Regional Seminar Proceedings 1993

Small-Scale Contractors

1. Improve Your Construction Business

2. To what extent can Experiences in Training Contractors and their Staff be carried from one Country to Another?

3. Labour-based Contracting: Contractor Management 

4. Labour-based Contracting: Uganda's Experience 98

I. Improve Your Construction Business:

Entrepreneurship Training for Small-scale Contractors in the Labour-based Road Sector

By Claes-Axel Andersson, ILO Improve Your Construction Business Programme

SYNOPSIS

This paper starts with a brief introduction to the Construction Management Programme of the ILO followed by a description of the Improve Your Construction Business (IYCB) programme, from how it was developed or a contractor training project in Ghana to the present plans for geographical and sectoral expansions. The paper ends with a discussion on the possibilities of applying the material and methodology for more specialized parts of the construction sector such as labour-based road maintenance and construction based on a presentation of the recently started project "Entrepreneurship training for labour-based road maintenance contractors" in Lesotho.

The ILO Construction Management Programme

Since the middle of the 1970s, the ILO has been in the forefront of the development of national construction capacity and in the dissemination of construction management knowledge and skills. The growth of the ILO Construction Management Programme (CMP) has been aligned with, but separate from, the development of infrastructure programmes relying on the cost-effective utilization of locally available human and material resources.

Drawing on the results of 20 years' practical experience and research, the CMP offers a unique service in international construction industry development. It is based on the application of professional engineering and management skills coupled with extensive experience from numerous projects in Africa and Asia. A particular strength is the range of training methodologies that have been built up and tested in practical technical co-operation projects. Examples are the fourthcoming International Construction Management (ICM) series of textbooks for large construction firms, the Inter-active Contractor Training (ICT) modules to develop basic construction management skills, and the Improve Construction Business (IYCB) handtools and workbooks for owners and managers of small construction enterprises.

History

In the early 1970s support by the Overseas Development Administration (ODA) enabled the United Kingdom-based Intermediate Technology Development Group Ltd. (ITDG) to pioneer management training for owners and managers of small contracting firms in newly independent developing countries. The demand for this assistance grew rapidly, and it became clear that it would be more appropriate for the work to be taken forward by a larger organization with greater resources and more extensive international links. The ILO, with its highly reputed general Management Development Programme and special interest in the development of small enterprises, sized this opportunity and started to promote programmes to assist the development of indigenous construction industries in member states. The development of this Programme has proceeded through three distinct phases:¹

1. Exploration of needs and priorities; development of pilot training materials.

2. Pilot regional programmes, including seminars and workshops, to discuss experience, formulate strategies, and test out and publish training materials and prospective publications.

3. Institution building, primarily through the design and implementation of national technical co-operation projects.

The first phase from the mid 1970s to 1980 was exploratory im ore senses than one, since the needs of domestic construction industries in developing countries had been generally neglected and the ILO was unsure of its potential role in providing assistance to its member states in the specialist field of construction management. During this period the programme was run on a part-time basis by various ILO officials without any background in construction, and relied heavily on outside consultants for its field activities. The main event was a three week "training of construction management trainers" course for Africa held in Nairobi in 1976, and the three Publications as its "small building contractor" series².

The outcome of the exploratory phase was a growing appreciation of the importance of this neglected group of owners and managers of small enterprises, and the Government of Norway agreed to support an ILO project for the African region "to create in the participating countries a basic capability for delivering management training to small-scale building contractors". This provided a firm base for the establishment of the Construction Management Programme, and the first full-time Director was a qualified civil engineer who was also a management specialist and had extensive experience in developing countries.

With an experienced professional engineer in charge, the Programme began to benefit from the application of a more systematic and goal-oriented management style. Thus the second phase included an examination of the policy constraints which adversely affect the performance of domestic construction industries in developing countries in the books "Foundations for change"³ and "Guide-lines for the development of small-scale construction enterprises"⁴, while the earlier training initiatives were consolidated with the publication of three Interactive Contractor Training (ICT) modules⁵ and an accompanying book "Training contractors for results".⁶ It led naturally into the third phase which began with an examination of the policy constraints which adversely became clear that more emphasis needs to be put on institution building in order to achieve sustainable sectoral development. The lessons learned during these studies have been distilled in the recent book "Building for tomorrow".⁷

A complete review of experience during the initial phases led to a decision to develop a comprehensive and distinctive rang of products and services covering three main areas of activity:

Table 1. Construction Management Programme: Main activities

The ILO was among the first international organizations to appreciate the need to develop a range of construction management training systems and methodologies to suit the special needs of its member states. These needs themselves are far from uniform, and range from large and sophisticated construction organizations employing computer-based management information systems to small contractors specializing in the construction and maintenance of rural roads using labour-based techniques. With these considerations in mind, the CMP has been engaged in a major effort to develop a range of products and services to support its technical cooperation, consultancy and advisory activities. CMP publications can be divided into five categories:

Since the main focus of this paper is on training of contractors for the labour-based public works sector the following section will focus on the IYCB materials and methodology which are specifically designed to improve the performance of small construction enterprises (for a complete list of publications, see Appendix I).

The Construction Management Programme was transferred from the Management Development Branch to the Policies and Programme for Development Branch (E/DEV) in April 1993. The previously established link between CMP and the labour-based public works activities of E/DEV was thereby strengthened. The contractor training programme in Lesotho is a pilot project concerning utilization of previously developed training material (the IYCB material) when training contractors in this specific sector. Before presenting and discussing the Lesotho programme more in detail ti may be helpful to describe how the IYCB materials and methodology were developed.

The CMP had already developed the Inter-active Contractor Training (ICT) training modules for construction enterprises of modest size. However, the target group for this material is sufficiently well established to employ a number of specialist managerial and supervisory staff and apply conventional construction management techniques. The many owners/managers of much smaller enterprises, or whom the management of their enterprises is a personal and part-time activity, required a more basic approach.

