A principal technology provider offers clients a small suite of sophisticated, standardised distribution modules. Its established playbook relies on repeatable (“cookie-cutter”) delivery across multiple warehouse automation projects worldwide. In this matter, the provider was operating in a new country with a newly appointed (and experienced) project manager.
Delivery typically involves a small group of contractors who move with the OEM from project to project “as a team”, leveraging on past knowledge (cost, staffing, requirements, etc.). A priced buffer acknowledged by the OEM is included for expected changes (i.e. incomplete designs) and unexpected changes (i.e. site conditions). The OEM is aware of their ‘cost per module’, so excessive tender prices or under-pricing that may prejudice team members are quickly flagged and dealt with to ensure overall success.
A package with “a newcomer to the team” which departed from the OEM standard and was allowed to be negotiated on conventional lump-sum terms. The amended contract re-introduced the usual mechanics of notices, variations and contemporaneous approvals for delays and costs increases.
On the face of the records, when construction commenced, the project manager managed the newcomer in line with the other contractors on the project as if if the teaming model applied. We noted the mismatch between the day-to-day administration of multiple contracts with other trades that made on-site commercial teams almost redundant and the more standard, heavy management the contract with the newcomer required.
The materials we reviewed included prior expert reports and extensive management correspondence. The other expert reports focused on lack of productivity, considering that the tens of unapproved variations submitted by the newcomer were part of a dispute. Ultimately, the newcomer tried to re-negotiate terms in line with the teaming agreement, but by then, the disputes during construction had caused an irreversible breakdown of the parties’ relationship.
Our independent analysis mapped the contract actually in force to the controls being used on site, highlighting the practical consequences of fundamentally altering the nature of the OEM’s delivery model, and set out scenario-based time/quantum analyses under each model.
Note: Our experience allowed our report to be the first (within the materials we reviewed) to identify the delivery-model misalignment as the central explanatory issue.
