1.1

What is dictated by the ultimate client and is, therefore, a given? (The operator is not always the client. In many countries, the client may be a state‐owned entity).

1.2

What are the objectives, motives, needs, and opinions of each of the stakeholders?

1.3

What are the client's minimum conditions of satisfaction?

1.4

The client's key drivers are cost, schedule, new market or new country entry, and so on.

1.5

What is anticipated by all other stakeholders, such as the non‐governmental organizations, company shareholders, local communities, and so on?

2.1

What are the key features, and what is the general environment of the area in which the work will be carried out? That is, is there deep water, pristine land, political instability, lack of infrastructure or local supply facilities, and so on?

2.2

Have we worked in this area before, and which contractors are familiar with it? Is this a mature contracting and operating environment or not?

2.3

What is our understanding of requirements for applications, permits, and approvals from federal, state, and local authorities? Are the environmental and social requirements clear, and what do we have to do to satisfy internal or external authorities?

2.4

As the client, are we going to, or be allowed to, distinguish between cost and value in evaluating tenders?

3.1

Do we have sufficient market intelligence about industry capacity, contractor workloads, and so on?

3.2

Have we looked at supply‐chain management and access to global framework agreements and supplier relationships? What will be the impact on the project strategy and the contract and procurement strategy?

4.1

Are we obtaining competitive tenders, single sourcing (obtaining only one tender from a selection of possible sources) or sole sourcing (only one tenderer is available)?

4.2

What resources are available to manage the contracts? What is the quality of the people, and how many are available? What is their background and culture?

4.3

Do we know of all the contractors and or manufacturers capable and competent to do the work?

4.4

Have we established the contractor's interest in and availability to do the work?

4.5

Is there alignment of objectives, and could we enter into an alliance.

4.6

If partnering or alliancing arrangements are to be considered, sufficient time must be allowed to understand the characteristics, compatibility and abilities of the alliancing parties. Forced marriages rarely work well. Are the company's cultures compatible? Are they all going to be familiar with common codes, standards, and practices? Are they really going to work as a team when things go wrong? See Part V, Section J Joint Associations.

5.1

Consider paying contractors if they are to participate in design competitions or re‐tenders.

5.2

When contractors are grouped into arrangements such as:

• Engineering procurement and construction (EPC)
• Engineering procurement construction and commissioning (EPCC)
• Engineering procurement construction and management (EPCM)
• Engineering procurement construction and installation (EPCI), and so on
• Give consideration to which contractor should be the lead contractor. See 5.12 following.

5.3

The lead contractor should ideally be the one with whom the largest amount of money is to be spent. This gives the client more effective and direct control over the financial outcome.

5.4

Do we understand and have the ability or resources to manage the major interfaces being created by the chosen strategy? Has this been adequately considered in arriving at the breakdown of work?

5.5

For large projects that are to be executed in a variety of locations, for example, say, design by a major contractor in London, construction in Korea, procurement from a variety of international manufacturers, all in different places, with different time zones, different languages, and different legal systems, as well as different standards and so on. With so many locations that could be used on the project, can they be minimized or even reduced to just one? If not, do we understand the implications on management resourcing and how we maintain a common standard and focus on a common plan? There is a need to develop coherent and consistent expectations and for a plan to maintain connectivity.

5.6

Generally, construction or installation contracts are of the largest monetary value and, therefore, are the contracts which can have the most impact (good or bad) on budgets and schedules. Consider how these contractors do their work and what they need from the client and others to be able to work efficiently. Equally, is the client able to maximize their influence in design?

5.7

What inputs do they need to make to other contractors' activities so that they may also be efficient? Specifically, get the construction or installation contractors (users) involved in the design process.

5.8

Who is going to be responsible for purchasing, and hence, delivering the supply of material and vendor data to site?

5.9

How are you going to ensure that the design sequence and material supplies are compatible with the fabrication and installation or construction requirements?

5.10

If the client's requirements are not sufficiently developed for contractors to submit realistic prices, consider a two‐stage tendering process for the design and build phases. The design team is then novated/transferred to the construction contractor for the construction stage.

5.11

The major confrontation, which traditionally occurs, is that design data and materials are delivered to site late or incomplete. If this issue can be overcome, the constructors have the opportunity to perform and build efficiently, and budgets and schedules will be secured. This assumes they have adequate and quality supervision, good planning, effective materials management and logistics, and a trained competent workforce.

5.12

Consider making the constructor the lead contractor. Evaluate any implications of this decision on design and operability. Conventionally, in the past, the design contractor was often the lead contractor who let and managed the construction. When the construction contract is the most expensive, it may be better to be dealing with the contractor that is going to be spending the most money.

5.13

Contracts should allow for construction personnel to be involved with the design contractor to ensure constructability and correct sequencing for the build programme. Further, installation personnel need to be involved with the design of lifting and installation aids.

5.14

Contracts should ensure that maximum onshore commissioning is carried out for offshore projects. For all projects, a commissioning plan and strategy need to be in place and understood. This includes a systems approach, transitioning from the bulk build to systems completion and progressive handover, including handover certification.

5.15

Design contracts should include full details of the required plant operational performance, reliability, spares requirements, and so on.

5.16

Ensure that contractors and manufacturers have good quality assurance processes in place and are also capable of ensuring excellent quality control.

5.17

Understand the lessons and problems from other similar projects and operations.

5.18

Ensure that operations are involved in these contracting strategy deliberations from the very beginning.

5.19

Understand the cost, implications, and benefits of imposing punitive conditions, such as heavy liquidated damages and so on.

5.20

Consider the views and objectives of the potential contractors on all of the above.

5.21

Consult corporate finance for advice on currency arrangements and financial checks with respect to potential contracts.

5.22

What contribution to improved environmental and safety performance can the proposed contractors or contracting strategy make?

5.23

What new technology can be offered?

5.24

In what way can any form of e‐business be utilized in either the design, procurement, or construction activities?

5.25

How can the contracting strategy help us to guarantee that everything will work first time and continue to do so? This is particularly important with offshore deep‐water or remote installations where remedial work on even a simple, single component can cost a huge amount of money.

5.26

How can the contracting strategy help us to achieve successful start‐up? Where start‐up means:

1. Meeting first the production date or earlier
2. Ramping up to peak production as planned or quicker
3. Achieving design throughput or more
4. Maintaining planned on‐stream time or greater