Construction contract strategy - Revision history

Designing Buildings at 10:26, 17 December 2020

2020-12-17T10:26:04Z

← Older revision		Revision as of 10:26, 17 December 2020
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	* The potential for prefabrication.		* The potential for prefabrication.
	* Third party dependencies.		* Third party dependencies.
		+
		+	[https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/941536/The_Construction_Playbook.pdf The Construction Playbook, Government Guidance on sourcing and contracting public works projects and programmes Version 1], produced by the Cabinet Office and published in December 2020, states:
		+
		+	'This is where we define the form of contract informed by the commercial model. This includes:
		+
		+	* 'defining critical risk allocation, and ensuring it is properly reflected in the contract
		+	* 'documenting the decisions made earlier on the contractual roles and responsibilities
		+	* 'defining clearly the rights and obligations of each party and the associated contractual processes required to implement the commercial model, manage the contract and deliver the project
		+
		+	'The contract is where all the key elements of the project are drawn together and must<br />
		+	be a fully integrated, consistent suite of documents. It will define what you want to buy (specification), the method and timeframe for delivery, risk allocation and other key<br />
		+	commercial terms (e.g. the payment mechanism and KPIs) and what happens if things go wrong.'

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Editor at 17:57, 22 September 2020

2020-09-22T17:57:06Z

← Older revision		Revision as of 17:57, 22 September 2020
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	* Main contractor.		* Main contractor.
	* Negotiated contract.		* Negotiated contract.
		+	* Pre-contract management.
	* Pre contract meeting.		* Pre contract meeting.
	* Procurement route.		* Procurement route.
	* Supply chain management.		* Supply chain management.

−	[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Guidance]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 17:50, 27 March 2019

2019-03-27T17:50:23Z

← Older revision		Revision as of 17:50, 27 March 2019
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	* Third party dependencies.		* Third party dependencies.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Construction contract.		* Construction contract.
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	* Contract conditions.		* Contract conditions.
	* Contract negotiation.		* Contract negotiation.
		+	* Contractual right.
	* Essentials of a contract.		* Essentials of a contract.
	* Main contractor.		* Main contractor.

Designing Buildings at 08:25, 25 July 2018

2018-07-25T08:25:23Z

← Older revision		Revision as of 08:25, 25 July 2018
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	* Risk allocation.		* Risk allocation.
	* Market conditions.		* Market conditions.
		+	* The potential for prefabrication.
	* Third party dependencies.		* Third party dependencies.

Designing Buildings at 08:25, 25 July 2018

2018-07-25T08:25:00Z

← Older revision		Revision as of 08:25, 25 July 2018
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−	As construction projects involve large amounts of money, a great number of organisations, long durations and great complexity, the development of a clear contract strategy is very important. Adopting the right strategy at the beginning of ~~the~~ project can ~~help~~ reduce the risk of problems further down the line.	+	As construction projects involve large amounts of money, a great number of organisations, long durations and great complexity, the development of a clear contract strategy is very important. Adopting the right strategy at the beginning of a project can significantly reduce the risk of problems further down the line.

	The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.		The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.

−	Developing ~~and~~ effective contract strategy that supports the ~~clients~~ objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes. For more information see: Procurement route and Standard forms of contract.	+	Developing an effective contract strategy that supports the client's objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes. For more information see: Procurement route and Standard forms of contract.

−	This can be particularly difficult on large or complex projects, where the supply chain can be very long and responsibility ~~and~~ performance may cascade down through a plethora of suppliers sometimes unknown to management at the top of the chain. For more information see: Supply chain.	+	This can be particularly difficult on large or complex projects, where the supply chain can be very long and responsibility for performance may cascade down through a plethora of suppliers sometimes unknown to management at the top of the chain. For more information see: Supply chain.

−	A problem ~~often encountered in the construction industry~~ is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all. It is important therefore for all parties to ensure that certain rights and obligations exist not only in their own agreements, but also in the agreements contracting parties have with others. This ensures that the main contractor is not left responsible for all obligations to the employer, that sub-contractors have enforceable rights and that timings are co-ordinated throughout the supply chain. For more information see: Back to back provisions in construction contracts.	+	A common problem is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all. It is important therefore for all parties to ensure that certain rights and obligations exist not only in their own agreements, but also in the agreements contracting parties have with others. This ensures that the main contractor is not left responsible for all obligations to the employer, that sub-contractors have enforceable rights and that timings are co-ordinated throughout the supply chain. For more information see: Back to back provisions in construction contracts.

