The contract the delivery team receives
A client may have good reasons for every amendment it makes to a construction contract. It wants confidence in the completed asset, timely notice of emerging problems and remedies if the contractor fails to perform. Its lawyers may identify an exposure which the published form does not address adequately. Changing the contract can be a necessary part of preparing the project.
The difficulty arises when those changes are examined principally for their effect on legal exposure. A shorter notice period, wider design obligation or additional approval may strengthen the client's position if something goes wrong. The same provision can affect how information reaches the project team and how quickly it can respond. Those consequences need to be understood before the drafting is settled.
The delivery team inherits the resulting arrangements. It has to obtain the approvals, produce the reports and meet the response periods, using the authority the organisation actually gives it. A provision that appears workable during contract preparation may depend on internal decisions by people who are not required to respond within the time the contract allows.
In Are We Managing the Project or the Contract, I examined how contractual requirements become embedded in management routines (Evans, 2026). Those routines begin to take shape before award, when the contract helps determine what the team will spend its time doing and which decisions it will be able to make. Improving one party's position in a future dispute is only one part of that work.
Who shapes the risk allocation
Melbourne Law School's 2014 study received 295 survey responses describing 379 projects, alongside 47 interviews. Some respondents may have reported on the same project. Sixty-eight per cent of the contracts reported on used a standard form, and 84 per cent of those standard-form contracts had been amended. Where the decision could be identified, the principal or its lawyer selected the standard form in more than 80 per cent of cases. The main reason respondents gave for amendment was to shift risk (Sharkey et al., 2014).
Respondents also perceived benefits from amendment, including better understanding and more efficient administration, alongside increases in the need for legal advice, outturn cost and disputes. Amendment itself was not necessarily the problem. The findings show how commonly organisations altered the published allocation, with mixed views about the results.
The later report on the health of the Australian construction industry is more directly concerned with who contributes to those decisions. Its interviews recorded concerns that lawyers sometimes determined risk allocation without sufficient involvement from people responsible for delivery. Interviewees also described allocations defended as accepted market practice and clients who did not fully appreciate the risks their contracts transferred (Sharkey et al., 2020).
The interviews identify concerns rather than establish how widespread those practices are. They describe a difficulty I have repeatedly raised in NEC training: lawyers should not be the only people deciding which contract is used or how it is amended.
Legal expertise remains essential. A delivery team may overlook an exposure or underestimate the consequences of imprecise wording. Equally, a lawyer cannot be expected to establish alone whether an approval period matches the construction sequence, a reporting obligation duplicates existing information or an operational interface can be managed by the party receiving it.
The organisation needs those perspectives before it decides the allocation. Commercial and procurement staff can explain likely tender responses, while the planner and delivery team test the proposed procedures against the work. Technical specialists and the future operator can identify requirements that cannot be compromised. With that contribution, legal advisers can work from a more complete understanding of the project and the intended bargain.
What a risk transfer can achieve
Australian government guidance distinguishes contractual risk transfer from the client's continuing responsibility for delivery. The National Framework for Traditional Contracting explains that a client procuring an asset remains accountable for successful service delivery, even where it transfers risks to a supplier. It calls for allocation to consider who can manage the risk and recognises the benefit of mutual support in mitigation (Department of Infrastructure and Regional Development, 2015, section 3.5.3).
A latent-condition clause can determine who bears the cost of an unexpected physical condition. That allocation does not give the contractor missing ground information or the means to prevent the condition. Other risks depend on approvals from an external authority or access which only the client can provide. Some consequences can be insured or priced even where the event cannot be controlled; others are difficult to quantify or require action by several parties. The allocation needs to reflect those differences.
Infrastructure Australia's 2022 market-capacity report described government clients transferring risk in pursuit of outturn-cost certainty, while commercial strategy and risk allocation were sometimes considered in isolation. Risk could then pass further down the supply chain to organisations with less information and less involvement in the delivery team. The report favoured earlier collaboration and allocation informed by capability to manage and bear the risk (Infrastructure Australia, 2022).
An obligation may give a contractor a reason to investigate a risk and invest in avoiding it. That is a legitimate purpose of allocation. Where the contractor cannot obtain the necessary information or influence the event, the client needs to understand what it gains from the transfer and what practical arrangements are still required. Establishing who pays does not complete the work of managing the underlying issue.
