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This study aims to investigate how contract design influences supplier performance. This study synthesises three theoretical views (efficiency, relational, contingency) and provides empirical support on how effective contract design improves supplier performance.

This study reviewed contract design literature and uncovered 18 factors that may impact supplier performance. Multi-criteria, decision-making analysis examined the impact of contract factors on three supplier groups: average-, over- and under-performers. Procurement experts working with a large multinational company dealing with hundreds of procuring contracts, yearly, provided their judgement on the impact of these factors on supplier performance. Semi-structured interviews with experts and other evidence were used for data and method triangulation.

Results show that contracting with under- and over- performers presents significant differences: in the case of over-performers, contracts have a dual, yet discrete, efficiency and relational role: at transaction level, they emphasise formality, protect from opportunism and include both liquidated damages and legal action clauses. At relational level, they focus on relational learning and incentivising suppliers. However, in the case of under-performers, contracts appear to focus on contingency factors, which can be a source of ambiguity, particularly in complex environments, and trust, which has a negative impact on supplier performance.

Improving contract design can help reduce partner opportunism, reduce inter-firm conflicts and avoid disputes that can bear a social cost. This study demonstrates that companies can use advanced analytical tools to reflect upon their own decision-making process of contact design in making transparent supplier performance assessments.

To the author’s knowledge, this is the first study using decision-making techniques to enhance supplier performance by improving the contract design process.

One of the possible systems of project delivery is design & build (D&B), which is widely used in many countries. In the Polish public procurement market, the D&B system has been applied for a relatively short time, only since 2004, and despite the possibility, so far public clients have applied the D&B system only occasionally. This paper describes the current status of using the D&B method in the public procurement sector in Poland. Five hundred and fifty eight completed public-sector projects have been subject to analysis. Items analysed include the design/builder method of award, and types and value of contracts. The results provide insights for owners, the advantages and disadvantages of the D&B system, and highlight the need to change the method of selecting the contractor for the D&B system.

The purpose of this paper is to explore key challenges of adopting, designing and managing performance-based contracts (PBC) for advanced logistics services, as seen by providers. The shift toward performance-based solutions has proved challenging since providers often struggle to link performance to their payment. Despite such managerial challenges, empirical research in this area has been limited.

A multi-case design was adopted. Three cases of logistics service providers were selected based on purposive sampling. Data were collected through 38 semi-structured interviews and review of 43 documents such as contracts and customer target letters.

Key PBC adoption challenges include customer and provider intention to align their goals and incentives as well as their views on risk and reward sharing. Contract design challenges center around performance metric definition and weighting, designing performance monitoring systems that consider service co-production effects and help improve customer relationship and designing incentives with appropriate intensity levels. Contract management challenges include fostering provider pro-activity, provider changes in terms of processes and resource investments, perceived fairness of designed incentives and contract re-design to allow for win-win relationship outcomes.

The study empirically contributes to extant logistics service provider literature by identifying specific challenges that extend also beyond PBC adoption and design and cover contract management (and potential contract re-design). It also unpacks the notion of performance attributability by analyzing its role also in terms of contract and performance management as well as its potential effects on customer relationship management.

The study presents implications for logistics provider managers regarding how the observed PBC challenges can be overcome.

The study unearths several challenges of PBC for advanced logistics services, particularly in connection to contract management and re-design.

In the construction industry, an under researched area of study is how main contractor (MC) sub-contract design responsibilities to sub-contractor (SC). This lack of knowledge is particularly serious in the context of delivery methods such as design and construct where design responsibilities are pushed down the supply chain. In this study, it is aimed to explore which level of design responsibility MCs sub-contract to SCs, for what reasons, and what the impact of sub-contracting decisions is on projects.

A qualitative in-depth multiple case study was conducted. Six sub-contracting cases were examined in two civil engineering projects. In each project, the MCs sub-contracted pre-fabricated beams, reinforcement and railing to SCs. Data collection included document analysis and interviews. A within-case and cross-case analysis was conducted to examine emerging empirical patterns. These patterns were used to elaborate theory and develop propositions.

MCs sub-contracted design responsibilities to SCs as suggested by literature. However, despite that sub-contracting was in keeping with literature, several problems were reported in the cases where MCs involved SCs no earlier than in the construction stage. This is not to be expected according to theory.

This study adds value to the sub-contracting field as it provides new insights in relationships between the level of design responsibilities sub-contracted and the impact of that on projects. The study also revealed new factors such as building information modelling (BIM) interoperability that should get more attention in sub-contracting.

This paper explores changes in the attitudes of managers at a state transportation agency towards working with professional service consultants over time. The development of a relational orientation amongst agency managers is explored, i.e. managerial styles recognizing greater interdependence and emphasizing trust, partnership and collaboration over formal procedures and monitoring. Case studies of two points in time (2003 and 2007) are presented using semi-structured interviews and survey data. The evidence demonstrates growing patterns of interdependence and the structural and procedural adaptations made by the agency. Corresponding difference in means tests demonstrate patterns of change in relational orientation over time.

This paper aims to gain more in-depth knowledge in the tendering procedures and organisational typologies of consortia working with integrated contracts for social housing renovation projects and especially in the inherent changes in the role of the architect and his or her relations with the client and consortium members.

In total, 21 Dutch social housing renovation projects using an integrated contract with the involvement of an architect were identified in the period 2005-2013. The study is based on interviews with 13 from 21 architects working in these projects.