 Improve Your Business (IYB)

In its search for means to assist this target group, the Construction Management Programme drew upon the experience of another ILO programme - IYB or "Improve Your Business". IYB consists of self-teaching material that introduces the user to basic management techniques such as business analysis, financial analysis (accounting, key ratios, etc.) and activity financial planning. The material is packaged neatly in the form of a "handbook" and companion "workbook", and includes checklists and a reference guide, together with advice on how to prepare an action plan and practical suggestions on how to bring the plan to fruition.

IYB had proved very successful in assisting small traders and manufacturers of simple products but, as CMP experience had shown, it was not sufficient when trying to cater for the specialized needs of small construction enterprises. A useful definition of a small business (and small construction businesses) is that it is one in which the manager or owner spends much of his or her time actually carrying out the function of business⁸, so it follows that there are disadvantages in separating management from technical training. Indeed ILO thinking on small enterprise development now emphasises the importance of a sectoral approach to training and consultancy.⁹

The answer seemed to be for the CMP to draw upon the experience of the IYB programme and develop a system which would meet the specific needs of small contractors called IYCB or Improve Your Construction Business. Rather than attempt to produce a generalized version and then test it in field conditions, it seemed best to develop the system in one country so that it would be possible to work practically with both the beneficiaries and the individuals and organizations who could provide training, advice and continuing assistance.

Luckily this idea coincided with a request to prepare a technical cooperation project to improve the performance of local construction enterprises in Ghana, which certainly offered a demanding environment and was of particular interest in view of the Government's action to secure an effective transition from a centrally planned economy to one based on enterprises within the private sector. Thus it seemed probable that if a system could be successfully developed in Ghana, it would be very likely to be suitable for replication in other countries with comparable problems and aspirations.

Many small-scale contracting firms in Ghana claim to be capable of implementing basic building and infrastructure projects, but fail to deliver quality work at reasonable cost within designated completion periods. Clients, consultants and the contractors themselves all appreciated that these enterprises needed help, and the Government of the Netherlands was approached to support an ILO-executed Improve Your Construction Business project. In view of the ILO's emphasis on institutional support to ensure sustainability, the enthusiastic support of the Civil Engineering and Building Contractors Association of Ghana (CEBCAG) and the existence of a well-established management training institution in the Management Training and Productivity Institute (MDPI), was seen as two main pillars for the project to rely and build upon. The planning of project implementation started in early 1990.

The duration of this first IYCB project was two years and the promised outputs were somewhat optimistic for such a short project:

 Assessing problems and needs

The mainly step was to determine the problems, practises and needs of the target group.¹⁰ This was done by circulating a questionnaire asking for a statement of problems and suggesting possible topics for training in six broad categories and was supplemented by face-to-face discussions with individual owners and managers at fact finding workshops in all ten provinces. These sessions were effectively "small-scale construction enterprise clinics" and respondents saw a "great need" for training in 42 topics, and there was general agreement that inadequate (or non-existent) construction management training was at the root of many of their problems. For example, contractors complained that "bank financing is difficult to obtain and is very expensive at 30 per cent interest". Following discussion, the complainants admitted that contractors generally have a poor repayment record and few have the skills to keep accurate accounts and make reliable forecasts of costs and cash needs. Thus it was decided that the training workshops should include discussion of the accounting needs of the small contractor, training in basic book-keeping and accounting, and advice on how to prepare a simple cash flow projection for a small building contract.

Another serious problem was that "a claim for payment has to go through no less than 30 separate stages before the cheque eventually reaches the contractor, and the whole process never takes less than 14 weeks (and often a good deal more)". Although training alone would not solve this problem, it was accepted that the workshops could help by developing the skills that contractors need in order to prepare certificates in a form that enables them to be rapidly and easily checked by the officials (50 or more!) through whose hands they pass.

The project team grouped the identified problems into ten different clusters as seen in Table 2 below.

Table 2. Ghana building contractors: Identified major problems

Result-oriented training

The preliminary discussions gave the project team a clear insight into the way in which these contractors run their business and the type and nature of the training required. What they were seeking was practical advice on how to improve the performance of their businesses, so it was decided that the IYCB workshops should be strongly result/action oriented with little formal lecturing, and heavy use of "action learning" groups to discuss problems and tackle them as case studies.

The sessions on estimating and tendering, for example, should enable each participant to produce a model of the bidding process to suit his or her own business environment, so the training was planned in eight successive steps (see following box).

Table 3. IYCB Training Example: Estimating and Tendering

Project strategy

With the training priorities identified, the project team faced three main tasks before the workshop programme could commence:

In keeping with the findings of the training needs survey, the original versions of the handbook and workbook were each divided into six sections. It quickly became apparent that the result would either be to omit or gloss over matters of essential importance, or to end up with books that were too bulky to be readily used by the target group. The only answer seemed to be to split up topic into three broad subject areas, each with their own handbook and workbook, which would have the additional advantage that readers could start by tackling t hose areas of their business which were in most urgent need of improvement.

For small contractors, estimating and tendering are crucial activities. Construction is a fiercely competitive industry; profit margins are often low and a small mistake on pricing a tender document can make all the difference between a worthwhile profit and a serious loss. Furthermore each individual project is taken on at a fixed price and represents a significant proportion of the contractor's annual turnover, so one serious error in pricing a single project can undermine the stability of the enterprise as a whole. Yet many small contractors lack even the most elementary grasp of cost accounting, and estimates could frequently be more accurately described as "guesstimate". Thus the first handbook and workbook were entitled "Pricing and Bidding". The two priority topics of project planning and productivity are essentially site activities, so the second handbook and workbook covered "Site Management". This left the range of activities concerned with managing the enterprise as a commercial entity, including ensuring a reasonable balance between workload and resources, which comes under the general heading of "Business Management".

Selection of training cohorts

The number of participants at the training of trainers course was decided to be 18, which is the maximum for the kind of highly participative sessions that were judged necessary to achieve the project's team building objectives. The figure of 18 was significant, since all ten CEBCAG Regional Committees demanded that they should participate in project activities and the manufacturers of building materials also sought assistance. The answer seemed to be to form six three-person teams or "cohorts", one of which would work with the manufacturers while the other five should each be responsible for delivering training and consultancy advice to contractors in two adjoining regions.

