An Exploration of Theoretical Concepts and Methods for Assessing Risk Impacts on the Variability between Contract Sum and Final Account in Design and Build Projects

Abstract

Design and Build procurement has been steadily increasing in popularity over the past number of years. Although it can provide some advantages, it can also lead to being a risky procurement method for both owner and contractor if the risks are not identified in advance and managed throughout. Therefore the overall aim of this study is to identify, assess and model the risk factors impacting the variability between the contract sum and final account in client-led and contractor-led Design and Build projects. The work presented in this paper is at the preliminary stage of the research programme and it looks into the possibility of developing a methodology for assessing risk impacts on the variability between contract sum and final account in design and build projects. As a first step, a detailed review of literature was made to establish the growing use of design and build procurement and the risk inherent in this procurement method. Secondly, different perspectives of risk were examined using the cognitive model of risk so as to position this study in the wider context of existing body of knowledge in this domain. The insights gained from the foregoing steps then helped in devising a methodological framework for assessing the variability betweenthe contract sum and final account in client-led and contractor-led Design and Build projects.