The effect of contract- and network management on performance and innovation in infrastructure projects

Abstract

IMPACT How should complex infrastructure projects be managed? A survey of practitioners in public–private partnership (PPP) projects and 35 interviews with these practitioners provided a detailed picture of the management of these projects. The survey research revealed that strict contract management (monitoring performance criteria and sticking to the contract) did not show a significant relationship to either the performance of, or innovation in, these projects. Network management (for example connecting involved parties and exploring new solutions), however, was significant—especially in terms of performance. In the interviews, practitioners highlighted that the complexity of these projects meant that a collaborative relationship between the public and private parties was essential to overcome unforeseen problems. It is therefore advisable to make process agreements at the start of contracts that provide for unexpected issues. The authors conclude that the contract is certainly important but will not generate good performance without active network management and making process rules about how parties can collaborate. ABSTRACT Based on economic and governance theories, this article uses survey and interview data to examine the relationship between contract management and network management on the one hand and collaboration, innovation and performance on the other. A positive relationship was found between network management and collaboration and performance. Contract management demonstrated no significant relationship with either collaboration or performance. Additionally, while there was a positive association between network management and innovation, it was not statistically significant. Qualitative data emphasized the complexity of projects and limitations of contracts as a possible explanation.