MEASURING D E S I G N AND CONSTRUCTION

QUALITY COSTS
By Kent Davis, 1 W. B. Ledbetter, 2 Fellow, ASCE,
and James L. Burati, Jr., 3 Member, ASCE
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ABSTRACT: Several troublesome challenges face the U.S. construction industry:

productivity is down, litigation is up, delays are common and expensive, foreign
firms are taking a greater share of the market. The reasons are complex, but one
important common factor is quality—or rather, the lack of it. In view of these
facts, a quality performance tracking system (QPTS) has been developed to provide
for the quantitative analysis of certain quality-related aspects of projects, by sys-
tematically collecting and classifying costs of quality. By defining quality as "con-
formance to requirements," the cost of quality becomes measurable. It consists of
two main parts, the cost of quality management efforts and the cost of correcting
deviations. A total of 15 categories identify the main quality management efforts.
When coupled with 24 deviation categories (plus six "repeat" quality management
categories), most of the important quality costs can be identified for tracking and
analysis. These categories can be easily changed and adapted to meet individual
company requirements for design, construction, and start-up.

INTRODUCTION

Several troublesome challenges face the U.S. construction industry: pro-

ductivity is down (Tucker 1986), litigation is up (ENR 1986b; NSPE 1977;
Wilson 1982), delays are common (Diekmann and Thrush 1986) and ex-
pensive (Wilkinson 1982), and foreign firms are taking a greater share of
the market (ENR 1986c; Moavenzadeh 1985). The reasons are complex, but
one important common factor is quality—or rather, the lack of it (Ledbetter
et al. 1986; Business Roundtable 1982).
While the importance of quality management as a project integration point
is clear (Parsons 1972; Rounds and Chi 1985), disagreements exist over the
proper approach to achieve quality (Haggard et al. 1984; Isaak 1982). The
situation was summarized by the report published by the Business Round-
table (1982) in their Construction Industry Cost Effectiveness (CICE) Proj-
ect, which concluded: "The application and benefits of a quality assurance/
quality control (QA/QC) program are neither fully understood nor effec-
tively utilized in the planning, design, and construction phases of many en-
gineered projects."
In response to the growing concern about quality, the ASCE adopted
"Quality in Engineering" as its theme in 1984 (Karn 1984) and continues
to pursue a major effort in that direction. The ASCE has prepared a pub-
lication entitled Manual of Professional Practice for Quality in the Con-
structed Project, which is currently undergoing Society review. Referring to
that project, Daniel Barge, the 1987 president of the ASCE, said, "This may
be the single most important endeavor undertaken by the ASCE" (ENR 1986a).
'Assoc. Prof, of Building Constr., John Brown Univ., Siloam Springs, AR.
2
Prof. of Civ. Engrg., Clemson Univ., Clemson, SC 29634.
3
Assoc. Prof, of Civ. Engrg., Clemson Univ., Clemson, SC.
Note. Discussion open until February 1, 1990. To extend the closing date one
month, a written request must be filed with the ASCE Manager of Journals. The
manuscript for this paper was submitted for review and possible publication on Feb-
ruary 2, 1988. This paper is part of the Journal of Construction Engineering and
Management, Vol. 115, No. 3, September, 1989. ©ASCE, ISSN 0733-9364/89/
0003-0385/$!.00 + $.15 per page. Paper No. 23847.

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J. Constr. Eng. Manage. 1989.115:385-400.

