Target Cost Contracting Strategy in Construction
Target Cost Contracting Strategy in Construction

Author: Daniel W.M. Chan

Publisher: Routledge

Published: 2016-10-14

Total Pages: 281

ISBN-13: 1317229266

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The problems inherent in the traditional design-bid-build procurement method often lead to the adversarial working relationships within the construction industry. Target cost contracts, accompanied by a gain-share/pain-share arrangement serving as a cost incentive mechanism, have emerged in the United States, the United Kingdom, Australia and Hong Kong with the aim of achieving better value for money and more satisfactory overall project performance under a collaborative working relationship. This book presents the underlying principles, practicalities and a series of short case studies of applying the target cost contracting strategy. Principles begin with the fundamentals then cover the development of target cost contracting in major countries/cities, definitions of target cost contracting, perceived benefits, potential difficulties and critical success factors for implementation. Practices include the target cost contracting approach and process in general, the key risk factors, risk assessment model, risk allocation and risk mitigation measures for target cost contracts in particular, together with a conceptual framework for the performance measurement of target cost contracts. Several short real-life case studies from the United Kingdom, Hong Kong, Australia and New Zealand are provided for further illustration. The book will appeal to a wide spectrum of readers from industrial practitioners to undergraduate students, researchers and academics interested in construction contracts and procurement methods.

Reducing Construction Costs
Reducing Construction Costs

Author: National Research Council

Publisher: National Academies Press

Published: 2007-10-09

Total Pages: 68

ISBN-13: 030917998X

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The National Academy of Construction (NAC) has determined that disputes, and their accompanying inefficiencies and costs, constitute a significant problem for the industry. In 2002, the NAC assessed the industry's progress in attacking this problem and determined that although the tools, techniques, and processes for preventing and efficiently resolving disputes are already in place, they are not being widely used. In 2003, the NAC helped to persuade the Center for Construction Industry Studies (CCIS) at the University of Texas and the Alfred P. Sloan Foundation to finance and conduct empirical research to develop accurate information about the relative transaction costs of various forms of dispute resolution. In 2004 the NAC teamed with the Federal Facilities Council (FFC) of the National Research Council to sponsor the "Government/Industry Forum on Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners." The forum was held on September 23, 2004, at the National Academy of Sciences in Washington, D.C. Speakers and panelists at the forum addressed several topics. Reducing Construction Costs addresses topics such as the root causes of disputes and the impact of disputes on project costs and the economics of the construction industry. A second topic addressed was dispute resolution tools and techniques for preventing, managing, and resolving construction- related disputes. This report documents examples of successful uses of dispute resolution tools and techniques on some high-profile projects, and also provides ways to encourage greater use of dispute resolution tools throughout the industry. This report addresses steps that owners of construction projects (who have the greatest ability to influence how their projects are conducted) should take in order to make their projects more successful.

Supply Chain Development for the Lean Enterprise
Supply Chain Development for the Lean Enterprise

Author: Robin Cooper

Publisher: Routledge

Published: 2017-12-06

Total Pages: 496

ISBN-13: 1351412728

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Four questions determine whether a company is using interorganizational cost management. Does your firm set specific cost-reduction objectives for its suppliers? Does your firm help its customers and/or suppliers find ways to achieve their cost-education objectives? Does your firm take into account the profitability of its suppliers when negotiating component pricing with them? Is your firm continuously making its buyer-supplier interfaces more efficient? If the answer to any of these questions is ""no"", your firm risks introducing products that cost too much or are not competitive. The full potential of the supply network can be realized only when the entire supply chain adopts interorganizational cost management practices. Competitive pressure has led many firms to try to increase the efficiency of supplier firms through interorganizational cost management systems, a structured approach to coordinating the activities of firms in a supplier network to reduce the total costs in the network. It is particularly important to lean enterprises for two reasons: Lean enterprises typically outsource more of the added value of their products than their mass producer counterparts. Lean enterprises usually compete more aggressively and must manage costs more effectively. Interorganizational cost management can reduce costs in three ways: through product design, through product manufacture and through cooperative approaches between buyers and suppliers to build smoother interfaces. However, more than just cost management must cross interorganizational boundaries. Suppliers are also a major source of innovation for lean enterprises. Successful supplier networks encourage every firm in the network to innovate and compete more aggressively. Read this book to learn to manage the supply chain to forge competitive advantage while reducing costs.

