A Quantitative Incentive Mechanism to Eliminate Change Orders in Construction Projects

Abstract:

Change orders are the main cause of over budget cost. A project delivery mode called IPD (Integrated Project Delivery) can eliminate change orders in foreign construction projects, because its internal incentive mechanism based on principles of IPD can prompt contractors participating in the design phase to assist designers in optimizing design actively. In previous study, an IPDbased qualitative incentive mechanism adapting the situation of construction projects in China was established to eliminate change orders. First, this paper summarized the qualitative incentive mechanism. Then, by analyzing the characteristics of change orders that would be eliminated by designers and contractors in China, established a quantitative incentive mechanism based on the qualitative one. Finally, it verified the effectiveness of the quantitative incentive mechanism with the financial data of actual projects.