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ASC Proceedings of the 41st Annual Conference
University of Cincinnati - Cincinnati, Ohio
April 6 - 9, 2005         
 
The Ramifications of Quality Assurance/ Quality Control
 
Vanessa Canori, Kenneth Sullivan, Ph.D., Dean Kashiwagi, Ph.D., P.E., and Marie Kashiwagi
Performance Based Studies Research Group
Arizona State University
Tempe, AZ
 
Jacob Kovel, Ph.D.
Central Connecticut State University
Hartford, CT
 
Construction and Project Management are two ways clients have protected themselves from construction nonperformance.  However, in the last ten years the Performance Based Studies Research Group (PBSRG) has investigated the ramifications of the client’s professional representatives reviewing/inspecting the contractor’s work for compliance.  Even though there is disagreement on liability, the authors propose that based on results in other industries, a contractor’s quality control program is the most efficient method to minimize construction nonperformance.  The authors propose, based on research results where contractors are forced to do quality control and the client’s inspections are limited, quality control/quality assurance should replace the client’s management and inspection program.  This paper introduces the theoretical concepts of QC/QA from the manufacturing sector, and uses the Construction Industry Structure (CIS) concept to define the differentials between QC/QA and management/inspection.  The paper then introduces a case study where these concepts are currently being assessed in terms of time and cost. 
 
Key Words: Quality control, Quality assurance, performance based
 
 
Introduction
 
Quality Control (QC) and Just-In-Time (JIT) practices were espoused by Deming and introduced by Toyota Car Manufacturers in Japan (Deming, 1982).  Both practices were the result of the minimization of inventory of finished parts on the manufacturing floor by the manufacturer.  Figure 1 (Kashiwagi, 2004) shows a main manufacturing line with sublines and suppliers supplying parts to the subline.  If the supplier does not show up in time, the parts are pulled from inventory.  When the supplier arrives, the inventory is restocked.  When Toyota minimized the inventory, the supplier was forced to arrive JIT.  The impact of the minimization of the inventories is even greater on the subline manager.  With minimal inventory, the subline cannot be shut down without the entire plant being shut down.  The subline supervisor must now be able to identify differentials in the finished parts.  If a part is not optimal, there is a possibility that there is something wrong with the subline.  The supervisor or the line team members must identify what is wrong as soon as possible.  The subline workers must now identify, prioritize, and know how to minimize the risk of breakdowns before they occur.  This is called quality control.  The manufacturing plant workers did not do quality control until they were at “risk.”  When the plant workers are at risk, they will do their best to implement QC/QA before breakdowns occur. 
 
Figure 1: Manufacturing Plant Production Line
 
With production workers doing quality control, the end-of-the-line inspectors’ function was greatly reduced.  The process was more efficient and resulted in higher performance.  This can be modeled for construction application using the Construction Industry Structure (CIS) concept (Figure 2).  The client minimizes the risk in the price based environment through management and inspection.  The contractor minimizes risk in the best value environment through quality control.  The client hires the technical expertise to minimize the risk in the price based environment.  The contractor uses their expertise and quality control to minimize risk in the best value environment.  In the price based environment the client is at risk.  In the best value environment, the contractor is at risk. 
 
Figure 2: Construction Industry Structure (CIS) (Kashiwagi 2004)
 
In Quadrant I, any contractor can submit a bid, regardless of their capability to minimize risk.  Since the client’s technical representative is minimizing the risk, it is not a requirement for the contractor to be able to minimize risk.  It is critical for the contractor to be able to follow the specifications of the professional.  In Quadrant II, contractors are competing based on their capability to minimize risk.  The best value is the contractor who can prove past performance, and prove that they can minimize the future risk by identifying and prioritizing the future risk.  It is more efficient if the participant at risk (the contractor) minimizes the risk through quality control.  On an assembly line, the lack of quality control may shut down a manufacturing plant.  It is not as definable in construction.  There are several problems in implementing QC/QA in the construction industry. 
 
