A Study By Anastasopoulos Et Al

However, the uncertainty stemming from these financial aspects of construction should be at least mitigated or ideally eliminated with proper forecasting techniques. During periods of economic expansion, major capital expenditures will raise the costs of construction, and during periods of economic downturn these same costs may decline. In order to control costs, some owners attempt to use fixed price contracts so that the risks of unforeseen contingencies related to an overheated economy are passed on to contractors (PM, 2012). Businesses must factor in that contractors will raise their prices to compensate for the additional risks.

In project management, contract almost related with every level of project, such as material buying, price negotiation, customer service and payments. Supplier is another important role in project management. If contractor could give a appropriate contact to supplier, it will helps on build stable relationship, with supplier, even more, it could bargain with price of materials. However, if contract not finish at each single phases of project, it will increase negotiation time, which means definitely time delay and cost overruns. With decent contract management of project, it will simply to avoid such fundamental problems. Another explanation for contract error is worker. Human resource is also important for basic project proceeding, and it has been included in contract management as well. Similarly, all potential possibilities need considered by manager. “careful consideration need to be finished when forming the initial contract, for about what might occur during its operation, this will guarantee that things are included in the contract documents that enable effective contract management”(OGC 2010)

I have to agree, project do differ and have to be match with the right contract type. Certainly, in my personal opinion a contract selection should leverage the efforts and resources needed in a project, the identify risk, the expected profit, and the customer satisfaction with the final result. Moreover, every contract features elements that make it more suitable to certain project conditions. For example, the Cost-Plus Incentive-Fee (CPIF) contract, should be used when the objective relationship can be established between the fee and such measures of performance as actual costs, delivery dates, and other key performance

In construction projects, mostly the firms (in this case the firms become client) do not have the skills or develop skills inside the firms to undertake the projects due to amount of the projects should be conducted or the complexity of the projects (Reve and Levitt, 1984). Therefore, the economic decision to conduct the projects is to procure them to third parties. However, more commonly the client agonize the final quality of the projects will meet standard requirements. Thus, impacts to involvement of complex contracts of construction procurement.

The solution is to get the proper training in using Revit and creating under budget construction documents throughout the company. It would allow the future and current team members to have a great deal of training when they start a new project for the client.

Client and the contractor have same priorities. Basically, contractor will make the decision in turnkey approach and client will just accept in silent. In this project, the contractor and the client have the same focus and priorities therefore the relationship between the contractor and client is good and there is no overruns or communication problems between both sides.

Besides, regarding to the clients, the JVI had never build up a connection with the client until the surprisingly got the contract, the existence of hierarchy and non-trust between client and project team lead to the inefficiency of obtaining client information, later resulted in Jack’s misleading proposal for market research. Also, because in the concept of high power distance, decision making process is limited one-way participation and communication (In the Eye of the Beholder, cross cultural lessons in leadership from project GLOBE, Mansour Javidan, Peter W. Dorfma, etc), Jack’s own lack of experience on project management made it is possible for the project to diverge from previous direction under one person’s leadership.

Construction projects are always unique and risks raise from a number of the different sources. Construction projects are inherently complex and dynamic, and involving multiple feedback processes. A lot of participants – individuals and organizations are actively involved in the construction project, and they interests may be positively or negatively affected as a result of the project execution or project completion. Different participants with different experience and skills usually have different expectations and interests. This naturally creates problems and confusion for even the most experienced project managers and contractors.

Within a project, the project’s success and budget belong to and are the responsibility of the customer. The Customer should have the final say in regards to what is acceptable and unacceptable in regards to risk and the quantification of risk. It is however, the contractor’s responsibility to be the primary source of expertise on a project or what they are being contracted to do. The contractor should offer their opinion and recommendations, and the customer should take their contractors opinions and recommendations seriously due to their expertise in the area. Overall, collaboration between the customer and the contractor should be the ultimate way to resolve a matter of dispute. Members from both the customer and contractor side should meet discuss historical events, modeling and simulation to arrive at the appropriate answer. Also, with quantifying risk, the customer and the contractor should be able to go back and look at the data. With risk quantification, there should be very little room for opinion and judgment which should make it easy to base a decision or a resolution based on hard core data. If a solution or an answer is not able to be decided upon, a third party consultation

Since for the companies in the construction industry it is not typical to bind their customers with long-term contracts and similar measures, it can be conclude that the switching cost of this industry is relatively low. The customer himself does not have a problem to change his supplier whereas on the market operate quite a large number of firms. The market is fragmented into more businesses offering similar products, respectively same and homogenous. The level of customer information rate is also fairly high. Thus the assumption is that the bargaining power of customers is rather high and hence

When engaging in a construction contract, time is of the essence and running over time projections can cause literally millions of dollars in additional non-contract costs. Therefore, construction contracts that can provide incentives to complete the project on time or early are beneficial because they effectively penalized contractors who fail to deliver on-time performance. With a CPIF contract, the

There however are challenges in the industry occasioned by uncertainty on future spending on construction projects by the government. Moreover, the cost of doing business and the ability to increasingly make revenue have created a challenging environment for the construction firms. Therefore stakeholders in the construction industry are concerned with whether the government would increase its spending and whether the public construction projects will be available in the future since less than 10 percent are currently financing their clients.

This type of procurement strategy is a ‘fast track’ strategy. Client pays a sum of money to hire a management contractor to manage the whole construction project. Therefore, some early work can be carried out before the design is complete. The contract for the construction projects are between the management contractor and sub contractor. The final cost for the project can not be identified until the final work has been awarded.

In this study, a tool was developed to estimate contingency cost for a maintenance contract based on historical records of the CO on the road maintenance activities. In order to develop the tool, the Visual C# and the R-program were selected as development platforms. As historical data, 614 road maintenance contracts were received from Kenya Rural Road Authority (KeRRA) in Kenya. These data were used for the validation of the tool developed during this study. The steps that were required to develop the contingency estimation tool is given in Figure 1.

Another key area that is necessary for the successful completion of the client construction project is the organization for the site meetings. Through a properly planned and conducted site meeting, much can be accomplished since well planned meetings enhance positive achievement, (Shmueli, Pliskin & Fink, 2016, pg 400). However, meetings with no pre-planning will tend to accomplish very little, and always result into a waste of time which is one of the most valuable resources. According to (Shmueli, Pliskin & Fink, 2016, pg 399), for the construction project, personnel have the right to call on the meetings which can be convened by both the Principal Contractor and the organization’s Key Personnel such as the construction Manager, Project Manager, Estimator and the Accountant. In the meeting some of the most important issues that can be discussed comprise of the feasibility of the Project. Generally, feasibility of the any project is based on the project’s Tender Documents.