Cooperative Contracting on Major Engineering and Construction Projects

The development and implementation of major engineering and construction projects in the oil, gas and petrochemical industry takes a long time and is in many cases contracted out to a main contractor in the form of a (single) lump sum contract for engineering, procurement and construction. This often leads to an inefficient solution and a confrontation between owner and main contractor. We discuss the implications of early contractor involvement and describe an alternative form of contracting that provides an efficient solution and facilitates a cooperative owner–contractor relationship. The considerations are illustrated through a comparative analysis of three case study projects.