CHAPTER 3Contracting and Project Outcomes: The Common Strategies
In this chapter we will define and present the project results for the four most common approaches to contracting engineering and construction services for industrial projects. One of these approaches has three forms, bringing the total number of strategies examined to six. These strategies account for about 80 percent of all industrial projects. Then we will discuss the advantages and disadvantages associated with each form. We will explore the underlying reasons they behave the way they do in Chapter 4.
The Key Performance Indicators and Their Measurement
We will discuss these six measures of project success:
- Construction safety
- Cost competitiveness
- Cost predictability
- Schedule competitiveness
- Schedule predictability
- Cycle time competitiveness
We will also discuss one other outcome that is significant for only one type of contract—startup and operability are poorer for EPC‐LS projects than for any other contract type. After controlling for the use of new technology, there are no significant differences in startup and operability among the other contract types.
Construction safety is described by three measures: the recordable incident rate (recordables), the days‐away‐from‐work/restricted work/job transfer rate (DARTs), and fatalities.1 Safety statistics follow a Poisson distribution in which a good many observations have zero in any category. Therefore, we examined the probability that an accident of a ...