Bibliographic Details
| Title: |
Choosing the right contract: probabilistic model. |
| Authors: |
Stovin, Virginia1, Eccles, Stephen2, O'Reilly, Michael3 |
| Source: |
Proceedings of the Institution of Civil Engineers. Civil Engineering. 2004, Vol. 157 Issue 2, p86-90. 5p. |
| Subjects: |
Civil engineering contracts, Cost, Contractors, Monte Carlo method, Estimation theory, Civil engineering |
| Abstract: |
The inherent risks of civil engineering projects mean the choice of contract can have a significant impact on cost and duration. In the absence of any quantitative comparisons, the decision tends to be based on qualitative criteria or personal preference — which may not result in the best solution either for the client or contractor Help is now at hand in the form of a spreadsheet-based, probabilistic model which uses a Monte Carlo simulation to plot the possible range of costs and durations associated with each type of contract. This paper shows how the model can be applied to a small tunnelling project making a comparison between fixed-priced and cost- plus-fixed-fee arrangements. The results are quite striking, showing the substantial potential cost savings offered by the cost-plus route in this case. [ABSTRACT FROM AUTHOR] |
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| Database: |
Engineering Source |
