Financial commission model for a collaboratively managed project with the target and ceiling price
Koskinen, Elisa (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024051010713
https://urn.fi/URN:NBN:fi:amk-2024051010713
Tiivistelmä
In today's volatile construction market, different types of project models are needed to share risks and responsibilities between the client and the contractor. The collaborative construction model can emphasize collaboration, transparency and risk sharing in a project, reflecting the needs of the current construction market.
A typical financial commission model for a project managed construction is a target budget model or a target and ceiling price model. However, the traditional contract type does not encourage the contractor to pursue the objectives set by the client. To make the contract form more attractive to both parties, collaborative elements need to be included.
The objective of this thesis was to define recommendations for a financial commission model structure that allows both the client and the contractor to achieve the project objectives in collaboratively managed project. This thesis studies how the commission model could be structured and how to set the project objectives. The commission structure of collaboratively managed project was compared to other collaborative project types.
The research problem was studied by using literature sources to investigate what kind of incentives, targets and sanctions could be set for the commission structure and assesses the risks from the client's and contractor's point of view.
Recommendations for improving the financial commission model structure and the objective set of projects were compiled based on the feedback received from the company's development team. Finally, the thesis summarizes what kind of commission structure would be suitable for a collaboratively managed project and what encourages the contractor to achieve the client objectives. The results of the thesis will be used to develop the case company’s operating models.
A typical financial commission model for a project managed construction is a target budget model or a target and ceiling price model. However, the traditional contract type does not encourage the contractor to pursue the objectives set by the client. To make the contract form more attractive to both parties, collaborative elements need to be included.
The objective of this thesis was to define recommendations for a financial commission model structure that allows both the client and the contractor to achieve the project objectives in collaboratively managed project. This thesis studies how the commission model could be structured and how to set the project objectives. The commission structure of collaboratively managed project was compared to other collaborative project types.
The research problem was studied by using literature sources to investigate what kind of incentives, targets and sanctions could be set for the commission structure and assesses the risks from the client's and contractor's point of view.
Recommendations for improving the financial commission model structure and the objective set of projects were compiled based on the feedback received from the company's development team. Finally, the thesis summarizes what kind of commission structure would be suitable for a collaboratively managed project and what encourages the contractor to achieve the client objectives. The results of the thesis will be used to develop the case company’s operating models.