Target pricing in partnering projects : Examining the effect of integrated project teams and target pricing in three pilot projects

Both national and international literature indicate that effiency and productivity in building and construction projects can be optimized. The literature also indicate that the reasons for selections in the front-end of projects can be evaluated more thoroughly, since they have large impact on both the execution and the result of a project.The owner of a project can use front-end assessments when selecting contract strategy, since they contribute to clarify the purposes, define the framework and explain the uncertainty in the project. The contract strategy consists of selection of prequalification, selection criteria, contracting method, work descriptions, contract model, contract type, incentives and contract regulations. What contract strategy that suits a project will depend on several parameters.The main objective of the research work was to reveal how results from front-end assessments can be used to optimize selection of contract strategies for single projects. Other objectives was to evaluate which front-end assessments that influence on selection of contract strategy, what else that influences this selection and what is recommended practice for it. One objective was to find out which contract strategies public owners select in their projects. The last three objectives dealt with recommendations of which information front-end assessments should give, which methods for front-end assessments that are applicable and how such assessments can be used to optimize selection of contract strategies.The two first hypothesises formulated in advance of the research work were that public owners select contract strategy in building and construction projects on basis of former experiences and that they do not select according to recommended practice. The third hypothesis was that front-end assessments give parameters that are necessary for selection of contract strategy according to recommended practice.The empirical material is mainly gathered through literature studies, a documentation study and tape recordings from semi-structured interviews. The research approach is based on an overweight of qualitative methods, an intension to suggest actions and a deductive way of thinking. The selection of cases and respondents has mainly been strategic.Both information from front-end assessments, other project specific information and general information will influence on what contract strategy the owner should select for the project. There are two extremes as far as contract strategy is concerned. The owners can transfer all the responsibility for the uncertainty to the contractors, or they can keep it. Between these extremes there are all the other contract strategies with various combinations of instruments for selection of contractor, instruments for dividing responsibility and instruments for the process.In 20 of the 22 examined governmental projects the contract strategies had large similarities. The last two projects were pilots for a Public Private Partnership model, where selections of contract strategies were based on terms set by the Norwegian Storting. The trend was that the examined public owners selected contract strategies were they kept much of the responsibility for the uncertainty. The documentation from the 20 projects did not always verify that the selection of contract strategy was based on information from front-end assessments. However, some of the assessments gave more gainful information than the others. The reason for selection of contract strategy in three of the 22 projects were more thoroughly examined through interviews with key personnel. These interviews gave, in combination with a literature study, information on how spesific and general information about a project should influence on selection of contract strategy.The contract strategies have two extremes, where maximum responsibility and steering possibility is transferred to the contractor or kept by the owner. In Public Private Partnership projects the owner transfers the responsibility for financing and operation, but except from that there are many similarities with the contract strategy where the owner transfers a maximum of the responsibility to the contractor. The hypothesis that public owners select contract strategy on basis of former experiences is not quite right, since there are more parameters that decides these choices. Another conclusion is that the selection of contract strategy often accord with recommended practice from literature, but that does not happen in all the examined projects. The hypothesis about front-end assessments giving necessary parameters for selecting contract strategy is right, but at the same time the owner need to know more parameters than those given by the front-end assessments.During the research work five academic papers were published. This thesis is a superstructure based on empirical datas, discussions and conclusions in these papers. The papers are independent, written in English and adapted to an international reading audience. Because public owners in Norway use characteristic contract regulations, the content in this thesis will be of most interest for readers confident with the Norwegian language.