Project Benchmarking: Tool for Mitigating Conflicts, Claims, and Disputes through Improved Performance

Abstract

The construction industry significantly contributes to the U.S. economy. However, this important industry is negatively affected with many challenges including safety issues, design errors, delay, and changes. To this end, performance measurement has become a commonly used tool for evaluating processes, managing human resources, and formulating corrective strategies. One of the most important aspects of performance measurement is the ability to perform benchmarking. Using case studies of projects carried out by the U.S. Army Corps of Engineers (USACE) in its Vicksburg District, this paper investigates how benchmarking can be used to evaluate and measure performance of the associated contractors, and thus mitigate conflicts, claims, and disputes. The utilized methodology encompassed three interdependent steps in which the writers: (1) collected project data for 40 contractors who performed work for USACE using file reviews for submittals, requests for informations (RFIs), claims, progress reports, and internal evaluation forms by the associated senior project managers; (2) defined the associated performance measures; and (3) analyzed the results to identify areas in which contractors needed to improve performance. The writers utilized five performance measures including quality control, timely performance, and effectiveness of management, compliance with labor standards, and compliance with safety standards. These measures were applied on a five-point rating system and categorized by using three characteristic groups, including use of subcontractors, contract modifications, and final contract price. It was shown that contractors who had higher performance measures did actually have fewer contractual and legal problems—either during construction or after completion—than those with lower ratings. Also, contractors with an outstanding rating in one area never had a contractual and legal problem in that area. This research supports the effectiveness of benchmarking as a tool to promote changes within the construction industry based on knowing strengths and weaknesses. The findings should better help contractors and owners complete their projects on time, more safely, and with fewer errors and changes.