Framework for Structuring Procurement Contracts

Lena Borg () and Hans Lind ()
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Lena Borg: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Department of Real Estate and Construction Management , Royal Institute of Technology, Brinellvägen 1, 100 44 Stockholm, Sweden
Hans Lind: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Department of Real Estate and Construction Management , Royal Institute of Technology, Brinellvägen 1, 100 44 Stockholm, Sweden

No 14/9, Working Paper Series from Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: The aim of this paper is to propose a new structure for classifying contract types and payment methods. Concerning the procurement contract types the first important feature is the stepwise structure with three main steps in the contract design: (1) should the contract only include construction or both construction and operation/maintenance? (2) Who should do the detailed design of the premise? (3) How many contractors should the client use? An important new feature of the structure is that in both step 2 and step 3 there is a continuum of alternatives. Concerning the payment methods the structure is primarily based on how the project specific risks are shared.

Keywords: Procurement; Contract; Construction sector; Infrastructure projects (search for similar items in EconPapers)
JEL-codes: H44 L74 R40 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2014-10-24
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Published as Borg, Lena and Hans Lind, 'Framework for Structuring Procurement Contracts' in Australasian Journal of Construction Economics and Building, 2014.

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