Making the right contract choice: A study of AB 04 and ABT 06 in office construction procurement in Gothenburg

Abstract

The construction industry is one of the biggest sectors globally and face a recurring problem in budget overruns, often linked to flaws in contract writing and risk dividing between stakeholders. This thesis investigates the Swedish standard agreements AB 04 and ABT 06 and how these differ, how these address economic, social and qualitative risks and how the choice of contract form can affect the risk of a project breaching its budget. The study focuses on the construction of an office construction in Gothenburg and employs an abductive research approach to develop theories and generalizations to help the construction industry. The research is based on nine interviews with experienced industry professionals and the development of a theoretical framework. The findings of the research demonstrate that the the most fundamental difference between the AB 04 and ABT 06 lies in the project execution structures where AB 04 adopts a Design-bid-build (DBB) execution and ABT 06 involves a Design-build (DB) execution. Furthermore, the results display that the choice of contract form cannot be generalized for all office building but rather emphasize the need to understand the nature of the project and the clients’ internal resources for design and planning. Also, the findings underscore the significant role of collaboration in ensuring project success