Effects of interpersonal relations on public sector construction contracts in Vietnam

Abstract

Public owners and private contractors and consultants are expected to maintain arm’s length relationships with each other to avoid any accusation of corruption. In the context of public construction projects in Vietnam, this study examines: the relational contracting (RC) related behavioural patterns that lead to better interpersonal relations during the construction stage and at the end of the project among public project owners, and private contractors and consultants; and the extent to which better interpersonal relations affect project performance. Using a questionnaire survey, data were collected from public owners and private contractors and consultants in Vietnam. Correlation analysis shows that there exist several behavioural patterns that significantly affect interpersonal relations among project team members during the construction stage and at the end of the project, and the general harmony during the construction stage. It was also found that cost performance is significantly correlated with project harmony level. Schedule performance is significantly correlated with interpersonal relations between project team members during the construction stage, and at the end of the project. The findings indicate the important role that interpersonal relations play in project outcomes and vice versa. The behavioural patterns that are found to be significantly correlated with harmony during the construction stage and/or relationships among project team members suggest that concrete actions may be taken by owners, consultants and contractors to improve relationships, and thereby improve cost and schedule outcomes. It is recommended that owners, consultants and contractors adopt some of the behavioural patterns identified.