A comparison of contractual arrangements for building projects

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Abstract
This paper considers contracts from an organizational perspective, comparing the major forms of contracts available for building projects and examining the factors influencing their selection. The analysis is based on the finding of a study of ten building projects, six in the USA and four in the UK, together with the results of a survey of those prominent in the industry. A comparison of five different contractual arrangements indicates that they establish different patterns of responsibilities and relationships between clients and the various parties involved in building projects: In so doing, they are regarded as offering clients differing combinations of expertise, risk, flexibility and costs. For the projects studied, three factors were found to be related t o contract selection: the characteristics of clients, particularly their experience and expertise in construction, the level of performance required by clients and the construction complexity of projects. These findings, together with previous research, suggest that it is unlikely that there is one ‘best’ form of contract for building projects. Rather, which is the appropriate contractual arrangement varies according to the particular set of project circumstances, especially the type of client, his time and cost requirements and the characteristics of the project.

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