University of Twente Student Theses
Enhancing Target Cost Process under NEC4 in Large Infrastructure Projects : A Guideline bringing Theory into Practice
Brinkman, J.J. (2024) Enhancing Target Cost Process under NEC4 in Large Infrastructure Projects : A Guideline bringing Theory into Practice.
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| Abstract: | In recent years, optimizing target costing processes in complex infrastructure projects under the NEC4 framework has gained significant attention. This research seeks to address the challenges inherent in these processes and improve efficiency and collaboration. The NEC4 framework is favoured for its emphasis on fostering collaboration and effective risk management. Early contractor involvement in the design process under NEC4 ensures that substantial effort is invested when the design is still developing, and risks are at their highest. This approach offers numerous advantages, including enhanced risk and cost management, opportunities for innovation, and reduced fragmentation of expertise. However, the intricacies of the target costing process within NEC4 necessitate a cooperative approach to price development between clients and contractors. The objective of this research is to analyse and refine the target costing process in large-scale infrastructure projects, emphasizing insights drawn from the Oosterweelknoop project to inform future projects. The research aims to identify theoretical patterns, gain insights from practical situations, and compare them to explore how a guideline for the collaborative target costing process in Phase 1 of the NEC4 framework can be conceptualized to enhance project management practices and foster collaboration between contractors and clients. Eventually, how this can be effectively applied and adapted to improve the target costing process amidst concurrent activities, evolving project parameters, and associated risks. To address this question, the research adopted a mixed-methods approach. Initially, a comprehensive literature review was conducted, examining existing knowledge on target costing, the NEC4 framework, and collaborative practices in construction. Recognizing gaps in the literature, the study then proceeded with an in-depth case study of the Oosterweelknoop project. This case study involved semi-structured interviews with key stakeholders and thematic analysis of the data collected. Key findings from the research highlighted several important aspects. Early contractor involvement (ECI) significantly enhanced the target costing process by improving communication, reducing risks, and fostering a collaborative environment. However, to fully leverage the benefits of ECI, clear guidelines and effective stakeholder management are essential. Effective risk management practices also emerged as crucial. Proactive identification and mitigation of risks early in the project lifecycle are necessary to prevent cost overruns and delays. Additionally, aligning prices during the project's early phases through transparent negotiations and continuous monitoring is vital to ensure that the target costing process remains effective and realistic. The outcome of this research was a practical guideline for the target costing phase. This guideline integrates theoretical patterns from both literature and empirical findings, focusing on three main aspects: collaboration and communication, risk management, and cost monitoring. Establishing clear channels and protocols for stakeholder interaction enhances cooperation and understanding, while proactive risk identification and mitigation strategies address potential issues early in the project lifecycle. Utilizing tools and techniques for continuous cost assessment and adjustment ensures financial control throughout the project. Document analysis and interviews with representatives from both client and contractor sides who participated in the target costing process provided empirical support. Validation of the guideline was achieved through expert evaluation. Validation involved feedback from industry experts, assessing the completeness and applicability of the guideline in realworld scenarios. The research concluded with a refined model comprising critical success factors for optimizing the target costing process in NEC4 projects. These factors were categorized into themes based on the identified obstacles and are essential at both the project initiation and during the design phase. The final model included critical success factors, essential for effective target costing, and indirect success factors that support other critical success factors, ensuring a comprehensive approach to optimization. Recommendations for practice include the adoption of the developed guideline by construction firms to enhance their target costing processes. Furthermore, the study suggests additional research to refine the guideline and explore its applicability in different project contexts and geographical regions. This study provides a robust framework for improving target costing in complex infrastructure projects, contributing valuable insights to both academic literature and industry practice. By adopting the proposed guideline, construction firms can achieve better cost control, enhanced collaboration, and improved project outcomes under the NEC4 framework. |
| Item Type: | Essay (Master) |
| Clients: | Mobilis B.V., Rotterdam, Nederland Rinkoniên OWK, Belgium |
| Faculty: | ET: Engineering Technology |
| Subject: | 56 civil engineering |
| Programme: | Construction Management and Engineering MSc (60337) |
| Link to this item: | https://purl.utwente.nl/essays/102241 |
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