Selecting the Right Contract Model: A Key to Success in Construction and Energy Projects
In the ever-evolving landscape of project planning and delivery—particularly within the construction and renewable energy sectors—the choice of contract model plays a critical role in determining project success. Selecting a contract structure that aligns with a project’s unique requirements lays the groundwork for managing costs, ensuring schedule certainty, and mitigating risks such as delays and cost overruns.
At the recent Australian Wind Industry Forum in Melbourne, CPB Contractors’ General Manager of Engineering, Benita Husband, addressed this complex issue. Her presentation focused on the essential balance between competition and collaboration when selecting the optimal contracting model.
Collaboration as a Cornerstone
The market offers a range of well-established contract models. Among these, those that embed collaboration as a core principle—not merely as a supplementary feature—tend to deliver stronger outcomes in terms of innovation, efficiency, and cost control.
This collaborative approach becomes particularly valuable for projects with complex, unique, or evolving requirements. In such cases, maturing the design prior to final pricing improves project feasibility and enhances cost and schedule predictability. Compared to traditional lump-sum, design-and-construct models, collaboration allows for detailed design development ahead of contract finalisation—leading to better-informed decisions around design efficiency, logistics, constructability, and overall project delivery.
Strategic Timing of Competition and Collaboration
Within the energy sector, early and effective stakeholder engagement is critical. It enables better alignment of environmental approvals, optimised placement of wind turbine generators, and coordination between civil and electrical infrastructure. It also ensures that key planning considerations—such as access roads and supply chain logistics—are addressed proactively.
To maximise these benefits, careful timing of collaboration and competition is essential. During the competitive tender phase, it is important that all bidders operate under fair and transparent conditions, with clearly defined evaluation criteria. Holding contractors accountable for non-binding bids during early works or early contractor involvement phases can further strengthen project planning and delivery outcomes.
Embracing a “One Team” mentality
Post-competition, a transition to a “One Team” approach is crucial.
Once a contractor is selected, having all stakeholders unite towards a common goal — reaching the final investment decision — enables a more flexible and adaptive approach to working together to solve challenges. Alignment encourages all team members to work collaboratively towards the project’s success, achieving the best overall outcome while delivering transparent pricing and managing uncertainties effectively.
An informed understanding of project risks is also achieved, so they can be best allocated and provisioned for, leading to better certainty for the project owner and reducing windfall gains or unsustainable losses.
Digital solutions and innovation
Innovation remains a linchpin in modern contract delivery. Techniques such as precast foundations can revolutionise project timelines and reduce costs. By exploring new materials, construction methods, and technologies, teams can vastly improve project outcomes and sustainability. Collaborating early in the design process increases opportunities for innovative methods of construction. Collaborative approaches enable greater innovation by avoiding reliance on fixed price solutions which push contractors to minimise risk by relying only on established – but potentially dated – approaches.
The integration of digital solutions is another critical factor. Utilising advanced technologies such as building information modelling can streamline project planning and execution. These tools not only boost efficiency but can also enhance the accuracy and precision of designs, thus preventing costly mistakes and delays.
Expertise and lessons learnt
Structuring the optimal contract model requires equitable competition, a “One Team” approach to collaboration, and a commitment to innovation and digital tools. Partnering in the early stages helps to advance the design and identify and appropriately address project risks, then (when design reaches a level of maturity) the owner and contractor can approach the cost of work on an open-book basis. This means increased certainty of cost and schedule, early start opportunities and advancing approvals jointly, reducing the risk of delays/changes during delivery.
Each project is unique and choosing the appropriate contracting model is essential to ensure a project’s success. More information on contracting models can be found here:
