ABSTRACT
The worst example of inappropriate contracting I ever saw was some years ago when performing an independent post-project review of a major infrastructure project, the schedule and cost of which had been announced (for politically expedient reasons) by central government before any real estimation had been undertaken, and where the customer PM team had little previous experience of anything even approaching the same size and duration. In order to preserve the schedule – which of necessity was unextendable, since the project had to be delivered on an irrevocably fixed date – unquantified cost overruns were inevitable; the prevailing attitude had been ‘just get on with it – we’ve no time to discuss and agree the details now – we’ll sort everything out afterwards. Trust us’. The general management of both purchaser and supplier was kept in the shade, if not the dark, with project reviews showing amber at worst – somewhat understandably, since their past behaviour when told the real situation had been to
simply threaten the respective project teams with increasingly painful tortures. When ‘afterwards’ eventually came, the main subcontractors put in significant claims for variations, which were challenged by the customer, who insisted that they were not variations at all but necessary and fundamental aspects. They admitted that these had only loosely been defined (or not defined at all) in the requirements, but they claimed that in their view the subcontractor – ‘selected due to their experience and knowledge’ – should have understood what would be needed, identified and addressed issues as they occurred, and anyway, sufficient contingency should have been included in the tolerances of the bid price.
