Advantages of Management Contracting—Critical Analysis

Abstract

This paper is based on a review of the literature on management contracting and findings from a program of interviews with top‐level managers of client, design and contracting organizations in the United Kingdom. An influence diagram showing interrelationships between advantages cited for management contracting is used, to structure a critical discussion under four general headings: fast completion, improved design, lower costs, and better supervision and coordination. Another section examines the effect of management contracting on project uncertainty. Client reasons for choosing management contracting are identified and related to perceived advantages of management contracting. Projects suited to the use of management contracting are those that are large, complex, have a need for flexibility, and can gain advantage from early completion. However a number of important provisos suggest that management contracting will only work if everyone involved understands how to make it work and wants to make it work.