Alternative Quality Management Systems for Highway Construction (2015)

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CHAPTER 1 : INTRODUCTION 1.1 Introduction This research project is focused on the identification, understanding, and dissemination of alternative QMSs being applied in the highway industry throughout the United States. Innovations in QAO and other features of quality programs are being used by state departments of transportation across the country on projects using both traditional DBB delivery and alternative delivery methods as well. The need for this research is partially a consequence of both the growing use of alternative project delivery and the need for a better definition of quality management in the context of alternative project delivery. Changes in the roles of owners and contractors in QMS are occurring. These changes are leading to varying QAO, which range from the agency-dominated system of quality management associated with the traditional DBB method to PPP agreements where the responsibility for quality management is shared to varying degrees between the contractor and owner. One of the attractions of projects using alternative delivery methods like these is the transfer from the owner to other parties of some project responsibilities, which may include design, finance, and/or quality management. These alternatives may result in substantial savings to the owner, which have proven to be efficient and effective in many types of construction and are increasingly making inroads into the highway construction industry. In order to be considered for use, all projects using alternative quality management methods must be delivered with at least the same standard and level of performance that is found in the baseline method. In traditional DBB contracting in the transportation industry, decades of quality assurance (QA) and quality control (QC) experience provide a wealth of knowledge and standard practices that are readily accessible and widely accepted for assuring quality on infrastructure projects. For projects using alternative QMS (whether modifications of the baseline method or projects with alternative delivery methods) on the other hand, there exists a limited, but rapidly expanding, body of experience associated with assuring quality. The purpose of this research is to bring together this relatively new body of experience and summarize it in one easily accessible reference treating the subject of quality management in alternative projects. To that end, this report represents the first step in developing such a reference. The purpose of this report is to summarize the work and findings of the research effort of the project. This first chapter of the report opens with the research problem as a whole including its problem statement, goals, and primary questions. It then introduces the specific tasks performed to complete the project and the workflow used to accomplish those tasks. Finally, it closes with a guide to the rest of this report, mapping each task with the material in this report that supports it. 2

1.2 Problem Statement Quality management systems in the United States transportation industry are evolving. This is due in part to experimentation with changes to the baseline QMS and in part to accommodate the needs of alternative delivery methods, which are being used more frequently. These methods include DB, CMGC, and PPP and their use is becoming more prevalent, particularly on larger and higher profile rapid renewal projects. However, these alternative QMS are being applied on a project-by-project basis due to the lack of national guidance to promote standard approaches. For highway agencies, this lack of guidance is resulting in significant investment to develop individual programs and is minimizing the ability to capture and utilize knowledge across agencies. For consulting engineers and contractors, this lack of guidance is resulting in significant investment in response to project solicitations which require unique QMS for different agencies. The speed at which rapid renewal projects must be delivered creates a demand for a well-defined QMS that can be successfully replicated on a variety of projects. QMS guidelines on a national level will promote efficiency and allow for the transfer of knowledge to continuously improve these systems. 1.3 Research Objectives and Tasks The objective of this research is to address the needs for QMS guidance for evolving alternative project delivery methods. The following research objectives have been established for this: 1) Identify and understand alternative QMS; and 2) Develop guidelines for their use in highway construction projects. The successful accomplishment of these objectives will yield a Quality Management Organization that can apply to adaptive project delivery approaches. The products from this research study include: 1. A Guidebook to match appropriate QMS to alternative delivery methods; 2. A research report that addresses implications of adopting the guidelines and barriers to implementation. The main objectives will be addressed through a focus on the following questions and sub- objectives: 1. What is the fundamental definition of quality and what is the underlying purpose of a “quality program”? Document and discuss the underlying motivation for quality management through a fundamental exploration of literature describing quality programs in a variety of industries (e.g., transportation, process industry, aerospace and automotive). 3

