Procurement & Commercial Advisory - Contract establishment

Procurement &
Commercial Advisory

PCI has helped establish around 300+ large alliances and other forms of collaborative contracts for complex projects and programs in Australia and internationally.  We help asset owners make fully informed choices about their contracting strategy based on deep understanding of commercial and cultural issues common to complex projects and service arrangements

Procurement & Commercial Advisory Contract Establishment

Contract Establishment

Wherever a project or service involves high risks or unknowns there is a need for supplier(s) to be well aligned with the asset owner’s needs, and this defines the field of ‘relationship’

contracting.  Regardless of the terminology, all contracts involve the following ingredients:

  • Commercial arrangements – including payment mechanisms, risk allocation, and potential variations to cost or scope – the details of which can act to align (or misalign) the parties’ interests.

  • People – with their capacity to perform well or poorly, in particular as a result of the commercial and cultural ‘rules’ established by the contractual relationship and the dynamics of the contract team.

When engaged by owners to establish a relationship contract we:

  • Help owners make fully informed choices about the procurement strategy including the commercial and cultural implications of those choices.

  • Design and establish frameworks and selection processes for alliances and other forms of relationship contracts (e.g. ECI). This includes the preparation of expression of interest (EOI), request for proposal (RFP) and proposed compensation framework (PCF) documentation as well as selected parts of the contract agreements.

  • Facilitate all aspects of selection processes, including behavioural assessments and processes aimed at securing genuine alignment on all commercial aspects.

  • Help prepare the owner’s team & evaluation panel to participate effectively in the selection process and eventual contract.

  • Value for Money (VfM) analysis – prospective, current, and retrospective.
     

Our extensive experience covers a range of contract models including Alliances, ECI, Managing Contractor, Collaborative D&C, Competitive Dialogue/Delivery Partner, and Incentivised Performance Contracts across an array of sectors.  
 

View our client case studies here…

 

Contract Health Assessment

PCI has developed an instrument for assessing mission-critical service contracts against best practice.  This survey instrument will enable asset owners to:

  • self-assess against best practice/ against a wider user group;

  • identify strengths and areas for improvement in their contracts; and

  • promote awareness/action in ‘blind spots’.

 

Our Contract Health Assessment tool assesses both contract design and performance.  It calibrates 20 attributes against best practice in four critical areas:

  1. Scope and term

  2. Compensation framework

  3. Nature of Relationship

  4. Governance and Leadership

Assessing your portfolio of contracts can identify systemic opportunities for improvements.

Procurement & Commercial Advisory - Contract Health Assesment
 

Contract Review & Rescue

PCI has over 20 years’ experience in the establishment and delivery of complex infrastructure projects in Australia and internationally.  This experience has shown us that despite the best of intentions, sometimes contracts do not perform to the expectations of the different parties involved.  This non-performance can be a factor of by ‘harder’ issues such as contract design and commercial terms or ‘softer’ issues such as relationship breakdowns and cultural dysfunction.

 

Our core competencies span both the commercial and cultural dimensions within projects and we have deep experience in turning around non-performing contracts/projects.  Some of the strategies we employ include:

  • Commercial review and reset

  • Dispute avoidance strategy and facilitation

  • Expert determination

  • Leadership coaching and support

  • Team development

  • Cultural change interventions

 

An example of our success is The P3 Accord where we provided commercial and cultural change support to create a 35% uplift in the performance of the program within the first 12 months.  

Read the case study here…

Procurement & Commercial Advisory Contract Review and Rescue