Project Delivery and Contract Strategy

RT-165 Topic Summary
RT 165

Overview

Selecting a project’s delivery and contracting strategy (PDCS) is a key owner decision. It defines the roles and responsibilities of all project participants, how the owner will pay for services, and the overall project execution framework.

In the late 1990s and early 2000s, the process of selecting the appropriate project delivery and contracting strategy was hampered by an incomplete set of alternatives, poorly defined selection criteria, and the absence of quantitative analysis to guide good decision making. RT-165’s mandate was to address the above issues and “to develop a tool that will assist owners in selecting a project delivery method and contracting strategy for their projects, based on their project objectives.”

RT-165 delivered on this mandate by defining and describing an expanded set of 12 PDCS alternatives, developing a structured procedure for making this critical project decision, and creating a spreadsheet tool to support this decision which:

  • Incorporates the expanded set of alternatives for consideration
  • Encourages decision makers to identify and focus on the project objectives and other critical success factors early in project development
  • Enhances insight into PDCS selection through systematic consideration of all decision variables
  • Provides a defensible rationale for PDCS selection based on quantification of alternatives

The PDCS selection procedure and tool should be used as a standard. The procedure and tool are easy to use and ultimately align owner project objectives with the PDCS selected for capital projects. 

Key Findings and Implementation Tools

1 : Selection Procedure

RT-165 developed a PDCS selection procedure which incorporates the following six variables: (RS165-1, p. 4)

  1. PDCS alternatives
  2. Project objectives
  3. Selection factors
  4. Analysis approach
  5. Relative effectiveness values each alternative with respect to each selection factor
  6. Compensation approaches
Reference: (RS165-1)

2 : PDCS Alternatives and Selection Factors

A two-phase data collection campaign, which consisted of both questionnaires and in-person workshops, resulted in the identification and definition of: (RS165-1, p. 4)

  • 12 Project Delivery and Contract Strategy (PDCS) alternatives
  • 20 selection factors that drive the selection of the appropriate PDCS
Reference: (RS165-1)

3 : PDCS Selection Analysis Tool

The PDCS selection analysis tool incorporates the “Simple Multi-Attribute Rating Technique with Swing Weights” (SMARTS) decision analysis technique, which was selected after subjecting several potential methods to analysis using a case-study example. The level of decision-maker effort, the quality of insight generated, and cost were all factors assessed in determining the most suitable decision making technique. (RS165-1, p. 7)
Reference: (RS165-1)

4 : Relative Effectiveness Values

Relative Effectiveness Values for each selection factor, which support the SMARTS decision-making technique, were developed through extensive expert input and evaluation in a series of workshops. The PDCS that most strongly supports the selection factor is given a score of 100, the least effective is scored 0, and the remainder between 0 and 100 based on how strongly (compared to the bookends) they support the selection factor. These are incorporated into the PDCS selection tool. (RS165-1, p. 8)
Reference: (RS165-1)

5 : Compensation Strategies

Default and alternative compensation strategies were identified and documented for each of the 12 PDCS alternatives. (RS165-1, p. 10)
Reference: (RS165-1)

6 : Procedure and Tool Validation

The PDCS selection procedure and decision support tool were tested and validated on 12 projects contributed by RT-165 team members. (RS165-1, p. 11) The testing found:

  • The result obtained was appropriate (for the project being tested.)
  • Sometimes the result obtained suggest a different approach (versus that actually used by the project.)
  • The procedure and tool are an improvement over current practices.
  • The procedure and tool provide insight into the selection of PDCS for projects.
Reference: (RS165-1)

7 : Implementation Tool #1

IR165-2, Owner’s Tool for Project Delivery and Contract Strategy Selection User’s Guide, Second Edition

This is a decision support tool for owners consisting of Microsoft Excel spreadsheets for selecting project delivery and contract strategy. These spreadsheets are available for download from CII. 
Reference: (IR165-2)

Key Performance Indicators

Improved estimating/forecasting, Reduced change, Reduced claims, Reduced project growth, Customer satisfaction

Research Publications

Characteristics of Integrated Project Delivery and Contract Strategies - RR165-11

Publication Date: 12/2003 Type: Research Report Pages: 196 Status: Reference

Owner's Tool for Project Delivery and Contract Strategy Selection User's Guide, Second Edition - IR165-2

Publication Date: 10/2003 Type: Implementation Resource Pages: 74 Status: Tool

Project Delivery and Contract Strategy - RR165-12

Publication Date: 09/2002 Type: Research Report Pages: 273 Status: Reference

Owner's Tool for Project Delivery and Contract Strategy Selection - RS165-1

Publication Date: 07/2001 Type: Research Summary Pages: 26 Status: Supporting Product


Supporting Resources

Education Materials

Project Delivery and Contract Strategies Tool - WS165-01

Publication Date: 11/2009 Type: Video Pages: 0 Status: Supporting Product

Using Project Delivery and Contract Strategy Tools - Instructor's Guide - EM165-21

Publication Date: 12/2003 Type: Education Module Pages: 0 Status: Supporting Product

Using Project Delivery and Contract Strategy Tools - Participant Handbook - EM165-21A

Publication Date: 12/2003 Type: Education Module Pages: 0 Status: Supporting Product


Presentations from CII Events

Session - Project Delivery and Contract Strategy(PDCS)

Publication Date: 07/2001 Presenter: Gary Vandiver Number of Slides: 25 Event Code: AC01

Session - Project Delivery and Contract Strategies(PDCS)

Publication Date: Presenter: Number of Slides: 61 Event Code: PIW405

Session - Project Delivery & Contract Strategy

Publication Date: Presenter: Number of Slides: 32 Event Code: PIW1110


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