Rethinking Contract Strategies and how to avoid the design hiatus

Rethinking Contract Strategies

Rethinking contract strategies and how to avoid the inevitable design hiatus must be implemented. Traditionally, there is a hiatus in the design process throughout which the design professionals package up drawings, specifications and ‘fail-safe’ clauses for passing to Contractors to be able to derive their price for the project. Engineering services including detailed design are then out of sequence, with the inevitable consequences of delay, disruption and cost overruns. This can be achieved by using NEC.

[1] Martin Davis, Vice Chairman Drake and Skull Engineering, Achievements, Action Plans and how Clients can Help. The Latham Implementation Plan, AIC Conference, London October 1995.

Rethinking Contract Strategies for:

1) Process plant

In the process plant sector design is usually carried out by the contractor and a lump sum or activity-based form of contract is used.  The client and his professional advisors specify plant performance and the constraints within which the contractor is to provide the works. 

How are they to draft such specifications without the close involvement of the eventual supplier of plant and materials which in many cases is not likely to be the main contractor? Innovative alternatives would not necessarily be known to the specifier. 

When the main contractor prices the bid it often provides the sketchiest of details to a group of potential suppliers to price.  The communication chain between client and specialist plant supplier all done through words in an enquiry document is now so long it is quite likely that the two parties have a very different idea about each other’s needs.   Are the Clients objectives best served this way?  

2) Building works

In a building contract the situation is even worse as the building design is usually done by the employer before tenders are called.  Certain assumptions are made by both architect and structural engineer about specialist plant capacities, space requirements and loadings again based on past experience.   Only when the contract is awarded and the contractor places his subcontract is the Client’s project team aware of the specialist supplier.   With this disjointed chain, possibly compounded by some changes made along the way between architect and Client the specialist plant supplier now advises final loading and space requirements.   The building, now well under way requires larger columns to support the higher loads and the cable racks need to be 20% larger.  It is an all too familiar tale.   The project schedule goes out of the window and the claims consultants arrive on the site to initiate delay and disruption expense claims. It is time for rethinking contract strategies.

Contract strategies – the design hiatus

                        The Design Hiatus     © Martin Davis, Drake & Skull 1996

3) Civil engineering

Constructability is a key part of design.  There are numerous examples where, had a contractor been involved in preparation of the enquiry document, the project design could have been a lot simpler and resulted in a far better outcome with less aggravation for both parties.

4) Design partnering

At the risk of promoting yet another fashionable panacea, we propose that clients are rethinking contract strategies to design partnering at the enquiry preparation stage.   (There is of course no reason why this partnership could not continue to the end of the project). The project team should include not only the design professionals (whether internal or externally appointed) which is the case at present but also representatives of the specialist engineering services, plant suppliers and in particular the control and instrumentation suppliers.   These appointments should be directly with the Client and managed by the appointed Project Manager.  The Project Manager would need to ensure that the Client’s open market interests were protected as far as possible and the question of liability for design and operating guarantees would need to be analysed on a contract by contract basis.

NEC can offer a new approach to collaborative contracting and strategies


[1] Martin Davis,  Vice Chairman Drake and Skull Engineering, Achievements, Action Plans and how Clients can Help The Latham Implementation Plan, AIC Conference, London October 1995.