Championing collaboration in the construction industry

A TRADITIONAL construction contract, typically in the form of a fixed-price contract, clearly sets out each party's roles, responsibilities and risks. But this clear delegation can also lead to a "blame and claim" culture, especially in building and construction projects, where claims, disputes and adversarial behaviour are commonplace.

The recent experience of constructing a processing plant highlights this. Issues first arose over the constructability of a piping design prepared by the design consultants. The project's contractor, who had been hired under a "build-only" fixed-price contract, had no financial incentive to propose a solution to solve those design issues. Such a solution would only have increased its costs, without a corresponding increase in fees, which had been set in the contract.

Ironically, the consequential delays caused by the design issues meant that it was in the contractor's best interest to blame the design consultants and claim additional time and fees from the developer, instead of solving the problem collaboratively. This stalled the entire project and soured relations all around.