The construction contract as a mean for improving the contractor’s performance

Abstract

A construction contract is seen as a document that establishes the legal and commercial rights and duties of a client and a contractor for carrying out a construction project. The main focus of contract development is the regulation of the relationship and risk assignment between the two parties. Normally, the party in charge of developing the contract is the client and most of the times the contractor adheres to it. However, the construction contract can also be used as a means to improve the performance of the contractor. This paper proposes a new, more encompassing methodology for contract development. This methodology was developed by using a cross-impact approach based on the concepts of the Quality Function Deployment scheme. With this methodology, the client would be able to structure a contract that explicitly considers the factors that can improve the contractor’s performance. This paper describes the methodology and shows an experimental application using information obtained from a number of clients and contractors through non-structured interviews. The main conclusion of this work is that by using this approach, clients would be able to produce a contract that would be better aligned to both, his and the contractor objectives.