The Development and Comparative Analysis of Engineering Project Management Modes

doi:10.15302/J-FEM-2015060

Front. Eng

2015, Vol. 2

Issue (4) : 351-358 https://doi.org/10.15302/J-FEM-2015060

Engineering Management Theories and Methodologies

The Development and Comparative Analysis of Engineering Project Management Modes

Ji-wei Zhu^1,^*(

),Li-nan Zhou¹,Ming-yuan Yu¹,Zhao Zhai²

1. School of Civil Engineering and Architecture, Xi’an University of Technology, Xi’an, 710048, China
2. Research Institute of Complex Engineering&Management, Tongji University, Shanghai, 200092, China

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Abstract

Engineering project management is the whole process of project construction management activities up to the point of achieving the goals of engineering construction, which adopts the means of planning, organizing, leading, and controlling. In addition, engineering project management modes are the works of project management and the technical guarantee of project success. For the quality and efficient transformation demands of the Chinese construction industry in the process of marketization, internationalization and informatization, based on the connotation and development path of engineering project management modes, the 16 main and new kinds of project management modes both domestically and abroad are divided into trading mode, financing mode and management mode. These have led to comparative analysis and brief commentary. Finally, it will be pointed out that the engineering project management modes move throughout the whole management process, the combined model and the expansion development of financing model. This work will provide reference for project participants to choose the appropriate project management modes and better understand building company transformation.

Keywords engineering projects management mode comparative analysis development trend

Corresponding Author(s): Ji-wei Zhu

Online First Date: 15 March 2016 Issue Date: 31 March 2016

Cite this article:

Ji-wei Zhu,Li-nan Zhou,Ming-yuan Yu, et al. The Development and Comparative Analysis of Engineering Project Management Modes[J]. Front. Eng, 2015, 2(4): 351-358.

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https://academic.hep.com.cn/fem/EN/10.15302/J-FEM-2015060
https://academic.hep.com.cn/fem/EN/Y2015/V2/I4/351

Comparison	Modes
DBB	DB	EPC	NC	Partnering
Connotation	Design-bid-build	Design-build	Engineering-procurement-construction	Novation-contract-pattern	The partnership model
Main characteristics	Strict accordance with the sequence of design, bidding, and construction, and the next stage after the completion of a stage	Owner signs a design-construction contract with a big project management contractor instead of bidding	General contractor is responsible for the design, procurement, construction, and orderly crossover	Design agency designs 30?80% of the project, then the owner chooses contractors to take the outstanding design and construction	Voluntary, the sharing of the information exploitation, improves the relationship between the various project participants
Contract mode	Unit price contract	Lump sum contract	Lump sum contract	Tend to be lump sum contracts	The partnership agreement
Contractor risk	Only responsible for their own risk	The contractor has high risk of design	The contractor has risk of design, purchase, construction	The construction and design risk of themselves part	The owner and the contractor take a risk together
Contractor’s scope of work	The contractor carries on projects in their own field	Responsible for design and construction work according to the contract	Management of the whole process from planning to the trial operation	Part of the design and construction work	Agreement agreed scope of work
Degree of clearly-determined responsibility	Small	Big	Big	Middle
Involvement degree of the owner	The owner chooses consulting, design, and supervision by themselves. High involvement	The owner manages general contractor. Low involvement in design and construction	The owner focuses on the completion acceptance. Low involvement	The owner deeply involved in the early design stage, but the opposite is the case later	The owner cooperates with the contractor. High involvement
Imperfection of the mode	Long construction period and the “construction” of design is inferior	Low design control of owner, complex delivery operation	The owner controls the project ineffectively, The general contractor’s risk is too big	Responsibility and risk allocation should be carefully considered in the novation of design contract	It cannot exist alone. Subjective factors lead to transfer of interest more easily
Scope of application	Smaller and simple projects	Projects which are smaller and have mature technology	Projects which are big scale and difficult to manage, lots of purchasing work	Big projects which have clear technical and performance standards	Suitable for owners with a long-term investment and more complex projects

