Contracting in the Changing World of Projects
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Download BrochureContracting in the Changing World of Projects is a day and a half long seminar to share knowledge on how contracting approaches and strategy are linked to business value. Contracting strategy is an important element of any project execution plan. It is often a contentious area
with strongly held beliefs about how contract plans can influence project outcomes. However, no one contracting strategy is right for all projects or project systems. As more and more work is outsourced by owners to contractors, contracting arrangements have become increasingly important elements of the capital project process. This program is registered with the Project Management Institute (PMI), allowing attendees to claim 12 Professional Development Units (PDUs) upon completion of the course.
IPA began its research into contracting issues over a decade ago when we first recognized the trend toward outsourcing engineering activities. Research has continued to identify the circumstances under which various contracting approaches are effective. Misalignment of contracting strategy with project specifics has been found by IPA research to add 20 percent to cost and 18 percent to schedules relative to those projects that make more effective use of contract types.
The Contracting Strategy program illustrates the results of in-depth IPA research into the effect on project results of contracting approaches, alliance agreements, and incentive arrangements. The findings presented for discussion in this one and a half-day program are based on the analysis of thousands of projects of various size and type executed around the world.
Seminar Content and Organization
The material in Contracting in the Changing World of Projects, consisting of 5 separate modules, will be covered in one and a half days. Each module will cover a specific topic with material being presented in a variety of ways. Important research findings will be presented through lectures with supporting presentation material and readings. Case studies and examples will form the basis of active class discussions. Participants will be able to form implementation plans to translate materials and learnings into action items they can use to improve their capital project process. The specific modules for the Contracting Strategy program include the following:
Module 1: Introduction
During the introduction, we discuss the motivation of this course and why contracting is an important element of a successful project strategy. Also presented are IPA’s measurement of project performance, and the methodology to quantify the effects of practices on project performance, predictability metrics, and competitiveness metrics.
Module 2: Contracting and Outcomes
Contracting and Outcomes focuses on the relationship between contracting strategy, project attributes, and project results, along with recent trends in contracting.
Module 3: The Current Contracting Market
This section discusses risks in the current market, including the premiums paid to transfer risk to the contractor, and it also illustrates how project savings can be realized by reducing project risks transferred to contractors through modifying terms and conditions.
Module 4: Effective Resourcing
Module 4 explains how owners can effectively outsource project execution. Also presented are competencies that owners must maintain and those that can be supplied by contractors, as well as strategies for addressing the current resource crisis.
Module 5: Contractor Selection
This module presents the effect of consolidation in the contracting market and provides key criteria and common mistakes regarding contractor selection.
Module 6: Incentives
The sixth module focuses on the increasing use of incentives and their effects on project outcomes.
Module 7: Executing Contracts
Execution issues, such as drivers of changes, claims, and costly contracting mistakes are discussed, and strategies for avoiding common problems in execution are presented. Best Practices for project controls and the importance of owner involvement are also covered.
Module 8: Contracting and the Stage Gated Process
The methodology used in selecting and implementing an appropriate contracting strategy are presented in the course’s final module. Additionally, it is discussed how the use of a gated process drives better project outcomes.
Course Benefits
Contracting in the Changing World of Projects will improve the understanding of the relationship between contracting practices and outcomes of those who attend. The contracting program will provide a set of practices and tools that will allow participants to align contracting strategy, alliance arrangements, and incentive plans with business objectives. Participants will learn how contracting practices affect outcomes. Improved knowledge of the link of contracting strategy to capital effectiveness will allow for better alignment with business needs. Class size will be limited to allow for in-depth discussion of the material presented. Participants will receive presentation slides and appropriate reference and supporting material.
Target Audience
All who consider contracting an important element of success in capital effectiveness will benefit from this program. This program will aid those involved in selecting and implementing contracting strategies and will benefit managers of individual projects who establish the contracting approach for their projects. It will also provide insight to contracting approaches for those who manage the whole project system and look to establish system wide approaches to contracting.
Claiming PDUs
Contracting in the Changing World of Projects is officially registered with PMI, which allows attendees to easily claim 12 PDUs upon completion of the course. Simply visit the PMI Continuing Certification Requirements site and submit the PDU Activity Reporting Form (Provider Number: 2767 / Activity Number: INS-CON). For those claiming PDUs through other education organizations, please note that the duration of this course is 12 hours.