The building materials' cohort was made up of manufacturing specialists and the five contractors' cohorts were well balanced, each containing one MDPI trainer together with one CABCAG member from each of the two participating regions. Preliminary enquiries showed that the demand for training far exceeded the provision in the project document; CEBCAG's regional members requested that the proposed 8-10 workshops of 1-2 weeks duration should be increased to 6 workshops of one week in each of the 10 regions, or 60 workshops altogether. In response to this request, the Government of the Netherlands agreed to support a 6-month project extension which would permit this increased output, and would also increase the number of owners and managers of construction business who would benefit from the programme from between 120 and 150 to more than 200.

Project outputs

In Ghana the IYCB project is an indisputable success. The formal project outputs have been substantially exceeded:

The new interest in contractors and their potential contribution to national prosperity cannot be measured by statistics alone; CEBCAG and its members feature regularly in the local press and members of training cohorts are generally proud to be part of the national IYCB team. The sustainability of improvements can never be guaranteed, but it is very encouraging that MDPI, together with CEBCAG, continues to deliver IYCB training in all regions of Ghana one year after the local project activities terminated in the autumn of 1992.

IYCB is now about three years old, and the Ghana project has shown that the concept has worked well in one country. The IYCB approach has potential for a geographical expansion and will probably also develop from its original focus on building contractors into several specialist sub-sectors such as the manufacture and distribution of building materials, building maintenance and labour-based road construction and maintenance.

A number of African countries have shown interest in using this methodology to increase the productivity of their local construction industries and some proposals have resulted in concrete initiatives. A pilot project, testing the validity of the IYCB concept in Kenya, is presently being evaluated to determine whether a full-scale intervention is feasible. A similar test has been prepared for Malawi and previously mentioned, a project to apply the IYCB concept to the development of labour-based road maintenance contractors in Lesotho started in April 1993.

Lesotho, background

In Lesotho, as in most countries which have initiated labour-based road construction and maintenance programmes, these activities have so far generally been organized on force account using labour recruited from local communities. The Labour Construction Unit (LCU) located within the Ministry of Works was founded in 1977 with two primary objectives; to promote efficient use of labour based construction methods in Lesotho and to create as much gainful employment as possible. It has since grown into a substantial organization with more than 260 support staff and a manual labour force of about 1,800 and is currently responsible for routine and periodic maintenance of about 700 km of gravel roads.

A long-term (20 years) LCU development plan was prepared in 1989, envisaging reorganization of the LCU. In line with general GoL policy, the LCU now intends to involve the private sector in undertaking the works, provided they can adapt to labour-based, employment-intensive techniques. This will entail considerable initial support and training for the contractors and government supervisory staff, but will significantly reduce the projected government establishment while substantially increasing private sector employment and achieving overall cost savings and greater operational efficiency and flexibility.

The Lesotho construction industry is currently dominated by foreign and non-Basotho, locally-based contractors. There are no domestic contractors specializing in roads and civil construction and domestic building contractors are poorly capitalized and lack essential managerial and business skills. This project is based on a step-by-step approach to contractor development helping them take advantage of relevant market opportunities. The niche market of labour-based road maintenance is one which offers potential growth and an opportunity for domestic contractors to develop the basic business and technical skills that will be needed if they are to take a larger share of the market for civil works.

Selection of participants

The fact that no domestic civil works contractors exist means that the training, in addition to management aspects, also must fully cover the basic technical aspects of road maintenance. Another complication was the absence of an apparent group to recruit the trainees from. Consideration was given to three alternative sources for recruitment of routine maintenance and regravelling contractors. Firstly, existing domestic building contractors having the advantage of understanding the competitive nature of the construction industry but lacking experience and plant for the road sector. Secondly, haulage contractors owning tipper trucks which could make them competitive for regravelling, although their experience in building contracting is limited and thirdly, LCU road supervisors - particularly Senior Technical Officers (STOs) and Technical Officers (Tos) - having relevant technical knowledge and experience but might lack capital and business experience. The selection of suitable LCU staff members to participate in the training course in order to later on administer the contractors work was done by LCU themselves.

Based on the tremendous interest in participating, it was decided that 14 potential contractors (project document: 10 No.) should accompany the three LCU representatives in the first round of training that started in May 1993. When carefully assessing the prospective road maintenance contractors the likelihood of creating or strengthening a suitable contractor was emphasized. The conclusion was that relevant business experience was made an important criteria in the selection process.

After assessing expressions of interest from all three groups mentioned above, the selected 14 was composed of one very experienced and highly appreciated STO in LCU while the other 13 had their background in contracting or other construction related companies, either as owners or in a managing capacity. After one week of training, when the general conditions and associated risks for a contractor in the labour-based field had been presented, the former STO opted for staying on as LCU staff member and followed the rest of the training in that capacity. It was, of course, much better to opt out at this stage, before putting his and his family's savings at risk, but it was also another illustration showing that a technician, perfectly mastering those aspects of running construction work, does not necessarily make a successful contractor.

Training concept

Given the participant backgrounds it was considered necessary to offer them an integrated programme where classroom and practical training is mixed. The first step was a six-week "class-room" training that started on the 10^th of May this year. Following an assessment during this course it was decided that additional training on "contracts and tendering" as well as practical on-site training was needed before the trainees could take on their test-contracts.

The first of these contracts, routine maintenance, running up until Christmas, is to start towards the end of September, so the contractors are currently mobilizing their resources. An assessment of the contractor's performance on the first contract will be undertaken in mid-January 1994, and their second test contracts (regravelling) are supposed to cover the time between February and June next year.

Training material

The IYCB material is designed according to a modular concept and its three original titles 1. "Pricing and Bidding", 2. "Site Management, and 3. "Business Management" each cover a coherent group of subjects. This main set of three Handbooks and three corresponding Workbooks are written so they can be used both for self-study and in a classroom setting. A Trainer's Guide, containing suggested exercises, discussion topics, suitable handouts and general training advice will be available to help the trainer design a contractor training programme that fits the identified needs of the trainees.