 The Construction Industry Institute (CII) is also actively addressing the qual-
ity of design and construction through its Quality Management Task Force.
Quality has many meanings, but in the final analysis it is a "bottom-line"
issue. It is incorrect to think of quality as only aesthetics, or gold-plating,
or as a "degree of excellence." In design and construction, quality is often
defined as "conformance to requirements." Quality-related efforts cost or
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they pay. On the one hand, in engineered construction, providing quality

assurance and quality control requires an expenditure that has been reported
to range from approximately 1-5% of total project costs (Hays 1983; Led-
better 1983). On the other hand, in industrial construction direct costs in-
curred for rework alone (termed deviations) have been estimated to be greater
than 12% (Burati and Farrington 1987). Together they can add up to more
than 15% of the total cost of a project.
In spite of the size and significance of the quality issue, an extensive
review of the literature has revealed no comprehensive system in the con-
struction industry for the definition, collection, and analysis of quality-re-
lated costs (Davis 1987). This is surprising since the construction industry
is perhaps the largest industry in the United States, accounting for more than
8% of the gross national product (NAP 1986). Industrial construction in-
volves in excess of $130 billion annually (Constructor 1986), and the re-
ported 12% spent for rework would amount to over $15 billion wasted an-
nually—a huge sum! The obvious question is, "Why are there no systems
to track quality-related costs in the construction industry?" After all, the
concept of tracking this kind of information is over three decades old (Fei-
genbaum 1956) and has been used in the manufacturing industry for many
years (ASQC 1984). The writers believe that a major reason that such sys-
tems do not exist in the construction industry is the nature of the construction
process itself. Manufacturing quality management normally involves assem-
bly-line products after the assembly process has been designed, constructed,
and optimized. Essentially, manufacturing involves a steady-state process.
Design and construction of facilities involve single, unique projects with
many changes occurring during design and construction.
It might be concluded that the manufacturing-oriented quality cost con-
cepts do not apply to the construction industry because of this fundamental
difference. The CICE did not accept this conclusion. The report of that proj-
ect stated (Business Roundtable 1982): "Methods for measuring quantita-
tively, to the extent practical, both the additional costs and benefits of formal
QA/QC programs in the design and construction of engineered projects are
also needed."
How do managers make intelligent decisions about the extent and nature
of their quality management efforts if they do not know the relationships
between the quality management efforts and the avoidance of quality-related
problems? An objective method is needed to compare and optimize different
quality management programs. This is not limited to engineered construc-
tion; every segment of the construction industry could benefit from quanti-
tative analysis of quality-related efforts. Further, the determination of the
overall cost of poor quality in design and construction is vital. A method
for accomplishing these goals is clearly needed. The information generated
would provide a direction for improving quality, which should help alleviate
some of the problems faced by the construction industry.
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 QUALITY PERFORMANCE TRACKING SYSTEM

Basic Premises
In view of these facts, the Quality Management Task Force of the CII has
undertaken the development and field trial of a quality performance tracking
system (QPTS). The QPTS is defined (Burati and Farrington 1987) as: "A
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management tool providing for the quantitative analysis of certain quality-

related aspects of projects by systematically collecting and classifying costs
of quality."
Three fundamental premises were made in the development of the QPTS:

1. Quality is defined as conformance to requirements, not as a degree of good-

ness or excellence.
2. The requirements for the design and construction are clearly stated.
3. An adequate work breakdown structure cost and schedule system is in place.

Concerning the first premise, quality sometimes refers to degree of good-

ness or excellence (Guralnik 1984), which is subjective and often not quan-
tifiable. A more technical definition given by the American Society for Qual-
ity Control (ASQC) is: "The totality of features and characteristics of a product
or service that bears on its ability to satisfy given needs" (Freund 1985).
This and similar "fitness-for-use" definitions are often used for design qual-
ity (ASCE 1973; Trainor 1984), but they, too, are subjective. They raise the
issue of defining the real need and determining if it has been met. Also, this
"needs-based" definition does not work well for the construction phase of a
project. Construction must be performed in accordance with the contract
documents. Doing so guarantees that the needs of the user will be met only
if the design itself is adequate. In other words, quality, by this definition
(meeting needs), may be beyond the control of the construction contractor.
Consequently, the more pragmatic and objective "conformance-to-require-
ments" definition of quality has been adopted. The use of this definition has
three important effects. First, since the achievement of quality is made ob-
jective, it can be studied in terms of costs. Second, it requires the estab-
lishment and careful communication of the requirements from the client to
the designer and from the designer to the constructor (the second premise).
Finally, the presence or absence of quality becomes objective, provided the
requirements are completely specified. If the requirements are met, quality
has been achieved; otherwise it has not.
The third premise involves the capture of quality-related costs in an ef-
ficient manner. As discussed in following sections, an adequate cost and
schedule system is necessary for capturing and tracking quality-related costs.