The first problem is that the majority of the construction industry is in the price based environment.  The requirements are in terms of subjective minimums which have no correlation with performance.  The price based award motivates contractors to minimize price and performance and maximize the risk (Figure 3).  If a contractor is maximizing risk, they cannot at the same time minimize the risk.  Therefore the client’s professional representative and the contractor are in the mode of management, inspection and maximizing risk.  Contractors are therefore not skilled in performing quality control.  This was clearly demonstrated at the University of Hawaii, where the painting contractors were forced to do their own quality control.  All the contractors were trained and certified.  However, when faced with doing the quality control, they turned to the union trainer and requested retraining or that the training personnel do the quality control.  This was because the owner was not managing and inspecting, and they did not know how to do the quality control.  When contractors are in the low price environment, quality control training is not effective (Kashiwagi, 2003). 
 
Figure 3:   Low Bid Maximizes Risk
 
The second problem is that some of the client’s technical representatives do not understand QC/QA.  Quality control is ensuring performance through technical knowledge of the contractor.  Therefore, by definition, Quality Assurance is non technical.  It is simply checking to see if the contractor has done their quality control.  However, the majority of QA inspectors are technically based engineers who do not understand that their function does not require any technical expertise.  Once the QA inspector makes technical decisions, they are back in the price based environment where the client’s professional representative is minimizing risk through technical management and inspection.  In moving from a management and inspection function to a QA function, the need for technical knowledge is minimized, making engineers very uncomfortable.  Theoretically, the engineers are no longer needed by the client, and should be working for the contractor.  This trend is feared by professionals who view contractors as nonprofessional.       
 
The third problem, where the client is specifying and directing the QC/QA, is a result of the engineers and designers being technically oriented and feeling responsible to minimize the construction risk.  Some clients create the QC/QA program for their project (State of Washington, 2005).  They identify the risks and define how to minimize the risks.  They then force the contractor to do the specified QC/QA program.  In doing this the client makes the decisions, directs the contractor on the means and methods, and is required to inspect the contractor to ensure that the QC/QA is completed.  The inspection transfers some of the risk back to the client, and forces the client to ensure that the contractor has minimized the risk.  The most successful documentation of implementations of a QC/QA program is when the client identifies the requirement (through specification or performance requirement,) and allows the contractors to compete based on past performance, and the ability to identify, prioritize, and minimize risk.  This has been accomplished through ten years of testing (380 tests) of the Performance Information Procurement System (PIPS) (Kashiwagi, 2004). 
 
PIPS is a best value process which requires the contractors to submit a risk minimization plan which identifies, prioritizes, and minimizes risk to the project not being on time, on budget, or not meeting the expectations of the client.  The risk minimization plan, along with risks identified by other contractors bidding on the project, became the source of the contractor’s quality control plan.  The contractor creates the quality control plan.  It must meet the technical requirements of the specification.  The quality control plan also includes a quality assurance plan on how the contractor is ensuring that they are implementing the quality control plan.  The most effective quality assurance plan is a non-technical checklist or form that the contractor and the QA inspector can quickly assess if the contractor is in compliance with its own quality control plan.  It is optimal if the contractor, and not the client, generates the quality control plan/quality assurance forms, which will keep the risk with the contractor.  Therefore, PIPS defines quality control as how the contractor is minimizing risk.  PIPS defines quality assurance as how the client knows that the contractor is doing the quality control.  It is optimal for the client to know that the contractor did the QC and that the results were in accordance with the requirements.  If a high performing contractor is selected, they will do their own QC, and they will enforce performance.  This is the optimal methodology of QC/QA, but it is not the traditional approach.  This paper will test the traditional approach. 
 
 
Quality Control/Quality Assurance
 
The objective of a construction project is for a contractor to provide a product to the client on time and within budget while meeting the quality expectations of the client as described in the contract documents.  The client can either be the owner or the general contractor.  The party that holds the contract is referred to as the “client.”  The owner is the client for the general contractor and the general contractor is the client for the subcontractors.  In addition, the contractor can either be the general contractor or a subcontractor.  The party under contract is referred to as the “contractor”.  The general contractor is the contractor for the owner and the subcontractor is the contractor for the general contractor. The relationship between the client and the contractor appears to be simple as it relates to the construction project objective (contractor providing a product to the client on time, within budget and meeting the quality expectations).  The challenge is for the client to maintain the simplicity of the project objective. 
 
