Guidelines for incorporating mutual trust between client and contractor in integrated contracts
Last Updated: 8-2017
The level of trust between client and contractor plays an important role in the realization of complex construction projects; the trust relationship between client and contractor can be supported by contracts and control mechanisms. There is a need from the construction industry for more support for the trust relationship between client and contractor in Dutch integrated contracts. It is found that the Uniform Administrative Conditions for Integrated Contracts 2005 do not suffice in this regard. This research examines the relation between the concept of trust, integrated contracts and control mechanisms in complex construction projects in the Netherlands.
This exploratory and qualitative research is conducted by applying three different research methods and comparing their results: a literature review, a Delphi study with an expert panel of 18 experts from the industry and in-depth interviews with five experts on integrated contracts in general and NEC3 or alliance contracts. This research focuses on the NEC3 and alliance contracts to find the advantages they provide regarding trust. Furthermore, this research considers formal and informal control mechanisms to find the most beneficial mechanisms to use in future complex construction projects.
This research shows that a high level of trust between client and contractor is beneficial to a complex construction project governed by an integrated contract; a high level of trust reduces conflicts and costs, improves quality and motivates communication and overall cooperation. It is found that a combination of an explicit mention of trust in a contract clause, formal control mechanisms, financial incentives and informal control mechanisms is required to incorporate trust in integrated contracts. The contract clause can align interests and motivates trust building; the informal control mechanisms (project start up, code of conduct) can be used to form the basis for the trust relationship and formal control mechanisms (open book accounting, early warning system, adjudication) are needed for comfort and safety of the stakeholders.