Blog articles - Project Gearbox.com

Contract alignment

A project enters a whole new level of complexity when there is more than one main contractor. Eye-watering amounts of money can be won or lost, depending on how well interface management is set up (see our article on interfaces here) - and also on how well the contracts are written. Specifically, how well the contracts are aligned with each other.

There are many challenges in aligning contracts:

Multiple contract teams

Some of the biggest challenges are unexpected - for example, that the contracts may be written at different times, by different teams, from different companies, using different standard contracts. And the teams may not communicate with each other. It may sound improbable, but unfortunately it is all too possible.
Get your contract teams together as soon as possible, and as often as possible! If you don´t get this right then bad things will happen.

Milestones and more

Yes, of course you know about, and have planned to have detailed milestones in your contracts. But have you taken into account that contractor B will need specific information (a technical study, for example) from contractor A, and will need it by a certain date? That study needs to be in the Scope of Work (SOW) of contractor A`s contract, and a milestone is also needed, so that it is available before contractor B needs it.

Company-Provided Items (CPIs)

Items - or Information - that will be produced by one contractor and used by another contractor are considered to have been delivered to Company by contractor A, and given by Company to contractor B - even though the handover is often done without Company being directly involved at all.
The point is that the Company carries the can if anything goes wrong.
Sometimes this is tiny details, and nothing really bad will happen. But what about large, expensive pieces of equipment that need to be transferred long distances? Does contractor A deliver? Does contractor B collect? Does one of the parties (or Company) need to hire someone else to do it?
And what about preservation? How has the equipment been packed? Where is it stored? Who needs to maintain it if it is waiting a long time?

Battery Limits

If there are more than a few items where more than one party is involved - in Engineering, Procurement, Construction, Transport, Installation, Hook-up, or Commissioning then it is worth making a "Battery Limits" document. This is quite time-consuming but saves a lot of heartache later on. Make sure that all the contractors agree on what is stated in the document.
Don´t know how to make a Battery Limits document? We do.

Interface Management resources

People from all the contractors are going to have to talk to each other, and exchange detailed information. They will need to have interface managers, procedures, training, and some kind of IT system supplied by the Company for them to exchange information in (SPOILER ALERT: Excel just won`t cut it).