Quality-Related Activities
In the global sense, one could argue that all activities related to the suc-
cessful completion of a project involve quality. While philosophically this
argument may be correct, there are certain aspects of quality that merit spe-
cial attention in a tracking system. These aspects include quality assurance,
quality control, and quality management, which might be considered the
inputs to the quality system, and quality-related failures, the negative outputs
of the system. The quality-related failures are called deviations.
Quality assurance (QA) is sometimes used as an all-encompassing term

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J. Constr. Eng. Manage. 1989.115:385-400.

 (Fuller 1986; Mayben 1983); in other cases, quality control (QC) is used in
this sense (Besterfield 1979; NSPE 1977). Alternately, quality management
(QM) may be the broad term and QA and QC considered to be sub-elements
(Johnstone 1985). The latest usage is adopted herein, and quality manage-
ment (Burati and Farrington 1987) is defined as: "the optimization of the
quality activities involved in producing a quality product, process, or ser-
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vice. As such, it includes prevention and appraisal activities."

Therefore, quality management does not include the cost of performing
the work correctly. For example, providing protection to achieve a "quality
cure" for concrete is not a quality management activity, but participation in
a quality circle or testing concrete specimens is.
Another important term is "deviation," which is defined as "departure
from established requirements" (Burati and Farrington 1987). The analogous
term used in manufacturing is "failure." "Deviation" is used because de-
partures from requirements can result from owner "changes" which cannot,
in many cases, be accurately characterized as failures.

Cost of Quality Concept

The cost of quality (also termed quality costs) concept has been developed
and used in the manufacturing industry (Feigenbaum 1983; Juran 1962; ASQC
1984). Conceptually, quality costs have been defined as "all costs incurred
by the business because the product was not designed, produced, or serviced
in a perfect manner during the initial cycle" (Simmons 1970). A broader
view includes the costs to the consumer (Feigenbaum 1983) and even to
society (Sullivan 1986). However, for practical reasons, quality costs in-
variably have been measured from the perspective of the producer, not the
consumer.
Costs of quality can be divided into two major components: quality man-
agement costs, which consist of prevention and appraisal costs, and devia-
tion costs (Feigenbaum 1983). Detailed breakdowns of quality costs have
been given by many writers (Besterfield 1979; Dhillon 1985; Feigenbaum
1985; Harrington 1987). Quality management costs are planned, budgeted,
and implemented, and are the discretionary part of quality costs. In contrast,
deviations are unplanned; the costs are reactive. Quality management costs
plus deviation costs constitute the total cost of quality.
It has been shown in manufacturing that increased expenditures for quality
management activities (particularly for prevention) lead to decreased expen-
ditures for deviations (Chauvel and Andre 1985; Lenane 1986). The objec-
tive, however, is to minimize the total cost of quality, which is defined as
the sum of the costs associated with quality management efforts and with
correcting deviations. In the manufacturing industry, the relationship be-
tween quality management costs and deviation costs is well known. Increas-
ing quality management costs decreases deviation costs. In the construction
industry, this relationship is not known. Fortunately, the precise relationship
between the quality cost components is not needed to make the information
useful. An incremental approach to quality costs can be used, i.e., as long
as incremental savings from reduced deviation costs exceed incremental ex-
penditures for quality management, additional investment in quality man-
agement is justified.
The importance of tracking quality costs has been expressed by many writ-
ers (Lowe 1986; Moore 1984; QME 1975; ASQC 1971). One major reason
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J. Constr. Eng. Manage. 1989.115:385-400.

