Multi-Contracts

Multi-Contracts

When embarking on a Multi-Contract Approach to Projects; the client does not deal only through one main contractor (who then sub-contracts the other parties); but rather enters into direct contracts with all the contractors who carry out the work.

This results in a flat project organogram (as opposed to a multi-layered organogram) which has the following benefits:

• Improved communication between consultants and contractors
• Lower capital cost on the project by avoiding mark-ups on contractors
• Lower P&G costs (no main contractor)
• Lower risk (if a main contractor performs poorly, the whole project suffers; whereas one contractor in a Multi-Contract project can be replaced with far less disruption to the overall project)
• A Multi-Contract project provides far more flexibility, and faster mobilisation at the start of construction is possible
• In the event of a time delay, such as strikes, weather, client changes; the effect on time and costs are far easier to determine on a Multi-Contract project
• OHSA is dealt with in terms of legislation – no downside
• The client takes out the CAR insurance policy (normally at better rates); which provides umbrella cover and avoids any split responsibilities on insurance cover

Share post: