Contractors' risk in Design, Novate and Construct contracts

S. Thomas Ng, R. Martin Skitmore

Research output: Contribution to journalArticleResearchpeer-review

29 Citations (Scopus)

Abstract

The Design, Novate and Construct (DN&C) system is becoming an increasingly popular method of construction procurement. In the DN&C system, the contractual rights and liabilities of the design team are transferred to the contractor once appointed. This makes DN&C a very attractive procurement option for the client but leaves contractors with the problem of identifying and managing the extra risks involved. The aim of this paper is to identify these risks. The results are described of a series of interviews with construction projects managers experienced in DN&C work. These show that the major risks to contractors in DN&C are concerned with (i) the novated design team's ability to perform, (ii) the lack of design team fees allocated to the post-novation phase, (iii) the working relationship with the novated design team, and (iv) the timing of the novation. It was also found that contractors had insufficient time during the bid preparation period to check the design produced by the novated design team.

Original languageEnglish
Pages (from-to)119-126
Number of pages8
JournalInternational Journal of Project Management
Volume20
Issue number2
DOIs
Publication statusPublished - Feb 2002
Externally publishedYes

Fingerprint

Dive into the research topics of 'Contractors' risk in Design, Novate and Construct contracts'. Together they form a unique fingerprint.

Cite this