Search for key performance indicators (kpis) for target cost contracts in hong kong

Abstract

In view of the adversarial working relationships inherent with the traditional procurement method, Target Cost Contracts (TCC) and Guaranteed Maximum Price (GMP) contracts (being a variant of TCC), which align the individual objectives of various contracting parties together, would be appropriate integrated procurement models to cultivate more collaborative working atmosphere and partnering spirit within the construction industry. Different countries have already applied both TCC and GMP (TCC/GMP) schemes for several years. However, there exists a lack of published literature about the performance measurement of TCC/GMP projects worldwide, particularly in the Hong Kong context. In order to fill up this knowledge gap, this paper aims to identify those key performance indicators (KPIs) for TCC/GMP contracts in the construction industry of Hong Kong. Based on a series of various KPIs sought from a comprehensive desktop review, a two-round Delphi survey was launched with 14 industrial practitioners with direct hands-on experience in TCC/GMP construction projects in Hong Kong. A total of seven KPIs were identified in the survey. It was found that time, cost and quality are perceived as the typical KPIs for these kinds of projects. Moreover, the research findings reflected that relationship-based elements are also discerned as significant performance indicators such as mutual trust between project partners and contractor's involvement in project design, which play a vital role in project performance associated with TCC/GMP schemes as well. The identification of those KPIs has enhanced the understanding of project team members in implementing a successful TCC/GMP project.