Incentive/Disincentive Contracts: Perceptions of Owners and Contractors

Arditi, David; Yasamis, Firuzan

doi:10.1061/(asce)0733-9364(1998)124:5(361)

Cited by 62 publications

(36 citation statements)

References 15 publications

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“…This schedule is then compressed into an expedited schedule with a 6-or 7-day week and extended working hours. There is general agreement between owners and contractors that this method is widely used to determine the project duration in I/D contracting [3].…”

Section: Establishing Project Durationmentioning

confidence: 99%

“…The following are the most common problems encountered in I/D contracting as noted by Arditi and Yasamis [3]: scheduling difficulties, contract language interpretation, crew redundancy affecting productivity, working in adverse weather conditions to maintain the schedule, adverse relationships within the contractor's team resulting from the pressure of trying to achieve the maximum incentive, delays in the review of drawings and change order approvals, and sacrificing quality for speed.…”

Section: Contracting Problemsmentioning

confidence: 99%

“…Several industrial projects, either new projects or extension to the existing facilities, are currently in progress. The questionnaire developed by Arditi and Yasamis [3] was used as the basis in developing the questionnaire for this study. The questionnaire (in the Appendix) covered various aspects of I/D contracting.…”

Section: The Case Studymentioning

confidence: 99%

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Incentive/disincentive contracts and its effects on industrial projects

Bubshait

2003

International Journal of Project Management

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Project delays and cost overruns are becoming major problems in many projects, especially industrial projects. The present economic situation has forced owners to establish time and cost reduction programs to control expenditure. The main objectives of this study are to study the perceptions of owners and contractors about incentive/disincentive (I/D) contracting. A questionnaire was used to gather the required data for the study. This was distributed among owners and contractor companies working in petrochemical plants, power plants, and refineries. The findings of the study support the use of I/D provisions in contracts. In addition, the use of I/D contract provisions ensure that contractors do their utmost to manage and control factors that influence labor productivity, project duration and/or project cost. #

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Section: Establishing Project Durationmentioning

confidence: 99%

Section: Contracting Problemsmentioning

confidence: 99%

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Incentive/disincentive contracts and its effects on industrial projects

Bubshait

2003

International Journal of Project Management

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“…The provision of incentives will undoubtedly reduce the high up front cost for green projects. [30] support this notion by asserting that incentive provisions are used in construction contracts to reduce contract costs, to minimize contract duration and to maintain acceptable levels in health and safety, productivity, technological progress, innovation, management efficiency, and quality of construction. On the other side, five states in U.S offer limited grants, such as in Kentucky, it's offer the symbolic gestures promoting certification.…”

Section: Methodsmentioning

confidence: 99%

The Priority Importance of Economic Motivation Factors Against Risks for Green Building Development in Malaysia

et al. 2017

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Abstract. Green building development is an emerging paradigm for the construction industry practice all around the world. The establishement of Green Building rating tool helps to assess the whole life cycle process in planning to operation in a building. The Malaysian construction industry recognizes buildings that have been assessed using established green building tool such Green Building Index, Green RE or My CREST. Eventhough these rating tools provide motivation factors in its criteria and sub-criteria to promote sustainability in Malaysia buildings, there is still a major doubt to developers in terms of risks that may hinder their investments in green buildings. This paper highlights the priority importance of economic motivation factors against risks in the green building development in Malaysia. The data presented in this paper have been mainly derived from responses received through questionnaires completed by building stakeholders involved in green building developments. In order to determine the priority importance of economic motivation factors and risks identified for green building development, the questionnaire outcomes have been thoroughly assessed using the Analytical Hierarchy Process (AHP) method. As a result, lack of government incentive and high capital cost, which classified under green building risks, are the two key factors with highest priority importance that influenced most of the decision making for green building development in Malaysia. The results show green buildings have proliferated as governmental support and incentives with more exampler of higher profit return of investment in enhancing developers preference for green building development.

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“…The limitation of sample size also makes differentiating between the benefits of GMP and TCC separately difficult, even though GMP and TCC are somewhat different in terms of cost and time risk allocations. Some previous research studies on a similar topic, however, also pooled GMP and TCC together as cost incentive contracts for analysis (Arditi & Yasamis, 1998;Bower et al, 2002;, so the approach of analysis used in this study can be taken as justifiable and reasonable.…”

Section: The Profiles Of Survey Respondentsmentioning

confidence: 99%

A Comparative Study of the Benefits of Applying Target Cost Contracts between South Australia and Hong Kong

Chan

Lam

Chan

et al. 2012

Project Management Journal

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This paper aims to identify and analyze the key benefits of adopting Guaranteed MaximumPrice and Target Cost Contracts (GMP/TCC) over and above the traditional lump-sum contractual arrangement through an empirical questionnaire survey conducted in South Australia and compared with the findings in Hong Kong. The Mann-Whitney U Test indicated differences in perception between the two groups of respondents on the majority of the identified benefits. The study has provided an in-depth understanding of the perceived benefits of the GMP/TCC scheme, hence leading to a wider application of those alternative integrated procurement strategies in both regions for reference by the construction community at large.

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Incentive/Disincentive Contracts: Perceptions of Owners and Contractors

Cited by 62 publications

References 15 publications

Incentive/disincentive contracts and its effects on industrial projects

Incentive/disincentive contracts and its effects on industrial projects

The Priority Importance of Economic Motivation Factors Against Risks for Green Building Development in Malaysia

A Comparative Study of the Benefits of Applying Target Cost Contracts between South Australia and Hong Kong

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