Functional Evaluation of Change Order and Invoice Management Processes under Different Procurement Strategies: Social Network Analysis Approach

Abstract

As construction projects become more complex, making strategic decisions such as selecting the appropriate delivery method and the right type of contract becomes more convoluted. Several studies have realized that delays in progress payments and change orders during construction projects are among the main causes of overruns in megaprojects. Using social network analysis (SNA), the present paper examines the effect of different types of project delivery methods and contract types on these factors through an organizational lens. The three main research objectives of the study include (1) finding the most prominent actors who control the change and invoice processing procedures; (2) examining the contribution of different delivery methods to these workflows; and (3) evaluating the effect of contract type on the behavior and characteristics of project’s key actors. Two project delivery methods (design–bid–build and design–build) and three contract types [unit price, lump sum, and engineering, procurement, and construction (EPC)] are examined. Correlations were identified among the roles (rather than actors) and strategic positions in the networks. The constructive involvement of the owner in the invoice process of an EPC contract was also identified as an advantage of such a procurement strategy. On the other hand, although traditional delivery methods have more egocentric and hierarchical social networks, it became apparent that regular periodic meetings in such projects reduce the number of bridges between individuals/clusters and hence can decrease the risk of bottlenecks in the processes. The main contributions of the paper include providing an analytical tool for the analysis of projects’ actor networks; as well as performing a functional comparison among the three common delivery methods and contract types through the behavior of actor networks in three case-study projects. Besides laying out an approach for owners to decide on the project delivery method, this study sheds some light on the multilayer structure of project social networks and promotes SNA as a fruitful technique for analyzing project behavior.