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Evaluation of Lump Sum Contracts in the Organization for Development, Renovation and Equipping Schools

Shafaei, Mohsen | 2017

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  1. Type of Document: M.Sc. Thesis
  2. Language: English
  3. Document No: 50080 (53)
  4. University: Sharif University of Technology, International Campus, Kish Island
  5. Department: Science and Engineering
  6. Advisor(s): Mofid, Masoud
  7. Abstract:
  8. The construction industry is one of the most important economic sectors, which shares a major part of Gross Domestic Product (GDP) and employment. In Iran many development projects are designed and implemented annually which billions of Rials are due as a result of construction and operation for executive bodies. The Organization for Development, Renovation and Equipping Schools (ODRES) as the executive branch of the Ministry of Education, is one of the largest construction bodies which undertakes construction of hundreds of educational, cultural and athletic projects annually. Given that the project delivery methods and the need to choose the correct method of contract payments exerts great importance on project quality, and reduction of time and budget, and claims, this study investigates the most crucial factors, flaws and defects in the lump sum contract (Iranian version of the contract Lump Sum) concluded with the ODRES that brings about delays and increased costs for the contractor. Some suggestions are made and solutions to correct the flaws and shortcomings are presented. Furthermore, in this study, the identified variables, in question format, have been grouped in four sections including the body of the lump sum contract, environmental factors, and owner and contractor. Based on the data extracted from 152 questionnaires distributed among the participants, the signed lump sum contracts were 556 of which 51.8% had delays and rising costs and for 30% of the contracts the clause 48 of the General Conditions was applied. Most of the failure and increase in cost of these projects occurred during 1391 to 1393 solar calendar. The most critical variables that cause delays, increased costs or failure for the project are as follows: sanctions, owner’s inability to pay on time the debts to the contractors, and inflation caused by rising prices
  9. Keywords:
  10. Project Delivery Method ; Lump-Sum Contract ; Effective Factor ; Payment Cost Minimization (PCM) ; Cost Overrun ; Gross Domestic Product ; Organization for Development, Renovation and Equipping Schools

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