Why do ECC option C contracts often fail to deliver successful outcomes?
Why does any contract or contract option fail to deliver successful outcomes? I can give you lots of good examples as to where ECC option C has led to excellent results to both Parties on a project.
The main reason that any ECC project fails I can list as follows:
- poor Works Information which leads to lots of change and conjecture
- uneducation of project team that being contractual is a positive thing not a negative thing
- lack of simple training on how the ECC contract mechanism works. The contract is meant to be simple to read and understand but it is a little different to other forms of contract.
- lack of project team following the programme process to have a regular up to date Accepted Programme
- lack of project team following compensation event process to be assessing affects of change as you go rather than discussing them at the end which is always both subjective and very time consuming/costly.
I agree with everything Glenn has said and add :
- wrong contract strategy : target cost contracts, like ‘partnering’ can be seen as a panacea. If used in the wrong circumstances they do not fix a poor project. In particular I see target contracts being used as a ‘solution’ for the client giving a poor quality specification / WI and then we will work it out together;
- lack of good open book accounting, which can be caused by either or both parties failing to appreciate or be capable of their proper administration;
I concur with Glenn and Jon and would add that:
Many Employers seem to forget that Option C is a ‘shared risk’ contract. The words I most dread from an Employer are, “I have a skeleton team”, “we plan to have a light touch”. Alarm bells start ringing. Read we will let the Contractor to get on with it, we wont keep records or get involved - that is until of course the costs start rising and the programme starts to slip.
Option C is or should be that the Parties jointly manging the inherent risks together.
Jon’s makes a really good point that they are often used for the wrong reasons.