Tab.1 Characteristic Contrast of Typical Trading Modes

Comparison	Modes
BOT	BT	TOT	PFI	ABS	PPP
Connotation	Build-operate-transfer	Build-transfer	Transfer-operate-transfer	Private-finance-initiative	Asset-backed-securitization	Public-private-partnership
Main characteristics	The terminable infrastructure management right is mortgaged to get project financing	The owner pays the total investment and a reasonable return through operating project investors hand over	Private investors operate the public facilities which have been put into operation for incremental assets	The financing mode that government purchases services from the private sectors	Issuing bonds to raise funds according to the guarantee of anticipated return	The public sector and private enterprise cooperation in infrastructure construction
Contract mode	The franchise right contract	The agreement of BT	The franchise right contract	The public service contract	The contract of transfer project future earnings	The franchise right contract
Source of funding	The rights and interests of investors and debt investors	Investors financing from financial institutions	Private investors (operators)	All come from the private sector or investment together with the government	Issuing bonds to raise money in the capital market	Public and private organize a company to raise capital and loans
Project ownership and management rights	Private enterprises have project ownership and management rights during the charter period	The government has the ownership of the project, transfers financing, construction rights to investors	Private companies have all or part of the management of the property rights in the charter period	The government has the ownership of the project, the private sector only has construction and management rights	Chartered trust only owns the property of project assets within the bond duration	Private enterprises have project ownership and management rights during the charter period
The recovery system of capital	Getting the indirect economic benefit and social benefit through the project construction and operation	Investors get the total project investment returns according to repurchase agreements	Investors get the future years revenues through operation of projects	Recycling costs through charging fees form project user within the contract period	Using the project construction, management and future earnings to recovery capital	In addition to direct income, the government also give preference to the preferential tax, land rights and other compensation
Project risk	The high risk of investment recovery	The high risk of government debt repayment	Do not have construction phase risk	The high risk of too many participants	The least risk because of protection policy of ratings downgrades	The government transfer part of the risk to private enterprises
Scope of application	The public infrastructure with a large investment and long period	The projects of non-operating government infrastructure	The stock facilities which have compensation mechanism of charge	The urban public infrastructure which have greater investment and profitability of operation	The infrastructure, public exploitation projects that future earnings and cash flow are foreseeable	The urban infrastructures and public services, especially the large one-time items

Tab.2 Characteristic Contrast of Typical Financing Modes

Comparison	Entrusted management mode						The construction mode
Agency CM mode	Risk-based CM mode	PMC	DM	PC	Agent construction
Connotation	Construction-Management			Project-Management-Contract	Design-Management	Project-controlling	Agent construction
Main characteristics	The design is divided into several parts, when a part is completed, the tender starts, and then construction begins. It effectively shortens construction period			The owner is only responsible for the macroeconomic regulation and control, does not do the specific management	The same entity (DM company) provides the owner with design and construction management services	The contractor provides decision support for large, complex projects through modern technology	This mode separates “investment, construction, use and management” to avoid corruption.
Contract mode	Cost plus compensation contract			Total price contract	Unit price contract		Entrusted construction contract
Management institutions	Experience in the construction of CM units			The PM company has the corresponding qualifications, experience	With design and management of qualification units of DM	Master of modern information technology PC unit	Specialized construction unit
Scope of control	Provide advice at design and approval stage and supervision at construction stage for the owner			Starting from the early stage of the project planning, providing the whole process of management	The design and construction management services	Provide decision support and the integrated management services for owner in the process of implementation	Provide whole process or management services in stages
Relationships between contractor and other participants	CM unit is only responsible for coordinating management, does not sign contracts with other contractors	CM unit signs a contract with other contractors who are responsible for protocol management	PMC contractor coordinates and manages other participants on behalf of owner	DM company is responsible for managing the design, supply, and other units and signs the contracts with them	PC company has no right to give an instruction and directly manage other participants	Construction unit signs contracts with the contractors of design, procurement, supervision, etc. as a project management corporation
Scope of application	The projects which request to start as soon as possible, construction schedule is tight, engineering change is higher and the price cannot be accurate			The projects with large scale investment and complex technology	The projects whose owner has poor independent management ability	The super large projects which have complicated works and more important decision problems	The non-operating projects which are on direct fiscal investment

Tab.3 Characteristic Contrast of Typical Management Modes

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