The Cost-Trust Relationship in the Construction Industry

The following project characteristics are important in determining the level of trust between parties:

• Involvement in project scoping
• Involvement in project design
• Familiarity between the parties
• Attainment of the most important project objective, and type of contract.

(SD-100, p. 5)

The following are areas of activity in the contracting process where trust-related issues have a significant impact on project cost:

• Open discussions of alternative methods of performing the work
• Value engineering
• Constructability
• Contract administration
• Risk allocation
• Level at which disputes related to risk allocation are solved
• Communications, and dispute resolution

The following is a sampling of specific actions related to the level of trust have been identified as having the highest potential impact on project cost. Refer to SD-100 for a complete listing.

• Adopt a mission statement committing both parties to an open and fair approach to contract administration.
• Emphasize the intent rather than the letter of the contract.
• Share project objectives with all parties during the scoping and planning stages of a project.
• Explore alternative methods of performing the work related to project scope, standards, procedures, specifications, and sequence.
• Openly discuss merits of alternative methods and adopt those that best suit the project objectives.