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Integrated Contracts in a Circular Economy_An explorative research into different types of integrated contracts and their added value in a circular building industry

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The circular economy has been introduced as a reaction against the linear economy. The linear economy is based on the take-make-dispose model of consumption which originates from the industrial revolution. Despite that this model of consumption worked well for a long time, the economy is now facing resource depletion. It demands for a new, and more sustainable economic system. The circular economy is such an economic system. In a perfect circular economy, there is no need for raw materials, and no waste production anymore. As the building industry is one of the largest resource consumer in Europe, the new economic system certainly has impact on this sector. This research analyses the added value integrated contracts can have in this new economy, by asking the question to what extend existing types of integrated contracts respond to the demands of the circular economy. First, a literature study is completed to analyse the benefits of integrated contracts and to determine the characteristics of a circular building. Second, expert interviews are conducted to evaluate the advantages of integrated contracts in a circular economy. Lastly, a data analysis is performed to determine which characteristics affect contracts.
Integrated contracts have been introduced to optimise building processes. The essence of an integrated contract is that the design and construction are combined in one contract. The design largely determines the execution method, planning and material choices. By linking these design choices to implementation methods, optimisations can be achieved in terms of planning and costs. The contract can be expanded with a maintain, finance or operate component. By including a finance or maintenance component to a contract, optimisations can be achieved in terms of costs and product quality.
The circular building criteria defined in this research are materials, design, energy and value. For a building to be circular, designers must design for longevity and disassembly. Longevity can be achieved by designing with the principles of reuse and flexibility in mind. Products need to be flexible and detachable in order to be upgraded, repaired or remanufactured. In addition, products must have a high perceived value, and must have low environmental impact. Furthermore, buildings must be constructed from sustainable materials. The quality and value of materials used in the building must be retained by maintenance or other circular business models, and by the use of material databases.
Important decisions concerning circular building criteria can occur at different stages in the construction process. As each component of a contract is related to a stage of the construction process, it is possible to link the different circular building criteria to the different components of an integrated contract. In the design phase, many decisions are made in terms of material choice and layout of the building. Including the design component in a circular project can therefore be suitable in terms of reuse of materials, sustainability, disassembly and flexibility. Decisions about energy neutrality, and renewable resources used in the building are also taken in this phase. In addition, choices are made about products used in the building, which is related to the choice for certain circular business models. The engineering component can be related in the same way to circularity, but to a lesser extent. As the primary design is already made, most influence can be exerted on material choice and engineering. The choices in engineering can have significant impact on the level of disassembly and flexibility of the building. Maintenance prolongs the life time of a building. As life time extension is one of the concepts of the circular economy, effective maintenance can increase the circularity of a building. The use of circular business models is related to the finance component of a contract. The operation component can influence the use of a material passport, the energy neutrality of a building, and the use of renewable resources during the exploitation of the building. In addition, the value of the building can be maintained by good operation management.

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