Strategy framework for post-construction contractor services

In view of UK government strategies concerning the construction industry, there is a need for contractors to reconsider their options regarding the kind of services they may need to offer. Both Building Information Modelling and Government Soft Landings policies imply a shift of emphasis towards contractors providing post construction phase services. By combining a number of approaches to innovation in services, a new theoretical framework, the Pavitt Gallouj Barras model, is devised to assess the capability, capacity and stage of development of any firm as part of its self assessment of its ability to innovate new construction services. The framework is shown to depend on the characteristics of the construction firm or its output and where the firm or its output can be found in terms of its innovation path, its production intensity and its phase of innovation. This a priori research discusses construction performance-based contracting (PBC), and total property outsourcing (TPO) in the light of this theoretical framework. The limitations of PBC and TPO are reviewed and found to be critical in terms of the ownership, control and management of buildings as real estate assets. Both PBC and TPO offer contractors opportunities and incentives to build to higher and more sustainable standards in the long run. By modifying contractors' perceptions of post construction service agreements and contracts, contractors could add value to their output with incentives to build to higher and more sustainable standards. This could herald a shift in contracting culture. However, the conclusion drawn is that although highly innovative, PBC and TPO will only be options for some construction firms, as the additional risks and inflexibility for both contractor and client may be greater than the benefits offered.