Public Private Partnership Contracts In The Uk Business Essay

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The aim of this chapter is to provide detailed explanations of the research methods used in this study. Specifically, the purpose of this chapter is to explain and to justify the research methodology that was adopted to achieve the research objectives, to show how the chosen methodologies are related to the research objectives and to describe the data collection and data analysis methods.

THE RESEARCH PROBLEM

Before considering the research methodologies in detail it would be beneficial to restate the basis of this research again to give context to the following sections.

The use of PPP/PFI contracts in the United Kingdom is a relatively new way of delivering facilities and services. Some research has been done in recent years to seek to measure the performance of these projects in their operational phase, however this has mainly focused on projects in Great Britain. The author is unaware of any research work done by way of comparative analysis in relation to the performance of operational PPP/PFI projects in Northern Ireland. Therefore, main objectives of this research are to,

Critically review academic literature on the factors which influence the performance of operational PFI projects and develop an understanding of their influence;

Identify and analyse the performance of operational PFI projects in GB;

Analytically compare the performance of operational PFI projects in GB to the NI context;

Identify areas of performance variance between GB and NI and explore the reasons for this, and

Develop a series of recommendations for the future performance improvement of operational PFI projects in NI.

Bearing these in mind it is important, for the purposes of this research, that the appropriate methods are used to seek to meet these objectives. The following section gives an overview of the research methods available.

5.3 RESEARCH PARADIGMS AND METHODS

Before considering in detail the research methods used, brief explanations of the overall research methodology and research paradigms relevant to this study are first provided.

Hussey and Hussey (1997) describe the methodology as;

'the overall approach to the research process, from the theoretical underpinning to the

collection and analysis of the data' (Hussey and Hussey; 1997, p.54)

Here the term 'methodology' is used in the widest context to describe how the aims and objectives of the research are to be achieved within the research paradigms and the associated research methods.

Basically, there are two main research paradigms which have been subject to debate among researchers, namely `positivist' and `phenomenological'. Within a positivist research paradigm the researcher believes that he/she does not influence the research subject (Wass and Wells, 1994) but seeks to establish facts and explain the relationships between variables (Bryman, 2001).

The opposite viewpoint is the phenomenological or interpretivist. Interpretivism is based upon the assumption that social reality does not exist outside the individual research subject (Wass and Wells, 1994) so it depends on the subject's interpretation of it. The researcher using this type of paradigm describes and analyses the culture and behaviour of human beings and their groups from the view point of those being studied.

A number of authors highlight the close relationship between the research paradigm and research methods and suggest that the use of any of the research paradigms will have a strong influence on the choice of research methods used. (Burrell and Morgan, 1979; Gill and Johnson, 1991).

The term 'research method' is referred to as the technique or tool used for data collection and data analysis (Bailey, 1994). In social science research, `quantitative' and `qualitative' methods are the two types of methods which are directly associated with the two research paradigms; `positivist' and `phenomenological' respectively.

QUANTITATIVE METHOD

Quantitative research methods arise from a positivist paradigm that is centred on the research for objective truth, the use of scientific methods and the systematic measurement of phenomena. The method involves collecting and analysing numerical data and applying statistical tests (Hussey and Hussey, 1997). Research conducted using quantitative research methods tends to emphasise the importance of large-scale and representative sets of data, and has been perceived as being about the gathering of observable `facts' (Blaxter et al., 1996).

Quantitative studies include a substantial amount of literature to provide direction for the research questions or hypotheses. Owen (2002) suggests that the emphasis on quantitative research is to prove or disprove the hypothesis in a statistically analytical way and as such deliver prescriptive findings. The quantitative theory is believed to be a more accurate, valid, reliable and objective form of research than the qualitative methodologies.

Idris (1994) suggests that data gathered through the quantitative method is thin and narrow but generalised and produces findings that are prescriptive in nature while data gathered through qualitative methods is thick, deep and holistic and produces findings that are descriptive in nature.

