Cost Production and Utilization in Collaborative Delivery Methods in the Construction Industry

Abstract

Although cost generation and utilization are central to project delivery, the construction industry has a poor record of predictability. Studies suggest that this lack of predictability stems from the traditional project delivery method and propose to substitute collaborative delivery methods. By comparing the production and cost utilization processes of each, this research aims to compare different delivery methods and identify the key elements that allow collaborative methods to perform well in terms of cost predictability. Based on the principles of action research, it integrates two case studies, one in a vertically integrated company and the other in a company that uses Integrated Project Delivery (IPD) contracts for project delivery. The results show that the key elements include the establishment of the entire project team at the pre-project phase, the collaborative contracting method where risks and benefits are shared, and the use of creativity-based methods to optimize project value. They also demonstrate that a vertically integrated structure does not guarantee success. This research confirms that the use of a collaborative approach to construction project delivery can greatly improve cost predictability, and identifies the mechanisms used to achieve this.