What tender acceptance tells us
An organisation may defend an onerous provision by saying that the market will accept it. A signed contract establishes willingness to contract on the agreed terms. It does not establish that the transferred risk was fully priced or that the contractor can manage it efficiently.
Laryea and Hughes (2009) observed four live tender reviews in two major UK construction firms. Risks arising from amendments were addressed largely through contractual mechanisms, including qualifications and clarifications for subsequent negotiation, rather than direct price adjustments. The changes therefore did not necessarily appear in the tender price in the way a client might assume.
The Australian health-of-industry report recorded similar interview concerns about contractors accepting risk without pricing it adequately, hoping it would not arise or that the contractual position could later be improved. It also summarised a 2001 Western Australian study in which 49 per cent of respondents did not determine the financial cost of changes to risk allocation, and 35 per cent reported receiving risks they regarded as impossible to manage (Yates and Sashegyi, 2001, cited in Sharkey et al., 2020, section 10.1). These figures describe that earlier Western Australian sample, not the Australian industry today.
Competitive tendering can make the problem difficult to see. A tenderer that allows fully for a remote exposure may be less competitive than one which accepts it without an equivalent allowance. The client receives a lower price, but may also receive a contractor with less capacity to absorb the event if it occurs. The absence of an identifiable premium does not show that the risk has disappeared.
Contractors should carry construction risks within their expertise and be accountable for their performance. The client still needs to assess whether the proposed allocation is commercially workable, rather than rely on the contractor's willingness to sign.
How allocation affects cooperation
Risk allocation also affects what happens when the parties have to work together. Zhang et al. (2016) collected data from 284 Chinese project professionals and found that terms allocating risk in the owner's favour were negatively associated with contractor cooperation. Perceptions of fairness partly explained the relationship. For an Australian client, the finding raises a question about whether its proposed terms encourage the cooperation the project needs; it cannot predict how a particular contractor will respond.
Tang et al. (2020) studied 226 projects reported by Chinese construction firms. Allocating more risk to contractors was associated with higher costs of negotiating conflicts. Detailed client control over how the contractor worked strengthened that relationship, while control focused on outcomes weakened it. The distinction concerns how control is exercised, rather than whether the client should supervise its contractor at all.
That combination deserves attention during contract preparation. A client can allocate a consequence to the contractor while restricting the choices through which the contractor might manage it. Detailed approval requirements may be justified, but the client needs to consider their effect on the contractor's ability to carry the allocated risk.
Perez, Gray and Skitmore (2017) surveyed contractors and consultants involved in medium to large commercial projects in South-East Queensland. Approximately half regarded their contractual risk allocation as unfair, and respondents perceived increasing arbitrary transfer of risk downstream. The survey records those perceptions; it did not independently assess the fairness of individual contracts.
Firm contractual obligations can support cooperation. Poppo and Zenger (2002), studying information-service exchanges, found evidence that formal contracts and relationships based on trust and cooperative working can complement one another. Their findings help explain why clear expectations and cooperative relationships need to be considered together, although the study was not specific to construction.
The cost of contractual protection
A protective provision may be justified and still have a price. Zaghloul and Hartman (2003) examined mistrust and contracting in the Canadian construction industry and reported risk premiums associated with commonly used clauses excluding or limiting a party's liability. Their estimates concerned particular clauses in a seller's market and cannot be used as percentage allowances for Australian projects today. The study does, however, illustrate a cost the client needs to consider when seeking additional protection.
There can also be a cost in understanding and administering the wording. Rameezdeen and Rodrigo (2014) compared 281 modified clauses with their originals in FIDIC-based infrastructure contracts in Sri Lanka. About 60 per cent became harder to read, while the remainder improved. More than half of both sets fell in the study's most difficult readability category. These were formula-based measures of readability, not a direct test of practitioners' comprehension or project performance.
The findings support reviewing the clarity of amendments without assuming that every modification makes a contract less readable. A necessary change can improve clarity. Several individually defensible changes can also leave overlapping procedures or inconsistent obligations which the team must reconcile during delivery.
For each additional requirement, the organisation should establish who will use the information or exercise the control and what it is expected to achieve. If a programme revision, cost forecast and internal report reproduce the same information, their separate preparation and review need a reason. If an approval protects against an exposure, the decision needs an owner and a response time consistent with the work it controls.
