DEPARTMENT OF TECHNOLOGY MANAGEMENT AND ECONOMICS DIVISION OF SERVICE MANAGEMENT AND LOGISTICS CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2021 www.chalmers.se Report No. E2021:070 Innovation through Early Contractor Involvement A comparable case study of Swedish infrastructure projects and their contractual disposition
Examensarbete för masterexamen
Design and construction project management (MPDCM), MSc
The use of Early Contractor Involvement (ECI) has gained increased attention in the construction industry as a means to remove the separation of projects’ design and construction, thus integrating the contractor’s expertise and knowledge in early planning and design work. The benefits seen thereof are numerous, including an improved time- and cost certainty, improved risk management and improved buildability. Another benefit commonly acknowledged is a larger opportunity for and increased innovation, yet current studies of the ECI-concept and its links to innovation have given little attention to how the projects’ contractual disposition affects innovation. Thus, this study has investigated this seen knowledge-gap through a qualitative comparable case study of two current ECI-projects within the Swedish infrastructure sector. Moreover, the study has also in a broader perspective investigated the perceived benefits and hindrances seen through ECI-implementation, as well as the challenges seen through the use of target cost principles and economic incentives. Focus has been placed on the projects’ initial planning and design phase and empirical material was gathered from interviews with both projects’ respective client and contractor organisations. The most notable benefit seen through ECI-implementation was the integration of the contractor’s expertise in planning and design, thus allowing considerations of the contractor’s input in both decision-making and design development. The hindrances to achieving all ECI-benefits were concluded to stem primarily from the lack of equal commitment and the lack of a compromising attitude among the projects’ participating organisations, primarily grounded in accustomed client and contractor roles. These cultural aspects were also seen to create challenges in the projects’ target cost processes, in which client and contractor interests pre target cost agreement were seen to stand in conflict with one another, hence creating large difficulties in reaching agreements which both parties perceived as fair. The difficulty in equating the client and contractor’s economic interests in the planning and design phase was also seen as impeding an increased level of innovation in both projects, and when paired with a lack of economic incentives for innovation efforts, instead created unwanted incentives as to hide innovative solutions till post target cost agreement at which the contractor was also economically reimbursed for such efforts.