III : Mobilising the Resource Base
• mobilising the resources required to deliver
the project mission
• forming the project coalition
• motivating the project coalition
• the dynamics of the supply chain
• appropriate transaction governance
– flows across a technologically separable interface
© Graham M Winch
III : Mobilising The Resource Base
1
Appropriate Transaction Governance
uncertainty
appropriate
governance
mode
opportunism
asset specificity
bounded rationality
© Graham M Winch
III : Mobilising The Resource Base
2
5 : Forming the Project Coalition
When people seldom deal with each other, we
find that they are somewhat disposed to
cheat, because they can gain more by a
smart trick than they can lose by the injury
which it does to their character
Adam Smith
© Graham M Winch
III : Mobilising The Resource Base
3
Forming the Project Coalition
• the principal/agent problem in construction
– adverse selection
– moral hazard
•
•
•
•
procuring construction services
the formation of project coalitions
selecting resource bases
improving procurement practice
© Graham M Winch
III : Mobilising The Resource Base
4
Procuring Construction Services
• four selection options
–
–
–
–
in-house capability
appointment
concours (competition)
competitive tendering
• supplier selection methods
– level of uncertainty at selection
– point in project life-cycle
© Graham M Winch
III : Mobilising The Resource Base
5
Supplier Selection Methods
high
level of
mission
uncertainty
at supplier
selection
design
services
execution
services
in-house
capability
in-house
capability
appointment
appointment
concours
competitive
tender
competitive
tender
low
early
© Graham M Winch
late
level of dynamic uncertainty
6
Formation of Project Coalitions
• three options
– separated routes : trades and general contracting
– integrated routes : turnkey
– mediated routes : construction management
• the formation of firm contract
– a life-cycle perspective
• procurement route risks
– from a client perspective
© Graham M Winch
III : Mobilising The Resource Base
7
Separated Project Coalition 1:
Traditional Trades Contracting
client
architect /
surveyor
masons
© Graham M Winch
carpenters
roofers
III : Mobilising The Resource Base
other
traders
8
Separated Coalition 2: General Contracting
client
architect
© Graham M Winch
consultant
nominated
subcontractor
quantity
surveyor
domestic
subcontractor
main
contractor
operative
workforce
9
Integrated Coalition: Turnkey
client
turnkey
contractor
in-house
professionals
© Graham M Winch
operative
workforce
III : Mobilising The Resource Base
subcontractors
10
Mediated Coalition: Construction
Management
client
architect
consultant
quantity
surveyor
construction
manager
trade
contractors
© Graham M Winch
III : Mobilising The Resource Base
11
Client’s Risks Associated with Different
Project Coalitions
low
mission
uncertainty
high
min
max
© Graham M Winch
max
client’s realisation risk
client’s conception risk
client’s specification risk
max
min
min
12
Criteria for Selecting Resource Bases
• in-house
– no choice
• appointment
– certification and reputation
• concours
– open or invited
• competitive tendering
– tendering code of practice
© Graham M Winch
III : Mobilising The Resource Base
13
The Formation of Firm Contract
• when risk passed to the supplier
• early contracts
– low value contracts
– high value decisions
• late contracts
– much higher value contracts
– lower value decisions
© Graham M Winch
III : Mobilising The Resource Base
14
The Formation of Firm Contract
integrated
general contracting
management contracting
design and manage
construction management
trades contracting
early
late
dynamic uncertainty
© Graham M Winch
III : Mobilising The Resource Base
15
Improving Procurement Practice
• e-procurement
• partnering
– raising transaction frequency and enabling
learning
• best value
– appropriate price/quality ratios
© Graham M Winch
III : Mobilising The Resource Base
16
Appropriate Price / Quality Ratios in
Competitive Tendering
high
max
importance
of quality
low
min
© Graham M Winch
importance of price
max
17