Contract Strategies for Major Projects: Mastering the Most Difficult Element of Project Management - Hardcover

Merrow, Edward W.

Hardcover

ISBN 10: 1119902096 ISBN 13: 9781119902096

Publisher: Wiley, 2022

Synopsis

Major Projects are Delayed by Months or Years, and Cost Millions More Than Budgeted, Because of Common Mistakes Made at the Contracting Stage

Organizations that invest huge amounts of capital in major building/industrial projects almost never do the engineering and building themselves. They hire engineering and construction contractors to do it for them. Unfortunately, selecting contractors and negotiating the terms of a major project is one of the most difficult aspects of project management...and organizations waste billions of dollars and "bake in" months or years of delay by doing it wrong. Contracting is also the area of project management that is most prone to firmly held opinions unencumbered by any facts. We intend to remedy that situation with this book. Drawing on a properietary detailed database of over 1100 major projects, the world's leading industrial engineering project consultant, Ed Merrow explains:

Key Principles of Contracting for Major Projects:

1. Owners are from Mars; contractors are from Venus
2. All the biggest risks in contracting belong to the owner
3. Contracting “games” will normally be won by contractors, not owners
4. Most risk transfer from owners to contractors is an illusion
5. Contractors do good projects well and bad projects poorly
6. Contractors may have shareholders, but they are not your shareholders!
7. Mixing different contract types with different contractors on the same project is unwise
8. Economize on the need for trust; trust only when being trustworthy has value

Merrow also explains:

• Which contract incentives work and which don’t and WHY
• Which of over a dozen contracting strategies work best and which ones hardly ever work and WHY

The strategic advice in this book is designed for owners and contractor project managers, team members and supply chain, executives, and other business leaders involved in major projects. It's also an indispensable resource for engineers, leaders of industrial firms, bankers, and academics studying the messy realities of the construction and engineering industries.

About this title

About the Author

EDWARD W. MERROW is the Founder and CEO of Independent Project Analysis, Inc., the world’s leading evaluator of billion-dollar mega-projects. IPA benchmarks project costs, schedules, and safety, start-up and operational performance and helps owners gauge their competitiveness and project management practices.

From the Back Cover

Mitigate risk and increase profits on your next major construction project

Contract Strategies for Major Projects: Mastering the Most Difficult Element of Project Management offers readers an insightful and practical exploration of how to engage with construction and engineering contractors on projects regardless of the locale, project type, or market in which you find yourself.

In the book, you’ll discover the key principles of contracting that apply across all kinds of major projects, including dams, oil rigs, alternative energy projects, and more. You’ll learn why the largest risks in contracting are almost always borne by the owner and why attempts to shift that risk to the contractor are usually ineffective.

The author explains how to avoid the most common contracting games played (and almost always won) by contractors and how to avoid mixing contract types with different contractors on the same project.

A can’t-miss resource for business leaders, department heads, team leads, corporate counsels, and anyone else involved in the contracting process of large, industrial projects, Contract Strategies for Major Projects offers readers invaluable insights into the trickiest part of the complex and uncertain world of mega-project management.

From the Inside Flap

In modern industry, the companies that invest huge amounts of capital in new and upgraded facilities rarely do the engineering and building themselves. Instead, they contract with engineering and construction firms to perform that work. While some of these contracting engagements go smoothly, many others become mired in cost overruns, contract breaches, and timeline extensions.

In Contract Strategies for Major Projects: Mastering the Most Difficult Element of Project Management, renowned mega-project evaluator Edward Merrow delivers an expert discussion of what sets successful contracting arrangements apart from the many that fail. In the book, Merrow explains the key principles of contracting success he’s gleaned from advising on many of the world’s largest construction and engineering projects.

Contract Strategies for Major Projects explains with actual project data how and why to avoid mixing contract types with different contractors on the same project, how large projects like chemical plants, pharmaceuticals, minerals, oil facilities, and renewables projects and renewable energy projects actually get built in the real world, and the principles that apply to all of them across various locales, markets, and project types.

An indispensable contracting handbook for executives, project managers, and other business leaders involved in construction and engineering projects, Contract Strategies for Major Projects will also prove to be an invaluable resource for corporate counsels, project managers, team leaders, and department heads at contracting firms.

Edition details

• Publisher: Wiley
• Publication date: 2022
• ISBN 10: 1119902096
• ISBN 13: 9781119902096
• Binding: Hardcover
• Language: English
• Edition number: 1
• Number of pages: 304