5.3.2 QUALITATIVE METHOD

In contrast to the above, the qualitative research methods such as participant observation, interviews and certain secondary data analysis arise from the phenomenological perspective which considers the meaning of the phenomena as highly important. The objective of employing a qualitative research method is to explore, in as much detail as possible, and to obtain depth and understanding of the subject (Blaxter et al, 1996). This method seeks to gain an insight into peoples perceptions and relies on their interpretations therefore the researcher should ensure that the research instruments used do not direct subject of the questions asked.

According to Naoum (1998), a theory may emerge during the data collection and analysis phase of the research or be used relatively late in the research process as a basis for comparison with other theories. The placement of theory in qualitative research tends to be towards the end of the study. Therefore, the end product of qualitative research will be throwing up research questions which can be tested more rigorously by further quantitative research.

RESEARCH STYLES

Within the above mentioned research methods there are a number of research styles which have been identified as being appropriate for construction management research (Bell, 1993; Fellows and Liu, 1997; Naoum, 1998). These styles are action research, ethnographic, case studies, surveys, experiments and archival.

ACTION RESEARCH

In action research, also known as the problem-solving approach, the researcher reviews the current situation, identifies the problem, generates hypotheses about the causes and effects, acts on these and evaluates the changes or impacts (Fellows and Liu, 1997). According to them, action research is designed to suggest and test solutions to particular problems. This type of research is more attractive to practitioners, industrialists and professionals who have identified a problem during the course of their work and wish to investigate and propose a change to improve the situation. Examples of action research include changing organisation policy towards promotion or recommending a new system for measuring the quality management of the organisation. In this study, action research is not suitable as there is not an existing process to change or improve.

ETHNOGRAPHIC STUDY

According to Wallen & Fraenkel (1991) (cited in Creswell, 1994), ethnographic research deals with an intact cultural group in a natural setting during a prolonged period of time by collecting, primarily, observational data. The aim is to understand something of participants' lives from the inside, to find out what goes on and why, and all with reference to the social context (Creswell, 1994; Fellows and Liu, 1997; McQueen and Knussen, 2002). Typically, theories and hypotheses are generated and explored during the research process with the assumption that researchers will put aside their own beliefs and values before exploring those of the target group. In most cases, this approach can only succeed with the full cooperation of the participants and involved considerable amount of time and costs therefore is not suitable for this research.

CASE STUDIES

Case studies encourage in-depth investigation of particular instances within the research subject. Case studies are usually descriptive, and may take the form of interview notes, observations and video material, documents and records. The approach rarely involves experimentation in the usual sense of the word and is suited more to the generation of hypotheses than their testing.

The major disadvantages of case study, according to (Robson, 1994; McQueen and Knussen, 2002) are:

Causal inferences are impossible because there is no control over confounding variables;

Hypothesis testing is not possible;

Time consuming;

Observer may well attend selectively to the information presented to by overvaluing some events at the expense of others; and

Difficulty in expanding findings from the study involving a sample to a population and to make an argument for generalising observations on an individual to society as a whole.

For these reasons case study style is not considered appropriate for this current study.

SURVEYS

Surveys may be cross-sectional (information is collected at one point in time) and longitudinal (collected over a period of time) studies using questionnaires or interviews for data collection with the intent of generalising from a sample to a population (Bresnen, 1990; Creswell, 1994). Surveys vary from highly structured questionnaires to unstructured interviews and the subject matter of the study must be introduced to the respondents, irrespective of the form adopted (Fellows and Liu, 1997). There are two types of surveys available namely descriptive survey and analytical survey (Naoum, 1998). The descriptive survey deals with counting the number of respondents with certain opinions/attitudes towards a specific object which will later be analysed to compare or illustrate reality and trends. The analytical survey aims to establish relationship and associations between the independent and dependent variables of the subject matter. Robson (1994) suggests that the major advantages of survey design are:

Results allow for generalisation particularly if the sample is representative of the population;

Personal influence is minimised;

Large amount of standardised data can be easily utilised via statistical techniques for testing the hypotheses, and

The survey design has various methods of systematic data collection.

In this research, the survey style is primarily preferred due to its ability to gather data from a relatively large number of respondents within a limited time frame. This type of data collection deals with perceptions and attitudes of people and is the best fit in relation to the objectives of this research.

