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Boukendour, S and Hughes, W (2014) Collaborative incentive contracts: stimulating competitive behaviour without competition. Construction Management and Economics, 32(03), 279-89.

  • Type: Journal Article
  • Keywords:
  • ISBN/ISSN: 0144-6193
  • URL: https://doi.org/10.1080/01446193.2013.875215
  • Abstract:
    One of the major and recurring problems in designing cost incentive contracts is related to setting target cost and a risk-sharing ratio. With the standard sharing formula, contractors or alliance partners are incentivized to artificially inflate their target cost in order to maximize profit and minimize risk. Knowing that, owners attempt to pressure contractors by using various mechanisms, which are time-consuming and may jeopardize collaborative relationships afterwards. A fair risk-sharing formula is suggested that incentivizes the contractors or alliance partners to truthfully submit their target cost. The main tangible benefit is in removing suspicion and fostering trust and collaborative relationships between the contracting parties.

Clegg, S and Kreiner, K (2014) Fixing concrete: inquiries, responsibility, power and innovation. Construction Management and Economics, 32(03), 262-78.

Davies, P J, Emmitt, S and Firth, S K (2014) Challenges for capturing and assessing initial embodied energy: a contractor’s perspective. Construction Management and Economics, 32(03), 290-308.

Gajendran, T, Brewer, G, Gudergan, S and Sankaran, S (2014) Deconstructing dynamic capabilities: the role of cognitive and organizational routines in the innovation process. Construction Management and Economics, 32(03), 246-61.

Lloyd-Walker, B M, Mills, A J and Walker, D H T (2014) Enabling construction innovation: the role of a no-blame culture as a collaboration behavioural driver in project alliances. Construction Management and Economics, 32(03), 229-45.