The findings indicate that in the majority of these projects, the architect is contracted by the main contractor rather than by the client, the social housing organisation. The new contractual relationship has no significant effect on the relationship of the architect with the social housing organisation and improves the relationship of the architect with the main contractor, consultants, advisors and other consortium members, such as specialist contractors. The architect switches from the role of designer to that of technical and aesthetic advisor, compared to traditional design-bid-build projects.

The findings are based on the first experiences of architects working with integrated contracts for social housing renovation projects. Results may be different for other types of projects.

Architects involved in integrated contracts for housing renovation projects can foresee the implications for their daily work. The study provides useful insights for educational reform to prepare students and practising architects to make the most of the new situation.

The few studies into integrated contracts that refer to the role of the architect have flagged up changes in this role relative to the traditional design-bid-build approach. This study provides in-depth knowledge of the role of the architect in integrated contracts.

The prominent role of traditional contract and design‐build methods in the procurement of projects and the importance of planning in the success of the projects prompt this study. The study evaluates the levels of use of project documents and their influence on the outcome of projects procured by the two methods. The purpose of this paper is to assist stakeholders in comparing the documents prepared and the performance of projects procured by traditional contract and design‐build methods.

The study adopted a questionnaire survey approach to achieve its purpose. A field survey of 84 projects made up of 42 traditional contract projects and 42 design‐build projects selected by purposive sampling was conducted. Three categories of variables namely: procurement method, project planning and project outcome were used. Data were collected with the aid of structured questionnaires and analysed to derive and compare the levels of use of selected project plans, levels of project inception, design, tendering, construction and overall planning in projects procured by traditional contract and design‐build methods using percentage, mean and t‐test.

The results reveal that the levels of project stage and overall planning in projects procured by the two methods investigated are the same. However, the levels of use of specific plans and project outcome in the two categories of projects are significantly different. The study considers the difference in the levels of use of project plans to be responsible for the lower delivery time and cost of projects procured by traditional contract method and higher quality standards in projects procured by design‐build method.

The paper has revealed the level of efforts put into the planning of projects procured by traditional contract and design‐build methods and their influence on the performance of the projects. The results will make project stakeholders aware of how to improve their efforts, thereby improving the outcome of the projects.

For a number of years, the construction industry has seen an ongoing shift from design-bid-build to design-build contracts. This transition in contract type entails changes for both the organizations and the individuals involved. Consequently, the purpose of this paper is to investigate how the client manages the transition between the different contract types from an organizational change perspective in a project-led organization.

A multiple case study of six infrastructure projects with DB contracts, all managed by the Swedish Transport Administration, was conducted. The major source of data is semi-structured interviews with respondents from both the client and the contractors.

Results suggest that the transition has resulted in a mix of design-bid-build and design-build as contract type owing to issues when changing in a project-led organization. A change in vision also requires a concomitant change in culture, systems and roles.

The study only includes cases from the Swedish transport infrastructure sector, which limits the generalizability. The findings are also indicative owing to the small number of cases.

The findings further our understanding of managing change in complex projects, which might help practitioners to manage change in a more integrated way.

The findings enrich our understanding of the systemic change that a switch in contract types can have in inter-organizational complex projects such as transport infrastructure projects. Furthermore, it emphasizes the intricate task of change management in project-led organizations and its effects on roles and responsibilities.

To build a more comprehensive understanding of factors affecting the success of service contracting, the purpose of this paper is to investigate the influences of service complexity, contract structure and contracting process on the buyer-perceived supplier performance in business-to-business (B2B) services.

A research model is developed based on transaction cost economics and the research on service contracting. The model is tested by the survey data collected. Professional focus groups on LinkedIn are used to generate the list of potential respondents. The sample consists of 177 purchasing professionals from 25 countries.

The results indicate that three major contract dimensions and follow-up management practices positively influence buyer-perceived supplier performance. Furthermore, service complexity amplifies the effects of incentives designed in the contract and the buyer’s follow-up contract management on perceived supplier performance.

The sample consists of respondents from 25 countries and provides good geographic coverage. However, the results should be generalized with caution because not all countries were represented equally.

The study suggests a framework and guidelines for purchasing managers to improve the design and management of service contracts to secure good performance from their supplier.

This paper contributes to understanding the performance-enhancing aspects of designing and monitoring service contracts in B2B contexts. It also adds to the knowledge of the role of service complexity in successful B2B service purchasing.

This article aims to explore how knowledge-intensive service firms design inter-firm contracts to govern the exchange of highly intangible and inseparable knowledge under varying degrees of property right protection.

This research uses a multiple case study of management consulting firms domiciled in Serbia and Albania.

Firms domiciled in relatively weak property right settings prefer more informal contracts, whereas those in settings of superior property right protection favour greater formality as a means of encouraging the creation and sharing of knowledge, whilst concurrently mitigating the threat of opportunism.

This article contributes new knowledge with regard to the design of inter-firm contracts to govern the sharing of highly intangible and inseparable knowledge. In terms of theory, it employs a transaction cost economics approach in which inter-firm contracts are decomposed into five requisite provisions, which are then related to the degree of formality.

Knowledge-intensive service firm managers should assess the degree of property right protection when considering the degree of formality of inter-firm contracts.

The study constitutes the first attempt to empirically examine how knowledge-intensive service firms craft contracts in different property right settings. With the burgeoning number of cross-border collaborative partnerships between such firms, it offers important insights into the choice of governance mechanism in different property right protection settings.