Diales Compendium Issue 3 - Flipbook - Page 26
Building Back with Better
Commercial Management
The author, John Mullen’s, 40 years of experience in construction and engineering
should give a mature view of which management failures most commonly lead to
problems that can end in claims, dispute and increased costs. Recently combining that
experience with an informal survey of the worldwide perspective of colleagues across
Driver Group’s multiple offices confirmed that similar issues repeat across continents
and project types. In the limits of this short paper, they are only set out in summary
and are far from comprehensive, focussing on the most commonly reported, starting
with project inception and ending with dispute resolution.
Management failures can start from inception phase, with:
• Rushed procurement;
• Premature procurement based on incomplete design
and/or site acquisition;
• Lack of involvement of end-users;
• Passing risks to the contractor that it is least able to
control;
• Lack of understanding of local laws, regulations and
culture.
Enquiry documents lay fertile ground for later problems
where they:
• Use an inappropriate standard form;
• Mismatch contract strategy to design certainty /
complexity;
• Use ill-conceived one-off terms;
• Poorly amend a standard form;
• Contain onerous provisions;
• Are lazily drafted;
• Are over-lengthy;
• Are ambiguous or contradictory;
• Ignore laws, regulations and culture.
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At tender stage the opportunity to mess things up passes
to the contractor in its pricing, where that activity involves:
• ‘Buying’ the job;
• Failing to identify and price risks;
• Lack of co-ordination between tender and project teams;
• Failing to understand completion requirements;
• Failing to recognise particular project restrictions /
circumstances;
• Naïve pricing based on a previous ‘similar’ project.
Particularly where a tenderer gets such aspects wrong,
the damage is exacerbated if the employer then makes its
selection:
• Solely or principally on price;
• Without establishing that the contractor understands,
such as:
Scope;
Specification;
Programme;
Risks.
• With no requirement for programme, method statements
or resource details.