2. How are projects using alternative delivery methods currently applying QMS? Document practices as found in quality management literature, surveys and case studies. 3. What are the advantages and disadvantages to the contractor and the owner of alternative QMS relating to various project delivery alternatives? Analyze the benefits and challenges of the alternative QMS through rigorous and scientific case study means and develop a selection model for matching these systems to alternative project delivery methods. 4. What changes must be made to the baseline QMS to adapt to evolving project delivery methods? Provide agencies with a roadmap of changes to the baseline QMS to accommodate alternative delivery methods and improve the efficiency and effectiveness of the overall delivery system and end product. The research team focused on these four research questions and sub-objectives of the research project to insure that the main objectives are successfully achieved. 1.4 Research Framework In order to fully answer each of the four primary research questions, the research team developed a roadmap indicating how work would proceed from a state-of-practice review to a Guidebook detailing practices for alternative QMS. This roadmap, shown in Figure 1-1, maps the progress of the project from an understanding of baseline quality theory at the start of Phase 1, to the development of a catalogue of common practices for alternative QMS at the conclusion of Phase II. One of the key deliverables for this research project is a Guidebook which disseminates information related to alternative QMS. As a result, research questions 2 and 3 are the primary questions to be answered in the course of this research project. However, care must be taken to answer these questions in a justifiable and rigorous manner. To that end, the research team has developed a research framework that will ensure both questions are answered thoroughly through the case studies and research of this project as a whole. The case studies conducted by the team were the primary sources of information to answer research questions 2 and 3. These case studies are in-depth studies of exemplary transportation projects using alternative methods of quality management. They were conducted on a wide variety of projects of many different sizes, locations and owners, and used information gathered through interviews, participant questionnaires and document analysis. 4

Phase I – Quality Management Theory about Practice From Baseline Quality Management Theory To Integrated Quality Management Theory Fundamental understanding of quality definitions and the purpose of quality Coding of alternative delivery, procurement, and contracting approaches Defining the current state of practice in alternative quality management approaches Describing the advantages and disadvantages of the alternative quality management models in comparison with the baseline Documenting the Quality Management Organization Phase II – Quality Management Theory for Practice From Integrated Quality Management Theory To Integrated Quality Management Practice Documenting the Quality Management Organization Creating the “business” case and key messages for upper management Mapping a path from the baseline to the quality assurance organizations for program management Decision support for quality management organization selection with innovative project delivery for project management Cataloging common practices for project engineers Figure 1-1 –Project “Roadmap” The QAO, shown in Figure 1-2, is a model that could adequately describe the quality management system used for every type of project delivery. The model acts as a framework to structure the analysis of other alternative project delivery quality systems that are common in highway construction and was used in that manner throughout this project. The boxed area represents the universe of QA requirements that exist during both the design and construction phases of a highway project. In this form, it makes no specific assignment of QC and quality acceptance roles and responsibilities between the owner, the designer and the constructor. The owner is free to make QC and quality acceptance assignments to whichever entity is best suited to carry them out in a satisfactory manner. The QAO model shows that no matter who actually performs the classic design and construction review, inspection, or testing tasks, at some point, the owner must make a business decision as to accept or not accept the completed design product and the finished construction product. In the case of design, this decision is indicated when the owner agrees to allow the completed construction documents to be “released for construction.” In construction, this decision is indicated when the owner agrees to make final payment, and when both these decision have been made, the highway project is accepted. 5

QAO Tools and Procedures QMS Figure 1-2 – Quality Assurance Organization (QAO) Framework 1.5 Task Descriptions To answer the four primary research questions, the team has completed the following nine tasks. Figure 1-3, Figure 1-4, and Figure 1-5 show the flow of work from Task 1 to Task 9 with key research products along the way shown in the bold lines. Phase I  Task 1 – Evaluate State of the Practice (see Chapter 2) The primary focus of Task 1 was establishing the state of practice regarding alternative QMS. This was achieved using a two phase approach. First, a comprehensive literature review was conducted that established the characteristics of baseline QMS and explored what literature existed to characterize alternative QMS. Second, the information gleaned from the literature review was used to structure an online survey to establish the current state of practice of alternative QMS among various transportation agencies and owners.  Task 2 – Documentation of Alternative QMS Approaches (see Chapters 2 and 3) The main goal of Task 2 was to establish a consistent coding structure for use throughout this research project. The structure was to be used to organize the case study protocol and to analyze the results of the literature review, survey, and case studies. 6

Figure 1-3 – Work Flow Tasks 1 to 3  Task 3 – Case Studies and Content Analysis (see Chapter 4) Task 3 focused on both gathering case study data and analyzing it in the light of existing models. To do this, a case study protocol was created to maintain consistency between case studies across the project team. After conducting the case study interviews and gathering the relevant documents, a thorough content analysis was performed to discover trends and usable indicators among the case studies. Transportation Agency Survey Industry Advisory Board Coding Structure Input Potential Case Study Project Identification Task 2 Documentation of Alternative QM System Approach Catalog/Correlate by Project Delivery Method Alternative QM Implementation Strategies Alternative QM Practices Tabulation Alternative QM Common Lessons Learned Synthesize US and International Literature Review Output International Literature & Project Documents US Literature & Project Documents Alternative QM Case Study Selection Distill and correlate output from Literature Review and Survey to create state-of-the-practice baseline Possible Alternative QM Practices Possible Lessons Learned Synthesize by categories of successful outcomes including, but are not limited to: managerial, engineering, QM policy, QM contract clauses, and QM workforce challenges associated with alternative project delivery Go to Next Page Task 1 Evaluate State of the Practice Task 3 Case Studies and Content Analysis 7

