Mediating effect of benefits realization management on contractor’s team competency and post-contract transaction costs in design-build projects

Abstract

The current approach to understanding client’s needs have progressed from a lower level of engagement viewed as a cross-sectional attempt to formulate a client's brief, to a higher level systematic extraction of client's requirements that is longitudinal in nature. It is evident that dissatisfaction of clients with the finished product and construction process has prompted many researchers to address the issue of client's requirements. This very much needed emphasis to improve construction project performance has however been plagued by the lack of a coherent methodology or framework as a structuring mechanism, except to include requirements capture within an extended boundary of process protocols. Taking a systems view, the aspect of improving project performance by tackling parts of the system allows for a more focused and systemic solution to performance improvement. The much neglected aspect of Post-Contract Transaction Costs (PTCs) that affect project performance, viewed as a sub-system that needs to be minimized for projects to have a clear benefits realization potential. This is mediated by the effect of having in place a benefits realization management (BRM) strategy that can markedly reduce PTCs. The particular context of developing this Benefits Realization Model is framed within the Design-Build (D&B) project delivery method that is very much maligned by its inability to secure better performance. Questionnaire survey data from a sample of major D&B contractors in Malaysia was analysed using SmartPLS 3 to test the research hypothesis. The questionnaire survey was designed based on collation of past literature findings and validated using a Delphi study undertaken with D&B experts. Results indicate that BRM partially mediate the relationship between D&B contractor team competency and post-contract TCs whilst team-competency has a strong positive and significant influence on minimizing PTCs. The findings also indicate that proactive management and learning; stakeholder engagement of D&B contractors' team to be the most significant factor. These findings establish the extent to which human agency within its interplay with structure can impact on construction project performance in D&B projects.

Keywords: Benefits realization management strategy, competency, post-contract transaction costs (PTCs), design and build projects