Assessing Perceived Construction Risk Allocation and Agreement under Design–Bid–Build Contracts: Evidence from a Developing Country

Abstract

Abstract This paper examines perceived construction risk allocation under design–bid–build contracts and evaluates the degree of agreement between clients and contractors regarding which party should bear specific risks in the Indonesian construction context. Data were collected through a questionnaire survey of 53 respondents, who evaluated the allocation of 73 construction risks. Descriptive analysis based on median values was used to identify general patterns of risk allocation, while inferential analysis examined differences in perception and associations between allocation and agreement. Agreement was assessed at both the aggregate and individual risk item levels. The results indicate that contractors are perceived as bearing the majority of construction risks, and no statistically significant differences are observed between client and contractor respondents in risk allocation. Overall, allocation patterns are broadly consistent with expectations. However, several deviations are observed in which risks are partially shifted to other parties, even though they are largely within a single party’s control. At the aggregate level, agreement is found to be unacceptable, with nearly half of the risks exhibiting a lack of or weak agreement, particularly for client-related and shared risks. Contractor respondents display higher levels of agreement, and risks allocated more heavily to contractors are associated with stronger agreement. These findings highlight the potential for conflict arising from disagreement in risk allocation and offer theoretical and practical implications.