Contract Strategies for Major Projects

CHAPTER 7Prequalification

As we are closing out a disappointing project with one of our owner clients, one of the most common observations of the project team is “We selected the wrong contractor.” Of course, sometimes this is just scapegoating, but often it reflects important realities. What kinds of things do we hear?

• The contractor didn't really have the experience we thought they did.
• They can't do direct‐hire.
• We didn't get the people they promised.
• They didn't QC design; they didn't even do interference checks!
• They didn't have any bench strength when we needed more people.
• They didn't understand how to work with the labor around here.
• They didn't have the construction management talent we thought they did.

And so forth and so on. When we ask “Did you prequalify?” the answer is too often “We didn't really have time to do much. We needed to get FEED started ASAP.”

The evolution of a project's contracting strategy should begin early in scope development, which we call FEL‐2. However, in strong project systems, some contracting activities have been proceeding all along outside the realm of any individual project. Those activities are constant monitoring of the contracting market in all of the locations—sometimes around the world—where the company is likely to pursue capital projects. These activities, which we call elements of FEL‐0, may be part of the work of a contracting group within the owner's projects organization or undertaken by corporate procurement or supply ...