The use and abuse of programmes in construction contracts

Abstract

Many disputes arise on engineering and construction contracts due to the risks that are inherent in the realisation of complex projects in challenging environments. While contracts encourage collaboration between parties, the commercial consequences of managing risk and uncertainty can create tension. This paper reflects some of the authors’ experience of the use of programmes in international construction contracts. It identifies some of the issues that arise from integrating the rights and obligations set out in contract conditions with time, cost and risk management activities. It highlights the challenges that face project funders, contract administrators, project managers, designers, contractors and their suppliers in planning and reporting on the progress achieved in their project. This paper illustrates the tension between the commercial consequences of risk and transparency of contractor performance. It discusses how issues can arise that reduce the effectiveness of the programme as a collaborative management tool. It also proposes how some of these issues can be guarded against when establishing the contracting environment and in the subsequent administration of the contract.