Training materials has unfortunately often been developed on a project related basis. This has led to numerous "re-inventions of the wheel" where previously developed material was completely ignored when designing material for a new project. Everybody, including the "training adviser", realizes, of course, that it would be useful to build upon existing material but either because he/she does not know it exists or because the material actually he/she finds is too country- or region-specific it is seldom of any help when designing methodology, books etc.

In order to achieve flexible and generally applicable material, these aspects need to be considered already during the design stage. Applying this principle does not mean that you do not adjust the training programme and your material to local conditions but rather that, for instance, "country-specific" rules and regulations are covered in separate modules that can be used together with the knowing local conditions well enough to be able to prepare exercises etc., based on local conditions, if the general ones in the Workbook do not correspond with the situation where the contractors are to work.

When developing the IYCB package, it was primarily designed for general building contractors. Building was seen as the best basis for "general material" since it coverers a larger number of activities compared to most other sub-sectors, for example road contracting. It includes virtually all stages and aspects of contracting normally forms the "centrepiece" of the domestic construction industry in virtually all developing countries.

By choosing building as the basis for the material, several positive features were automatically gained. The most obvious being it that represents the largest market for training but even more important, a better position to create or strengthen contractors for long-term survival or even expansion on the market. If you aim at creating strong small scale contractors, available to carry out contracts several years down the road, the danger of too much specialization and accompanying inflexibility must be avoided. The ups and down of all domestic construction markets need to be bridged. By their size and often accompanying limited amount of resources tied in sector-specific plant they are more flexible than their colleagues in the medium sized companies but have less financial resources to overcome temporary changes in the market.

Although the three IYCB books use building contracting as a basis, the emphasis is primarily on the business and entrepreneurial aspects of running a small-scale contracting firm. These aspects are fairly similar regardless of which part of the construction business you work in. All contractors need to ensure all their indirect costs are included in their bids, plan deliveries of building material and prepare a simple cash-flow for a project to take one from each of books No. 1,2 and 3.

To extend the IYCB concept and facilitate tailor-made training for other sub-sectors than building contractors, a set of complementary Handbooks and Workbooks is planned to be developed when suitable projects are available. For the Lesotho project a ROMAR (Road Maintenance And Regravelling) package, currently only in draft form, is one of the outputs listed in the project document. This package covers all the technical aspects of how to maintain and regravel secondary roads using labour-based methods. Another output, to be produced in the project's later stages, is guidelines for an extended training, incl. training material, covering construction and rehabilitation of labour-based roads (ROCAR).

Training course

The six-week training course held in May-June this year in the LCU Training Centre in Teyateyaneng was divided into two major parts. The first three weeks covered the technical ROMAR material while the following three weeks were voted to the management aspects.

This entire course provided, because of the participants practical background, a mixture of short lectures, site visits, discussions and tutorials. The subjects were generally presented using a three-step approach where step one is an introduction and presentation by the trainer, often using examples from the Handbook. In the following step the trainees were given some exercises/problems to solve, either individually or in groups, and the last step was for the trainer to evaluate the trainee's results on the exercises and clarify and complement previous training, if necessary.

To ensure that the trainees are able to use the knowledge gained from each of the different training modules not only individually but also when interacting in a normal business environment a number of group tutorials were given where several skills had to be employed simultaneously. These tutorials were often coupled with a site visit to further underline the linkage between theory, learned in the class-room, and practical application in the normal small scale contractor element of the linkage between generally applicable training material and the local conditions pertaining.
  An example:

1. The importance of undertaking a proper site inspection before preparing a bid was presented and discussed in the class-room, using IYCB Handbook 1 as a basis.

2. The trainees solved some exercises from the Workbook.

3. A tutorial was given where the trainees, after a site visit to an LCU site, should list all the necessary background information they discovered concerning location of gravel pits, where and how to establish a site camp, etc.

4. The trainees results were evaluated and some clarifications and explanations were given in a follow-up session.

The fully incorporate local laws, rules practice and regulations in the training some guest lecturers were invited to cover items such as local labour legislation and safety & health regulations. This is seen as a most important component in view of ILO's commitment to showing contractors that lower cost and higher productivity can be achieved by good management while adhering to standards and regulations.

The first training session in Lesotho was highly appreciated by the participants that felt well prepared for their future tasks although they expressed a wish for repetition of selected parts of the training all through the programme.

Issues for discussion

1. Special needs of business training

2. Links between business and technical training

3. Characteristics of the ideal trainer

4. Training needs of client staff who will supervise contractors

5. How to select contractors for training

6. Value of a modular approach to training material preparation

7. Methods improving feed back from projects on training systems and case studies

8. Evaluation of training

1. Miles, Derek and Richard Neale, (1991), "Building for tomorrow: International experience in construction industry development", ILO, Geneva.

2. Miles, Derek, (1978), "Accounting and book-keeping for the small building contractor", (1978), "Financial planning for the small building contractor, (1980), "The small building contractor and the client", Intermediate Technology Publications, London.

3. Edmonds, G.A. and D.W.J. Miles, 1984), "Foundations for change: Aspects of the construction industry in developing countries", Intermediate Technology Publications, London.

4. ILO, (1987), "Guide-lines for the development of small-scale construction enterprises", ILO, Geneva.

5. Hernes, Tor, (1987), "Interactive Contractor Training - Module 1: Estimating and tendering, Module 2: Project planning, Module 3: Site productivity", ILO, Geneva.

6. Hernes, Tor, (1988), "Training contractors for results", ILO, Geneva.

7. Miles, Derek and Richard Neale, op cit.

8. Harper, Malcolm, (1984), "Small business in the third world", John Wiley & Sons, Chichester.

9. Theocharides, S. and A. Tolentino, (1991), "Integrated strategies for small enterprise development: A policy paper", ILO, Geneva.

10. Miles, Derek and John Ward, (1991), "Small-scale construction enterprises in Ghana: Practices, problems and needs", ILO Construction Information Paper CIP/1, Geneva.