On Target
On Target

Author: David Trench

Publisher: Thomas Telford

Published: 1991

Total Pages: 176

ISBN-13: 9780727716460

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Describes a new system of target cost building procurement in which there is a more equitable balance between employer's and contractor's risk, the quality of design is improved and there is an incentive to complete the project to an agreed target cost.

Project Management for Facility Constructions
Project Management for Facility Constructions

Author: Alberto De Marco

Publisher: Springer Science & Business Media

Published: 2011-03-23

Total Pages: 183

ISBN-13: 3642170927

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This book describes concepts, methods and practical techniques for managing projects to develop constructed facilities in the fields of oil & gas, power, infrastructure, architecture and the commercial building industries. It is addressed to a broad range of professionals willing to improve their management skills and designed to help newcomers to the engineering and construction industry understand how to apply project management to field practice. Also, it makes project management disciplines accessible to experts in technical areas of engineering and construction. In education, this text is suitable for undergraduate and graduate classes in architecture, engineering and construction management, as well as for specialist and professional courses in project management.

The Theory of Incentives
The Theory of Incentives

Author: Jean-Jacques Laffont

Publisher: Princeton University Press

Published: 2009-12-27

Total Pages: 436

ISBN-13: 1400829453

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Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents. This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.

Project Risk and Opportunity Management
Project Risk and Opportunity Management

Author: Agnar Johansen

Publisher: Routledge

Published: 2019-03-29

Total Pages: 134

ISBN-13: 0429773404

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Effective risk and opportunity management is key to the successful delivery of any major engineering and construction project. This book looks at how all those involved can manage risk and capitalise on the opportunities that uncertainty present. The authors of this book highlight that uncertainties should be managed rather than avoided. This book will look at simple projects with a small team, to megaprojects where some hundreds of people are involved, and the consequences of delays or unforeseen costs. However, while the obvious risks can be planned for, the authors argue that it is often the opportunities in these situations that can have unexploited potential. This book is about opportunity management seen from the owner’s perspective. It will be an invaluable resource for those studying Engineering both undergraduate and postgraduate and set out ways in which projects should be managed from planning to completion. This book is also a great tool for those working in project management and the construction industry. While there are many books that demonstrate effective construction management, this book is the first of its kind to emphasise that there is opportunity in uncertainty, and possibility in the unexpected.

Early Contractor Involvement in Building Procurement
Early Contractor Involvement in Building Procurement

Author: David Mosey

Publisher: John Wiley & Sons

Published: 2009-11-24

Total Pages: 328

ISBN-13: 9781444309874

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Can contractors and specialists add value to a project by theirearly involvement in design, pricing, risk management andprogramming? How can this be structured and what role docontracts have to play? What is the impact on procurement andproject management? Commentators from Banwell to Egan have recommended earliercontractor appointments, and this has also been linked tosuccessful project partnering. How are the two related? Early Contractor Involvement in Building Procurementconsiders the case for a two stage procurement approach based on asystem of agreed project processes during the preconstructionphase. It examines the ways in which a contract can describeand support this model throughout its procurement, partnering andproject management, and is illustrated with case studies taken fromprojects and programmes across the construction and engineeringindustry. The roles of the various parties involved, the obstacles theyencounter and the benefits they can achieve are examined indetail. There is practical guidance on how to improve speed,economy, sustainability, change control, dispute avoidance, andclient satisfaction. This book bridges the gap betweencontract law, partnering and project management and will beessential reading for middle and senior management at constructioncontractors, consultants and clients in both the public and privatesectors.