A Comparative Study of the Benefits of Applying Target Cost Contracts Between South Australia and Hong Kong

• Published in: Project management journal Vol. 43; no. 2; pp. 4 - 20
• Main Authors: Chan, Daniel W. M., Lam, Patrick T. I., Chan, Joseph H. L., Ma, Tony, Perkin, Thomas
• Format: Journal Article
• Language: English
• Published: Hoboken Wiley Subscription Services, Inc., A Wiley Company 01.04.2012; Sage Publications Ltd
• Subjects: benefits; Comparative studies; guaranteed maximum price; Hong Kong; Project management; Purchasing; South Australia; target cost contracting; Hong Kong China; Australia; China
• ISSN: 8756-9728; 1938-9507
• DOI: 10.1002/pmj.21255

This article aims to identify and analyze the key benefits of adopting Guaranteed Maximum Price and Target Cost Contracts (GMP/TCC) over and above the traditional lump‐sum contractual arrangement through an empirical questionnaire survey conducted in South Australia and compared with the findings in Hong Kong. The Mann‐Whitney U Test indicated differences in perception between the two groups of respondents on the majority of the identified benefits. The study has provided an in‐depth understanding of the perceived benefits of the GMP/TCC scheme, hence leading to a wider application of those alternative integrated procurement strategies in both regions for reference by the construction community at large.