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Building and Environment 39 (2004) 229 – 237
www.elsevier.com/locate/buildenv
Risk analysis in ÿxed-price design–build construction projects
Ahmet Oztas∗ , Onder Okmen
Department of Civil Engineering, University of Gaziantep, 27310 Gaziantep, Turkey
Received 11 June 2003; received in revised form 2 August 2003; accepted 26 August 2003
Abstract
Construction projects are being tendered and implemented under di erent contract systems and payment methods. Design–build has
been a popular contract system in recent years. It provides various advantages through entailing the contractor carrying out and being
responsible for not only construction but also the design of the work. However, design–build turns out to be a risky system for both
owners and contractors unless the risks are identiÿed, analyzed and managed throughout the tender preparation and project execution
stages. In this context, this study aims to present a literature survey on the issues of risk, risk management/analysis and the design–build
contract system, to propose a schedule and cost risk analysis model, and to show the applicability of these models in scheduling and cost
estimation of a ÿxed-price design–build construction project through a case study.
? 2003 Elsevier Ltd. All rights reserved.
Keywords: Risk analysis; Construction; Contract system; Design–build; Monte Carlo simulation
1. Introduction
In a competitive tender, decisions on pricing strategies
are based on contractor’s experience, intuition, and personal
bias. There are a lack of practical models that could quantify risks on construction projects. Xu et al. [1] proposed
an approach to the risk assessment of contractor’s pricing
strategies while Tummala et al. [2] formulated a risk management process (RMP) model to evaluate the risks associated with project cost in di erent phases of the project life
cycle. Songer et al. [3] suggest risk analysis tools like Monte...