Incentivizing effort in highly collaborative construction and design teams

The commercial construction industry has been experiencing a transition to project types that promote increased collaboration between designers and contractors, such as integrated project delivery and design-build. The project performance of these highly collaborative projects appears to be greater than that of traditional project types, such as design-bid-build. Collaboration can be challenging though, as the contracted collaborators can provide varying levels of needed effort. Thus, promoting and monitoring the collaborative effort of project participants is of value to the project owner and project participant alike. However, there is a lack of guidance regarding how to promote efficient and effective effort from project team members. Traditional construction and design projects (Lump Sum/Hard Bid, for example) utilize procurement and contracting methods that incentivize individual profit maximization over project success. Rational contracted parties are forced to balance collaboration with the need to maximize profits. If collaboration comes at a cost, and profit realization is not guaranteed, the rational party must act in self-interest over that of the project. These self-interested actions may or may not degrade project outcomes. This focus on self-interest contrasts with highly collaborative projects where the contractual intent is to incentivize “collaborative effort” of the project team. Unfortunately, there is little guidance regarding what “collaborative effort” means or how to measure it. The following research examines the measurement of collaborative effort, the contractual implications, and incentives structures of “collaborative effort”, and the association “collaborative effort” to project outcomes.