Roles, responsibilities and risks in management contracts

This thesis is based upon research conducted under a study funded by the Science and Engineering Research Council (SERC) between October 1987 and September 1989, and further research conducted by the author while acting as a consultant for SERC, the Construction Industry Research and Information Association (CIRIA), and other organisations. The objectives of the research programme as stated in the application to SERC were to investigate the strengths and weaknesses of management contracting as a system for procuring construction works, and to provide guidelines on its future use. The research study focusses upon the problems affecting any system of procurement. It considers the diverse roles of the parties involved in construction projects, the conflicting objectives and lack of trust between them, the fundamental requirements for good project management, and the appropriate allocation of project risks. The rationale underlying the formulation of the JCT 1987 Standard Form of Management Contract is discussed. An analysis is made of the advantages and disadvantages of management contracting in relation to other systems of construction procurement. A particular comparison is made between management contracting and construction management. The inter-relationships between the various factors that influence the choice of a procurement system are explored. Other key areas evaluated are the vulnerable position of works contractors, the requirements for the effective management of design, the alignment of the objectives and the linkage between payment systems and motivation for contracting parties, and the collaborative assessment and management of project risk. The research study provides a unique, independent and wide-ranging analysis of the management contracting system within the context of other construction procurement systems.