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The purpose of this paper is to find how those uncertainty factors influence transaction costs generated and to identify ways to minimize the transaction costs borne by the construction owner.

The literature indicates that there is no consensus on a standard definition of transaction costs in the construction industry. A detailed literature review of research work on transaction costs in construction is conducted in order to identify the determinants of transaction costs in construction projects. A structural equation model is tested on data collected by means of a survey administered to construction owners.

The findings indicate that the transaction costs borne by the owner can be minimized if the owner minimizes the uncertainties inherent in the construction project by making sure the engineering design is as complete as possible before bids are sought from contractors; harmonious relationships between project participants; fair risk allocation; have experience in similar type projects; and contractor selection practices that routinely detect irregular behavior.

The data used in this research are primarily based on the experiences of public owners and the markets in which they operate; a larger representation of private owners could make the conclusions more general. Another limitation of the study is that it relies on a survey of opinions rather than actual records of costs and other hard data.

No empirical study has ever been conducted of transaction-related issues in the construction industry because of the lack of a common understanding of transaction cost. This paper provides the groundwork for such a study.

This paper attempts to reconcile the many determinants of transaction costs in construction projects under uncertainty considered by different researchers in a multitude of research studies.

Transaction costs arise from economic exchange rather than production activities. However, the term “transaction cost” is not consistently defined in the construction industry because the concept of transaction cost is not universally accepted by all stakeholders in construction projects. As a result, empirical studies are few and conflicting because accessing data on transaction costs is problematic, and the interpretation of the data is difficult. The purpose of this paper is to analyze the transaction costs borne by the owner in a construction project from the perspective of transaction cost economics and construction project characteristics.

A questionnaire survey was administered to construction owners. The factors that impact transaction costs were analyzed in the context of human-related issues (the owner's and the contractor's positions in the transaction), and environment-related issues (the transaction environment, and project management efficiency). Statistical analyses were conducted to compare the transaction costs incurred in the pre- vs post-contract phases of a project relative to the private vs public sector, different project delivery systems, different procurement methods, and different types of contracts.

The owners surveyed believe that transaction costs may be reduced if the owner and the contractor follow some basic guidelines (e.g. experience in similar projects, prompt payment, good relationship with project participants, no irregularities in bidding, and only few material substitutions and claims), if the project is well-run (e.g. technical competency, strong leadership, prompt decision-making, effective communication, and fair/speedy conflict management), and if the transaction environment is favorable (e.g. fair risk allocation, early contractor involvement, and complete design documents). The findings of the survey also indicate that post-contract transaction costs are much higher than pre-contract transaction costs expressed as percent of project value and that transaction costs are affected by the owner (public vs private), the procurement method, the project delivery system, and the type of contract.

The primary contribution that this research makes to the body of knowledge is a better understanding of transaction costs incurred by construction owners in the USA. The highest transaction costs are to be expected in the post-contract phase of public projects awarded on a unit price basis, but can be reduced, hence reducing overall project cost.

The purpose of this paper is twofold: first, determining which factors critically influence asymmetrical trust behaviors in construction projects within the Chinese context; second, proposing corresponding measures to deal with the asymmetrical behaviors of both the owner and the contractor promoting cooperative relationships among participants in construction organizations.

A theoretical model was developed and a questionnaire survey was conducted with 183 professionals. The data collected were analyzed by the structural equation modeling (SEM) technique.

The results identified six critical factors influencing trust asymmetry behavior in construction projects. The power imbalance, information asymmetry and cognitive difference have a positive influence on both upward-trust behavior and downward-trust behavior in the construction organization, while the competence, performance capacity and relationship satisfaction have negative effects.

This paper based on the assumption that trust asymmetry behavior has a negative impact on project performance, which should be further studied. Besides, future research may carry out a comparative analysis among the trusting relationships and behavior of different participants dynamically.

This paper contributes to the literature in three aspects. First, the factors influencing trust behavior in project organization have been identified for the first time. Second, a comprehensive view of trust asymmetry behavior has been theorized by SEM method. Third, the result bridges the existing gap caused by the lack of empirical evidence to understand the genetic mechanisms of trust asymmetry behavior in the construction industry.

This study provides a framework for comparing construction management contracts in the UK and the US construction practices. It starts by reviewing previous studies on UK and US contracting practices and explores the main delivery methods, inform of comparison with construction management contracting systems. It examines construction management contracting types, processes and procedures and interaction between the construction manager and other stakeholders. This study was based on a literature review and the result shows the similarities and differences between the American and British CM systems within each practice and between both practices; the distribution of responsibilities and risks both in pre‐construction and during the construction stages; and allocation of responsibility in both practices.

