The Potential For adopting GMP/TCC in Sri Lankan construction industry

Abstract

Increasing project complexity, schedule constraints and budget limitation causes a strong call for changes in construction contracting procedures. There has been a trend in world for applying both Guaranteed Maximum Price (GMP) and Target Cost Contracting (TCC) to align the interest of owners and contractors together. However, this practice has not yet evolved in the Sri Lankan construction industry and the knowledge about it is poor. Therefore, this research investigates the potential for adopting GMP/TCC in the Sri Lankan construction industry. Through literature review success factors for implementing of GMP/TCC and difficulties in implementing GMP/TCC was identified. Semi structured interviews were conducted to obtain the perceptions of the industry experts in order to find the level of existence of success factors and manageable level of difficulties relevant to GMP/TCC. The study concludes that favourable environment exists to development of GMP/TCC in Sri Lankan construction industry. The research helps key project stakeholders to equip with a knowledge and understanding of GMP/TCC and generates a useful outcome to construction industry of Sri Lanka to drive for increased efficiency in overall project performance.