During the 1st phases (FEL 1 / FEL 2) of the Project Development phase the project team shall develop a project contracting & procurement strategy which is based on the project execution philosophy and where all key stakeholders participate in the strategy development process.
The above diagram shows the 4 step program which can be followed in a logical order. The strategy development can be done by means of a number of facilitated workshops. The preferred contracting strategy which is determined in step 2 should be tested in the market through a market consultation process with key suppliers and (EPC/EPCM/Construction) contractors.
Once the feasibility of the preferred / selected contracting strategy is confirmed then approval and implementation can be planned and performed in step 4.
“Keep It Simple” [KIS] is always a good starting point for a contracting strategy. Project owners should always realise that more contracts mean a bigger team, higher cost, more interfaces, more complexity so higher risk (unless you can manage these risks).
The number of agreements and contracts that you typically may require for the development, design and construction of an onshore industrial / energy facility are indicated in the following picture.
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