SUITABILITY OF PACKAGE DEAL CONTRACTS FOR RESIDENTIAL BUILDING CONSTRUCTION

Abstract

Residential construction is becoming an increasingly important subdivision of construction industry, necessitating advanced procurement methods in order to accommodate changing requirements. Commonly, residential construction demand is met by the informal sector of construction industry. With the changing environments, a novel trend of package deal contracts is spreading in the context bringing in formalities to the residential construction projects. Package deal is a developed procurement method with unique characteristics. However, in selecting an appropriate procurement method for a specific housing construction project, proper understanding of characteristics of available procurement options are utmost of importance. Therefore, this research aimed to elucidate the suitability of package deal contracts for residential building construction, against time, cost and quality benefits. Study identified 43 time, cost, and quality related expectations through a comprehensive literature survey, which residential construction clients would expect to be born of package deal contracts. The factors were ranked against industry experts' view and further, tested via a survey with a sample of clients with package deal and informal construction experience. Data were analysed for medians and standard deviations in to rank the factors considering the reliability. Consequently, experts appreciated time and cost benefits of package deal contracts over informal construction. Importantly, projects start quickly with known early commitments under package deal contracts. However, informal construction offers better quality with attractive finished products. Therefore, the package deal is suitable for the clients, who are concerned of time and cost benefits, while informal construction is suitable for the client’s with prime concern of quality benefits.