Driving Forces behind and Barriers to Relational Transaction Practices in Public Construction Projects

Abstract

Relational transactions, comprising relational contracts and network strategies, could contribute to better outcomes for general construction projects. However, public projects seem to face more constraints when adopting relational transactions because of the fear that close relationships may be construed as corruption. The aim of this study is to identify drivers of and barriers to relational transaction practices in public projects. A questionnaire-based survey of public projects was administered to construction professionals in Singapore. It is found that the adoption of relational transactions in public projects is motivated by (1) increased value proposition, (2) improved business competitiveness, and (3) improved project time and cost performance. Meanwhile, contracting parties attempting to adopt relational transactions are restricted by (1) a lack of capabilities, (2) ethos of public service, (3) a lack of continuity, and (4) institutional constraints. The implication is that with a better appreciation of the drivers and barriers, contracting parties could customize effective relational transaction strategies in public projects. It is recommended that contracting parties pay more attention to the institutional environment, as this affects the effectiveness of relational transactions.