September 14, 2021
Canada’s infrastructure industry has slowly been shifting towards cooperative project delivery models in which all members operate as an integrated team and make united decisions.
In an interview with Lexpert speaking about new delivery models, partner Mark Bain said that it may take some time for people to change their way of thinking.
“It will be a real change, particularly for people who are more senior in the industry, to give up all the company contractual tools and procurement approaches that they cut their teeth on,” Mark said.
He described a trend towards what would broadly be described as collaborative contracting.
“Things that reduce risks to contractors or reintroduce that sort of collaborative spirit of partnership into the relationship. Integrated Project Delivery (IPD) model, progressive design-build, early contractor involvement [and others] generally involve a more collaborative, less confrontational set of contracts,” he said, adding that there is no one specific model that is dominating the industry right now.
Mark estimated there have been 30 to 40 of these projects across the country, all mid-size projects of medium-size complexity that seem to succeed well for people not hung up on a precedent and who are prepared to get a fair deal rather than a swing-from-fences great deal.
“But where they still have to be proven is on the bigger, more complex projects, with more risk,” he said.
While there has been success so far, there have been a few failed projects using this collaborative approach (particularly in alliance contracting) in Australia.
“Once you burn through the profit or the fee or both, depending on which model you’re talking about, risk does end up back to the owner,” he explained.
“When projects go well, these models will work as well as anything else. And when there is ‘minor bruising’ on a project, an alliance or IPD model will still work well, but may run out of ammunition if you have a really upside-down project.”
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