 is the magnitude of quality costs. Some think it is as high as 15% of sales
in manufacturing (Caplan 1985; Schmidt and Jackson 1982), and that real-
istically it can be reduced to 2.5% (Heldt 1986; Schmidt and Jackson 1982).
Quality costs may be even higher in the construction industry.
If, in fact, rework costs are typically 12% of industrial project costs, then
there is considerable room for improvement, which would result in signif-
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icant savings. Achieving these savings depends on the ability to accurately

identify and track the cost of quality.
In principle, applying the quality cost concept to design and construction
is straightforward. In practice, it is rather complex. Quality costs include
direct and indirect costs associated with labor, material, and equipment for
quality management activities and for correcting deviations. This applies
whether the costs are borne by the owner, the design firm, or the construc-
tion firm. Labor costs for quality management include full-time quality man-
agement personnel, as well as others only occasionally involved in quality-
related activities. (A careful analysis of the management function will reveal
that much of the time is spent on quality-related matters.) Deviation costs
cover a broad spectrum, including costs of rework (which includes both re-
pair and replacement), impact, liability, and warranty work.
The QPTS has been designed to supplement existing cost-coding systems
to capture many of these costs. Pertinent information captured by the existing
system is combined with QPTS information to characterize quality costs.

Deviation Description
The major issue in the development of the QPTS was how to handle de-
viations. The writers have proposed nine important questions that should be
answered in connection with a deviation. Each of these questions has a num-
ber of possible answers, as shown in Fig. 1. A tracking system designed to
answer all these questions would involve thousands of combinations. To limit
the initial effort, only a portion of these combinations was considered in the
initial system. Fig. 1 also shows whether the information is tracked by the
current QPTS (Q), the usual cost tracking system (W), or is not tracked (N).
The following discussion expands each question in Fig. 1 and explains its
relationship to the QPTS.

Which Task?
The complete question is "Which specific tasks were involved in the de-
viation?" This information is vital if corrective action is to be taken to pre-
vent future occurrences. This information is captured by the usual cost cod-
ing and need not be tracked separately by the QPTS, provided relevant costs
are assigned to the task responsible for the deviation. For example, if un-
derground piping were improperly installed, requiring removal and replace-
ment of a concrete slab, the cost of the concrete rework should be charged
against the piping task.

Who Affected?
The complete question is "Which phase of the project incurred the quality
costs due to the deviation?" Deviations can result in quality costs affecting
any of the seven phases shown under this question in Fig. 1. To limit the
scope of the current effort, the QPTS has been restricted to design, con-
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J. Constr. Eng. Manage. 1989.115:385-400.

 WHAT COSTS ? WHICH TASK ? WHO AFFECTED ?
Direct Excavate Site "Preplanning
Overhead Place Concrete Design
*Impact -«-» - Erect Steel "'"Procurement
^Liability \ Fabricate Pipe Construction
"'Warranty \ Install Pump *S tare-Up
^Permits Etc. ""Operation
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\ ^'•Disposal
\ 4

WHAT CLASS ?
Imperfection w w w WHEN DETECTED
Nonconformance
Defect -^Preplanning
Design
""Procurement
Construction
Start-Up
"^•Operation
"'Disposal
WHAT RESPONSE ?
Rework
-''Accept

WHO CAUSED ?
•

' Owner
WHAT TYPE ? Designer
QM INVOLVED ? Vendor
Error
Change Transporter
Prior QM input
Constructor
QA/QC Rework

•' This category omitted from current tracking system.

Tracking U - Tracked by the added QPTS code

Devices W - Tracked by the usual WBS code
Legend M - Not tracked by this system

FIG. 1. Anatomy of Deviation and Deviation Tracking Devices

struction, and start-up. Again, as this information is normally captured by

the usual cost coding, it is not tracked separately by the QPTS.

