Project Delivery and Contract Strategy

Project delivery and contract strategies (PDCS) define the roles and responsibilities of the parties that are involved in a capital project, and how the project owner pays for services. They define the owner’s framework for managing project execution. An efficient framework would facilitate project success. Establishing such framework for a project would be achieved when the most suitable project delivery and contract strategy is selected.

In place of informal assessments that is the current practice, a structured methodology has been developed for making this important project management decision by project owners. This procedure focuses on the owner’s overall project objectives and the project execution environment, and incorporates a quantitative assessment of twelve integrated PDCS alternatives in a decision support tool.

The procedure includes a decision support tool in the form of a simple Excel workbook, for performing the PDCS selection analysis. This analysis involves identifying the selection factors that are relevant to the project under consideration (decision objectives that are aligned with the owners’ overall project objectives and other success parameters for the particular project), assigning preference weights to those factors to reflect their priority on that project, and obtaining aggregate scores from the spreadsheet. The aggregate scores are computed as sum-product functions of the user-defined preference weights, and pre-determined relative effectiveness values. The higher the aggregate score, the more suitable the PDCS alternative is, in theory, for the subject project. The results of the decision support tool are reviewed in a final decision making step.

Responses obtained during testing and validation of this procedure and tool have already shown that it:

• Expands the set of PDCS alternatives that are available to owners in the decision-making process.
• Is an improvement over current practices.
• Identifies optimal solutions.
• Enhances insight into the problem of selecting a project delivery and contract strategy for a capital project.
• Harmonizes delivery systems with contract strategies and relates these to the owner’s project objectives.
• Constitutes a useful decision support system.
• Provides a defensible rationale for PDCS selection