ABSTRACT

There is much research that helps provide a context for work in this area. The research was based on the idea of investigating the cost consequences of the kind of collaborative working practices called for by various strategic reports on the construction industry. In order to deal with these consequences, the distinguishing characteristics of different procurement methods need to be articulated. Further, since there are commercial transactions at every level in the supply chain, work on supply chain mapping sheds light on the scale of transactions in construction projects. There has been much theoretical work, based on the costs of transactions, which seeks to provide explanations for the existence of firms and markets (i.e. the decision about whether to make or buy supplies). While this work provides a useful starting point for defining transaction costs, the focus is not on the choice between firms and markets, but on different ways of selecting and contracting with supply chain partners. There has been some interesting work investigating the factors that affect the costs of procurement, and some work on assessing the costs. This section of the report describes the previous work done in these areas, providing the context for the research carried out.