Currently in the construction industry, many clients hire outside consultants directly to conduct inspections on the jobsite.  This results in the client alleviating the contractor of the contract responsibilities.  In addition the client has reversed the risk transfer.  By having a consultant employed by the client to review the construction work, the contractor performing the work is no longer contractually obligated if the project is delayed, over budget or below expectations from directives given by the client’s consultant.  Therefore the client is responsible for the project objectives; the client has reassumed the risk.  The idea that inspections add risk to the client was proven in 1985 in the U.S. Home Corp v. George W Kennedy Construction Co. court case (Fisk, 1994).  A federal court ruled that if a project owner agrees to oversee or direct a contractor’s performance of work, then the owner may share responsibility for defective work performed by the contractor.  The ruling of this court case has set a precedent that the client is ultimately responsible for the project schedule, budget and expectations if the client conducts inspections on the jobsite.
 
It is therefore not in the best interest of the client to conduct inspections.  The contractor must perform the contract work and verify that the work is completed in accordance with the contract documents and project objectives without assistance from client inspections.  Quality Assurance (QA) and Quality Control (QC) programs are tools to ensure that the risk remains with the appropriate party and that the project objectives are accomplished.  Quality assurance is a program covering the activities necessary to provide work that will meet the contract expectations.  Quality assurance involves establishing project related procedures, standards and other systems necessary to produce the contract work.  Quality control is the specific implementation of the quality assurance program, which includes reviewing and testing contract work by the contractor.  It is important to note that the quality assurance program can be established by the client and/or the contractor; however the quality control program must be specifically conducted by the contractor.  Involvement by the client in the quality control program may be viewed as client inspections, thus transferring the risk back to the client.    Risk must remain with the contractor by strictly following the principles of the quality assurance and quality control programs: the client and/or contractor establish a QA program, the contractor implements QC program.
 
 
Hypothesis
 
If the client implements a quality assurance program and passes the risk of construction and the function to minimize the risk to the contractors, the contractors will in turn implement quality control measures.  This will result in a more efficient, high performance project (on time, within budget and meeting expectations).  
 
 
Implementation of Quality Control Programs
 
The most successful documentation of implementations of a QC/QA program is when the client identifies the requirement, and allows the contractors to compete based on past performance, and the ability to identify, prioritize, and minimize risk.  This was proven through ten years of testing of the Performance Information Procurement System (PIPS).  PIPS is a best value process which requires the contractors to submit a risk minimization plan which identifies, prioritizes, and minimizes risk to the project not being on time, on budget, or not meeting the expectations of the client.  The risk minimization plan, along with risks identified by other contractors bidding on the project, became the source of the contractor’s quality control plan.  The quality control plan also includes a quality assurance plan on how the contractor is ensuring that they are implementing the quality control plan.  The quality assurance plan is a non-technical checklist or form that the contractor and the QA inspector can quickly assess if the contractor is in compliance with its own quality control plan.  It is optimal if the contractor, and not the client, generates the quality control plan/quality assurance forms.  This is advised to keep the risk with the contractor; however, the client can also generate the documents.  The client absorbs the remaining risks if the contractor performs the quality control as directed. 
 
 
Case Study
 
To test the hypothesis, two projects were selected.  The projects are similar projects, one using management and inspection, and the other using QC/QA.  The methodology includes comparing the two projects in terms of performance (time, cost, and client satisfaction, effort, and efficiency).
 
Project A
 
An undisclosed property owner contracted with an undisclosed general contractor to construct a three story 140,000 square foot shell office building in ten months for seven million dollars.  The owner required that the general contractor submit window test reports at the end of the project that indicate the windows installed have passed a random eight pound water test. 
 
