Correlation between contract type selection and cost growth in U.S. Army corps construction projects

In United States federal construction projects, government contract managers seek to negotiate a contract type that will result in a reasonable level of contractor risk, as well as provide the contractor the greatest incentive for improved performance. The Federal Acquisition Regulation provides government contract managers a variety of contract types to choose from to provide flexibility in acquiring a wide range of required supplies and services. Contract types can be broadly group into two categories: fixed price and cost-reimbursement contracts. The aim of this research was to investigate the impact of contract type selection on cost growth in USACE construction projects. Based on the quantitative and qualitative analysis conducted, contract type selection does have an impact on construction cost growth. In addition, it can be concluded that negotiated non-competitive task orders and more specifically, those, which use RSMeans and a contractor coefficient, are best at reducing construction cost growth in federal construction projects. © 2018 The Authors. Published by Diamond Congress Ltd. Peer-review under responsibility of the scientific committee of the Creative Construction Conference 2018.