THE OPPORTUNITIES OF A COLLABORATIVE CONTRACTING MODEL TO BOOST PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY

Abstract

The Construction Industry today is riddled with fragmentation across the value chain. With poor unity among stakeholders, there is an impetus to address the sorely lacking cooperation within project teams. One of the ways this can be explored is through collaborative contracting (CC) – which aims to govern the relationship between parties to a project based on trust. CC has been widely adopted in various contract forms globally and has seen its fair share of successes and disadvantages, which makes it worthwhile to study if it is ready to be introduced in Singapore.

Based on a literature review, 8 key principles shaping CC have been identified, i.e., Mutual Trust and Operational Integration; Jointly Developed Project Criteria and Commercial Arrangements; Shared Risks and Rewards based on Project Outcome; Early Warning Procedure; Early Involvement and Full Integration of Key Participants; Common Processes, Open Communication and Information Sharing; Transparent Financials; and Dispute Avoidance and Early Dispute Resolution. In addition, 4 key benefits in relation to construction productivity from adopting CC and 4 areas of challenges in adopting CC were identified.

Additionally, an in-depth study into three different standard forms was conducted for comparison and evaluation of their principles – CIOB Time and Cost Management Contract 2015, JCT Constructing Excellence Contract 2016, NEC Engineering and Construction Contract 2017.

Following the literature review and study of the CC forms, a questionnaire was developed, pilot-tested and conducted. 34 responses were received from building professionals in Singapore. Interviews with 3 industry professionals from the legal sector were subsequently conducted to validate the questionnaire findings.

From the analysis of the results, a total of 11 perceived benefits of CC and 19 collaborative principles were found to be critical in CC forms. Improved decision-making process and early risk detection and better responses were identified to be the most significant benefits, while having predetermined dispute resolution method and early warning of emergent issues that may adversely impact cost were perceived to be crucial collaborative principles. Furthermore, the results also established that there is a generally positive impact of collaboration on construction productivity, with the highest factors being improvements in constructability score and work hours expended.

Through this study, building professionals can have a better understanding of the available clauses in CC to better inform on the anticipated changes that CC will introduce in place of traditional contracts. The research also surveyed for the respondents’ receptivity towards measures to promote adoption of CC, with recommendations on overcoming barriers to CC adoption.