What Costs?
The primary question is "What is the cost of the particular deviation?" A
companion question is "What measurable costs are caused by deviations in
general?" Although these costs are normally captured by existing systems,
they may not be distinguishable from the normal cost of performing work.
The QPTS captures these costs and adds information about them.
In addition to the direct costs associated with deviations, there are indirect
costs. The QPTS, in combination with the usual cost-tracking system, can
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J. Constr. Eng. Manage. 1989.115:385-400.

 be expanded to approximate indirect quality costs by using overall direct and
indirect cost percentages. If, for example, overall indirect costs average 30%
of total project costs, it seems reasonable to assume that this percentage
applies to deviation costs. Thus, a direct deviation cost of $70,000 would
represent an additional indirect cost of $30,000 or a total deviation cost of
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$100,000.
Impact is an additional element that may be associated with design or
construction deviations. A deviation-caused delay or disruption in one ac-
tivity may have a detrimental effect on another activity resulting in additional
costs, i.e., an impact. While all deviation-related impact costs are a part of
quality costs, the current QPTS does not track impact costs.
Liability costs may be considered to be deviation costs (Besterfield 1979).
This includes some legal costs, the costs of certain types of insurance, and,
under some circumstances, liquidated or actual damage payments. These costs
are generally available from existing cost-tracking systems and are not tracked
by the current QPTS. The determination of what portion of liability costs
should be classified as deviation costs is not addressed herein.
Warranty costs are also properly included as part of the costs of deviations
(Besterfield 1979). The consideration of such costs is also outside of the
scope of the current QPTS.

When Detected?
The complete question is "During which phase of the project was the de-
viation discovered?" Obviously, early detection of deviations is better than
late detection (Schrader 1986). Further, the ability to detect deviations in-
ternally is a measure of the effectiveness of the appraisal effort. Information
about when deviations are detected may lead to improved approaches to quality
management.
The QPTS is designed to identify detection times for design, construction,
and start-up. To limit the scope of this work, consideration of deviation
detections during pre-planning, procurement, operation, and disposal is not
currently included.

Who Caused?
The complete question is "Who caused the deviation, and why?" A de-
viation by any of the participants of the project may cause quality costs for
that participant or for others. "Cause" need not have the connotation of
"blame." For example, a decision to proceed with a detailed design without
complete vendor, information may be considered the best approach even though
it is suspected that some design rework will result. In many cases, however,
the attachment of blame to a deviation is inevitable and appropriate. This
question is closely tied to the previous question of "Which Task?" Whenever
a deviation occurs and rework results, the task causing that rework should
be charged the total cost, regardless of what other tasks were affected.
At times, determining the cause of deviations will be difficult. Respon-
sibility may be shared or unclear. The current QPTS identifies five causes:
owner, designer, vendor, transporter, and constructor. Once the cause has
been determined, management can take the necessary next step to determine
the underlying reason, e.g., haste, fatigue, or faulty communication. This
consideration is outside of the scope of the current QPTS.

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J. Constr. Eng. Manage. 1989.115:385-400.

 QM Involvement?
There are two questions involved: "Was quality management effort ex-
pended on the activity for which there was a deviation?" and "Does the
deviation necessitate a repetition of the quality management activity?" The
answer to the first question provides a way of evaluating the effectiveness
of quality management efforts. The second question recognizes that devia-
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tions may lead to repeat work for quality management personnel. (The term
"repeat" is used instead of "rework" for this situation.) The cost of repeat
work must be considered a deviation cost rather than an ordinary quality
management cost. The QPTS provides answers to both of these questions.