The five conceptual studies produced by the CMP are intended to provide policy-makers with ideas and suggestions on new ways of improving the competitiveness and performance of national construction industries.

Foundation for change (1984) examines the patterns of organization of construction industries in developing countries, and shows how the institutional framework could adapt to make better use of local human and physical resources.

Guidelines for the development of small-scale construction enterprises (1987) distils and analyses the extensive experience of the ILO in devising and implementing management development and training programmes for small-scale construction enterprises.

Training contractors for results (1987) provides guide-lines for the assessment of the management training needs of contractors, and delivering integrated training programmes to enhance technical, managerial and financial skills.

Building for tomorrow (1991) is a handbook of ideas, methods and techniques to help national construction industry development institutions to improve performance. It is based on four case studies of successful institution building, and offers a 12-point action plan that will have an immediate impact on the performance of the institution.

Training on tap (forthcoming) examines the scope for applying modern distance learning techniques to provide cost-effective training for construction managers and supervisors.

The Construction Information Papers (CIP/-) are the outcome of practical research on issues of international interest. The series was started in 1991, and current titles are:

CIP/1 Small-scale construction enterprises n Ghana: Practices, problems and needs (1991)

CIP/2 The construction industry in Nepal: Practices, problems and needs (1991)

CIP/3 Women can build: Women's participation in the construction industry in Sri Lanka(1991)

CIP/4 A strategy for the China International contractors' Association: CHINCA (1991)

CIP/5 Room for improvement: a study of women building workers in Bombary (1992)

CIP/6 The impact of the ILO Construction Management Programme on the development of small construction enterprises (1993)

CIP/7 Building her future: Guidelines for encouraging women's participation in construction industry development projects in India (1993)

2. Practical manuals

These four manuals provide succinct advice for practising construction managers, and take special account of the needs of managers in developing countries.

Managing construction projects (1984) is a fully illustrated guide to planning and controlling the construction process from briefing through to commissioning, and is based on internationally accepted procedures.

Construction management and technology: A bibliography for developing countries (1987) countries, divided into three sections "Maintenance strategy", "Maintenance management" and "Maintenance methods".

Improving site productivity in the construction industry (19870 provides a practical and readable introduction to the application of work study techniques in the construction industry.

3. International Construction Management (ICM)

This series of text books (all forthcoming) has been written to assist engineers and other construction professionals who will be involved in bidding for, negotiating and managing major international construction projects.
The titles are:

4. Interactive Contractor training (ICT)

This range of training modules for upgrading the management skills of construction managers and owners of small and medium-scale construction firms contain learning texts together with worked examples, exercise and simulations. They also provide a model of how learning-effective material for construction managers should be structured.

Module 1 : Estimating and tendering (1987) provides the basis for a simple, but comprehensive, introduction to the calculation of quantities and pricing techniques.

Module 2 : Project planning (1987) describes how enterprises can improve profitability through effective planning, the preparation of schedules for labour and materials, and the forecasting of cash flow throughout the project. It also contains sections on network analysis, and offers advice on putting the plan into action.

Module 3 : Site productivity (1987) describes specific ways of improving productivity including better site layout, more effective supervision, measuring site activity and reviewing work methods.

5. Improve Your Construction Business (IYCB)

The Improve Your Business system (forthcoming) consists of three handbooks and three workbooks covering all the essential aspects of managing a small construction enterprise. They can be used for self-study or in training courses in conjunction with the Trainers' guide.

The titles are:

Construction Management Publications

Building maintenance: A management manual, by Derek Miles and Paul Syagga (London, Intermediate Technology Publications for the ILO). - 1987 - 213pp. ISBN 0 946688 92 3

Construction management and technology: A bibliography for developing countries, compiled by R.H. Neale (Aldershot, United Kingdom, Gower for the ILO). 1987 - 122pp. - ISBN 0 566 05379 9

Foundations for Change: Aspects of the construction industry in developing countries, by G.A Edmonds and D.W.J. Miles (London, Intermediate Technology Publications for the ILO). 1984 - 143pp. ISBN 0 946633 00 1 hb

Guide-lines for the development of small-scale construction enterprises (Geneva, ILO). 1987 - 136pp. ISBN 92-2-10569-3

Improving site productivity in the construction industry, by A. Heap (Geneva, ILO) 1987 - 124pp. ISBN 92-2-105694-5

Managing construction projects: A guide to processes and procedures, edited by A.D. Austen and R.H. Neale (Geneva, ILO). 1984 - 158pp. ISBN 92-2-103553-0

Training contractors for results: A guide for trainers and training managers, by Tor Hernes; edited by Derek Miles (Geneva, ILO). 1988 - 114pp. ISBN 92-2-2106253-8

Building for tomorrow: International experience in construction industry development, by Derek Miles and Richard Neale (Geneva, ILO). 1991 - 238pp. ISBN 92-2-107284-3

Inter-active Contractor Training (Module 1: Estimating and tendering; Module 2: Project planning; Module 3: Site productivity), by Tor Hernes; edited by Derek Miles (Geneva, ILO). 1988 ISBN 92-2-105994-4

CIP/1 Small-scale construction enterprises in Ghana: Practices, problems and needs, by Derek Miles and Jon Ward (Geneva, ILO). 1991 - 56pp.  ISBN 92-2-107847-1

CIP/2 The construction industry in Nepal: Practices, problems and needs, by Derek Miles and John Ward(Geneva, ILO). 1991 - 40pp. ISBN 92-2-107940-6

CIP/3 Women can build: Women's participation in the construction industry in Sri Lanka, by Claes-Axel Andersson (Geneva, ILO). 1991 - 57pp. ISBN 92-2-108093-5

CIP/4 A strategy for the China International contractors's Association: CHINCA, by Derek Miles and Professor K.N. Vaid (Geneva, ILO) 1991 - 62pp. ISBN 9202-1-8157-5

CIP/5 Room for improvement: A study of women building workers in Bombay, by Vinita Shah (Geneva, ILO) 1992 - 63pp. ISBN92-2-108439-6

CIP/6 The impact of the ILO Construction Management Programme on the development of small construction enterprises, by Derek Miles (Geneva, ILO) 1993 - 19pp. ISBN 9202-108817-0

CIP/7 Building her future: Guidelines for encouraging women's participation in construction industry development projects in India, by Vinita Shah (Geneva, ILO) 1993 - 39pp. ISBN 9202-108xxx-x

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This package recognises the interdependence of the 3 phases and takes into account of the phasing periods.

