TENTA Flashcards
Spell out the acronym DBB
Design-Bid-Build
Briefly state the main characteristics of the DBB-method.
Design completed before procuring contractors, client procures design consultants and is responsible for design. Fixed price contracts and lowest price common.
3 strengths of the DBB-method?
Certainty of costs and specified performance, clear accountability, competitive prices, opportunity to combine best design and contracting skills, well-tested contracting method, lower tendering costs, lower risk premium, more contractors can tender.
3 weaknesses of the DBB-method?
Guarded and sometimes adversarial relationships, longer time than for DB since design has to be completed before contractors are procured, poor integration of design and construction competence, split responsibilities.
What characteristics should a project have for the DBB-method to be suitable?
Design is important to the client, not many changes to design expected during construction, time not too important, (enough competition).
Give an example of a project that has suitable characteristics for a DBB-contract?
New construction of building of high design importance - theatre, concert hall, museum, (hotels, high profile office buildings).
Although the project itself may be suitable for the DBB-method, there may be other causes that make the client choose another method. Give one example of one such cause.
Market situation, contractor competence, client competence, resources and willingness to assume risk, client contracting policy.
In psychology, two different types of motivation have been identified. Which are these?
Intrinsic and extrinsic motivation.
Incentives do not always have favorable effects on performance. What kinds of negative effects may occur and why?
Incentives fail to target all important areas - agents focus on what’s measured and rewarded only. Crowding out of intrinsic motivation - if incentives signal that the agent’s own motivation to try their best is not respected. Incentives are too week to impact on behavior.
Which are the three stages of risk management, seen as a process?
Identification, analysis, response.
How do you estimate the expected monetary value of a risk (give the formula and explain it)?
[Risk exposure=] Impact x Probability
Which principle would you follow in order to allocate a major project risk to the client, the structural engineer consultant, or to the contractor?
You should bear the risk if it is in your control, you can transfer it by insurance, you benefit from running the risk, it is more efficient or if the risk eventuates, impracticable to transfer loss to another.
What is the name of the economic theory (approach) that is used for studying why firms choose contracting or not?
Transaction cost approach (or similar).
What is meant by an ‘hierarchical’ relation in construction?
Command relation, not a market relation or inside a firm.
Explain what Winch calls ‘professional governance’ in construction projects.
Separate purchase of design reduces opportunism, standardized intangibility of service, redress for poor performance, liability unlimited and personal, high trust relation.
What is meant by a quasi-firm relationship?
Trade subcontractors are offered repeat contracts based on satisfactory performance or a relation intermediate/hybrid between market and hierarchy.
Who receives the concession? Draw an organizational structure for a typical project and explain who-does-what in the project.
Promoters, or special purpose vehicle, or concession company; Joint venture or consortium.
When first introduces in the UK, these concession projects belonged to PFI. What does PFI stand for?
Private Financing Initiative.
Is it really a good idea that all project risks are transfered by the government to a concessionaire? Explain your answer.
No. There has been insufficient transparency on the future liabilities created by PFI projects to the taxpayer and on the returns made by investors. Inappropriate risks have been transferred to the private sector resulting in a higher risk premium being charged to the public sector.
What does cognitive heuristics mean?
Anchoring, availability and representativeness/reputation/fairness.
What does naive realism mean?
Fixed-pie assumption, overconfidence, confirmatory information search.
What does ego defensiveness mean?
The tendency to view oneself as better and more cooperative than average, including one’s counterpart, hampers conflict resolution.
