Selection Of Project Delivery System And Payment Method And Its Influence On Cost

Through literature review, this paper identified 27 factors which may affect the selection of project delivery system and payment method. These factors were further grouped into four levels, including project characteristics, owner ability, the requirements of owners and the environmental characteristics. Based on data from 168 projects which were collected through questionnaire survey, multivariate statistical analysis was conducted. With the method of hypothesis test, at the significance level of 0.05, the mean values of nine factors have significant differences between DBB method and DB method, including project size, the clarity of scope definition, the change allowance degree, the requirements of quality, the changes of exchange rate, public resistance, and the frequency of war and coup. By correlation analysis, project delivery system and payment method are found to have significant correlation. By variance analysis, at the significance level of 0.05, the mean values of three factors have significant differences among different payment method, including the changes of exchange rate, the number of contractors in bidding, labor costs.To analyze the influence of project delivery system and payment method on project cost, four indicators were built, including the rate of cost overrun, the growth rate of contract price, the rate of rework cost and the rate of change cost. By two independent samples T-test, at the significance level of 0.05, the mean values of two indicators have significant differences between DBB method and DB method, which are the rate of cost overrun and the growth rate of contract price. The result indicates that DB method would significantly reduce the rate of cost overrun and the growth rate of contract price, with a better control on project cost and contract price. By analysis of covariance, three factors of project size, the frequency of war and coup, and the clarity of scope definition would have significant influence on the rate of cost overrun, the growth rate of contract price, and the rate of rework cost separately.By analysis of variance, at the significance level of 0.10, the mean values of the growth rate of contract price is significantly different, either between lump sum through negotiation and lump sum through competitive bidding, or between lump sum through negotiation and unit price. As to the owner, lump sum through negotiation is a preferable choice, which could have a lower rate on contract price growth. At the significance level of 0.05, the mean values of the rate of cost overran is significantly different between lump sum through competitive bidding and unit price. By analysis of covariance, no factors are found to have a significant influence on project cost, with the co work of payment method.Finally, this paper conducted regression analysis on the four indicators, with project delivery system, payment method, and influencing factors used as independent variables. Three regression equations are established for the rate of cost overrun, the growth rate of contract price, and the rate of rework cost.