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Contractor Risks in Design, Novate and Construct Contracts

Ng, S. Thomas & Skitmore, Martin (2002) Contractor Risks in Design, Novate and Construct Contracts. International Journal of Project Management, 20(2), pp. 119-126.

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Abstract

The Design, Novate and Construct (DN&C) system is becoming an increasingly popular method of construction procurement. In the DN&C system, the contractual rights and liabilities of the design team are transferred to the contractor once appointed. This makes DN&C a very attractive procurement option for the client but leaves contractors with the problem of identifying and managing the extra risks involved. The aim of this paper is to identify these risks.

The results are described of a series of interviews with construction projects managers experienced in DN&C work. These show that the major risks to contractors in DN&C are concerned with (i) the novated design team’s ability to perform, (ii) the lack of design team fees allocated to the post-novation phase, (iii) the working relationship with the novated design team, and (iv) the timing of the novation. It was also found that contractors had insufficient time during the bid preparation period to check the design produced by the novated design team.

Impact and interest:

17 citations in Scopus
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ID Code: 4230
Item Type: Journal Article
Keywords: Contractor’s risk, design, novate and construct, procurement system
DOI: 10.1016/S0263-7863(00)00051-X
ISSN: 0263-7863
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200) > Building Construction Management and Project Planning (120201)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Copyright Owner: Copyright 2002 Elsevier
Copyright Statement: Reproduced in accordance with the copyright policy of the publisher.
Deposited On: 19 May 2006
Last Modified: 09 Jun 2010 22:32

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