The impact of contractual and collaboration forms on risk management in Swedish construction projects

In order to be able to carry out a construction project with the expected final result, professional risk management as well as a conscious risk sharing among the actors in the project are required. A question of a particular interest for the actors in Swedish construction industry is the way in which project risk management needs to be further developed, based more on openness, trust and collaboration rather than on sharp contract formulations. The objective of the study is to investigate the impact of the chosen form of contract and collaboration on risk management in construction projects. We analyse three major forms used in Sweden: performance-based contracts, design-build contracts and collaboration through partnering. A questionnaire survey and a series of interviews with clients, contractors and consultants involved in three construction projects were conducted. In the performance-based project no collaboration in risk management process existed between the actors. Both identified and unforeseen risks occurred in the project and had a large economic effect for the contractor. The design-build project showed very good project performance and successful collaboration in risk management. From the contractor's perspective, risk management is more effective in design-build projects as it gives the contractor the possibility to influence the project during the early phases. In contrast with first two projects, the partnering project showed that all actors had the same degree of influence on risk management. Despite the fact that the identified risks occurred during the project implementation, all actors acknowledged very good collaboration in risk management. Moreover, the partnering project was completed with a better economic result for both the client and the contractor. The results show a clear connection between the form of contract and collaboration and risk management in the chosen construction projects. Those forms that support early involvement of the actors and create opportunities for open dialogue and collaboration result in a more efficient risk management process.Godkänd; 2007; 20070924 (ekaosi)