Positive and negative factors influencing the implementation of relational contracting in Public Construction Projects in Australia

Abstract

Despite relational contracting (RC) having been used increasingly in public funded construction projects in some countries such as Australia, there are different perspectives and concerns about RC. This research aims to understand the perceptions of what makes RC attractive or otherwise as a contracting strategy for public construction projects using Australia for data collection. Literature review was used to identify relevant factors, which were incorporated into the survey questionnaire. An online questionnaire survey technique was used for primary data collection from the greater Sydney region. The survey response data was subjected to descriptive statistical analysis using SPSS software. The research results show that RC is perceived as attractive in terms of positive factors including “Improve design”, “Improve quality of project”, “Build up closer relationship with contracting parties”, “Reduce time in delivering the project” and “Enhance the organization’s reputation in the industry”. The most negative aspects and factors included “Public sector accountability concerns”, “Lack of training and guidance in relational arrangement”, “Stringent public rules, regulations and laws”, “Conservative industry culture inhibits changes and encourages preservation of the status quo”, and “Concerns about opportunistic behaviour of other contracting parties”. These negative factors may make RC arrangement less attractive. As the delivery of public facilities and services is exhibiting more RC behavioural patterns, this research suggests that at the early stage of preparing a business case, a clear and common understanding of the positive and negative factors surrounding RC by the parties involved, would provide a more informed basis for decision making.