Team Selection and Cost Deviation Sharing in IPD Systems for Emerging Markets: A Cooperative Game Theory Approach

Abstract

Regardless of its ability to efficiently achieve the projects’ goals, integrated project delivery (IPD) is one of the project delivery systems (PDSs) that is seldom used in emerging markets due to its unfamiliarity in the region and significant differences from traditional PDS. To bridge between the traditional PDS and IPDs in emerging markets, this study proposes a temporary transitional model that (1) selects the IPD project parties that have the highest expected positive impact on the project; and (2) fairly distributes the project cost deviations among the stakeholders based on their marginal contribution. The research discusses the team formation and selection phase and the procurement and construction phase of the IPD project by applying best value procurement methodology while integrating the target band concept into earned value management (EVM) and finally utilizing cooperative game theory. The proposed model was applied to case studies adopted from the literature. Published project budgets were used to illustrate the proposed methodology and resemble the model’s applicability. Results reflected the model’s flexibility and adaptability to different cases. Using the Shapley value, the cost deviations were fairly distributed, highlighting the owner’s essential contribution to the project’s success. Results revealed that each participant’s share reflected their impact and contribution at each milestone during the project course. Results implied that the proposed model’s application best fits the shift between the traditional PDS and the IPD mindsets in emerging markets. This research contributes to the body of knowledge by proposing more common practice methods for IPD in emerging markets to ensure the fast-growing construction market in different regions is benefiting from the novel delivery method.