Modern contract types

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During the past 10 to 15 years a number of advanced contract types have been introduced in the construction industry, all of which can make a major contribution to solving structural delays and facilitating risk management and increasing financial transparency. Unexpected delays, unforeseen risks and "additional work" are common problems that can be extremely difficult to resolve if the client is contracting the work out using traditional methods and traditional 'fixed price' contracts. Clients are accustomed to having projects completed in a number of steps. Design, engineering, execution and maintenance are often viewed and put on the market separately. That approach has a number of downsides. A single fixed price leads to a length lead time and considerable uncertainty on both sides.
Hidden costs In major projects 25% to 35% of the total costs are often spent on "third-parties" responsible for "overseeing the contractor". Those costs are not usually covered sufficiently when the work is tendered. Saving time Different contract types can save huge amounts of time, especially in projects featuring a fast time to market. Lead times can be reduced by 25% or more by carrying out the draft design, architecture, design, procurement and execution partially parallel to each other.
Model contracts A variety of carefully formulate contractual templates are available for use The table below provides an overview of the contract types as described in the uniform administrative conditions for contracting 1989 (UAV). Nacap operates various international contractual models. Operating partnership concepts involves a different role being taken by clients, designers and construction companies. Some important aspects of partnership in Building team / Turnkey / Design & Construct arrangements: There is partnership throughout the contractual period Those taking part in the building preparation process are equal at all stages of the process   Each participant carries out the tasks for his particular discipline  The activities are coordinated, supported where necessary by mutual verification and advice. In financial terms, the costs are divided differently on the basis of an alliance model where surpluses and shortfalls are shared up to a certain amount. The most important advantages of modern contracts as compared to the tendering model: Lower price as failure costs are reduced by more accurately estimating the risks. The approach reduces problems rather than solving them retrospectively during the building process.  The contractor has the most all-round knowledge of materials and detailed specifications.  Relatively early budget guarantee for clients as design and execution responsibility are linked and guaranteed in the definition phase.  The early combination of design and implementation partners in the team makes it possible to optimise the plan in stages between the desired and financially feasible quality, measured according to aesthetic, functional and construction-technical aspects.  Shorter lead time in the design/implementation process, so that the new premises can be put into use sooner.  An active role on the part of the client is guaranteed in the definition, design and implementation phases. The integral approach guarantees optimum coordination between the various disciplines, which is beneficial to the price, the lead time and the overall quality.