The Classroom phase deals with the normal teaching of principles of road building and maintenance whilst the Field Training phase is to expose the trainees to conditions similar to ones they will be encouraging on their sites. Although this phase is run by the project staff, an attempt is made to simulate that of a private contractor.

In the Trial road phase, the five trained supervisors are made to demonstrate effective team work by operating in the same environment (real life situation) as a private contractor.

Whereas in Ghana this package has been adequately tested for its effectiveness over a number of years, the Kilimanjaro project has just entered into the trial road phase of the programme for the first batch of 6 contractors.

To be able to address the question of transferring experiences in training contractors from one country to the other there is also the need to consider in detail the approach in the pre-training, training and post training phases.

The major difference between the two models concerns the number of players involved in the implementation of the programme.

In the Ghana model, two players are involved namely the Ministry of Roads and Highways represented by the Department of Feeder Roads and the Contractor. The project is thus considered an integral part of the Ministry and decisions taken are implemented without reference to a third party.

The Kilimanjaro model involves three players, - the Ministry of Works (MOW), the Contractor and the National Construction Council (NCC) which is the Implementing Agency but acts in an advisory capacity. Thus, unlike in Ghana, decisions taken by NCC will have to be referred to the Ministry of Works for approval in Tanzania.

The pre-training phase is considered to be the most crucial phase where experiences could be ported from one country to the other. It is vital that the planning of the pre-training phase is done properly to ensure commitment from contractors as well as the trainees.

The Training needs analysis carried out on the Contractors and their trainees revealed that there were some slight differences between the two countries i.e. as at the time of start of the Ghana project and the current condition in Tanzania.

Selection of Contractors

Ghana

Most of the small contractors identified at the inception of the project for training were already involved in the execution of roadwork using heavy machinery. Thus it could be said that these contractors had some knowledge of contracting.

The selection criteria currently in use was evolved over a number of years after some modifications had been made to the original one developed for the programme. The criteria for selecting Contractors takes into consideration the following factors:

(i) Contractors' ownership of Equipment;

(ii) Contractors' fixed assets;

(iii) Supervisory Capacity of the Contractor vis a vis the education/training background of staff;

(iv) Experience of the firm in roadwork;

(v) Educational background of the Managing Director

Tanzania

The factors listed in 5.2.1 with some slight modifications were considered in establishing the selection criteria for contractors.

Since most of the potential Contractors who responded to our questionnaire were Building Contractors, the factor on experience in roadwork was replaced with the number of workers handled by the Contractor on building projects. The marking scheme was therefore skewed to favour mainly the up and coming Contractors bearing in mind that the major thrust of the project is on maintenance for which most of the established Building Contractors do not find attractive.

Selection and Acceptance Process for Trainees

Ghana

Contractor's trainees are not screened before being accepted for training. The Department of Feeder Roads only stipulates that a selected Contractor submits certificated of 4 trainees with a minimum educational background of GEE O' level.

A one week intensive revision course in basic mathematics is conducted for all trainees at the start of the classroom training. Since trainees are accepted before being examined, the Training section finds itself in a tight corner and thus takes on the responsibility of running classes for the weaker ones.

Tanzania

A minimum educational background of form four was adopted (equivalent to the GCE'O' level in Ghana) and the trainees were interviewed and tested in basic mathematics before being accepted to the first training course. The major problem identified with the first batch of trainees was their inability to fully understand lectures conducted in English.

The Project further refined the process of screening trainees by developing and making available a set of guidelines to selected contractors which stresses on the importance of choosing well qualified candidates for training. This approach involves the Project providing the Contractor some set questions which the Contractor uses to screen his trainees before submitting them for interview and further testing at the project office Fig (1).

The assessment of the capabilities and requirements of the trainees has enabled the project to make some modifications to the course content with the resultant effect of the shortening of the duration of the classroom and practical site training periods from 23 weeks to 16 weeks. It is premature to comment on the effectiveness of this approach however it is hoped that within the next six months, the project should be in a position to evaluate the course.

A comprehensive and clearly communicated training activities has been defined in the Kilimanjaro Project document based on the structure developed for Ghana. The training which is tailor made and very practically oriented provided a tarting point for preparing our training programme to suit the local conditions.

Classroom Training

As already stated, this phase deals with the teaching of basic principles in road construction and maintenance. References were made to the standards and codes prevailing in the country and the course content consisted primarily of topics appropriate to the Tanzania conditions.

For the management training, which is attended by the Managing Directors and their Site Agents, the focus is centred on Contract Administration, Costing and Estimating, Work Planning and Programming and Preparation of claims.

The fundamental difference in approach between the two countries is that a lot of emphasis is placed in the use of profile method in setting out in the Kilimanjaro Project as opposed to the Ghana Project. Also training needs analyses are carried out on all contractors selected for training in Kilimanjaro to enable the project identify their deficiencies and weaknesses.

Site Training

A rotational system is used in Ghana whereby a trainee is made to supervise an activity each week until he/she has been exposed to all the activities on the road.

This system was initially adopted in Tanzania but currently the five trainees from each of the six contractors are assigned 500 metres stretch and are made to plan and execute the works with the project providing all the inputs required.

The payment of trainees during the site training phase by the Project to ease the financial burden on the Contractors and also the issue of paying bonuses to workers for completing their tasks were ideas ported from the Ghana project although some slight changes have been effected. For example, the maximum bonus paid to the worker is 4 days compared to 14 day in Ghana and workers are paid every fortnight.

