An Assessment of Risk Factors Impacting the Cost of Contractor-Led Design and Build Projects

Henry Odeyinka, Keren Larkin, Robert Eadie, Gervase Cunningham

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Procurement in use surveys have confirmed a steady increase in the use of design and build procurement method. However, there was also a criticism that the out turn cost of design and build procurement method makes it more expensive than the traditional procurement method. The conjecture in this study is that risk factors inherent in design and build projects are responsible for the observed variance between the contract sum and the out turn cost. Using a set of 37 risk factors, the study utilized an online survey of UK-based construction professionals to evaluate risk impacts on the variance between contract sum and final account in contractor-led design and build projects. Survey responses were analyzed using mean ranking analysis and oneway analysis of variance (ANOVA). Result showed that ‘scope changes’, ‘ambiguous client brief’, ‘scope creep’, ‘insufficient design completion during tender’, and ‘change in employer’s requirement’ are top risk factors impacting the variance between contract sum and final account. The implication of this finding is that it alerts the design and build contractors to specific risk factors they need to pay attention to in their delivery of design and build projects and to devise a proactive approach to their management so as to avoid significant cost overrun.
LanguageEnglish
Title of host publicationUnknown Host Publication
Number of pages9
Publication statusPublished - 20 Sep 2016
EventThe Construction, Building and Real Estate Research Conference of the Royal Institution of Chartered Surveyors - George Brown College, Toronto, Canada
Duration: 20 Sep 2016 → …

Conference

ConferenceThe Construction, Building and Real Estate Research Conference of the Royal Institution of Chartered Surveyors
Period20/09/16 → …

Fingerprint

Risk factors
Contractors
Costs
Procurement
Creep
Analysis of variance
Employers
Criticism
Ranking
Cost overrun
Online survey

Keywords

  • contract sum
  • cost overrun
  • design and build
  • final account
  • risk factors.

Cite this

@inproceedings{2a9452b28367421c8a270071ce78fade,
title = "An Assessment of Risk Factors Impacting the Cost of Contractor-Led Design and Build Projects",
abstract = "Procurement in use surveys have confirmed a steady increase in the use of design and build procurement method. However, there was also a criticism that the out turn cost of design and build procurement method makes it more expensive than the traditional procurement method. The conjecture in this study is that risk factors inherent in design and build projects are responsible for the observed variance between the contract sum and the out turn cost. Using a set of 37 risk factors, the study utilized an online survey of UK-based construction professionals to evaluate risk impacts on the variance between contract sum and final account in contractor-led design and build projects. Survey responses were analyzed using mean ranking analysis and oneway analysis of variance (ANOVA). Result showed that ‘scope changes’, ‘ambiguous client brief’, ‘scope creep’, ‘insufficient design completion during tender’, and ‘change in employer’s requirement’ are top risk factors impacting the variance between contract sum and final account. The implication of this finding is that it alerts the design and build contractors to specific risk factors they need to pay attention to in their delivery of design and build projects and to devise a proactive approach to their management so as to avoid significant cost overrun.",
keywords = "contract sum, cost overrun, design and build, final account, risk factors.",
author = "Henry Odeyinka and Keren Larkin and Robert Eadie and Gervase Cunningham",
note = "Reference text: Chartered Institute of Building (2010) A Chartered Institute of Building Report Exploring Procurement in the Construction Industry, Ascot, UK. Davis, P, Love, P and Baccarini, D. (2009) A Research Report on Building Procurement Methods, Cooperative Research Network for Construction Innovation, Brisbane, Australia. Greenhalgh, B and Squires, G (2011). Introduction to Building Procurement. Oxon. Spon Press. Hughes, W., Hillebrandt, P.M., Greenwood, D. and Kwawu, W. (2006) Procurement in the Construction Industry. Taylor and Francis, London. Joint Contract Tribunal (2011) Design and Build Contract. Sweet and Maxwell, London. Latham, M. (1994) Constructing the Team. HMSO Odeyinka H, Larkin K, Cunningham G, McKane M, Bogle, G and Weatherup R (2012) Modelling Risk impacts on the Variability between Contract Sum and Final Account. Royal Institution of Chartered Surveyors’ Research Report [Online]. Available at: http://www.rics.org/uk/knowledge/research/research-reports/variabilitybetween- contract-sum-and-final-account/ RICS (2007) Contracts in use: A survey of building contracts in use during 2007. The Royal Institution of Chartered Surveyors/Davis Langdon Winch G.M. (2010) Managing Construction Projects, 2nd Edition. Oxford, Blackwell",
year = "2016",
month = "9",
day = "20",
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isbn = "978-1-78321-160-9",
booktitle = "Unknown Host Publication",

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Odeyinka, H, Larkin, K, Eadie, R & Cunningham, G 2016, An Assessment of Risk Factors Impacting the Cost of Contractor-Led Design and Build Projects. in Unknown Host Publication. The Construction, Building and Real Estate Research Conference of the Royal Institution of Chartered Surveyors, 20/09/16.

An Assessment of Risk Factors Impacting the Cost of Contractor-Led Design and Build Projects. / Odeyinka, Henry; Larkin, Keren; Eadie, Robert; Cunningham, Gervase.

Unknown Host Publication. 2016.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

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AU - Eadie, Robert

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N1 - Reference text: Chartered Institute of Building (2010) A Chartered Institute of Building Report Exploring Procurement in the Construction Industry, Ascot, UK. Davis, P, Love, P and Baccarini, D. (2009) A Research Report on Building Procurement Methods, Cooperative Research Network for Construction Innovation, Brisbane, Australia. Greenhalgh, B and Squires, G (2011). Introduction to Building Procurement. Oxon. Spon Press. Hughes, W., Hillebrandt, P.M., Greenwood, D. and Kwawu, W. (2006) Procurement in the Construction Industry. Taylor and Francis, London. Joint Contract Tribunal (2011) Design and Build Contract. Sweet and Maxwell, London. Latham, M. (1994) Constructing the Team. HMSO Odeyinka H, Larkin K, Cunningham G, McKane M, Bogle, G and Weatherup R (2012) Modelling Risk impacts on the Variability between Contract Sum and Final Account. Royal Institution of Chartered Surveyors’ Research Report [Online]. Available at: http://www.rics.org/uk/knowledge/research/research-reports/variabilitybetween- contract-sum-and-final-account/ RICS (2007) Contracts in use: A survey of building contracts in use during 2007. The Royal Institution of Chartered Surveyors/Davis Langdon Winch G.M. (2010) Managing Construction Projects, 2nd Edition. Oxford, Blackwell

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