The general contractor did not have any crews that could perform the glazing work; therefore, the general contractor hired a glazing subcontractor to perform this scope of work.  The glazing subcontractor was contractually required to provide a glass system that would pass an eight pound water test; however the subcontractor was not required to conduct any tests on the system.  The general contractor instead assumed the responsibility for conducting the tests and even hired an outside consultant to review the tests and provide jobsite inspections. 
 
The first general contractor and outside consultant water test was a failure; no windows passed the test (Project Specifications, 2004; Commercial Window 2004).  After the test, the consultant put together a report that addressed each reason for the failed windows.  The glazing subcontractor corrected all items indicated in the report and scheduled with the general contractor to retest the windows two weeks after the first test.  The second water test of the same windows also failed.  The consultant reported that the windows failed due to the same conditions listed in the first test report.  The glazing subcontractor then decided to review the entire installation of the failed windows and conduct internal quality control water tests on the failed windows.  The water tests that the glazing subcontractor conducted assisted them in finding additional window installation flaws that lead to the previous failed tests.  The subcontractor continued to test the windows until they passed the subcontractor internal quality control tests.  After the windows passed the subcontractor internal quality control tests, the subcontractor scheduled a time with the general contractor to retest the windows.  The third outside consultant water test for the same windows occurred one month after the second water test; all windows passed.
 
The window water tests conducted by the general contractor and consultant resulted in a total of $15,000 ($5,000/test) and a six week project delay (Window Testing Report 2004).  The general contractor absorbed the water testing costs and suffered an undisclosed amount of liquidated damages from the owner for the project delays. 
 
Project B
 
The same undisclosed property owner contracted with the same undisclosed general contractor to construct a two story 66,000 square foot shell office building in seven months for four million dollars.  The owner again required the general contractor to submit window test reports at the end of the project that indicate the windows installed have passed a random eight pound water test. 
 
Construction for this project has not commenced; however, the general contractor has decided that on this project all of the risks will be passed to the subcontractors completing the work.  This will be accomplished by implementing quality assurance and quality control programs.  The first step in establishing a quality assurance program will be to review the project requirements along with the methods of how the requirements will be accomplished.
 
Requirements and Methods of How to Accomplish the Requirements:
1.        Schedule
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Requirement – The general contractor must complete the project in seven months or less.
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Methods of how to Accomplish the Requirement - The general contractor must establish a project schedule that indicates the installation time of each trade.  The critical path must be identified and maintained.
2.        Budget
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Requirement – The general contractor must complete the project for four million dollars or less.
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Methods of how to Accomplish the Requirement - The general contractor must establish the budget for each trade and tract the costs through out the project.
3.        Scope
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Requirement - The general contractor must pass a random window test and provide the test results to the owner at the end of the project
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Methods of how to Accomplish the Requirement – Window water testing will be conducted through out the installation of the windows.
 
After the general contractor reviews the requirements, the risks along with the methods to reduce the risks must be identified. 
 
Risks and Methods to Minimize Risks:
1.        Qualified Contractor
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Risk - There is a perceived risk that the windows will not pass the window tests if an unqualified contractor is hired to perform the work.
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Method to Minimize Risk – Review past projects of bidding contractors, obtain information from previous clients, and interview the bidding contractor team.
2.        Schedule
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Risk - There is a perceived risk that the window glazing work will not start or be completed on time due to material lead times.
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Method to Minimize Risk – Award and order the glass and glazing work with sufficient time.
3.        Schedule
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Risk - There is a perceived risk that the overall project will not be completed on time if the window testing consultant is hired by the general contractor and not properly scheduled to conduct the testing inspections.  Failed tests will require additional testing and could prevent subsequent trades from starting and/or completing work.
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Method to Minimize Risk – The Glazing Subcontractor will be responsible for the window testing.  The glazing subcontractor will be responsible for hiring an outside consultant to conduct window testing.  The general contractor will require the glazing contractor to conduct window tests as soon as possible after installation of the system has commenced and at approximately 50% and 90% of window installation.  This will ensure the window installation quality throughout the project. In addition the glazing subcontractor will be responsible for meeting the project schedule, regardless of the window test results.  Glazing subcontractor will work overtime at the expense of the subcontractor as required.  If project is not completed on time, then liquidated damages will be passed to the responsible parties.  This will ensure that the project will be completed on time.
4.        Budget
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Risk - There is a perceived risk that the cost of window testing could exceed the glazing budget if the windows do not pass the tests.
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Method to Minimize Risk – The Glazing Subcontractor will be responsible for the window testing.  The glazing subcontractor will be responsible for hiring an outside consultant to conduct window testing; therefore all window testing expenses will be paid for by the glazing contractor.
 