Also from the onset of the Kilimanjaro project the issue of late delivery of equipment which was experienced at the inception of the Ghana project was envisaged and thus arrangements were made to hire equipment for the training programme. The initiative taken based on past experiences has enabled the project to successfully complete the first training course with the second one only 8 weeks from completion inspite of the fact that the Project is yet to take delivery of the training equipment.

Another area where one could rely on ones experiences is the preparation and administration of contracts. The rehabilitation of the model road in Tanzania had to be executed under a contract with MOW. The Project had to develop unit rates from first principle based on the Ghanaian experience by adjusting data on productivities achieved on a force account ILO project within Tanzania.

Trained Contractors in Ghana are classified immediately after the training phase. Trial contracts are executed on schedule of rates and all securities are waived for the Contractors. The DFR through a Financial Institution provides the contractor with basic equipment on a hire purchase arrangement and the firm is expected to rehabilitate a 5km road in 4 months.

Slight changes were made to the system used in Ghana and proposed for adoption in Tanzania, however the Ministry of Works expressed the concern that since these Contractors had not been classified no recognition will be given by the Regional Tender Board for the award of the contracts. Secondly the Ministry was not in a position to waive the provision o performance bonds.

To circumvent these problems, it was agreed that NCC acts as a Management Contractor by entering into a contract with MOW and subletting the works to the six trained Contractors.

The current arrangement has resulted in amendments to the special conditions of contract to incorporate all the changes effected.

Building up the capacity of the Domestic Construction Industry could be a difficult task and the trainer's responsibilities in transferring such experiences should first and foremost be to study and understand the environment within which the programme is to be implemented. This should then be followed by identifying correctly the resources required to meet the objectives of the programme, analysing these resources and finally proposing a framework for the utilization of these resources.

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III. Labour-based Contracting: Contractor Management

In September 1991, Norconsult was commissioned to administer contracts and to develop guidelines for labour based gravelling operations through the implementation of 96 km of gravelling contracts. The terms of reference were amended in March 1992 to change the emphasis from gravelling to training.

The objectives of the project were to establish guidelines for the selection, training and supervision of small, local contractors in labour based gravelling operations.

In order to achieve this, we had to:

 Structure of the Programme

The programme initially comprised 22 activities over a period of 12 months. This was later revised and extended to include a second tender exercise. The four major activities in the programme were preparation, road appraisal, training and practicals/contracts. These are illustrated in the following chart.

 Preparation

To test the technology and the procedures a contractor was appointed to undertake reshaping and gravelling on a section of road 6.5 km long which was identified as a demonstration and trial site. Although the task rates recommended by the Minor Roads Programme were achieved, the result was not satisfactory because the contractor was not familiar with the technology and therefore did not want to employ it, and consequently paid no heed to the consultants instructions.

Selection of Contractors

Advertisements were placed in the three daily papers in January 1992 and notices displayed at the district headquarters of the target districts. As a result, total of 64 companies registered their interest in the training programme. Small-scale contractors were identified with the assistance of the Ministry's representatives in the respective districts. After reviewing the contractors' qualification data (organization, personnel, education, equipment, past contracts etc.) 24 firms were short-listed, gave a written test and were interviewed. Contract managers from 12 of these firms were selected for training.

Selection of Foremen

During the contractor selection process, it was noted that most contractors did not have sufficiently qualified candidates for foreman training. Over 300 applications were received in response to advertisements. After initial screening the number of candidates was reduced to 24, all of which were invited to sit a written test and oral interview. Finally, twelve candidates were selected for training.

Training Material

As all selected participants were either university graduates or holders of a polytechnic higher diplomas, the ILO Engineers manual and the MRP Technical Manual were considered appropriate as course documentation for the contractors. In addition to this, had-outs were prepared for special subjects such as planning, reporting, pricing contracts documents etc.

For the Foremen the Kisii Training School Manuals (Overseer, Technical Manual, Headman's Maintenance handbook etc.) and selected hand-outs were used as background material. Specific training materials for road contractors are not available and should be developed.

Tools

The availability and suitability of hand tools was investigated and it was found that quality and price varied considerably. Hand tools available in Nairobi were of very poor quality and were not considered suitable for heavy work in quarries. In the absence of a better alternative a full set of tools was purchased from suppliers in Nairobi for the contractors.

Templates, camber and profile boards, which were redesigned by the consultant, were manufactured by one of the contractors, and supplied to all course participants.

Road Appraisal

Based on the available study report on Rural Access Roads (RAR) gravelling backlog, an input of 300 mandays/km were anticipated for reshaping. However, the following problems were apparent with the majority of roads proposed by the Districts:

In view of this a new set of roads was reviewed and provisions were made for:-

1. more extensive training (rehabilitation, drainage works, gravelling);

2. expanded contract documents; and

3. gravel surveys.

Training

The objective here was to introduce the contractors to labour based construction and gravelling techniques developed under the RAR and MR Programme. It comprised two one-week sessions at Kisii and four two-day sessions in Thika. The syllabus covered:

1. Project Planning, Supervision and Reporting Systems

2. Labour Based Road Construction and Maintenance Methods

3. Labour Intensive Gravelling Methods

4. Pricing, Tendering and Implementation of Labour Based Contracts.

An average attendance of 85% was recorded. Lecturers from the ILO and the Ministry of Public Works & Housing (MOPW&H) assisted in conducting the contractor training course.

Practical Assignments

It was also important for the trainees to acquire and develop practical skills in the effective use of labour based techniques. Each of the contractors were initially awarded a fixed rate contract for the reshaping and gravelling of a 3 km section of a rural access road (Assignment I). Two contracts were then awarded through competitive bidding, each for reshaping and gravelling a 5 km section of rural access road (Assignment II).

The foreman training programme covered four main subjects, comprising classroom lecturers and practicals as indicated below:

10 participants successfully completed their training course in Kisii and were subsequently appointed as foremen on fixed rate contracts (3 months), and also on the two contracts awarded to contractors based on competitive bidding (6 months each).

In May 1993 course certificates were issued to 9 participants on the contractor training course and 9 participants on the foremen training course.

