The central problem is one of managing uncertainty, and for most projects the best solution is for clients to engage with contractors to understand and to reduce, as far as possible, those uncertainties. This will not necessarily result in a cheaper price, but it will result in a more certain price and more certain delivery.
Musings of a busy mind
Under any construction contract, there will be provision for extensions of the time for completion caused by qualifying events, for example variations or delays by the employer or its agents (primarily the architect/engineer). The purpose of such provisions is to preserve the employer’s entitlement to claim delay damages.
There is growing acceptance across the construction industry, particularly among financiers and owners, that payments need to flow down the contract chain to those actually doing the work. This has seen a growth in construction contracts requiring head contractors to prove payment of their subcontractors, if cashflow is to continue; and in financiers also requiring proof of such payment. Similarly, head contractors are seeking direct payment obligations from project financiers to protect themselves against developer default.