How to proportion capability and fee percentage for team comparison in competitive early involvement

    Research output: Chapter in Book/Report/Conference proceedingConference article in proceedingsScientificpeer-review

    Abstract

    Early involvement of the construction team is increasingly utilized in challenging projects to incorporate versatile expertise in their planning. For public owners this is a challenge since they are obliged to use competitive, transparent team selection based on the ‘most economically advantageous criterion’ which ensures that both price and quality viewpoints are taken into account. In the case of early involvement, the price component naturally does not include the total price, but may consist only of the fees of competing service providers. This study examines such a selection situation and seeks to find a way to integrate the fee component in a multi-criteria selection system and determine reasonable fees for different levels of capabilities. The study builds on the productivity difference between different competences, derived from a survey of practitioners, and determines an indifference curve arithmetically for the planning of a selection method. The influence of the owner’s risk attitude and risk premiums are also taken into account based on the pricing methods of the theory of finance.
    Original languageEnglish
    Title of host publicationProceedings 28th Annual ARCOM Conference, 3-5 September 2012, Edinburgh, UK
    PublisherAssociation of Researchers in Construction Management
    Pages945-955
    ISBN (Electronic)978-0-9552390-6-9
    Publication statusPublished - 2012
    MoE publication typeA4 Article in a conference publication

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  • Cite this

    Lahdenperä, P. (2012). How to proportion capability and fee percentage for team comparison in competitive early involvement. In Proceedings 28th Annual ARCOM Conference, 3-5 September 2012, Edinburgh, UK (pp. 945-955). Association of Researchers in Construction Management. http://www.arcom.ac.uk/-docs/proceedings/ar2012-0945-0955_Lahdenpera.pdf