How early engagement in Projects can minimise conflict and enhance outcomes.

Construction projects can be considered as over complex, financially restricting, with supply chain management playing a crucial role in shaping how contractual management is governed. This paper will seek to explain how proactive measures and communication can help to avoid disputes, leading to more successful project outcomes. This paper will explore the management of cost escalation in offshore wind projects across various construction departments, collaborative supply chain engagement, and the ways in which it is governed, and finally the development and installation of offshore wind projects.

In the realm of renewable energy projects, particularly offshore wind ventures, there is a growing trend to shift liability down the supply chain. However, this practice is placing excessive strain on the existing mechanisms, which were originally not designed to accommodate such complexities. From developers to primary EPCI (Engineering, Procurement, Construction, and Installation) contractors and installation vessels, that the scope of undertakings involves a multitude of diverse elements. Further to this, cultural complexities further compound matters, with different stakeholders their own unique perspectives and practices.

Overly complex contractual mechanisms have formed as a result of contractual frameworks which have become increasingly convoluted, leading to misinterpretation and potential disputes. Traditionally, contracts were not crafted to handle intricate tasks and responsibilities within the supply chain, this has led to pragmatic restraints as a result of ignoring fabrication requirements. The cumulative impact of these combined factors almost always inevitably leads to delays, disruptions and ultimately disputes. This only further antagonises party relationships. Ultimately leading to costly consequences, it is therefore crucial that these issues are addressed early on to ensure project success. Such disputes can encompass claims for payment, changes, arbitration, or legal actions, with on average around 35% of a projects capital expenditure (Capex) are accounted for in contested costs.

– The Hon Dr Michael Keith Daly –