EXPERIMENTS

Experimental research is best suited to 'bounded problems' or issues in which the variables involved are known, or can be hypothesised with some confidence. A laboratory setting is ideal for experimental design. Its most common features are manipulation, measurement and control, and the aim is the demonstration of cause and effect relationships (Fellows and Liu, 1997; McQueen and Knussen, 2002). Stone (1978) points out that the major advantages of the experimental design are:

The measurement is generally more precise because it takes place under highly controlled conditions;

Causality can be inferred from the results since threads to internal validity may be reduced through control groups;

The independent variables of the study can be precise through manipulation techniques; and

The laboratory experiments can be replicated.

However, laboratory-based experiments are often demanding of resources and expensive support is required. As well as this, some phenomena are deemed too complex to be adequately studied under experimental conditions, the generality of results produced may be restricted, and the results may not reflect the realities of the case under investigations (Stone, 1978; McQueen and Knussen, 2002). For these reasons the experimental style will not be considered for this current research.

ARCHIVAL RESEARCH

This involves the analysis of research, documents, journals, statistics and information that has previously been written about the subject before the researcher became involved. In some ways it is similar to the case study style in that it relies on the researchers analysis of information and is suited more to the generation of hypotheses than their testing. This style can be used as a basis for gathering data on areas or issues to be investigated and can direct the researcher as the study proceeds. It can also be useful when topic areas or previous studies are being compared. The main advantages of this style are

Data is mostly easily sourced and accessed

Cheap to administer, and

Can be done in a relatively short timeframe

This style is considered to be applicable to the current research as this dissertation is a comparative analysis between previous PFI/PPP performance reports and those in NI. Given the short timeframe and lack of available funds this style is deemed suitable to be used.

5.5 TRIANGULATION

From the above sections it is clear that various research styles from both research methods are proposed. The combination of the two different methods forms a triangulation. The idea of triangulation, as revealed by Jick (1979), was based on the assumption that any bias inherent in particular data sources, investigator and method used would be counter-balanced when used in conjunction with other data sources, investigators and methods.

Triangulation assists the researcher to crosscheck data gathered by the different methods and ensures reliability and enhances validity (Silverman, 2000). Also, triangulation increases the amount and quality of data collected using the different research methods (Jick, 1979 and Gill and Johnson, 1997).

Sarantakos (1998) suggested that triangulation would allow researchers to obtain a variety of information on the same issue and use the strengths of each method to overcome the deficiencies of the other. The method could achieve a higher degree of validity and reliability to overcome the deficiencies of single method studies.

Fellow and Liu (1997) suggested that triangulation research, where quantitative and qualitative methods are used through synergy, can be powerful to gain insights and results from the multi-dimensional view of the subject being studied.

In this present research, both qualitative - secondary data analysis or archival research, and quantitative - questionnaire and interview survey and certain secondary data analysis, research methods are used. In so doing this study has also adopted both the `positivist' and `phenomenological' paradigms.

In line with the above and in the context of fulfilling the objectives of the research previously mentioned the triangulation method is seen as most appropriate and has therefore been adopted.

The triangulation method for the present research comprises,

a critical review of the literature to identify factors which influence the performance of PFI/PPP projects (qualitative, archival)

Identify and analyse the performance of operational PFI/PPP projects in GB from previous performance reports (quantitative and qualitative, archival)

questionnaire to key players in NI PFI/PPP industry to assess operational performance (quantitative and qualitative, survey)

Chapters 3 and 4 have dealt with the literature review stage noted in points 1 and 2 above and as a result have fulfilled the key objectives 1 and 2 of this research. The following section will describe how the survey instrument was designed and developed.

DESIGN OF THE QUESTIONNAIRE

In this study it was decided that the total population of construction related operational PFI/PPP projects in Northern Ireland would be surveyed using an electronic questionnaire. The respondents are the project managers of all those schemes. At the time of survey there were 23 construction related PFI/PPP schemes in Northern Ireland (http//www.ofmdfm.co.uk). Details of these schemes are given in Appendix 2 (schemes highlighted yellow indicate those which are operational and construction related). As a result, the decision not to select a sample of the population removed any potential difficulties over the representativeness of the sample.

