. ….. … ….. …. ….. (1)

Where W is the total weight given to each factor by the respondents, which ranges from 1

to 5 and is calculated by an addition of the various weightings given to a factor by the

entire respondent, H is the highest ranking available (i.e. 5 in this case) and N is the total

number of respondents that have answered the question.

50
CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

4.1. Introduction

This chapter focuses on the analysis of the various responses from the administered
questionnaires and deductions made from the analysis.

4.2 Analysis and Presentation of Descriptive Data

Sixty two (62) questionnaires were administered. As at the time of compiling this report,

a total of fifty one (51) usable responses were received, representing 82.26% effective

response rate.

Table 4.1 Type of Establishment


Frequency Percent
Consultancy Firm 14 27.5
Contracting Firm 17 33.3
Client Organization 20 39.2
Total 51 100.0
Source: field survey 2015
The demographic profiles of the respondents in table 4.1 above show that 39.2% were in

the Client organization, 27.5% in the Consultancy firm and 33.3% in the Contracting firm

Table 4.2 Designation of Respondent in the Establishment


Frequency Percent
Architect 16 31.4
Engineer 13 25.5
Quantity Surveyor 12 23.5
Builder 10 19.6
Total 51 100.0
Source: field survey 2015

Table 4.2 shows that out of 51 respondents, 31.4% were Architects, 25.5% were

Engineers, and 23.5% and 19.6% were Quantity surveyors and Builders respectively.

51
Table 4.3 Year of Experience of Respondent
Frequency Percent Cumulative Percent
0-5years 11 21.6 21.6
6-10years 15 29.4 51.0
11-15years 11 21.6 72.5
16-20years 8 15.7 88.2
21years and above 6 11.8 100.0
Total 51 100.0
Source: field survey 2015

Table 4.3 shows that most of the respondents possess a working experience ranging from

0-5years, 6-10years, 11-15years, 16-20years, and 21years and above. However, those in

the 6-10years category are more. This period is relatively long enough to provide a

reliable data.

Table 4.4 Number of Executed project by the Respondent


Frequency Percent Cumulative Percent
0-5 11 21.6 21.6
6-10 12 23.5 45.1
11-15 11 21.6 66.7
16-20 9 17.6 84.3
21 and above 8 15.7 100.0
Total 51 100.0
source: field survey 2015

In table 4.4, above, 21.6% of the respondents population agreed that the have executed 0-

5 projects. 23.5% and 21.6% of the same population have been involve in 6-10 and 11-15

projects respectively while the remaining of 17.6% and 15.7% respondents population

under taken 16-20 and 21 and above projects respectively. The implication is that most

of respondents have been involved in construction activities.

52
Table 4.5 Category of Registration
Frequency Percent Cumulative Percent
Federal 18 35.3 40.0
State 27 52.9 100.0
Total 45 88.2
Missing 6 11.8
Total 51 100.0
Source: field survey 2015

This table above show that 18 (35.3%) registered for federal while 27(52.9%) registered for state and

6 (11.8%) of the respondent population did not specify category of registration.

Table 4.6 Academic Qualification of Respondents


Frequency Percent Cumulative Percent
M.Sc. 15 29.4 29.4
B.Sc. 25 49.0 78.4
HND 7 13.7 92.2
PhD 4 7.8 100.0
Total 51 100.0
Source: field survey 2015

In table 4.6, above 29.4% of the population have MSC, 49% have BSC, 13.7% have

HND, and 7.8% have PHD. The implication of this is that we have respondents with

moderate management capability and this of course will affect their contributions as

detailed in table.

Table 4.7 Professional Qualification of Respondent


Frequency Percent Cumulative Percent

53
NIA 15 29.4 29.4
NSE 13 25.5 54.9
NIQS 12 23.5 78.4
NIOB 10 19.6 98.0
Others 1 2.0 100.0
Total 51 100.0
Source: field survey 2015

In table 4.7, shows above 15 (29.4%) had NIA, 13 (25.5%) has NSE, 12 (23.5%) has

NIQS, while NIOB has 10 (19.6%) and others make up of 2.0% of the professional

qualification of respondent.

