Construction procurement and profit: an analysis of the relationship from a contractor's perspective

At the time of writing this thesis, the construction industry related media’s attention was dominated by the issues of alternative procurement systems and the ability to profit from such variances. In the last decade Sir Michael Latham and Sir John Egan’s reports have contributed to a fundamental shift in the manner in which construction is procured. The risk:reward ratio is much talked about, but little has been reported academically to accurately quantify this relationship from a contractor’s perspective. Hence, the inspiration for this study stemmed from these factors, but rather than consider them in isolation, this thesis analyses the relationship between the mode of procurement and the contractor’s profitability variance associated therewith. To facilitate the investigation a literature review, questionnaire/survey and statistical analysis of anonymous subject companies' data significantly proves that procurement and profit are related in the construction industry. This research is a contribution to knowledge, which supports and challenges certain established procurement paradigms. This research could be utilised to gain competitive strategic advantage.