Empirical Analysis of Traditional Contracting and Relationship Agreements for Procuring Partners in Construction Projects

Abstract

Although traditional contracting is a primary method of procuring partners in delivering major construction projects, the relative benefits of relational agreements and its link to successful project delivery remain unclear among the construction professionals. Focusing on the Australian construction industry, the research aims to investigate the underlying attributes and factors critical to the success of relationship agreements in relation to traditional practices. On the basis of the results of a pilot study, a questionnaire was distributed to more than 150 participants from 43 selected projects managed by relationship agreements and traditional procurement practices. The rationales of selecting relationship agreements over traditional contracting methods were highlighted by standard statistical analysis. The findings revealed cost efficiency, trust, and communication as the key common drivers for successful outcomes in both relationship agreements and traditional contracting methods. However, relative impacts of these factors on the successful project delivery differ significantly. Factor analysis asserted cohesive project team as one of the key factors for achieving time, quality, and overall success across both contracting approaches in the project. Multivariate regression analysis performed on the factors’ scores highlighted the influence of four and five significant factors (