Ernzen, J J and Schexnayder, C (2000) One company's experience with design/build: Labor cost risk and profit potential. Journal of Construction Engineering and Management, 126(1), pp. 10-14. ISSN 0733-9364
Abstract
This paper offers the data from one construction company's experiences with design/build. Specifically, the paper presents an analysis of the company's labor cost risk based on a case study of two similar projects. One project was a typical design/bid/build job and the other was a design/build job. The design/build project experienced consistently greater fluctuations in the labor cost. These fluctuations seem to indicate that it is very difficult to accurately estimate labor costs for design/build projects, thus adding to the risk of such projects. The second half of the paper presents an account of this same company's overall profit experience with design/build work. Profit margins were analyzed using three categories-design/build versus non-design/build, client-specific design/build, and design/build construction types. The design/build projects' average profit margin was 3.5 percentage points greater than that for the non-design/build work.
| Item Type: | Article |
|---|---|
| Index terms: | profit, construction company, case study, labour cost, estimate |
| Subjects: | cost management, financial and cost management, economic analysis, data collection methods, organization |
| Topics: | Cost Management, Business Strategy, Research Practice, Procurement |
| Descriptive scope: | 3 PCE |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here