Incorporating Contractual Incentives to Facilitate Relational Contracting
Publication: Journal of Professional Issues in Engineering Education and Practice
Volume 132, Issue 1
Abstract
Construction projects are undertaken by many parties, all with their own goals and motivations which may not always be aligned. Furthermore, they are governed by contracts, which do not necessarily produce win-win outcomes. The aims of this study are (1) to compare the views of contractors, clients, and consultants on factors facilitating and deterring relational contracting (RC); and (2) to investigate the use of contractual incentives to increase the effectiveness of RC. Structured questionnaires were sent by post to randomly selected construction industry players in Singapore to find out factors that enable RC and the barriers that impede the formation of RC. The results show that RC can be facilitated by having top management support, alignment of project objectives, relationship building, and most importantly, appropriate contractual incentives. In most instances, contractors gave a lower level of importance to many of the factors than clients and consultants. It is concluded that more contractual incentives should be provided in contracts in order to evoke the desired relational approaches.
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Acknowledgments
The writers thank M. M. Kumaraswamy for the permission to use the questionnaire conceived by him and his team in Hong Kong. S. T. Phng’s collation of contractor respondents’ data is acknowledged with thanks.
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Information & Authors
Information
Published In
Journal of Professional Issues in Engineering Education and Practice
Volume 132 • Issue 1 • January 2006
Pages: 57 - 66
Copyright
© 2006 ASCE.
History
Received: Feb 8, 2005
Accepted: Jul 5, 2005
Published online: Jan 1, 2006
Published in print: Jan 2006
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