Developing a Risk Management Process for General Contractors in the Bidding Stage for Design–Build Projects in Vietnam

Duy-Hoang Pham,Dang-Huy Ly,Yong-Han Ahn,Ngoc-Khue Tran,Hyeongjae Jang

doi:10.3390/buildings11110542

Abstract

Design–build (DB) projects have become increasingly popular for construction projects in developing countries due to the cost and scheduling advantages and their design optimization ability. As a result, much research has been conducted on improving DB efficiency in terms of cost, scheduling, risk management, etc. However, the existing studies have mainly focused on the owner’s roles, whereas general contractors (GCs) must also take many risks on behalf of owners in DB projects. The adequate identification and assessment of risks before engaging a contractor can increase the likelihood of a project’s success, at least from a DB contractor’s perspective. Therefore, this study interviewed procurement experts to conduct a survey at the local level, then analyzed, developed, and proposed an additional risk management process (RMP) for use by GCs during the bidding process of DB projects. A case study was conducted with a large Vietnamese GC to evaluate the effectiveness of the process and find ways to optimize it in the future. The results of the study showed that risk management during a DB project is imperative. Nevertheless, preparing bids is time-consuming and increases the contingency costs, reducing the competitiveness of the bid prices for contractors. Therefore, depending on the specific project and risk management objectives, an RMP is recommended for adjusting the risk management target to reduce the risk, while still maintaining the competitiveness of the bid prices.

Highlights

A design–build (DB) system is a delivery system in which an owner assigns both the design package and the construction package to only one general contractor (GC), or a design–build team under a single DB contract [1]
Based on the results of survey data analysis, this study proposed a checklist of risk factors thaCt caosnetprarcotjoercstneed to consider during prPepriavratieosnefcotiroDnB, 2p5r-ofljoeoctrbaipdasr. tTmhenlitst ahlisgohlcilgahritfeiPderdothtjheeecrtipsnkraiofmaricettiozrastioofnthofe rhisigkhf-arcistokrlsebvaesl egdroounpt.hBeymreefaCenroenvnaficliduneegnoptfiraRelvLiovuaslusetus daineds on the biddOinwg nperrocess [11,17,30,31,39,40], existing researCchonofindernistkialmanagement [3,8,18,19,B27i,d28p,3a6c]k, aagnedsa team of consultingDeexspiegrntsa, nthdisbsutuilddy(MprEopPoisnecdluadneRdM) fPorfoCrTu1setower by GCs during the DB project bidding process
The top 12 factors were identified by mean value, and the 17 risk factors were considered as being at the high-risk level in developing the risk management process (RMP)

Summary

Introduction

A design–build (DB) system is a delivery system in which an owner assigns both the design package and the construction package to only one general contractor (GC), or a design–build team under a single DB contract [1]. The clear advantages for projects implementing the DB delivery system are a shorter project duration, and being able to determine the project costs early, as well as the design/cost optimization ability, in comparison with other traditional project delivery systems [2,3,4]. These DB method advantages have been proven in both theory and practice through an increasing number of academic studies and DB projects in the international construction market [5,6,7]. During the last few years in Vietnam and in other developing countries, the number of projects implementing a transfer to DB has increased significantly, and it has gained considerable attention from government, owners, and main contractors [10]

Methods

Results

Discussion

Conclusion