Risk under performance‐based contracting in the UK construction sector

Gruneberg, Stephen; Hughes, Will; Ancell, Debbie

doi:10.1080/01446190601164097

Cited by 89 publications

(67 citation statements)

References 6 publications

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“…Although there have been several reports on outcome-based contracts (Gruneberg et al 2007), there are not many studies that examine fundamental theoretical issues arising from the delivery of an outcome-based contract. In this study, we use a systems approach to analyse the delivery of two such contracts so as to highlight the theoretical issues contained within.…”

Section: < Take In Table>mentioning

confidence: 99%

Outcome-based contracts as a driver for systems thinking and service-dominant logic in service science: Evidence from the defence industry

Maull

Yip

2009

European Management Journal

231

192

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Section: < Take In Table>mentioning

confidence: 99%

Outcome-based contracts as a driver for systems thinking and service-dominant logic in service science: Evidence from the defence industry

Maull

Yip

2009

European Management Journal

231

192

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“…The researchers underlined that using detailed technical specifications does not create a level playing field for the contractors to flexibly perform their contracts innovatively (Gruneberg, Hughes, & Ancell, 2007). It does not allow them to include newly innovated concepts and ideas in the contract execution process so as to make the products and constructions fit for the contemporary technological demands of the public organizations (Lawther & Martin, 2005).…”

Section: Literature Reviewmentioning

confidence: 99%

“…It is used when the buyers clearly know their needs but want to be able to control the behaviors of the contractors in the contract performance process. However, the risk of the procurement is still left to the buyers (Gruneberg et al, 2007). In addition, like traditional contracting, it doesn't allow the contractors to flexibly perform their contracts and hence it restricts innovation.…”

mentioning

confidence: 99%

The practice of performance-based contracting in developing countries' public procurement: the case of ethiopia

Ambaw

Telgen

2017

Journal of Public Procurement

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ABSTRACT. Performance-Based Contracting (PBC) is widely accepted as a useful tool. It is believed that the use of PBC can assist the efficient utilization of the public resources. The objective of this research is to assess the extent of PBC application and the obstacles to applying it in the public procurement systems of developing countries. Interviews and factual analysis of procurement guidelines and contracts are used to collect data for this research. The analysis results indicate that the majority of public organizations have not yet used PBC even though it is allowed by the law. This is due partly to lack of clarity in the procurement laws and lack of capacity to use PBC.

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“…In a performance-based maintenance relationship performance criteria are explicitly stated by the client (Straub, 2007). Performance-based contracting clearly alters the nature of the risk and its allocation, shifting increased risks on to the contractor and away from the client (Gruneberg et al, 2007).…”

Section: Maintenance Tendering Approachesmentioning

confidence: 99%

Cost Savings From Performance‐based Maintenance Contracting

Straub

2009

International Journal of Strategic Property Management

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ABSTRACT. New procurement approaches combined with performance-based building approaches should reduce costs, but empirical qualitative and quantitative studies are lacking. Performance-based maintenance contracts give maintenance suppliers incentives to improve their way of working. Innovative, cost-effective solutions that meet the performance criteria can be achieved, especially if the principle of whole-life costing is being adopted. Indirect cost savings are expected as well. It enables maintenance contractors to assume responsibility for certain activities for which they are better equipped to perform than their clients. A calculation model was developed that calculates the net present value of the direct (product) and indirect (transaction) costs at project level for a competitive maintenance tendering approach and for performance-based maintenance contracts. The fi ndings show that performance-based maintenance contracts reduce both direct and indirect costs compared to a competitive tendering approach. Essential preconditions are an early supplier involvement and longer term contracts, giving opportunities for maintenance product and maintenance process improvements.

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Risk under performance‐based contracting in the UK construction sector

Cited by 89 publications

References 6 publications

Outcome-based contracts as a driver for systems thinking and service-dominant logic in service science: Evidence from the defence industry

Outcome-based contracts as a driver for systems thinking and service-dominant logic in service science: Evidence from the defence industry

The practice of performance-based contracting in developing countries' public procurement: the case of ethiopia

Cost Savings From Performance‐based Maintenance Contracting

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