Local contractors need to make great efforts to win a contract from a client in a very competitive arena. When the contract is signed, subcontractors and materials suppliers need to be mobilized. Different requirements, with different business partners, will result in different relationships within different contractual arrangements. Most construction firms today are orchestrators of fairly complex supply chains. They need to orchestrate the activities of a wide range of different business partners and to do so meticulously, in order to meet the client specifications and requirements. They also need to orchestrate the commercial arrangements underlying these relationships. International contracting is even more complex. Large contractors today operate in different cultural environments to deliver multimillion or even multibillion road and rail works, airports, harbors and adjacent industrial areas, oil platforms, power plants, wind-energy farms, energy-distribution infrastructures, and a wide range of buildings. For many years, the scope of Dutch contractors has been truly international. The Dutch have a good reputation for designing and realizing complex infrastructural works across the world. Over the years, engineering and project management have become more sophisticated. As well as contract management, large employers and clients today use complex contracts to create maximum value for money and mitigate risks related to their investments. Rather than just constructing what an architect or client may have envisaged, contractors are now faced with assuming design and engineering responsibilities. In some cases, they also may be requested to finance, operate, and maintain the infrastructure that they built! As a result of this, the risk exposure has changed dramatically in the contracting industry. Large clients and employers increasingly want to shift their risk to their contractors. International contracting has become a risk game; hence, international contracting has become a contracting game. b1597_FM.indd vii 1597_FM.indd vii 9/18/2013 10:04:30 AM /18/2013 10:04:30 AM viii International Contracting b1597 International Contracting: Contract Management in Complex Construction 18 September 2013 10:02 AM Where traditionally contractors have invested heavily in design and engineering, project planning and management, contract management still needs important improvements. Most project engineers and managers have a technical background. Increasingly, apart from technical challenges, they are faced with interface problems that need to be solved in the relationship between the contractor and the employer on one hand, and the contractor and its suppliers and subcontractors on the other hand. In doing so, effective arrangements need to be made between all parties involved and, when agreed, these arrangements need to be followed up. In complex projects, it is understandable that conflicts will emerge. This explains the need for project managers to be acquainted with the principles of contract management, and the most important contract models that are used. Project managers need to understand what they can do to avoid conflicts with business partners, and when they occur, how to solve them. Surprisingly, the opportunities to get acquainted with modern contracting in an international context are limited. Most training courses and executive education are aimed at accountants, lawyers, and legal counsels. Here, business law, tax law, and contract management are taught from a specialist, legal perspective. Little training and education on contract management and international contracting is provided from a business perspective. Such a perspective would allow project managers to understand the principles underlying business law and contract management. Next, it would allow them to get an insight into the main legal arrangements laid down in rules and regulations, in order to judge at what time they need to solicit specialist legal advice. In essence, they need knowledge and insight, which does not need to be as detailed as legal counsels would require. Therefore, general training for legal counsels and specialists would not be attractive to them. In 2007, the authors were requested by TiasNimbas Business School, the Netherlands, to design a program on international contracting for its three consortium partners, Ballast Nedam, Royal Boskalis, and Heerema Fabrication Group. The program was to be aimed at project managers, tender managers, regional managers, and project engineers. To meet their specific training needs, we decided to organize a workshop with representatives of these companies. This resulted in a program that we have conducted many times since then. As most people primarily learn by doing, we opted for an interactive course design built around real-life case studies, which were obtained from the practices of these companies. This format proved to be very successful. On top of that, it proved to be very enjoyable. The settings, which were designed in close collaboration with the steering committee, consisting of representatives of the three companies and TiasNimbas Business School, b1597_FM.indd viii 1597_FM.indd viii 9/18/2013 10:04:30 AM /18/2013 10:04:30 AM Preface ix b1597 International Contracting: Contract Management in Complex Construction 18 September 2013 10:02 AM allowed for learning, both by participants and teachers. During our discussions, many new insights and ideas were developed, and many gaps in knowledge were identified. As a result, we decided to write this book, in order to honor our participants and their leaders; also, to contribute to the international contracting domain. This book offers a blend of theory and practice. Chapters are built around introductory cases, practical illustrations and core text. Each chapter ends with an overview of the most important conclusions and findings. We include a large number of subjects and describe them in different chapters. In relations with an employer, a subcontractor, a surveyor, an agent, a supplier, a vendor or a banker, discussions are never restricted to one chapter only, because in one meeting multiple aspects come together. Therefore, the index will help the reader to find their way.
From The preface of the Book .
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