Probabilistic Cost Estimation for Major Construction Projects in Infrastructure

Abstract

In 2024, multiple tenders for infrastructure projects using Integrated Project Delivery (IPD) are issued. These models have recently been introduced in Germany and Austria. They aim to reduce cost and schedule overruns on major projects. IPD uses criteria such as partnership-based project management which is based on a collaborative culture to select a contractor. Contract models, such as cost reimbursement with bonus/malus mechanisms, are used to further reduce the impact of price. However, traditional calculation is not suitable for new remuneration models as it tends to hide extra profits. It is therefore not transparent enough for the successful implementation of IPD.