Collaborative Contracting

The construction industry is facing numerous challenges and difficulties, and one of the most prominent issues is project overruns. Studies have shown that only 8.5% of large construction projects meet their cost and time targets, indicating a significant problem in the sector. The top causes of cost overruns are often rooted in the early stages of a project. Poor quality of technical documents and studies, poor estimation of scope, time, and cost, permit risks, conflicts on trust between partners, and conflicts on scope, time, and cost are all contributing factors to project delays and overruns.

Fortunately, the industry has recognized these challenges and has developed accepted practices to help solve them. Collaborative contracting, for example, is an industry solution that can help construction companies overcome these obstacles. There are various standards such as the ISO 44000, established contract models such as NEC4 and Bouwteam, and guidelines such as the PIANC report on ECI. These standards have proven to be effective in reducing project overruns and improving collaboration in large construction projects. These approaches prioritize communication, trust, and cooperation between all stakeholders, ensuring that everyone is working towards the same goals, and can help to minimize disputes and delays.

By implementing collaborative contracting practices, developers and construction companies can significantly improve their project outcomes and avoid the costly delays and overruns that are all too common in the industry.

Our approach

1. Establish Collaborative Advantage

Identify Clients core goals it wants to be achieved on the project
Identify how collaborative arrangements can meet those core goals
Identify common goals to deliver value for money & fairness to all

2. Early Market Engagement

Engage with the market as to Clients plans and solicit potential bidders of the upcoming Client procurement proposal.

Explore ‘best fit’ collaborative contractual arrangements with bidders
Consider compensation arrangement for bidders' costs

Bidder engagement meetings: establish how client core and common goals can be aligned

3. Shortlist & select Contractor + Consultants

A selection process geared to assess potential bidders' suitability

Bid process to outline scope, requirements, deliverables, timelines
Select bidder(s) subcontractors & supply chain which best fulfil the Client core & common goals

4. Working together to achieve Goals

Fostering greater subcontractor & supply chain engagement
Identify and collate key project risks & how they may be dealt with
Promoting High Performing Team Culture and Behaviours

5. Implement the Collaboration Contract

Lock in the Collaboration Contract to fix price, time, and quality
Partners, subcontractors & suppliers work jointly to manage the project
Open communication with all project participants

6. Managing Collective Ownership

Continuous Performance Measurement and Management

An Integrated Delivery Program means no sudden surprises
A risk sharing mechanism fosters parties to achieve Client goals

7. Tools

Establish bid competition by evaluating bidders budget pricing at an early stage.

Open-book cost estimating and scheduling, leading to informed design choices and pricing proposals without surprises.
Effective oversight: use an independent cost estimator to provide confidence that bid pricing is fair and reasonable.
Continuous monitoring of Client’s project outcomes: budget, time, risks, and governance as project progresses

8. Bonus Deliverables