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In the large facilities construction industry, build-own-operate (BOO) projects have a high risk of failure because of the inability for organizations to control uncertainty (Kerzner, 2011). In a BOO mega-project organizations use their internal resources since funding is usually limited for outsourcing all phases of designing, building, and operating a large facility. Generally the organizational project sponsors are also trying to expedite the project by integrating or fast-tracking the design-build-operate phases using the same resources to avoid losing momentum during knowledge transfer (Strang, 2012a).
In a build-operate-transfer (BOT) approach, the project sponsors transfer the risk to a private company to operate once the facilities are completed. However, in a BOT project the company still integrates all phases up until the facility is ready for business, to speed up the construction (Kerzner, 2011).
Other methods such as construction management, design-build, or design-bid-build are used when specialized resources are needed, but this is usually at the expense of a longer duration, or higher costs if external resources are needed (Yoon & Han, 2006; Strang, 2012a). These approaches are conceptually illustrated in Figure 1, showing that using more internal resources will usually increase risks and managing more of the design-build phases internally typically reduces the time-to-market (project duration).
Figure 1. Risk vs. time for construction project strategies