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Contract types in the Swedish construction sector: Framework and arguments for using Design-Bid-Build Contracts

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  • Lena Borg

Abstract

Purpose: This paper aims to contribute to a better understanding of different contract types in the construction sector by presenting a new structure and also critically evaluate some recent arguments for design-build and PPP- procurement systems are critically evaluated.Design/methodology/approach: A review of the debate in Sweden related to the construction sector is presented as well as transaction cost theory, co nnected to incentives and rationality that is used in the theoretical analysis. The focus is on the infra structural sector.Findings: The relation between contract and procurement types is clarified by clearly separating two decisions – who should be responsible for design and should construction and operation/maintenance be bundled. PPP is then seen as special type of bundled contract. Many of the arguments for leaving design to the contractor, and for bundling construction and operation/maintenance have a weak empirical foundation.Originality: This paper presents a new way of structuring construction contracts and argues that there are a number of situations where design-bid-build contract could be rational even in a long-term perspective.

Suggested Citation

  • Lena Borg, 2011. "Contract types in the Swedish construction sector: Framework and arguments for using Design-Bid-Build Contracts," AfRES afres2011_115, African Real Estate Society (AfRES).
    • Handle: RePEc:afr:wpaper:afres2011_115
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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