What Type?
The complete question is "Did the deviation result as the consequence of
an error or a change?" A change is defined as (Burati and Farrington 1987):
"a directed action altering the currently established requirements. Changes
may encompass design, fabrication, construction, etc. and materially affect
the approved requirements, the basis of design, the existing scope of the
contract plans and specifications, or operating capability of the facility.
It is a matter of semantics whether a change is a deviation, but changes
are so costly to construction projects that they are addressed by the QPTS.
The QPTS, which tracks the costs involved with changes only when the
changes result in rework, is not intended to replace the change-control mech-
anism. Although the owner is involved in approving a change, the QPTS
provides for the possibility of change initiation coming from the other project
participants.

What Response?
The complete question is "What is done in response to the deviation?"
Typically, a deviation results in rework. Thus, the response to a design de-
viation is to redesign, and the response to a construction deviation is to
rebuild. All the extra costs involved are deviation costs. As has been stated,
the ordinary cost system captures these costs, while the QPTS identifies them
as rework and provides descriptive information. Occasionally an owner may
accept some "below-specification" work rather than demand rework. In ef-
fect, the acceptance of such work is a negotiated change in the project re-
quirements. This situation is not addressed by the current QPTS.

What Class?
The complete question is "Should the deviation be classified as an im-
perfection, nonconformance, or defect?" The classification of a deviation
refers to its degree of severity (Freund 1985). The class of deviation is in-
cluded here for completeness, but it is not included in the current QPTS
because of the limited value of tracking imperfections and the practical dif-
ficulties in distinguishing between nonconformances and defects.

Deviation Categories
The foregoing description illustrates some of the complexities of tracking
deviation costs. Referring to Fig. 1, it can be seen that the QPTS supple-
ments the usual cost-coding system by characterizing rework by type, cause,
and time of detection. While there are several thousand possible combina-
tions, only a relatively small number is required to properly track the cost
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J. Constr. Eng. Manage. 1989.115:385-400.

 TABLE 1. Rework Categories for Design and Construction
Detection Time Code
Cause Type Design Construction Startup
(1) (2) (3) (4) (5)
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Owner Change X X X
Designer Error X X X
Designer Change X X X
Vendor Error X X X
Vendor Change X X X
Transporter Error — X X
Constructor Error — X X
Constructor Change — X X
Other Change X X X

of quality. Table 1 summarizes the deviation categories that should be iden-

tified for tracking. There are a total of 24 deviation categories, which include
three designated as "other" to cover special situations. The value of the QPTS
is, in part, that it is quite simple and can be accommodated by most existing
cost-coding systems. The 24 additional codes suggested should not be in-
timidating to project personnel.

Quality Management Activities

Turning to the other major component of quality costs, many sources [ACI
1985; Bohannon 1978; Burgess 1984; Fuller 1986; ANSI 1980; NSPE 1977;
O'Connor et al. 1986; Parsons 1972; CFR (undated); Schrader 1986; She-
pard 1977] were reviewed to establish a list of quality management activities
used in design and construction. As expected, there is variation in emphasis,
detail and vocabulary. In design, for example, the definition of what con-
stitutes quality management varies from one firm to another, and the dis-
tinction between ordinary design practice and quality management is some-
times blurred. There is, however, reasonable agreement. 15 quality
management activities are given in Table 2. They are consistent with the
references cited and the definitions adopted. Although some activities may
be classed as "prevention" and others as "appraisal," the distinction is not
important for the current discussion. What is important is that only a rela-
tively small number of activities (15 in all) are sufficient to categorize quality
management activities for design and construction, keeping in mind that not
all activities are germane to both phases of a project.
One other important point should be made here. Whenever any of the
activities are repeated because of an earlier deviation, the cost involved be-
comes a part of the deviation costs, not the quality management costs. The
six activities marked with an asterisk in Table 2 are thought most likely to
fall into this category.
What has been presented is a simplified preliminary version of the QPTS,
designed to capture 15 quality management costs, 24 deviation costs, and
six "repeat" quality management costs. There are several reasons for this.
First, it was decided to tackle those portions of quality costs impinging di-
rectly on the overall productivity of a construction project. Second, it was
decided to reduce the number of QPTS codes to a minimum while still ob-

