PhD Final Thesis April 2013.pdf - Anglia Ruskin Research Online

Thesis Keith Gale 2013precious stones to reflect effort made by key individuals. (Altenmuller and Moussa,1991, p36). Although principles of modern economics are not present with this earlycivilisation, a link between productivity and reward was recognised.3.12 Use of monetary selection systems within constructionHistorical records indicate that use of resource allocation by payment in kind or timebased monetary payment continued for almost 5,000 years but was not without itsproblems. Payment through reimbursement of time based methods included anallowance for mark up which reflected a benefit to undertake the work. It can beviewed as an incentive to provide a service (supply) to someone who wishes it to beundertaken (demand). Modern economic theorists understand the variability of amark up allowance in reaction to market conditions (Harvey and Jowsey, 2007). Tahet al, (1994, p31) described mark up by relating it to the costs of a constructionproject. He stated that ‘direct costs of a project comprise labour, plant, materials andsub-contractor costs. Indirect costs consist of site overheads, general overheads,profit, and allowances for risks. When indirect costs exclude site overheads they areoften termed the mark up.’ Although this description provides a cost driven view ofa project, economic forces often dictate prices otherwise.Payment by resource has been a method of reimbursement for several millennia andis still occasionally used by some clients, but does suffer a flaw with the control ofproductivity. If operatives are paid per day for example, there is no incentive tofinish a project early. Projects undertaken using a resource method of payment areoften difficult to calculate due to uncertainty with the construction period. Concernsfrom clients requiring construction services are not new making the role of estimatoressential. An early example of concern appears in the Bible, as Jesus states:‘Suppose one of you wants to build a tower. Will he not first sit down and estimatethe cost to see if he has enough money to complete it? For if he lays the foundationand is not able to finish it, everyone who sees it will ridicule him, saying ‘this fellowbegan to build and was not able to finish.’’ (Luke 14.28-30).As sophisticated building techniques developed, shortage with skills became acute.Market trade guilds formed in the fifteenth century to meet demands of specific65