From idea to reality: planning a construction project from a legal perspective

We have all, at one time or another, witnessed the poor execution of a great idea.

The first film adaptation of Frank Herbert’s masterpiece Dune, by David Lynch in 1984, is a prime example of this phenomenon—but the same thing can happen with construction projects.

How can we make it work?

Here are some elements that, while not exhaustive, can help limit the risks of failure.

If there is any consensus within the construction industry community, it concerns the importance of devoting sufficient qualified resources, both human and material, to the pre-construction phase.

This stage, which ensures better quality documents (i.e., statement of conceptual requirements, plans and specifications, preliminary studies, budgets, provisional schedules, etc.), is too often neglected for budgetary and scheduling reasons.

However, the amount of attention devoted to this phase will be inversely proportional to the amount of attention that will have to be directed to making changes during the call for tenders or, even worse, the construction phase.

In principle, changes during execution:

In a market where the best players have no trouble getting contracts, it is becoming increasingly difficult to attract them under these circumstances.

Identifying the delivery method remains essential, but it is rarely accorded the importance it deserves.

General contracting, management for services, management for services and construction, design-build, integrated delivery, and hybrid methods (partial or progressive design-build, pre-procurement and construction by lots with or without assignment, etc.) each have their advantages and disadvantages with a butterfly effect in terms of risk.

The same is true for payment methods. Risks related to estimation errors; changes in the market and the cost of labour, equipment and materials; subcontractor insolvency; and other economic risks will be allocated differently depending on whether lump sum, unit, cost plus or target price is chosen, with or without a guaranteed maximum price and/or sharing of savings and overruns.

The various risks can be addressed through insurance, bonding, subcontracting, risk and contingency reserves, etc., but they will have to be treated consistently according to the principle that more risk = more reward.

To identify the method best suited to their needs, clients should determine, among other things:

When in doubt, we generally recommend opting for a method that favours the coordination of stakeholders at the pre-construction phase in order to benefit from their respective expertise and to improve the quality of the conceptual documents before the delays and costs associated with each modification are multiplied by the reality of a construction site in full operation.

We hope that these few tips provide clarity and will allow you to be more successful in executing your projects.