Monday, March 31, 2008

It is a mistake to even attempt to shift risks and dictate amendments/supplemental terms on collaborative or integrated project delivery agreements!

Any prospective party and their legal counsel/risk manager to the ConsensusDOCS 300 Standard Form of Tri-Party Agreement for Collaborative Project Delivery (ConsensusDOCS 300) and Form of Integrated Agreement (FOIA) that tries to unduly shift risks to one or more other parties and dictate amendments and supplemental terms/protocols (even as early as in the RFP) to these agreements will cause the other prospective parties to lose faith and trust that the party pushing such changes and terms is looking out for the project's best interest ("Best For Project") as is required under these relational contracts, but is instead only in looking out for their own legal and financial interests. This is especially the case for construction owners and their in-house or outside construction attorneys!

Under the ConsensusDOCS 300 and FOIA, actions and decisions must be made together and collaboratively after achieving a consensus in a Best For Project manner. The final negotiated terms of the ConsensusDOCS 300 and FOIA are no different. We believe that attempted risk transfers and/or a dictation of contract amendments/supplemental terms will "boomerang" against the party making such attempts (we call it "boomerang risk shifting")!

Instead, for these agreements to work at all, it is recommended (especially the first time around!) that amendments and supplemental terms and protocols to the ConsensusDOCS 300 and to the FOIA only be drafted by construction owner, designer and/or constructor's legal counsel/risk managers after: (1) the prospective parties have been educated on and prepared for the very important Best For Project (versus best for an individual party) philosophy and approach and unique features/requirements of these agreements; (2) the prospective parties have met face-to-face one or more times with or without the assistance of special consultants and (3) only after the prospective parties have verbally agreed or agreed in principal on the many negotiating points of these special, landmark agreements.

In short, stakeholders on major construction projects must begin to re-think their approach and to focus, from the very beginning, on how to achieve "Best for Project" results!

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