Chan, D M; Chan, A P C; Lam, P T I; Lam, E W M and Wong, J M W (2007) Evaluating guaranteed maximum price and target cost contracting strategies in Hong Kong construction industry. Journal of Financial Management of Property and Construction, 12(3), pp. 139-150. ISSN 1366-4387
Abstract
Guaranteed maximum price (GMP) and target cost contracting (TCC) with a pain-share/gain-share arrangement have been adopted to integrate the construction delivery process and motivate service providers to seek continuous improvements in project outcomes. However, there is still a lack of research evidence to evaluate the levels of success and lessons learned from these innovative procurement strategies. Based on the analysis of a series of in-depth interviews on the perceptions of various relevant experienced industrial practitioners, this paper aims to explore the key attributes of GMP/TCC including the underlying motives, perceived benefits, potential difficulties, critical success factors, key risk factors involved and optimal project conditions for adopting GMP/TCC. The research findings are useful in assisting key project stakeholders in minimising the detriments brought about by potential difficulties in and maximising the benefits derived from implementing GMP/TCC concepts. The study is also significant in contributing to new knowledge and practical information of GMP/TCC applications and implementation, in both a national and international context.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | guaranteed maximum price; Hong Kong; interview survey; procurement strategies; target cost contracting |
| Index terms: | evidence, project stakeholder, practitioner, critical success factor, lessons learned, interview, key attribute, strategy, survey, risk factor, construction industry, implementation, Hong Kong, pain, continuous improvement, motive, procurement strategy, project outcome, target cost |
| Subjects: | sociology, health conditions and diseases, environmental hazards, industry analysis, economics, performance measurement, management, professional development, Geography, psychology, contractual arrangements, project completion, risk assessment, evaluation and assessment methods, data collection methods, practitioner, control systems |
| Topics: | Quality Management, Human Resources, Information Management, Research Practice, Geographical Context, Project Management, Health and Safety, Cost Management, Business Strategy, Sustainability, Procurement, Risk Management, Stakeholder Management, Roles and Professions |
| Descriptive scope: | 5 PCTEA |
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