Project delays and cost overruns are becoming major problems in many projects, especially industrial projects. The present economic situation has forced owners to establish time and cost reduction programs to control expenditure. The main objectives of this study are to study the perceptions of owners and contractors about incentive/disincentive (I/D) contracting. A questionnaire was used to gather the required data for the study. This was distributed among owners and contractor companies working in petrochemical plants, power plants, and refineries. The findings of the study support the use of I/D provisions in contracts. In addition, the use of I/D contract provisions ensure that contractors do their utmost to manage and control factors that influence labor productivity, project duration and/or project cost. #
This paper discusses the appropriateness of contractual methods towards dispute avoidance and resolution (DAR) for industrial projects in Saudi Arabia. It focuses on the private industrial sector in the Eastern Province. A survey was conducted using the principles of quota sampling where 93 questionnaires were distributed to 11 owners, 59 contractors and 23 consultants. The survey consisted of 20 statements that measured the parties' attitude and opinion towards contractual methods recommended for dispute avoidance and resolution (DAR) during the construction phase. Respondents indicated their level of agreement on a 5-level scale. The results re¯ect the appropriateness of these techniques for industrial projects. The ®ve contract administration methods for dispute avoidance and resolution (DAR) covered in this study are: Allocating Fair Contract Risk, Drafting Dispute Clauses, Team Building, Provision of a Neutral Arbitrator, and Binding Arbitration.
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