−	In addition, there may be a need for collateral warranties, ~~agreements~~ which are associated with another 'primary' contract to allow a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract. For more information see: Collateral warranties.	+	In addition, there may be a need for third party agreements such as collateral warranties, which are agreements associated with another 'primary' contract to allow a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract. For more information see: Collateral warranties.

	Other factors that may influence the contract strategy might include:		Other factors that may influence the contract strategy might include:
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	* Whether the nature of the works required can be described in detail.		* Whether the nature of the works required can be described in detail.
	* Whether the quantity of works required can be determined.		* Whether the quantity of works required can be determined.
		+	* The complexity of the supply chain.
		+	* Whether the client requires a single point of responsibility.
	* Financing of the project.		* Financing of the project.
	* The location of the project (is it in the UK?).		* The location of the project (is it in the UK?).
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	* Whether the works involve repeating activities, allowing long term relationships to be built up between the parties to the project.		* Whether the works involve repeating activities, allowing long term relationships to be built up between the parties to the project.
	* Whether the client is a single party or multiple parties.		* Whether the client is a single party or multiple parties.
−	* Risk allocation ~~between client and contractor~~.	+	* Risk allocation.
−	* Market ~~factors and~~ conditions.	+	* Market conditions.
	* Third party dependencies.		* Third party dependencies.

Designing Buildings at 08:20, 25 July 2018

2018-07-25T08:20:30Z

← Older revision		Revision as of 08:20, 25 July 2018
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−	As construction projects involve large amounts of ~~capital~~ and complexity, the development of a clear contract strategy is very important.	+	As construction projects involve large amounts of money, a great number of organisations, long durations and great complexity, the development of a clear contract strategy is very important. Adopting the right strategy at the beginning of the project can help reduce the risk of problems further down the line.

	The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.		The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.
Line 9:		Line 9:
	A problem often encountered in the construction industry is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all. It is important therefore for all parties to ensure that certain rights and obligations exist not only in their own agreements, but also in the agreements contracting parties have with others. This ensures that the main contractor is not left responsible for all obligations to the employer, that sub-contractors have enforceable rights and that timings are co-ordinated throughout the supply chain. For more information see: Back to back provisions in construction contracts.		A problem often encountered in the construction industry is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all. It is important therefore for all parties to ensure that certain rights and obligations exist not only in their own agreements, but also in the agreements contracting parties have with others. This ensures that the main contractor is not left responsible for all obligations to the employer, that sub-contractors have enforceable rights and that timings are co-ordinated throughout the supply chain. For more information see: Back to back provisions in construction contracts.

−	~~The contract defines the alignment and relationship between the client~~, ~~contractor and other stakeholders, as well as the conditions~~, which ~~means that the right strategy at the beginning phase~~ of the ~~project can help reduce~~ the ~~risk of disputes further down the line~~.	+	In addition, there may be a need for collateral warranties, agreements which are associated with another 'primary' contract to allow a duty of care to be extended by one of the contracting parties to a third party who is not party to the original contract. For more information see: Collateral warranties.

−	~~Some of the~~ factors that may influence the contract strategy include:	+	Other factors that may influence the contract strategy might include:

−	* The ~~project~~ cost ~~considerations~~.	+	* The size, complexity, duration and cost of the project.
−	* ~~Location~~ of the ~~project~~.	+	* Whether the nature of the works required can be described in detail.
−	* ~~The type~~ of ~~technology~~ required.	+	* Whether the quantity of works required can be determined.
−	* ~~Project size~~.	+	* Financing of the project.
−	* ~~Experience~~ of the client and contractor with projects of a similar nature.	+	* The location of the project (is it in the UK?).
−	* ~~Financing arrangements~~.	+	* The experience of the client and contractor with projects of a similar nature.
		+	* Whether the works involve repeating activities, allowing long term relationships to be built up between the parties to the project.
	* Whether the client is a single party or multiple parties.		* Whether the client is a single party or multiple parties.
	* Risk allocation between client and contractor.		* Risk allocation between client and contractor.
	* Market factors and conditions.		* Market factors and conditions.
−		+	* Third party dependencies.
−	The contract strategy will enable selection of the most appropriate type of contracting arrangement for the project, according to how it may affect project performance and how it may benefit both the client and contractor.	+

	= Find out more =		= Find out more =

Designing Buildings at 08:13, 25 July 2018

2018-07-25T08:13:55Z

← Older revision		Revision as of 08:13, 25 July 2018
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	The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.		The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.

