Factors Influencing Building Contractors’ Pricing for Time-Related Risks in Tenders
Publication: Journal of Construction Engineering and Management
Volume 135, Issue 3
Abstract
The contractors’ pricing for contract risks in tenders determines how much the employers have to pay for the risk transfer. Therefore, understanding the factors influencing the contractors’ pricing for contract risks is crucial for employers to optimize the cost effectiveness of risk allocation in contracts. This study investigates the factors that contractors perceive to be important when they are pricing “time-related” contract risks. A questionnaire survey was designed for collecting data from building contractors currently operating in Hong Kong. Contractors were not only required to rate the importance of individual factors, but also to state the cost implications when compared with normal pricing in the absence of the concerned factor. The findings reveal that a single factor may have two-sided implications (both inflating and deflating the prices) for which they can be in unequal scales. These scales vary according to the contractor size and the reasons of the differences are investigated. The findings also assist employers in formulating a cost effective contract strategy by equipping them with the necessary knowledge.
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Acknowledgments
Acknowledgement is given to all parties who have made themselves available for participating in the research survey and to J. Wong, I. Young, and R. Yuen for taking part in related discussions and giving advice during their coursework exercises with the second writer. This research is supported by funding provided by the Research Grant Committee of the Hong Kong Polytechnic University.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 135 • Issue 3 • March 2009
Pages: 135 - 145
Copyright
© 2009 ASCE.
History
Received: Nov 28, 2005
Accepted: Sep 11, 2008
Published online: Mar 1, 2009
Published in print: Mar 2009
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