In addition, since the questionnaire is a structured data collection technique where respondents are asked the same set of questions, the questionnaire survey is more likely to offer greater uniformity. This therefore, provides greater reliability of the gathered information as compared to other data collection methods (Bailey, 1994).

However, electronic questionnaires also have several obvious disadvantages. The key limitation being that the interviewer has no opportunity to correct the misunderstandings or to probe. Also, there is no control over the person who actually completed the questionnaire. This may result in the questionnaire being answered by the wrong person. Also, there is also no guarantee that all the questions in the questionnaire will be fully answered.

As the drawbacks of using the electronic questionnaire were acknowledged, precautions were made to reduce the above mentioned limitations. The problem of misunderstandings was reduced as it was clearly stated in the covering letter that the respondent could directly contact the researcher if there were any queries or of further clarification or explanation was required or make assumptions when answering the questions. The questionnaire also contained open-ended questions to allow respondents to further explain their answers or to give comments on certain issues. This may help to overcome the lack of any opportunity to probe when using electronic questionnaires. The issue about potential low response rate was dealt with by sending an informative email well in advance of the questionnaire, addressing the questionnaire directly to the specific contact names email address and issuing reminders to all in relation to the importance of their response.

The literature review, mentioned above, discussed various issues and identified a number of common key themes considered important in the performance of operational PFI/PPP schemes. The questionnaire for this study was designed based on these issues which were extracted and developed and, as a result the following research questions were prompted which formed the basis of the primary research questionnaire survey instrument in this dissertation. Also, because this research is a comparative analysis of studies that have already been done in GB (covered in Chapter 4) some of the question topic content used in those reports has been adapted for use in this research. The rationale for this is to seek to facilitate a direct comparison as well as increasing the validity of the findings.

Research questions

Do PPP/PFI projects in their operational phase in NI perform as well as those in GB?

Does the existence of a dedicated contract management team have a positive influence on the operational performance of the PPP/PFI project?

Does a formal handover process between the procurement and contract management teams result in improved operational performance?

Does changing personnel during the operational phase reduce operational performance?

Does good communication improve operational performance?

Is the PPP/PFI payment mechanism too difficult?

Is the benchmarking/market testing process properly covered in the contract documents?

Do variations cause significant problems for PPP/PFI contracts?

Do PPP/PFI contracts become misaligned with the requirements of the output specification?

Do contract deductions help to maintain good operational performance?

Is user satisfaction adequately measured under the contract?

Do PPP/PFI projects have adequate resources and skilled staff?

Does the contract give sufficient flexibility in the operational phase?

Does the use of the formal dispute mechanism have a negative influence on the operational performance of the project?

When the decision was taken to use the questionnaire as a survey tool for this research concern was raised about too lengthy a questionnaire and how this might potentially damage the response rate. At the same time the researcher was also aware of the possibility of being too superficial and not receiving meaningful returns. Care was taken to link each question, where possible, to the key issues identified above and in turn to the objectives of this research. Appendix 1 shows a copy of the questionnaire and its length is considered reasonable as completing it would only take approx. 15-20 minutes.

The questionnaire was divided into 10 sections which form its basic structure. The themes for each section are as follows,

Section 1 Instructions for completion

Section 2 Project Profile

Section 3 Overall Performance

Section 4 User Satisfaction

Section 5 The Contract

Section 6 The Payment Mechanism

Section 7 Resources

Section 8 Relationships

Section 9 Benchmarking / Value Testing

Section 10 Future Challenges

The rationale for the questions in each section is given in paragraph 5.6.1.

The questionnaire consisted of a total of 59 questions of various forms including open-ended, closed-ended and partially closed-ended questions. This enabled a mixture of qualitative and quantitative responses within the survey instrument (Bryman, 2001).

