An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects

Keren Larkin, Henry Odeyinka, Robert Eadie

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

3 Citations (Scopus)

Abstract

Design and Build procurement has been steadily increasing in popularity over the past number of years. Although it can provide some advantages, it can also lead to being a risky procurement method for both owner and contractor if the risks are not identified in advance and managed throughout. Therefore the overall aim of this study is to identify, assess and model the risk factors impacting the variability between the contract sum and final account in client-led and contractor-led Design and Build projects. The work presented in this paper is at the preliminary stage of the research programme and it looks into the possibility of developing a methodology for assessing risk impacts on the variability between contract sum and final account in design and build projects. As a first step, a detailed review of literature was made to establish the growing use of design and build procurement and the risk inherent in this procurement method. Secondly, different perspectives of risk were examined using the cognitive model of risk so as to position this study in the wider context of existing body of knowledge in this domain. The insights gained from the foregoing steps then helped in devising a methodological framework for assessing the variability betweenthe contract sum and final account in client-led and contractor-led Design and Build projects.
LanguageEnglish
Title of host publicationUnknown Host Publication
EditorsSD Smith
Place of PublicationSchool of Construction Management and Engineering, University of Reading,PO Box 219, Reading RG6 6AW, UK
Pages337-346
Number of pages10
Volume1
Publication statusPublished - 3 Sep 2012
Event28th Annual ARCOM Conference - Edinburgh, UK,
Duration: 3 Sep 2012 → …

Conference

Conference28th Annual ARCOM Conference
Period3/09/12 → …

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Lead
Contractors

Keywords

  • Contract sum
  • design and build
  • final account
  • risk
  • variability

Cite this

Larkin, K., Odeyinka, H., & Eadie, R. (2012). An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects. In SD. Smith (Ed.), Unknown Host Publication (Vol. 1, pp. 337-346). School of Construction Management and Engineering, University of Reading,PO Box 219, Reading RG6 6AW, UK.
Larkin, Keren ; Odeyinka, Henry ; Eadie, Robert. / An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects. Unknown Host Publication. editor / SD Smith. Vol. 1 School of Construction Management and Engineering, University of Reading,PO Box 219, Reading RG6 6AW, UK, 2012. pp. 337-346
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abstract = "Design and Build procurement has been steadily increasing in popularity over the past number of years. Although it can provide some advantages, it can also lead to being a risky procurement method for both owner and contractor if the risks are not identified in advance and managed throughout. Therefore the overall aim of this study is to identify, assess and model the risk factors impacting the variability between the contract sum and final account in client-led and contractor-led Design and Build projects. The work presented in this paper is at the preliminary stage of the research programme and it looks into the possibility of developing a methodology for assessing risk impacts on the variability between contract sum and final account in design and build projects. As a first step, a detailed review of literature was made to establish the growing use of design and build procurement and the risk inherent in this procurement method. Secondly, different perspectives of risk were examined using the cognitive model of risk so as to position this study in the wider context of existing body of knowledge in this domain. The insights gained from the foregoing steps then helped in devising a methodological framework for assessing the variability betweenthe contract sum and final account in client-led and contractor-led Design and Build projects.",
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note = "Reference text: Burtonshaw-Gunn, S.A., (2009). Risk and Financial Management in Construction. Hampshire. Gower Publishing Limited Chritamara, S. Ogunlana, S.O and Bach, N. L. (2002). System Dynamics Modelling of Design and Build Construction Projects. Construction Innovation 2, 269-295 Creedy, G (2006). Risk Factors Leading to Cost Overrun in the Delivery of Highway Construction Projects. PhD Thesis. School of Urban Development. Queensland University of Engineering. Davey, K. (2000). Preventing project cost escalation. Engineering Management Journal 10(4),174-181. Flanagan, R. and Tate, B. (1997): Cost Control in Building Design. Oxford, Blackwell Science Ltd. Flyvbjerg B. Holm M.S. and Buhl S., (2002). Underestimating costs in public works projects. Error or lie? Journal of the American Planning Association 68(3), 279–95. Gidado, K. and Arshi, S., (2004). Suitability of Different Design and Build Configurations for Procurement of Buildings. RICS COBRA 2004 Research Conference, Leeds Metropolitan University, 7-8th September 2004, RICS Foundation,UK. Greenhalgh, B and Squires, G (2011). Introduction to Building Procurement. Oxon. Spon Press. Le-Hoai, L. Dai Lee, Y. and Yong Lee, J., (2008). Delay and Cost Overruns in Vietnam Large Construction Projects: A Comparison with Other Selected Countries. KSCE Journal of Civil Engineering 12(6), 367-377. Lock, D. (2007) Project Management. 9th Edition. Hampshire. Gower Publishing Limited Magnusson, O. and Olsson, N., (2005). Comparative analysis of cost estimates of major public investment projects. International Journal of Project Management. Vol. 24, pp. 281–288. Lord, W.E., (2008) Embracing a Modern Contract – Progression Since Latham? COBRA 2008; the construction and building research conference of the Royal Institution of Chartered Surveyors McCaffer, R. and Edum-Fotwe, F.T., (2005). Managing Intangibles – The Latent Dimension for Competitiveness in Construction. Proceedings of the 3rd International Conference on Construction in the 21st Century. Advancing Engineering, Management and Technology, Athens, 15-17th September 2005, CITC-III, Athens. Odeyinka, H.A., (2000). An evaluation of the use of insurance in managing construction risks. Construction Management and Economics 18(5), 519-524. Oztas, A. and Okmen, O., (2004). Risk analysis in fixed-price design–build construction Projects. Building and Environment 39, 229–237. RICS, (2010). Contracts in Use; A Survey of Building Contracts in Use during 2007. Royal Institution of Chartered Surveyors. Smith, N.J., (2006). Managing Risk in Construction Projects. 2nd Edition. London. Blackwell Science Williams, T.M., (1996). The Two-Dimensionality of Risk. International Journal of Project Management 14(3), 185-186 Winch, G.M., (2010). Managing Construction Projects. 2nd Edition. Oxford. Blackwell Publishing Ltd. Yakubu, O. and Ming Sun (2009). Cost and Time Control of Construction Projects: A Survey of Contractors and Consultants in the United Kingdom (UK). Construction Information Quarterly 11(2), 53-59.",
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Larkin, K, Odeyinka, H & Eadie, R 2012, An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects. in SD Smith (ed.), Unknown Host Publication. vol. 1, School of Construction Management and Engineering, University of Reading,PO Box 219, Reading RG6 6AW, UK, pp. 337-346, 28th Annual ARCOM Conference, 3/09/12.