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 TABLE 2. Quality Management Activities for Design and Construction
Activity Repeat"
(1) - (2)
Quality system development
Quality program development
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Feasibility study
Contractor/subcontractor evaluation
Quality orientation activities
Personnel qualification/testing
Personnel training
Formal design check/review *
Formal drafting check/review *
Formal check/review of other documents *
Constructibility review *
Materials inspections/tests *
Inspection *
Quality status documentation
Post-project review
"When repeated, the cost of these activities become deviation costs.

taining important information. Third, it was decided to learn how to walk

before trying to run, insofar as tracking quality costs is concerned. The next
step is to integrate the QPTS into existing cost-coding systems for tracking.

COST AND SCHEDULE CONTROL SYSTEMS AND CODING

Cost and schedule control systems vary from one firm to another, with
those used for construction tending to be more extensive than those used for
design. Those most compatible with the QPTS use a work-breakdown struc-
ture (WBS) system. A QPTS/WBS cost-coding system involves two parts:
the usual WBS portion and the quality cost portion. For example, on a cost-
coding system in which the QPTS has simply been added, a designer might
code his or her time: xxx-yyy-zzz-QM.
The code QM indicates that a designer is performing some quality man-
agement function (e.g., a formal design review). The xxx-yyy-zzz portion
would be the usual WBS code. Another approach would be to place the
QPTS codes into existing cost-coding schemes by utilizing unused fields and
numbers. Both approaches were accomplished on actual cost-coding schemes
for design (Diekmann and Thrush 1986) and for construction (Neil 1983).
Detailed analyses of these schemes demonstrate the ease of integrating the
QPTS into existing cost-coding structures (Davis 1987). It is clear that QPTS
coding can supplement existing WBS coding. Since coding systems vary,
the integration of the QPTS must be accomplished on a case-by-case basis.
The writers believe that many WBS cost-coding systems can absorb QPTS
coding very readily.

QPTS DATA COLLECTION

Some quality costs require frequent, perhaps even daily, tracking. These
are listed in Appendix I. Fortunately, continual record keeping of such in-
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J. Constr. Eng. Manage. 1989.115:385-400.

 TABLE 3. Quality Management Times of Design Department Personnel

QM Activity Discipline Date Hours

(1) (2) (3) (4)
Formal design check/review Piping 4/05/87 10.0
Energy system 4/05/87 24.0
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Energy system 4/12/87 18.0

Formal drafting check/review Structural 4/12/87 16.0

Structural 4/19/87 18.0

Constructibility review Structural 3/29/87 10.0

Design scrubbing" Foundations 4/05/87 6.0

Drafting scrubbing" Structural 4/12/87 65.0

Structural 4/26/87 115.0
HVAC 5/10/87 8.0
'Category added by participating firm.

formation for nonquality costs is quite common in the construction industry,

and doing so for quality costs represents no great additional burden.
Quality costs are meaningful only in the context of overall costs. A $10,000
piping rework cost has a different connotation on a $1,000,000 project than
it has on a $20,000 project. The cost breakdowns ordinarily available should
be used in connection with quality costs so that appropriate percentages can
be calculated and trends detected.

APPLICATION AND PRELIMINARY FIELD TRIAL RESULTS

The QPTS has been introduced on five projects ranging in size from about
$5,000,000 to about $170,000,000. Three of the projects include both design
and construction. The firms involved introduced the QPTS by defining spe-
cific work packages to be tracked (generally combined into major disciplines
such as civil, electrical, etc.). The only problem with the application was
in forcing each work package into the same discipline, whether it be the
design or the construction phase. A design organization may categorize a
work item in a different discipline than the construction company building
the item. This had to be overcome by utilizing consistent discipline defini-
tions throughout all project phases. The results of the field trials will be
made available after their conclusion. Preliminary results indicate that the
desired information is being tracked. This is illustrated in Tables 3 and 4,
which consist of information obtained from computer printouts during the
design phase of one project. Note the additional categories introduced by
the participating firm. The QPTS is designed to be dynamic and adaptable
to specific needs. Table 3 indicates that quality management activity hours
are being tracked by specific activity (e.g., design check/review) and dis-
cipline (e.g., structural). Table 4 indicates that design rework times are being
tracked by cause (e.g., client) and discipline (e.g., structural). Using this
information and overall times charged to the project by discipline, time per-