Figure 1-4 – Work Flow Tasks 3 to 6  Task 4 – Critical Analysis of Alternative QM Systems (see Chapter 4) The objective of Task 4 was to perform a critical analysis of the QMS approaches discovered in Tasks 1-3 and form conclusions on the use of these systems for alternative project delivery methods. The analysis took into account both the advantages and disadvantages of each system from the agency’s and the designer’s/ constructor’s points of view and used the QAO framework to organize and compare systems.  Task 5 – Comparison to Baseline QM Systems (see Chapter 4) Case Study Document Review Structured Interviews Agencies Structured Interviews Consultants Structured Interviews Contractors Synthesize and Categorize Raw Data for Analysis Task 3 Case Studies & Content Analysis Task 4 Critical Analysis of Alternative QM Systems Go to Next Page Revise in accordance with panel comments Advisory Panel Initial Review & Comment Satisfactory Synthesis by Research Team Pattern Matching from Case Studies Validation and Calibration by Industry Advisory Board Alternative QM Practice Categories: consistency, productivity, costs, risk management, etc. Task 6 Interim Report Unsatisfactory Task 5 Comparison to Baseline QM Systems 8

Task 5 focused on comparing alternative QMS to the baseline QMS. The task was performed concurrently and tracked closely with the analysis of Task 4 on this project. The QAO framework was used to compare each alternate model to the baseline model to identify key differences, paying special attention to design quality management, an area typically lacking in the baseline model.  Task 6 – Interim Report The main goal of Task 6 was to summarize the work, results, and findings from Tasks 1 to 5 in an Interim Report. Phase II  Task 7 – Develop Guidebook Task 7 was devoted to the development of one of the key deliverables of the research project, the Guidebook. The Guidebook has a wide audience and describes the business case for making the change, discusses the barriers to making the change, provides a tool for selecting appropriate systems, and provides tools for implementation. Due to its large scope and varied audience, the Guidebook only offers guidance, not specific instructions for direct implementation. The guidebook does provide a selection process for determining the proper QAO, which was tested, calibrated, and validated using the Delphi method.  Task 8 – Incremental Improvement of Baseline Systems The goal of Task 8 was to suggest and document incremental improvements to the baseline QMS. The research methods employed in Tasks 1 through 7 support this goal. The outcome of this task is included as a subsection in the Guidebook.  Task 9 – Prepare and Submit Final Reports The main goal of Task 9 was to finalize the Guidebook and prepare the final report, the key deliverables for this project. The Guidebook is expected to be published by NCHRP for use by highway agencies and industry professionals. This report includes most of the project documents including the literature review, state of practice survey, case study protocol, case study summaries, the Guidebook, and any other relevant documents. 9

Figure 1-5 – Work Flow Tasks 7 to 9 1.6 Report Format The Final Report records the activity from the all nine tasks and is broken into six chapters and 13 appendices. The work from Tasks 1-9 is incorporated throughout the various chapters of the report. 10

 Chapter 1, this introduction, provides a brief background for the research project and functions as a guide to the rest of the report.  Chapter 2 is focused on establishing and documenting the current state of practice for alternative QMS. Work from Tasks 1 and 2, the literature review, industry survey, and coding structure is contained in this chapter.  Chapter 3 presents a series of common quality management models which were identified and developed in part through the completion of Tasks 1 and 2.  Chapter 4 is devoted to the case studies which provide much of the material for Tasks 4 – 9. This chapter represents the work of Tasks 3 – 5 and contains brief summaries of each case study conducted (the full summaries are contained in the appendices). Each summary includes basic project information in addition to an analysis of each case study in terms of the QAO model, a comparison to the baseline system, and relevant findings and observations.  Chapter 5 discusses the QAO and tool selection procedures. It provides a background on the methodology, data and validation of the selection procedures. The procedures themselves can be found in the accompanying guidebook.  Chapter 6 includes the conclusions, limitations and future research. It summarizes the main findings. It discusses the research limitations that were encountered due to the nature of the research question and resources available. It also provides a brief discussion of future research topics that stem from this work.  Appendix A contains definitions for this report.  Appendix B contains the online survey used in Task 1.  Appendix C contains the case study protocol used in Task 3.  Appendices D – M are full-length summaries of each case study that was conducted to complete this research. 11