TY - GEN
T1 - A research framework for exploring risk allocation mechanisms for target cost contracts in construction
AU - Chan, Daniel W.M.
AU - Chan, Albert P.C.
AU - Lam, Patrick T.I.
AU - Chan, Joseph H.L.
AU - Hughes, Will
AU - Ma, Tony
N1 - Funding Information:
The authors wish to thank the Research Grants Council of the Hong Kong SAR, China for providing financial support to this proposed research study (RGC Project No. PolyU 5107/07E).
Publisher Copyright:
© 2008 Proceedings of CRIOCM 2008 International Research Symposium on Advancement of Construction Management and Real Estate. All rights reserved.
PY - 2008
Y1 - 2008
N2 - To achieve better value for money in construction procurement, a wider application of more innovative integrated procurement approaches is often recommended by policy-makers, such as Guaranteed Maximum Price (GMP) and Target Cost Contracting (TCC) contractual arrangements. The merits of these procurement strategies lie in their incentives for the contractor to become efficient and to achieve cost savings, as well as to allocate risks on an agreed basis between the employer and the contractor. The GMP arrangement, based on a target cost concept, has become increasingly popular in Hong Kong over recent years. Overseas experience derived from both the United Kingdom and Australia have shown that these procurement strategies can accrue many perceived benefits to both employers and contractors, provided that the risk factors are adequately identified, analyzed, shared and managed. A study is in progress on the Key Risk Factors and Risk Sharing Mechanisms for GMP/TCC procurement methods in Hong Kong, the United Kingdom and Australia. The research findings of this study are expected to help the decision-makers to generate clearer insights into equitable risk allocation amongst different contracting parties, especially between the employers and contractors at an early stage of project delivery and to mitigate the potential risks associated with GMP/TCC schemes.
AB - To achieve better value for money in construction procurement, a wider application of more innovative integrated procurement approaches is often recommended by policy-makers, such as Guaranteed Maximum Price (GMP) and Target Cost Contracting (TCC) contractual arrangements. The merits of these procurement strategies lie in their incentives for the contractor to become efficient and to achieve cost savings, as well as to allocate risks on an agreed basis between the employer and the contractor. The GMP arrangement, based on a target cost concept, has become increasingly popular in Hong Kong over recent years. Overseas experience derived from both the United Kingdom and Australia have shown that these procurement strategies can accrue many perceived benefits to both employers and contractors, provided that the risk factors are adequately identified, analyzed, shared and managed. A study is in progress on the Key Risk Factors and Risk Sharing Mechanisms for GMP/TCC procurement methods in Hong Kong, the United Kingdom and Australia. The research findings of this study are expected to help the decision-makers to generate clearer insights into equitable risk allocation amongst different contracting parties, especially between the employers and contractors at an early stage of project delivery and to mitigate the potential risks associated with GMP/TCC schemes.
KW - Guaranteed Maximum Price
KW - Research framework
KW - Risk factors
KW - Risk Sharing Mechanisms
KW - Target Cost Contracting
UR - http://www.scopus.com/inward/record.url?scp=77951279140&partnerID=8YFLogxK
M3 - Conference article published in proceeding or book
AN - SCOPUS:77951279140
T3 - Proceedings of CRIOCM 2008 International Research Symposium on Advancement of Construction Management and Real Estate
SP - 289
EP - 296
BT - Proceedings of CRIOCM 2008 International Research Symposium on Advancement of Construction Management and Real Estate
A2 - Feng, Chang-Chun
A2 - Yu, Ming-Xuan
A2 - Zhao, Zhen-Yu
PB - The Hong Kong Polytechnic University, Hong Kong
T2 - 2018 International Research Symposium on Advancement of Construction Management and Real Estate, CRIOCM 2008
Y2 - 31 October 2008 through 3 November 2008
ER -