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 TABLE 4. Rework Times of Design Department Personnel
Discipline Date Hours
(1) (2) (3)
(a) Client Change
Structural 3/29/87 43.0
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Structural 4/05/87 15.0

Structural 4/12/87 4.0
(b) Vendor Change—Preliminary
Structural 3/29/87 8.0
Structural 4/05/87 4.0
Structural 4/12/87 44.0
Structural 4/19/87 8.0

TABLE 5. Time Breakdown for Discipline X for Four-Week Period

Hours Percent (%)
Activity Breakdown Total Breakdown Total
(1) (2) (3) (4) (5)
Ordinary (nonquality) activities 797 797 52.8 52.8
Formal design check/review 135 — 8.9 —
Formal drafting check/review 323 — 21.4 —
Constructibility review 44 — 2.9 —
Drafting scrubbing* 152 — 10.1 —
Client change rework 19 — 1.3 —
Vendor change—preliminary 40 — 2.6 —
Total quality related — 713 — 47.2

Grand Total — 1,510 — 100.0

"Category added by participating firm.

centages (and therefore cost percentages) spent on quality-related activities

can be determined. This is illustrated in Table 5, which consists of infor-
mation taken from the same printout.

CONCLUSIONS

Based on the research reported herein, including very preliminary results

from the field trial of the QPTS, the following conclusions can be drawn
concerning the quality aspects of the design, construction, and start-up of
engineered projects:

1. Defining quality as conformance to requirements provides an objective ba-

sis for measuring quality and certain related costs, provided the requirements are
clearly stated.
2. The cost of quality is defined as the sum of the costs associated with quality
management efforts and with correcting deviations.
3. A total of 15 categories identify the main quality management efforts. When

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 coupled with 24 deviation categories (plus six "repeat" quality management cat-
egories), most of the important quality costs can be identified for tracking and
analysis. These categories can be easily changed and adapted to meet individual
company requirements.
4. Existing WBS cost-coding systems can be adapted to include the major
categories involved in the cost of quality for design, construction, and start-up.
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RECOMMENDATIONS

Much more work needs to be done, both in terms of the continuing field
trials and further quality-related studies. The surface has only been scratched
in terms of understanding the true cost of quality in the design and construc-
tion of engineered projects. The QPTS needs further refinement optimization
to make it truly effective, especially in the area of accurately tracking the
"true" causes of deviations. Companies need to use the system on a number
of projects to develop their particular cost of quality relationships and to
reach the optimum point where these costs are minimized. Finally, of course,
the QPTS must be expanded and adapted to include other critical phases of
projects, from conception through disposal.

ACKNOWLEDGMENTS

The work reported herein was sponsored by the Construction Industry In-
stitute of the University of Texas at Austin and under the direct supervision
of the Quality Management Task Force. The writers wish to acknowledge
the outstanding guidance and support of the task force in conducting the
research program.
The statements made herein are solely those of the writers and are not
necessarily those of the Construction Industry Institute or the Quality Man-
agement Task Force.

APPENDIX I. INFORMATION NEEDS OF QPTS REQUIRING

CONTINUAL TRACKING

Personnel Times
• By salary or wage scale.
• By QM activity or rework category.
• By design discipline or construction activity.

Equipment Times
• By hourly or daily rate.
• By Qm activity or rework category.
• By design discipline or construction activity.

Materials
• By cost.
• By QM activity or rework category.
• By design discipline or construction activity.

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