One Company's Experience with Design/Build: Labor Cost Risk and Profit Potential
Publication: Journal of Construction Engineering and Management
Volume 126, Issue 1
Abstract
This paper offers the data from one construction company's experiences with design/build. Specifically, the paper presents an analysis of the company's labor cost risk based on a case study of two similar projects. One project was a typical design/bid/build job and the other was a design/build job. The design/build project experienced consistently greater fluctuations in the labor cost. These fluctuations seem to indicate that it is very difficult to accurately estimate labor costs for design/build projects, thus adding to the risk of such projects. The second half of the paper presents an account of this same company's overall profit experience with design/build work. Profit margins were analyzed using three categories—design/build versus non-design/build, client-specific design/build, and design/build construction types. The design/build projects' average profit margin was 3.5 percentage points greater than that for the non-design/build work.
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References
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 126 • Issue 1 • January 2000
Pages: 10 - 14
History
Received: Jun 14, 1998
Published online: Jan 1, 2000
Published in print: Jan 2000
Authors
Metrics & Citations
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