Contingency Management in Construction Projects: A Survey of Spanish Contractors

José Ignacio Ortiz-González1, Eugenio Pellicer2 & Gregory Howell3

1 Primary contact: PhD Candidate, Universitat Politècnica de València (Spain). Phone: +34678086810, jiogmq@gmail.com
2 Associate Professor, School of Civil Engineering, Universitat Politècnica de València (Spain), pellicer@upv.es
3Research Associate, Project Production System Laboratory, University of California, Berkeley, USA

Abstract

The delivery of any construction project faces risk and uncertainty. Contingencies cover residual risks and absorb both variability and uncertainty. The management of contingencies plays a key role in improving risk management and project performance. Background literature reports that construction companies usually set time and cost contingencies with the goal of protecting project objectives. It also states that construction companies identify and manage opportunities in order to enhance project performance. Likewise, despite the fact some companies maintain formal procedures to manage risk, contingencies are often defined in a subjective and non-systematic manner. Background literature presents several methods to improve the management of contingencies; however, it seems that many practitioners either do not know them or do not use them. Therefore, a sound characterization of how construction companies currently manage contingencies is required. The major goal of this research is to explore how construction companies currently manage contingencies. In order to do that, types of contingencies, major success factors, drivers, benefits and barriers faced by construction companies managing contingencies on construction projects are characterized. A survey (questionnaire) developed in two Spanish construction companies is described and its results are analyzed. This research aims to shape contingencies as a driver of process improvement in construction. Conclusions will help practitioners to deal with risk and uncertainty in construction projects.

Keywords

Construction, contingency, risk, uncertainty, decision-making.

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Reference

Ortiz-González, J.I. , Pellicer, E. & Howell, G. 2014, 'Contingency Management in Construction Projects: A Survey of Spanish Contractors' In:, Kalsaas, B.T., Koskela, L. & Saurin, T.A., 22nd Annual Conference of the International Group for Lean Construction. Oslo, Norway, 25-27 Jun 2014. pp 195-206

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