Game Playing in Construction Contracts
A Crovetti Associates publication, written by John Heathcote, Associate
Illustrating game playing in construction contracts: the negative impact of procurement strategies on construction projects.
2021
A proposal for research
Construction projects are frequently procured through competitive tendering intended to provide clients with cost and programme certainty. In practice, complex design, changing requirements, volatile markets and fragmented supply chains can make reliable prediction difficult. This paper considers whether those pressures help create adversarial behaviours and recurring patterns of post-contract negotiation.
Research Context
The paper draws on longitudinal, unstructured interviews with construction managers, contract managers, quantity surveyors, project managers and project directors working directly on construction contracts. The interviews explored participants’ experience of project and contract management, particularly claims, outturn costs, programme delays and negotiations between clients and tier-one contractors.
A Proposed Explanation
From these accounts, the paper develops a hypothesis about how asymmetric negotiation may emerge after contract award. A contractor operating in a competitive market may submit a low bid to secure work while facing significant uncertainty about actual delivery costs. As the project progresses, claims, design changes and delays can accumulate. Client teams may reject those claims, while contractors continue to pursue them. Unresolved matters can therefore become concentrated towards completion, when commercial and programme pressures are greatest.
The paper does not present this as evidence of wrongdoing by one party. It argues that the behaviour may arise from structural features of UK construction procurement: competitive bidding, risk transfer, market volatility, fragmented supply chains, optimism bias and the difficulty of forecasting complex work. Clients and contractors can both become drawn into positional bargaining as they seek to protect their respective interests.
Why it matters
The proposed model helps explain why contractual processes and partnering language do not always result in collaborative behaviour. When the commercial structure rewards defensive positions, information sharing can become constrained and relationships can deteriorate. The consequences may include delayed decisions, unresolved claims, additional cost, pressure near completion and reduced confidence in the original business case.
The paper considers alternative approaches drawn from collaborative procurement, supply-chain management, early-warning processes and project bank accounts. It also highlights the importance of realistic cost expectations, transparent programme information and capable client-side leadership.
Further Research
The paper presents 35 linked propositions describing the hypothesised sequence of events. These propositions have not yet been tested statistically. It therefore proposes a quantitative survey, using a Likert scale, to examine whether the pattern identified through the interviews is widely experienced across UK construction.
The complete paper, including the detailed hypothesis, discussion and references, is available as a PDF.
About the Author
John Heathcote is an Associate of Crovetti Associates with a background in civil engineering, project management, research and value management. He has worked with large organisations and SMEs on project efficacy, project review, strategic analysis and project delivery. A PRINCE2 Practitioner, he is also a trained negotiator and value-workshop facilitator.