Table 4.8 Identified Factors in the Determination of Construction Contract Period

54
RII Rank
st
Project Funding 0.85 1
Contractors Cash Flow 0.78 2nd
Project Size 0.77 3rd
Inclement Weather 0.76 4th
Complexity of Project 0.73 5th
Imposition of Completion by the Client 0.72 6th
Type of Client 0.71 7th
Site Condition 0.69 8th
Project Type 0.68 9th
Economic Situation 0.66 10th
Availability of Accommodation at Project Location 0.65 11th
Construction Season 0.64 12th
Existing Relationship Between Contractor and Consultants 0.63 13th
Youth Unrest 0.62 14th
Permit and Other Regulation 0.62 15th
Contractual Arrangement 0.61 16th
Site Accessibility 0.61 17th
Nature Of The Project 0.60 18th
Labour Availability 0.59 19th
Foreign Resource Availability 0.59 20th
Type of Sub Contractor 0.58 21st
Previous Performance of Prospective Contractor 0.57 22nd
Availability of Material Locally 0.57 23rd
Project Location 0.56 24th
Labour Union 0.55 25th
Legal Implication 0.55 26th
Communication Channel 0.55 27th
Plant Source 0.54 28th
Familiarity With Project Environment 0.53 29th
Distance Between Labour Residence and Project Site 0.53 30th
Political Situation 0.53 31st
Work Space 0.49 32nd
Conflict Resolution Procedures 0.48 33th
Adequate Existing Infrastructures 0.46 34th
Traffic Consideration 0.43 35th
Availability of Foreign Workers 0.39 36th
Source: field survey 2015

Table 4.8 gives the RII of the factors that are considered by practitioners as the

determinant of construction contract period. The factors have been assigned rank in

relation to their RII. The table indicates that “project funding” is considered as the most

important factor that inhibits the ability of practitioners to plan the construction contract

period of their projects with a RII of 0.85. This was followed by “contractor’s cash flow”

55
with an RII of 0.78. The other factors making up the leading top 10 factors in order of the

ranking are; “project size” (RII of 0.77), “inclement weather” (RII of 0.76), “complexity

of project” (RII of 0.73), “Imposition of Completion by the Client” (RII of 0.72), “Type

of Client” (RII of 0.71), “site condition” (RII of 0.69) “project type” (RII of 0.68) and

“economic situation” (RII of 0.66). It will be noticed that some factors have the same RII,

in a bid to determine the factor with the higher rank, the factor with the most number of

‘very important’ ranking was ranked higher, hence while for example labour union was

ranked higher that legal implication even though both have a RII of 0.55.

Table 4.9 Method of Determining Contract Duration


RII Rank
Use of planning techniques 0.76 1st
By the use of production rate 0.69 2nd
By intuition or experience 0.66 3rd
Historical data 0.62 4th
Engineering judgment 0.52 5th
Source: field survey 2015

Table 4.9 show the raking order for the methods used in determining the contract period

of the construction project based on the relative importance index (RII), result of the test

indicates that use of planning techniques was ranked first with RII of 0.76 closely

followed by the use of production rate with RII of 0.69, By intuition or experience was

ranked third with RII of 0.66, comparison with previous projects (historical data) was

fourth with RII of 0.62 and engineering judgment ranked fifth with RII of 0.52.

56
Table 4.10 Construction Contract Duration Determination Techniques
Architects Engineers Q.S Builders Total Percent
Gantt Bar Chart 7 9 9 10 35 69
Critical Path Method (CPM) 7 9 8 7 31 61
Program Evaluation And Review 6 9 6 5 26 51
Technique (PERT)
Source: field survey 2015

The most popular time planning and control technique is Gantt Bar Chart, which used by

69% of the respondents (Table 4.10). This is closely followed by critical path method

(CPM) used by 61% respondents. The reasons for the popularity of these techniques

might be due to the fact that they are the most established techniques in the industry,

though ease of use and applicability to the construction process can also be argued as

being responsible for their popularity. Other used techniques include the Program

Evaluation Review Technique (PERT).

4.3 Discussion of Result


According to the overall RII ranking based on all respondents as shown in the Table 4.8

were: (1) Project Funding (0.85), (2) Contractors Cash Flow (0.78), (3) Project Size

(0.77), (4) Inclement Weather (0.76) and Complexity of Project (0.73) are the five

significant factors that must to be considering when dealing with determination of

construction contract period. Whereas adequate existing infrastructures (0.46), traffic

consideration (0.43) and availability of foreign workers (0.39) remain the least significant

factors to be consider when planning for construction contract period. We discuss five of

the most significant factors needed in planning construction contract period of building

project.

57
4.3.1 Project Funding

The financing of a project involves the arrangement of adequate funds to pay for the

development and operation of a clearly defined project. In some cases it is also necessary

to raise finance to cover maintenance and operation. A project cannot proceed without

adequate financing, and the cost of providing adequate financing can be quite large. For

these reason, attention to project finance is an important factor to secure a proper

construction contract period of a building project.

