A novel model for risk management of outsourced construction projects using decision-making methods: a case study

Amin Mahmoudi · Mehdi Abbasi · Xiaopeng Deng · Muhammad Ikram · Salman Yeganeh

34 citations0/0 files storedGrey Systems Theory and Application

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Multi-Criteria Decision Making Construction Project Management and Performance Value Engineering and Management

Abstract

Purpose Selecting a suitable contract to outsource construction projects is an ongoing concern for project managers and organizational directors. This study aims to propose a comprehensive model to manage the risks of outsourced construction project contracts. Design/methodology/approach To employ the proposed model, firstly, the types of contracts and risks in the organization should be identified, then, to prioritize the contracts, the identified risks are considered as criteria. After receiving the experts' opinions, the best–worst method (BWM) integrated with grey relation analysis (GRA) method was used to prioritize the contracts. BWM and GRA are multi-criteria decision-making methods with different approaches and applications. In the current study, BWM has been employed to calculate the weights of criteria because it has better performance than other methods such as the analytic hierarchy process (AHP). After calculating the weights of criteria, the GRA method has been utilized for ranking the alternatives. Findings According to the results obtained from the case study, the cost plus award fee contract is the most suitable alternative for outsourcing construction projects. The proposed methodology can be practically applied through different types of the projects such as construction or “engineering, procurement and construction”. Originality/value To the best of our knowledge, this is the first time a conceptual model has been proposed to select an appropriate contract for construction projects. Also, for the first time, the BWM integrated with GRA method has been used to prioritize project contracts based on the potential risks. The proposed model can contribute to project managers for selecting a suitable contract with the least risk in construction projects.

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References

1981Snowball Sampling: Problems and Techniques of Chain Referral Sampling 2014Best-worst multi-criteria decision-making method 2004A guide to the project management body of knowledge (PMBOK guide)1989Introduction to Grey system theory 2015Best-worst multi-criteria decision-making method: Some properties and a linear model 2008The use of grey relational analysis in solving multiple attribute decision-making problems 1992A Framework for Integrated Risk Management in International Business 2016A supplier selection life cycle approach integrating traditional and environmental criteria using the best worst method

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