The construction industry has long been criticized for unethical conduct. The owner usually manages the contractor's opportunistic behaviors by employing a professional supervisor, but there is a risk of covert collusion between the supervisor and contractor. Based on the principal–agent theory and collusion theory, this paper aims to investigate optimal collusion-proof incentive contracts.

This paper presents a game-theoretic framework comprising an owner, supervisor and contractor, who interact and pursue maximized self-profits. Built upon the fixed-price incentive contract, cost-reimbursement contract, and revenue-sharing contract, different collusion-proof incentive contracts are investigated. A real project case is used to validate the developed model and derived results.

This paper shows that the presence of unethical collusion undermines the owner's interests. Especially, the possibility of agent collusion may induce the owner to abandon extracting quality information from the supervisor. Furthermore, information asymmetry significantly affects the construction contract selection, and the application conditions for different incentive contracts are provided.

This study still has some limitations that deserve further exploration. First, this study explores contractor–supervisor collusion but ignores the possibility of the supervisor abusing authority to extort the contractor. Second, to focus on collusion, this paper ignores the supervision costs. What's the optimal supervision effort that the owner should induce the supervisor to exert? Finally, this paper assumes that the colluders involved always keep their promises. However, what if the colluders may break their promises?

Several collusion-proof incentive contracts are explored in a project management setting. The proposed incentive contracts can provide the project owner with effective and practical tools to inhibit covert collusion in construction management and thus safeguard construction project quality.

This study expands the organization collusion theory to the field of construction management and investigates the optimal collusion-proof incentive contracts. In addition, this study is the first to investigate the effects of information asymmetry on contract selection.

Inefficiency dilemmas in project governance are caused by various risks arising from the characteristic of construction supply chain projects, such as poor project performance, conflicts between stakeholders and cost overrun. This research aims to establish a fuzzy synthetic evaluation (FSE) model to analyze construction supply chain risk factors. Corresponding risk mitigation strategies are provided to facilitate the improvement performance of ongoing construction supply chain projects.

A literature review is utilized to reveal the deficiencies of construction supply chain risk management. Thus, a total of five hundred (500) questionnaires are distributed to construction professionals, and four hundred and thirty-five (435) questionnaires are recovered to obtain the evaluation data of construction professionals on critical risk factors. Additionally, the FSE is used to analyze and rank the significance of critical risk factors. Finally, this research discusses nine critical risk factors with high weight in the model, and explains the reason for the significance of critical risk factors in the construction supply chain.

The questionnaire results show that the thirty-one (31) identified critical risk factors are verified by related practitioners (government departments, universities and research institutions, owners, construction units, financial institutions, design units, consulting firms). Thirty-one (31) identified critical risk factors are divided into common risks, risks from contractors and risks from owners. The most significant factors in the three categories, respectively, are “political risks,” “owner's unprofessional” approach and “cash flow.” Managing these risks can facilitate the development of the construction supply chain.

This paper expands the research perspective of construction supply chain risk management and complements the risks in the construction supply chain. For practitioners, the research result provides some corresponding measures to deal with these risks. For researchers, the research result provides the direction of construction supply chain risk treatment.

Design-Build (D-B) is a project delivery method in which the owner procures both design and construction services in the same contract from a single legal entity. There is limited research on how communication among parties influences the success of D-B projects. The purpose of this paper is to examine D-B communication issues and provides effective practices on communication to improve D-B procurement processes in the USA.

The research methodology for this study includes a comprehensive review of literature, survey questionnaire, and structured interviews. A questionnaire was developed to collect data from professionals with an average of 23 years of experience related to D-B procurement. Eight structured interviews were conducted to verify and validate the survey questionnaire results.

The results showed that the communication issues vary along with each phase of the D-B process. The primary communication practices influencing the success of D-B projects are: establishing clear points of contact; providing clear and understandable information among stakeholders during the D-B process; and the timely sharing of information to all stakeholders.

The chief limitation of this research is that the primary data were mostly opinions from experts although several empirical data were collected for cross-validation. This research did not consider the relationship of relevant contract clauses and communication issues.

The findings from this paper will help professionals better understand the D-B procurement process.

This is one of the first attempts to discuss D-B communication issues in each different phase of a D-B project.

The most important element in construction procurement is contractor selection. Particularly, hiring contractors who are performers. Why then do facility owners continue to select non‐performing contractors? This paper presents a system for contractor selection that has resulted in a 99 per cent success rate for completing facility construction on time, on budget and meeting or even exceeding quality expectations. The Performance Information Procurement System (PIPS), a full information system that discourages non‐performers, identifies the best‐performing contractor for the project and motivates the contractor to improve their performance on the current project. Based on $3.5m research and over 300 tests, PIPS has the ability to minimise the owners’ risk (not being on time, on budget, and meeting quality expectations). PIPS allows facility and project managers the ability to control the contractor selection process through the use of performance information, assuring that the right contractor is selected for each project.