Incentivization and Interdependency in Construction Contracting

Cheung, Sai On; Zhu, Liuying; Lee, Ka Wai

doi:10.1061/(asce)me.1943-5479.0000601

Cited by 34 publications

(24 citation statements)

References 75 publications

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“…1-Project's Location [6][7][8] 2-Project's Size [8,9] 3-Clear and realistic goals/objectives [10,11] 4-Project's adequate funds/resources [12][13][14] 5-Effective procurement and tendering methods [15][16][17][18][19] II. Business-and Work-Environment-Related Factors 6-Economical environment [20,21] 7-Social environment [22][23][24] 8-Political environment [9,16,25] 9-Statutory approvals environment [26,27] III.…”

Section: Project-related Factorsmentioning

confidence: 99%

Critical Success Factors for Sustainable Construction Project Management

Gündüz

Almuajebh

2020

Sustainability

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It is necessary to identify critical success factors (CSFs) that affect the construction process. This paper’s aim is to define the CSFs considering views of all construction project stakeholders. The contribution of this paper is to categorize project success factors into categories and quantify the effect of each category taking into account the effect of all stakeholders on project efficiency and progress. To achieve this objective, a comprehensive literature review was carried out. After literature review, 40 success factors were compiled into seven categories: project-related factors, company- and work-related factors, client-related factors, project management factors, design-team-related factors, contractor-related factors, project-manager-related factors. Consequently, a survey including these listed success factors was prepared and distributed to various experts in the construction field to be ranked; 148 responses were received. Employing the Relative Importance Index (RII) and traditional Analytic Hierarchy Process (AHP) method with Saaty random index that prioritizes these CSFs, the collected data were analyzed after receiving responses. Even though there were disagreements in stakeholders’ views and their goals, significant areas have been identified as project financial issues, managerial aspects, and authorities’ approval mechanism. The outcome of this paper would be used by construction industry professionals to support, evaluate, and measure the success of projects for better allocation of resources.

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Section: Project-related Factorsmentioning

confidence: 99%

Critical Success Factors for Sustainable Construction Project Management

Gündüz

Almuajebh

2020

Sustainability

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“…The concept of asset specificity under transaction cost economics theory is central to explaining this phenomenon (Williamson, 1985; Lui et al , 2009; Liu et al , 2020). High asset specificity and interdependency asymmetry are thus breeding grounds for noncooperative behavior (Cheung et al , 2018). Other forms of retaliation include noncooperation, procrastination, withdrawal and in extreme cases, project abandonment (Adams, 1965; Schieg, 2008; Ceric, 2013).…”

Section: Introductionmentioning

confidence: 99%

Equity gap in construction contracting: identification and ramifications

Zhu

Cheung

2021

ECAM

Self Cite

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PurposeThis study conceptualizes the equity gap (EG) in construction contracting and examines its impact on project performance.Design/methodology/approachThe identification of EG was first summarized from a literature review. A conceptual framework that included EG elements of information, risks, expected return and power asymmetry was then proposed. A study of the Hong Kong–Zhuhai–Macau Bridge supported the existence of EG. The framework was further refined by incorporation of 21 EG identifications. To examine the reliability of the framework, data were collected from 106 senior project professionals to evaluate the extent to which EG identification occurred in their projects. A Partial Least Square–Structural Equation Modeling (PLS-SEM hereafter) analysis was conducted on the collected data.FindingsThe proposed framework was deemed statistically significant. Furthermore, no significant differences were detected between the developer and contractor. The concepts of asset and process specificities suggested that the unaddressed EG may be met with retaliatory behaviors, such as noncooperation, procrastination, opportunism and withdrawal, as the physical works proceed. These behaviors may also hamper project performance.Practical implicationsTo address the EG ex post, it is suggested that relational incentives to balance the power differential be set, reallocation of risks and return and enhancing task programmability for ease of monitoring and performance evaluation.Originality/valueThis study investigates the downside of the EG between the contracting parties. The proposed EG framework informs the project management of critical EG elements and possible methods to narrow the gap ex post. Practical suggestions are also provided to manage construction contracts in general and in the use of incentive schemes to address EG.

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“…The integration of independently owned resources across pre- and post-contract phases is a critical component of the construction project realization process (On Cheung et al, 2018). Even though other contracting systems are available, the design-bid-build (D-B-B) system is the most commonly used (Chakra and Ashi, 2019).…”

Section: Introductionmentioning

confidence: 99%

“…This has a knock-on effect on the performance of the remaining contractual elements. Other performance factors such as cost-time quality are also influenced as a result of this interconnection (On Cheung et al, 2018). However, if the interactions between incompatible practices and their connections to payments are better understood, the problem can be mitigated.…”

Section: Introductionmentioning

confidence: 99%

Examining dissimilar interactions enabling late payments, underpayments and non-payments to construction contractors

Kenyatta

Gwaya

Masu

et al. 2022

Journal of Strategic Contracting and Negotiation

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Previous research linked late, underpaid, and non-paid contractors to various performance issues. However, the degree to which these differences in practices enable the problem under design-bid-build contracting is unknown. To address this gap, expert interviews were used to rate 11 incompatible practices. One-mode matrices were computed by utilizing social network analysis methods. Using metrics like structural equivalence and Euclidean distance, the study established that different indexes have different connections to the payment problem. The most significant index suggests the issue is a low-cost acquisition strategy. The strategy's misaligned interests were also corroborated by the hierarchical clustering and block modelling results. The study contributes to the methodology of assessing the efficacy of existing payment default remedies, rationalization of intermediary roles, and illustrates deviations from the general contracting principles.

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Incentivization and Interdependency in Construction Contracting

Cited by 34 publications

References 75 publications

Critical Success Factors for Sustainable Construction Project Management

Critical Success Factors for Sustainable Construction Project Management

Equity gap in construction contracting: identification and ramifications

Examining dissimilar interactions enabling late payments, underpayments and non-payments to construction contractors

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