4.3.2 Contractors Cash Flow

Chen et al (2007) stated that cash flow is the life of a business. Ability for a contractor to

determine it cash flow management system will help to know the financial capacity of

executing an item of work and the duration will be stated without time overrun.

4.3.3 Project Size

It is no surprise that a larger facility can and often does take longer to complete than a

smaller one. When planning for construction contract period consider the size of the

project will help to know floor area, activities of work involved in the executing job and

proper time will be establish.

4.3.4 Inclement Weather

Weather plays a critical role in construction projects affecting everything from safety

issues to the day to day running of your building site. Avoid time overrun, better planning

around adverse weather should be done. Forecasting should cover all the weather

58
elements which are for planning and safety including: temperature, wind speed and

direction, frost occurrence and duration, precipitation and humidity etc.

4.3.5 Complexity of Project

The ranges of complexity depend on the projects scope of work and work type. Project

complexity can be defined as a single or combination of factors that affect the standard

response/actions taken to achieve the project outcomes (Wood and Ashton 2009). The

level of impact is usually directly proportional to the amount of time to complete a

project. Project location can add to the complexity. Breaking down projects into

manageable chunks would naturally aid effective planning of time in complex projects.

According to the result of this study the method in which the contractors or consultants

used to determine is construction contract duration include; critical path method, pert, bar

chart, historical data, engineering judgment, by intuition or experience and use of

production rate or parameter. The result indicated that the Use of planning techniques was

been ranked 1st and by the use of production rate or parameter was 2 nd this entailed that

the method is essentially determined based solely on the amount of the contractors or

consultants estimate. Most of the experience personnel combine their intuitions and

experience with the production rate or parameter to develop well-defined construction

contract duration of the building project. From the table 4.9 i will conclude that no

particular method tending for determination of construction contract duration of building

project in Akwa Ibom State. I discovered that each method have to do with the ability of

respondent to use it.

59
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Introduction

This chapter summarizes the procedure used in the study, the problems encountered in the

course of carrying the study, the recommendation made by the researcher, the area of

interest suggested for further studies as well as conclusion draw.

5.2 Summary of study

The research was carried out with the aim of examining the factors for the determination

of contract period and the method or trend which is commonly used by consultants or

contractors in Akwa Ibom State for the determination of construction contract duration of

building projects. Questionnaire was used to collect data for the study (16 from

Architects, 13 from Engineers, 12 from Quantity Surveyors and 10 from Builders

responded the questionnaire forms). Thirty six (36) project factors in determining of

construction contract period were identified through detailed literature review and the

factors were being identified in the questionnaire.

The study shows that the significant factors in determine construction contract period of

building projects are; project funding, contractor’s cash flow, project size, inclement

weather, complexity of project and imposition of completion by the client. And from the

method use in determination of your construction contract duration are; use of planning

techniques, by the use of production rate or parameter, by intuition or experience,

historical data and engineering judgment.

60
5.3 Conclusion

This study focused on the factors, method and techniques of determination of

construction contract period by consultants or contractor in Akwa Ibom State. The study

revealed project funding is the most significant factor out the 36 factors that was been

established in determining of construction contract period.

5.4 Problem Encountered in the Study

In the case of carrying out this research, the researcher experienced some challenges.

These challenges were:

i. The major problem of this study was the reluctance of some of the respondents in

finding time to complete and return the questionnaires even after persuading them

to do so.

ii. The time allowed for the research work was inadequate.

5.5 Recommendations

The following recommendations are deduced from this study:

i. Much focus should be placed on the major factors in determine construction

contract time in order to reduce the time overrun, enhance construction

performance and generate confidence within the construction industry.

ii. Clients should clearly identify their requirements and needs, whether they are

able to achieve them within the time frame in order to reduce delay problems.

iii. All parties need to understand the ramifications of the decisions in regard to

construction contract time.

61
iv. Adjust the construction contract time either prior to bid or by addendum when it

is in the best interest of all parties.

v. Contractors should come up with a clear plan and strategy before starting a

project. Early project planning and scheduling of time, equipment and cash,

combined with a good bidding strategy, will help to obtain efficient work within a

time frame.

vi. Effective contract documents need to be in force which covers such issues as

changes, conflict resolution and coordination.

vii. Each project should have established lines of communication between the owner,

consultants and contractor for a cohesive working relationship.

5.6 Area for Further Studies

For further studies, the following areas have been suggested

i. Developing a conceptual model for the determination of contract duration of

building project

ii. Insight on scheduling of construction activities

62
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