The content of the questions used in the questionnaire were classified into two general categories, namely some factual questions to elicit objective information e.g. scheme dates, sponsoring Departments etc., but mainly questions about subjective perceptions which were designed to obtain attitudes on issues like performance, user satisfaction, etc.

As these questions were mainly designed to explore how the respondents felt about something or give their attitudes to various issues a common Likert scale was used for responses to attitudinal type questions. Hussey and Hussey (1997) suggest this is useful as it allows a numerical value to be given to the opinion.

RATIONALE FOR THE QUESTIONS

Section 1: Instructions for completion

This was a general cover sheet which gave a brief outline to the respondents on how to complete the questionnaire in terms of navigating through it. As such there were no questions in this section.

Section 2: Project Profile

This section was fairly general in nature and consisted of five questions which were mainly designed to elicit objective information and facts about the respondents PFI/PPP project on which he/she was responding. These questions included in this section were an attempt to personalise the questionnaire to try and encourage the respondent to complete it. Also, the information gained from the answers in this section could be used to give a profile of the industry and possible trends within that.

Section 3: Overall Performance

This section included five questions on the respondents overall perception of their PFI/PPP projects. This is mostly subjective in nature as the perceptions of respondents will differ as well as the projects being different, however a conscious effort has been made to establish how the projects performs against the objectives of the scheme and the specified delivery of services in the contract for each scheme. This will allow a comparison to be made to the other studies previously done in GB.

Section 4: User Satisfaction

This section incorporated four questions, two were a statement of fact on how user satisfaction is assessed and if the last assessment was acceptable, and two open-ended qualitative questions in relation to what positive and negative were raised at the last assessment. The reason behind the inclusion of this issue was because the literature review indicated that some PFI/PPP schemes did not undertake such an assessment and this was likely to have an impact in understanding and meeting the requirements of the end user. Also, this topic was included in previous studies so responses to this questionnaire could be compared against them.

Section 5: The Contract

This section consisted of nine questions designed to obtain responses in relation to how the respondent perceived the contract to be working, does it accurately specify the type and level of service required, changes made since the scheme became operational, the existence and use of simplified guides and the respondents perception of the contracts flexibility. All of these issues were identified and discussed at the literature review stage of the research in relation to the contract and a measure of performance in NI will prove useful at the comparative analysis stage.

Section 6: The Payment Mechanism

This is a key section in the research survey instrument and this is reflected in the eleven questions included in this part. This part is specifically aimed at eliciting data on the performance of the payment mechanism of the contract, particularly the respondents understanding of the payment mechanism, if it effectively supports the management of the project, its difficulty of use, the relationship between the payment mechanism and the contract specification and the use of deductions and variations.

Section 7: Resources

This section, incorporating twelve questions, seeks to establish if PFI/PPP projects are better resourced than in GB, particularly the amount of time dedicated to the project by the project manager, numbers of staff allocated, training received and what effect this has, if any on the operational performance of the scheme.

Section 8: Relationships

This issue was identified as key in the literature review stage. The seven questions included in this section seek to obtain views on type and frequency of communications between parties, the perceived state of the relationship and the influences on it, the use of the dispute mechanism and frequency used.

Section 9: Benchmarking / Value Testing

This section was designed to elicit data on the use of benchmarking in contracts in NI and how often it is required. The questionnaire also asks how price levels are reassessed throughout the contract, if benchmarking is adequately described in the contract, what value testing exercises have been completed to date, and what plans are in place to deal with potential increased costs.

Section 10: Future Challenges

This section includes a single question to get respondents views on what are likely to be the main challenges for them in managing the PFI/PPP contract over the next five years. This was designed with a view to establish if there were relationships between some of their responses in earlier sections and their fears for the future.

A number of the questions in this questionnaire were not directly linked to the research questions above as they were designed to obtain factual information, but the majority were designed to have a direct link so that comparative analysis could be made with previous findings in the literature review.

DATA COLLECTION

The questionnaire method was chosen because of its specific relevance to the nature of this study as well as the obvious advantages it provides compared to other research tools. The key reason for choosing a questionnaire is that it can provide a much better statistical sample then other methods, because the questionnaire method enables the researcher to reach respondents who live in widely dispersed geographical areas (Nachmias and Nachmias, 1996).

