TY - CONF TI - How to Make Shared Risk and Reward Sustainable C1 - Perth, Australia C3 - 23rd Annual Conference of the International Group for Lean Construction SP - 257 EP - 266 PY - 2015 AU - Ballard, Glenn AU - Dilsworth, Blake AU - Do, Doanh AU - Low, Wayne AU - Mobley, James AU - Phillips, Philip AU - Reed, Dean AU - Sargent, Zach AU - Tillmann, Patricia AU - Wood, Nathan AD - Research Director, Project Production Systems Laboratory, University of California, Berkeley, ballard@ce.berkeley.edu,+1 415-710-5531 AD - Principal, KPFF Structural Engineers, Blake.Dilsworth@kpff.com AD - PhD student, Civil & Environmental Engineering, University of California, Berkeley, doanhqdo@gmail.com, +1 714-622-9754 AD - Principal, Degenkolb Engineering, walow@degenkolb.com AD - Principal, Devenney Group, jmobley@devenneygroup.com, +1 602-343-0074 AD - VP/Operations, Southland Industries, pphillips@southlandind.com, +1 510-477-3300 AD - Director for Lean Construction, DPR Construction, deanr@dprinc.com, +1 650-207-3486 AD - Vice President, Superior Air Handling, zach.sargent@superiorairhandling.com AD - Lean Integration Specialist, Superior Air Handling, patricia.tillmann@superiorairhandling.com, +1 408-630-1320 AD - BIM Integration Specialist, DPR Construction, nathanw@dpr.com, +1 650-454-5334 ED - Seppänen, Olli ED - González, Vicente A. ED - Arroyo, Paz AB - This paper is about restoring confidence in shared risk and reward. In such projects, characterized by multiparty contracts, clients bear the risk of costs exceeding budgets and the project’s design professionals and constructors risk doing the work for no profits. A small chance of either occurring might dissuade the parties from embracing shared risk and reward contracts. In a recent study by the authors, of four shared risk and reward projects, one exceeded budget. The client paid 6.4% more than expected and the risk pool members made no profit. Adding other shared risk and reward projects on which the authors companies have worked, the failure rate was 15%. Compared to traditional practice, clients may have received value for money even on these failed projects and so want to continue shared risk and reward, but may be unable to attract more experienced companies in the face of this probability of profit failure. The objective of this paper is to identify the factors that contributed to the failures and to propose counter measures to prevent reoccurrence. Failure to follow target value design principles is found to be a primary contributor to cost overruns on shared risk and reward projects. KW - Countermeasures KW - integrated project delivery KW - shared risk and reward KW - sustainability KW - target value design PB - T2 - 23rd Annual Conference of the International Group for Lean Construction DA - 2015/07/29 CY - Perth, Australia L1 - http://iglc.net/Papers/Details/1193/pdf L2 - http://iglc.net/Papers/Details/1193 N1 - Export Date: 19 April 2024 DB - IGLC.net DP - IGLC LA - English ER -