With any type of project management, be it construction or otherwise, the scale of the project determines budget primarily.
How does the scale and size of contracts influence business practices within the construction sector?
The scale and size of contracts influence business practices within the construction sector simply because everything depends on the amount of work that needs to be done.
Specifically, size and scale will have a direct impact on 2 things:
- Labour costs
- Sourcing material
I contractor will need to create a budget around these two factors, so it is important to know the scale and size of a project before getting started.
It's also worth taking into consideration the way projects are won in the construction industry: Through bidding. This means competitiveness if very important to sustaining a construction business.
When it comes to competitiveness, contract size is actually even more more crucial than contract type.
A pattern is pretty clear: Highly competitive contractors always have a preferred contract size within which they operate.
Competitiveness can be primarily influenced by the amount of standardisation within the contract type, and sizes of contract contained within a contract type.
The greater the degree of contract type standardisation and the larger the sizes of contract within a contract type, the more likely competitiveness will exist among bidders.