−	Developing and effective contract strategy that supports the clients objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes.	+	Developing and effective contract strategy that supports the clients objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes. For more information see: Procurement route and Standard forms of contract.

−	This can be particularly difficult on large or complex projects, where the supply chain can be very long and responsibility and performance may cascade down through a plethora of suppliers sometimes unknown to management at the top of the chain. A problem often encountered in the construction industry is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all.	+	This can be particularly difficult on large or complex projects, where the supply chain can be very long and responsibility and performance may cascade down through a plethora of suppliers sometimes unknown to management at the top of the chain. For more information see: Supply chain.
		+
		+	A problem often encountered in the construction industry is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all. It is important therefore for all parties to ensure that certain rights and obligations exist not only in their own agreements, but also in the agreements contracting parties have with others. This ensures that the main contractor is not left responsible for all obligations to the employer, that sub-contractors have enforceable rights and that timings are co-ordinated throughout the supply chain. For more information see: Back to back provisions in construction contracts.

	The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.		The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.

Designing Buildings at 07:51, 25 July 2018

2018-07-25T07:51:53Z

← Older revision		Revision as of 07:51, 25 July 2018
Line 5:		Line 5:
	Developing and effective contract strategy that supports the clients objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes.		Developing and effective contract strategy that supports the clients objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes.

−	This can be particularly difficult on large or complex projects, where the supply chain can be very long.	+	This can be particularly difficult on large or complex projects, where the supply chain can be very long and responsibility and performance may cascade down through a plethora of suppliers sometimes unknown to management at the top of the chain. A problem often encountered in the construction industry is that whilst the first and second tiers of the supply chain sign up to fairly onerous agreements, as the chain develops, so the contractual liabilities decrease until suppliers at the end of the chain are often not locked in at all.

	The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.		The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.

Designing Buildings at 07:49, 25 July 2018

2018-07-25T07:49:38Z

← Older revision		Revision as of 07:49, 25 July 2018
Line 1:		Line 1:
−	As construction projects involve large amounts of capital and complexity, the development ~~at the outset~~ of a clear contract strategy is important. The contract strategy determines the level of design, construction ~~and~~ maintenance ~~integration for a project~~ and ~~should support the client’s main objectives. As there are various~~ different ~~types~~ of ~~construction contract~~, the ~~adopted~~ strategy ~~can be~~ critical ~~for achieving~~ project ~~execution~~ on time ~~and~~ on budget.	+	As construction projects involve large amounts of capital and complexity, the development of a clear contract strategy is very important.
		+
		+	The contract strategy determines the level of management, design, construction, maintenance, operation and so on that will be required from different parts of the supply chain, and to what extent those services will be integrated. It also determines the level of risk that is allocated to different parties in the supply chain.
		+
		+	Developing and effective contract strategy that supports the clients objectives and allocates risks to those best able to control them, is critical to delivering a project on time, on budget, to the required level of quality and with the fewest possible disputes.
		+
		+	This can be particularly difficult on large or complex projects, where the supply chain can be very long.

	The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.		The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.

Editor: Created page with "As construction projects involve large amounts of capital and complexity, the development at the outset of a clear contract strategy is important. The contract strategy determine..."

2018-07-24T12:22:39Z

Created page with "As construction projects involve large amounts of capital and complexity, the development at the outset of a clear contract strategy is important. The contract strategy determine..."

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As construction projects involve large amounts of capital and complexity, the development at the outset of a clear contract strategy is important. The contract strategy determines the level of design, construction and maintenance integration for a project and should support the client’s main objectives. As there are various different types of construction contract, the adopted strategy can be critical for achieving project execution on time and on budget.

The contract defines the alignment and relationship between the client, contractor and other stakeholders, as well as the conditions, which means that the right strategy at the beginning phase of the project can help reduce the risk of disputes further down the line.

Some of the factors that may influence the contract strategy include:

* The project cost considerations.
* Location of the project.
* The type of technology required.
* Project size.
* Experience of the client and contractor with projects of a similar nature.
* Financing arrangements.
* Whether the client is a single party or multiple parties.
* Risk allocation between client and contractor.
* Market factors and conditions.

The contract strategy will enable selection of the most appropriate type of contracting arrangement for the project, according to how it may affect project performance and how it may benefit both the client and contractor.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Construction contract.
* Contract administrator.
* Contract conditions.
* Contract negotiation.
* Essentials of a contract.
* Main contractor.
* Negotiated contract.
* Pre contract meeting.
* Procurement route.
* Supply chain management.

[[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]