Gravelled roads

The average construction costs for contracts awarded in January 1993 ranged between US$ 5100 and US$ 11,600 per km, depending on the reshaping/reconstruction requirements and the transport distances for gravel. The cost of the main components of the work are set out in Table 1.

Contracts Documents

In view of the size of the contracts and the extent of the construction work which includes eathworks, drainage works and gravelling, it was considered necessary to prepare full tender documents covering the following aspects:

A. Conditions of Tender and Instructions to Tenders

B. Form of Agreement

C. Conditions of Contract

D. Specifications

E. Drawings

F. Bills of Quantities

Due to the special nature of the work, the conditions of contract included a number of clauses particularly relevant to labour based contracts, and gave special emphasis to management and labour issues.

Similarly brief specifications and measurement guidelines were provided for all items to supplement the details given in the Technical manual.

Apart from the standard cross sections, headwalls and culvert bedding details, a map and the quarry plan the road improvement plan forms MRP-E2 (B) and (F) were provided as contract drawings.

The Bills of Quantities were split into 7 different sections covering the main work components.

Costing/Tendering

As the local contractors were not accustomed to normal tender procedures and competitive pricing, the first set of contracts were awarded on the basis of fixed rates determined by the consultant. Prior to this, a special seminar was held with the contractors to discuss tender procedures and pricing during which each rate was analyzed and adjusted accordingly.

The contractors were given the first opportunity to submit competitive tenders for 6 contracts in January 1993. These contracts were scheduled for completion by late July/early August 1993. Competitive tenders for a further 7 contracts were received in June and some were awarded in Engineer's Estimates, while 40% of the tenders were within ±15%.

Apart from one contractor who submitted his tender document an hour after the deadline, all bidders complied with the conditions of tender.

Planning and Reporting System

The contractors were trained in the use of simple forms for estimating their input, costing the works, drawing up a work programme, and monitoring progress. 

Project Outcome

The results of the programme indicate that:

Problems Encountered

Institutionalization of the procedures in the districts was difficult for the following reasons:

Extensive gravel surveys are required to identify quarries with gravel of acceptable quality and quantity within reasonable distance of the project roads. Furthermore natural grave appears to be a scarce resource and alternative materials have to be considered, e.g., quarry waste, crushed rock, etc.

The high resource requirement, particularly during the field practicals, made it difficult to train more than 10 to 12 contractors at the same time. The training course currently takes about 24 to 30 months from inception to completion. The training capacity must therefore be increased.

During certain times of the year, and depending on the activities within the area at that time (e.g. planting, harvesting, etc), labour may be a scarce resource. It may therefore be necessary to stop contracts for shot periods during these times.

Tools are of very poor quality and negatively affect work output. Efforts must therefore be made to improve the quality of steel quality, the handles and the design of the individuals items. Standards for these items have been provided by ILO but do not seem to be compiled with.

Our experience from the project indicates that the following measures are required in order to successfully implement labour based contracting programmes:

1. Studies and trails need to be undertaken to ascertain the viability of labour based contracting which will depend on:

2. The Government must make a policy decision where routine and periodic road maintenance should, in future, be undertaken by small-scale contractors rather than by force account.

3. In line with No.2 above, the Government will have to study the implications of this decision with regard to staffing, funding, tender and payment procedures. In this connection a decision has to be taken as to whether the preparation of documentation and contract supervision is to be undertaken by the Ministry or by private consultants.

4. There must be sufficient and qualified personnel to plan, prepare the documentation, tender and supervise such contracts.

5. Personnel must be trained in all aspects (planning, contract documentation, tender procedures, supervision, monitoring, payment procedures, etc.) both at headquarter- and district-level.

6. Tender procedures must be streamlined so that:

7. Standard contract documents suited to labour based methods have to be developed to include:

8. Sufficient funding must be provided and payment procedures streamlined to guarantee timely payment to contractors.

9. Continued employment of contractors should be guaranteed through planning and budget provisions. Satisfactory performance on the part of the contractor can only be achieved by providing further training for foremen, contract supervisors and contractors (eg. seminars, lectures, etc)

10. Contractors must be involved in setting out policies and in the development of new techniques and procedures.

11. Social aspects need to be considered, particularly in terms of employment conditions and background of the contractors.

 Table 1

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The Labour-based contracting for the routine manual maintenance of the classified network was launched in January, 1993 in order to respond to the renewed initiative of keeping the already reconstruction rehabilitated roads well maintained.

Over the past six years the government has reconstructed/rehabilitated over 45% of the classified network and 10% of the rural feeder roads. There was mounting need therefore to adequately protect this investment.

The existing Road Maintenance Policies coupled with their constraints could be no means enable the timely application of effective maintenance to the network.

This led to the formulation of new strategies geared towards solving the setbacks and constraints of the previous maintenance system - hence the adoption of the labour-based contracting option for the routine manual maintenance.

This paper is based on the Uganda experience in implementing the labour-based contracting programme for routine maintenance of its classified network. The organizational set-up of the Ministry of Works, Transport and Communication (MOWTC), the implementing Ministry, together with a review of the Road Network under its jurisdiction is briefly presented.

The new strategies in the Road Maintenance Initiative and the evolution of the labour-based contracting options is discussed.

The adopted methodology and implementation approach of the labour contracting programme is described together with the outcome and experience so far.

The paper finally outlines the future programmes in respect to labour-based maintenance approach.

Uganda has a network of roads, amounting to approximately 30,000 km. It is most typically categorized into three main groups:

(i) Classified Roads - which amount to 8,085 km or 27 percent of the road network and come under the responsibility of the Ministry of Works, Transport and Communications (MPWTC);

(ii) Feeder Roads - which amount to 21,000 km of road or 70 percent of the total network and come under the responsibility of the Ministry of Local Government (MOLG); and

(iii) Urban Roads - which amount to 1,000 km or three percent of the network and come, again, under the MOLG through the urban and authorities.

The Classified Main Road Network

The classified main road network forms the principal inter-urban linkages. The structure of the network is shown in Table 2.1 below.

Table 1: Classification of the main road network (km)