An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects. / Larkin, Keren; Odeyinka, Henry; Eadie, Robert.

Unknown Host Publication. ed. / SD Smith. Vol. 1 School of Construction Management and Engineering, University of Reading,PO Box 219, Reading RG6 6AW, UK, 2012. p. 337-346.

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

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PY - 2012/9/3

Y1 - 2012/9/3

N2 - Design and Build procurement has been steadily increasing in popularity over the past number of years. Although it can provide some advantages, it can also lead to being a risky procurement method for both owner and contractor if the risks are not identified in advance and managed throughout. Therefore the overall aim of this study is to identify, assess and model the risk factors impacting the variability between the contract sum and final account in client-led and contractor-led Design and Build projects. The work presented in this paper is at the preliminary stage of the research programme and it looks into the possibility of developing a methodology for assessing risk impacts on the variability between contract sum and final account in design and build projects. As a first step, a detailed review of literature was made to establish the growing use of design and build procurement and the risk inherent in this procurement method. Secondly, different perspectives of risk were examined using the cognitive model of risk so as to position this study in the wider context of existing body of knowledge in this domain. The insights gained from the foregoing steps then helped in devising a methodological framework for assessing the variability betweenthe contract sum and final account in client-led and contractor-led Design and Build projects.

AB - Design and Build procurement has been steadily increasing in popularity over the past number of years. Although it can provide some advantages, it can also lead to being a risky procurement method for both owner and contractor if the risks are not identified in advance and managed throughout. Therefore the overall aim of this study is to identify, assess and model the risk factors impacting the variability between the contract sum and final account in client-led and contractor-led Design and Build projects. The work presented in this paper is at the preliminary stage of the research programme and it looks into the possibility of developing a methodology for assessing risk impacts on the variability between contract sum and final account in design and build projects. As a first step, a detailed review of literature was made to establish the growing use of design and build procurement and the risk inherent in this procurement method. Secondly, different perspectives of risk were examined using the cognitive model of risk so as to position this study in the wider context of existing body of knowledge in this domain. The insights gained from the foregoing steps then helped in devising a methodological framework for assessing the variability betweenthe contract sum and final account in client-led and contractor-led Design and Build projects.

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KW - design and build

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Larkin K, Odeyinka H, Eadie R. An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects. In Smith SD, editor, Unknown Host Publication. Vol. 1. School of Construction Management and Engineering, University of Reading,PO Box 219, Reading RG6 6AW, UK. 2012. p. 337-346