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Highway maintenance: impact of framework agreements upon project financial performance

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  • Terence Lam
  • Keith Gale

Abstract

Use of frameworks is recognized by the UK Industrial Strategy: Government and Industry in Partnership as an innovative procurement method that may be used to deliver cost savings. Support for potential efficiencies from use of frameworks by practitioners is, at best, mixed. A single case study was conducted to investigate the financial performance of frameworks for highway maintenance projects within the context of a major county council. Results from independent samples t-tests of 60 framework and 60 traditional discrete projects verified that use of a framework revealed no significant changes in production costs of tender prices, but significant reductions in total transaction costs for engagement and performance monitoring. These findings suggest that use of framework procurement methods can support significant cost savings when used within a public sector environment.

Suggested Citation

  • Terence Lam & Keith Gale, 2014. "Highway maintenance: impact of framework agreements upon project financial performance," Construction Management and Economics, Taylor & Francis Journals, vol. 32(5), pages 460-472, May.
    • Handle: RePEc:taf:conmgt:v:32:y:2014:i:5:p:460-472
    DOI: 10.1080/01446193.2014.892628
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    References listed on IDEAS

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    1. Patricia M. Hillebrandt, 1974. "Economic Theory and the Construction Industry," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-01927-4.
    2. Coase, R. H., 1990. "The Firm, the Market, and the Law," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226111018, September.
    3. Ferguson,C. E., 2008. "The Neoclassical Theory of Production and Distribution," Cambridge Books, Cambridge University Press, number 9780521076296.
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    Cited by:

    1. Obwegeser, Nikolaus & Müller, Sune Dueholm, 2018. "Innovation and public procurement: Terminology, concepts, and applications," Technovation, Elsevier, vol. 74, pages 1-17.
    2. Emmanuel Dele Omopariola & Abimbola Windapo & David John Edwards & Hatem El-Gohary, 2021. "Level of Financial Performance of Selected Construction Companies in South Africa," JRFM, MDPI, vol. 14(11), pages 1-18, October.
    3. Kang-Wook Lee & Kyong-Hoon Kim, 2021. "Analyzing Cost and Schedule Growths of Road Construction Projects, Considering Project Characteristics," Sustainability, MDPI, vol. 13(24), pages 1-18, December.

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