Modelling and Design Analysis of Contract Payment Methods in Civil Engineering Projects

Abstract

Contract payment method in a civil engineering project, to a certain extent, determines the distribution of project risk and benefits. Up till now, several types of contract payment method have been formed. However, with the continuous development and innovation of project delivery system, new contract payment methods are required to match with project delivery methods. By comparing the existing classic payment methods, this paper analyzes the effects of variable contract payment methods on risk allocation. Based on a unified view, existing contract payment methods are expressed by mathematical models and compared with parameters, and then the way of contract payment method design is discussed. Finally, a case study was presented to illustrate the design of contract payment method for a specific project in Chinese context.