The electronic questionnaire is a further development of the questionnaire method. It has additional benefits such as it reduces the cost of administration, provides automated invitations and reminders, includes statistical and graphical analysis tools and gives an anonymous forum for respondents.

A number of questionnaire hosting facilities are available on the internet such as Lime Survey, Survey Monkey, On Line Surveys, etc. For the purposes of this research Survey Monkey was chosen because of its user friendly interface, ease of use in building the questions and it could be simply attached to an email invitation to participate in this research.

Emails with an attached link to the questionnaire were sent to all project managers responsible for construction related PFI/PPP projects in NI. Although it has been previously stated that there are 23 of these in NI, some project managers are responsible for more than one project. The researcher could not reasonably expect these project managers to answer for each of their projects so they were asked to complete the questionnaire for one of their schemes. This meant that a total of 18 invitations were issued by email (copy attached in Appendix 3)

Another advantage of the on-line system is that when the respondent completes the questionnaire it is stored remotely on hosted web space until it can be downloaded by the researcher.

METHODS OF DATA ANALYSIS

The primary data from the questionnaire surveys and from the semi-structured interviews were analysed in two stages. First, the descriptive statistics such as measures of central tendency of mean, median, percentage and measures of dispersion were obtained to describe the data. Data were analysed mainly by computer in order to minimise errors and for ease of data handling. All quantitative data analysis was undertaken using the Statistical Package for Social Science (SPSS) to show the basic distributional characteristics of the responses. SPSS was chosen because it enabled data from the survey to be analysed fully and flexibly. It has facilities for the extensive manipulation and transformation of data. SPSS software also provides the opportunity for the researcher to produce fully labelled tables and graphs (www.spss.com).

In the second stage, the qualitative analysis of the interview data was undertaken. The examination of the interview records i.e. written notes to establish the observations and the interview data was analysed manually and the descriptive nature of the responses included, where appropriate, in the findings.

The results of this data analysis are given in the next chapter.

5.8 SUMMARY

This dissertation has the following main objectives.

1. Critically review academic literature on the factors which influence the performance of operational PFI projects and develop an understanding of their influence;

Identify and analyse the performance of operational PFI projects in GB;

Analytically compare the performance of operational PFI projects in GB to the NI context;

Identify areas of performance variance between GB and NI and explore the reasons for this, and

Develop a series of recommendations for the future performance improvement of operational PFI projects in NI.

The research adopts a triangulation research approach incorporating qualitative and quantitative methods to analyse multiple data from academic journals, Government sponsored reports, professional institutions and conducts questionnaires and interviews with selected expert key players in the PFI/PPP construction industry in NI.

The primary research instrument for this dissertation is an online questionnaire which has been sent to 18 project managers in the various Government Departments to obtain their perceptions of PFI/PPP project performance in NI.

The questionnaire has been designed around the following research questions which have been developed from the literature review stage.

Do PPP/PFI projects in their operational phase in NI perform as well as those in GB?

Does the existence of a dedicated contract management team have a positive influence on the operational performance of the PPP/PFI project?

Does a formal handover process between the procurement and contract management teams result in improved operational performance?

Does changing personnel during the operational phase reduce operational performance?

Does good communication improve operational performance?

Is the PPP/PFI payment mechanism too difficult?

Is the benchmarking/market testing process properly covered in the contract documents?

Do variations cause significant problems for PPP/PFI contracts?

Do PPP/PFI contracts become misaligned with the requirements of the output specification?

Do contract deductions help to maintain good operational performance?

Is user satisfaction adequately measured under the contract?

Do PPP/PFI projects have adequate resources and skilled staff?

Does the contract give sufficient flexibility in the operational phase?

Does the use of the formal dispute mechanism have a negative influence on the operational performance of the project?

Questions in the research instrument have been designed around these research questions which in turn are linked to the key objectives of the research.

Responses have been gathered using Survey Monkey and data has been analysed by hand and using SPSS software. Results and findings are reported in the next chapter.

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