After the Quality Assurance program is established, construction commenced.  By the general contractor establishing a quality assurance program and transferring the risk to the glazing subcontractor, it is assumed that the glazing subcontractor will implement more internal quality control measures in order to reduce the risks received from the general contractor.  If the glazing subcontractor conducts internal quality control measures and the general contractor reviews the information indicated in the quality assurance program, then this project will have a higher probability of being successful; on time, with-in budget and meeting expectations.  The client’s representative, the general contractor did the QA/QC on the first project.  The specialty subcontractor is doing the QA/QC on the second project.  The general contractor annotated the time and cost of the first project, and trend of corrections when the subcontractor realized that they were responsible, and predicts that the subcontractor performing the QA/QC will result in the following:
 
  1. More efficient results (time and cost.)
  2. Less stress for the general contractor.
  3. The specialty subcontractor/manufacturer will be motivated to use quality products and install the windows more carefully than in the first project.
 
The second project is ongoing, and when completed, the authors will analyze the results and publish their findings. 
 
 
Conclusion
 
This study is part of an ongoing effort at Arizona State University to optimize the use of QC/QA.  It has been well documented that the client or client’s representative minimizes their risk by forcing contractors to do QC/QA.  If the contract award is not based on price, but best value, the contractors should create their own QC/QA program to meet the requirements of the specification.  However, if it is a price based award, or if true best value cannot be run, the contractor can be directed to use the client representative’s QA/QC program.  If the risk and cost are embedded in the contractors contract, the authors propose that the contractor will be motivated to increase their performance and efficiency by using good products and high performing construction methods.  The preliminary test results show that this hypothesis is correct.   
 
 
References
 
American Architectural Manufacturers Association.  The Source of Performance Standards, Product Certification and Education for the Fenestration Industry, Schaumburg, Illinois, 2003.
 
American Society of Civil Engineers.  Manual of Professional Practice: Quality in the Constructed Project: A Guideline for Owners, Designers, and Contractors, New York, American Society of Civil Engineers, 1988.
 
Clough, R.H. Construction Project Management, New York, Wiley, 1972.
 
Commercial Window Systems Selection Specification, Installation, and Testing Guide, Phoenix, Arizona, 2004.
 
Deming, Edwards W (1982) Out of the Crisis.  Massachusetts:  Massachusetts Institute of Technology.
 
The Façade Group, Inc.  Glazing Systems Manual, Portland, Oregon, The Façade Group, Inc., 2004.
 
Fisk, Edward R. Construction Project Administration, 4th ed., New York, Wiley, 1994.
 
Kashiwagi, Dean T.  Best Value Procurement 2nd ed., Tempe, Arizona, Performance Based Studies Research Group, 2004.
 
Kashiwagi, D.T., Parmar, D., and Savicky, J. (2003)  Case Study of the University of Hawaii of Performance Based Procurement.  Joint International Symposium of CIB Working Commissions; Singapore, 1, 395-402.
 
Project Specifications for the Design and Construction of Section 08400 – Aluminum Framing & Glazing Systems, Phoenix, Arizona, 2004.
 
State of Washington Legislative Website, Laws and Agency Rules, WAC 173-303-335   Construction quality assurance program.  (1) CQA program, http://www.leg.wa.gov/WAC/index.cfm?section=173-303-335&fuseaction=section, Jan 3, 2005. 
 
Window Testing Report for Project A (2004).