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Published

16th January 2020

Knowledge Type

Data & Statistics Guidance

Organisation

, McKinsey Global Institute

Major Project

N/A

Of Interest To

Academia Consultants Contractors Investors Leadership teams Operators Private sector clients Public sector clients

Collaborative contracting: Moving from pilot to scale-up

Summary

Despite the early successes of collaborative-contract adopters, the industry remains hesitant. Five steps can help project owners better envision the transition toward more collaborative approaches.

There is mounting evidence that owners of large capital projects should consider alternatives to traditional, adversarial contracting practices. More collaborative agreements and operating models can be found in integrated project delivery (IPD) or project alliancing. Under such models, key delivery partners (usually the owner, engineer or architect, major equipment manufacturers, and contractors) work together during a defined preplanning period to develop the project scope, schedule, and budget. These partners form a single contract including a no-fault clause; and operate under a joint management structure that governs the project execution.