The cost of drafting is therefore only part of the assessment. Tendering effort, administration during delivery and the effect of slower decisions also need to be considered. Those costs may be justified, provided the client understands them when it chooses the protection.
Corporate contracts and project scale
In practice, I encounter another difficulty where organisations standardise their amended contracts. A form developed around the exposures of the largest or most complex projects becomes the corporate form. Smaller projects then inherit reporting and approvals designed for work of a very different scale.
Standardisation has real benefits. Staff know the procedures, advisers do not have to start again and lessons from earlier projects can be retained. The difficulty is deciding which requirements should remain common and which need to vary with the project. A technically demanding interface may require the same care on a small project as on a large one. The full reporting system from a major programme may not.
In my experience, people faced with repeatedly impractical requirements may bypass them or develop informal alternatives. The written procedures then become an unreliable account of how the project is managed. The wider prevalence and cost of that problem would need further research.
For NEC4 users, the distinction is particularly important. A team may experience extensive reporting and approval requirements as part of administering NEC, although some of that burden comes from the organisation's amendments or internal rules. As I discuss in What I've Learned Teaching NEC4 in Australia, explaining the published procedure cannot resolve an organisational obstacle which the people attending training have no authority to change.
Before attributing excessive administration to the contract form, the client should separate what the published form requires from what it has added. It can then consider whether the combined requirements are useful and proportionate to the particular project.
The client remains involved in delivery
Australian infrastructure research also records concern about contractual allocation. Businesses responding to Infrastructure Australia's 2024 Industry Confidence Survey ranked allocation of risk in contracts as the greatest threat to delivery, particularly for larger contracts. The accompanying report described concerns about complex contracting models and low government risk appetite. It called for a better balance of risk to reduce unnecessary cost and improve value for money (Infrastructure Australia, 2024).
Those views are relevant to clients choosing their procurement arrangements, although they do not establish why particular projects failed. A position that appears protective in one contract may also affect which capable suppliers tender and how they approach the work.
The Major Road Projects Victoria Program Delivery Approach offers a useful example of a client deliberately reconsidering its role. Parr and Greenham's (2023) case study describes integrated project risk reviews, early use of technical expertise and an active-client culture. The client remained involved in helping resolve delivery problems rather than treating construction as the contractor's responsibility and concentrating on non-compliance.
The researchers associated the arrangements with improved collaboration, trust and cost certainty. Their study was undertaken under a commercial research agreement with MRPV and drew on interviews with its staff, documents it supplied and publicly available material. The authors state that MRPV did not control their analysis or conclusions. At the time, no project using the model had reached practical completion, so the report could not assess final project outcomes across the programme quantitatively.
The case provides an account of how a client organised its contribution, with the limits of the evidence stated. Its relevance extends beyond the particular commercial model: continuing client involvement can be built into procurement and the arrangements for delivery.
Reviewing the contract for delivery
A client does not protect a project by retaining every risk. Poorly defined responsibilities can weaken accountability, and a contractor should bear risks it is engaged and equipped to manage. The organisation also has to protect public or shareholder funds. The research supports examining how that protection is achieved, rather than replacing demanding obligations with an expectation of goodwill.
During preparation, the organisation needs to understand the exposure each provision addresses and what it will require of the people delivering the work. The people assessing liability and those testing the construction sequence or approval route need to contribute to the same decision.
This does not require a committee to redraft every clause. A standard form and a considered set of organisational amendments can provide a sound starting point. Significant departures, unusual risks and requirements that depend on client action need a review proportionate to their consequences. That review should happen early enough to change the proposed arrangement, rather than invite the delivery team to comment after the position has been approved.
The practical assessment should identify the party able to influence the risk and the information it will need. It should examine how tenderers can assess the exposure and what happens if it materialises. Where the contract names a person to make a decision, the organisation's delegations need to permit that person to act within the required period. Reporting and approvals should support identifiable decisions without duplicating work for which there is no clear use.
The client can then make an informed choice. It may retain a risk, transfer it, share it or obtain more information before deciding. It may accept a demanding obligation because the delivery implications are understood and manageable. Legal advice is essential to expressing and testing that choice, while delivery and commercial expertise establish consequences which the wording alone cannot reveal.
Protecting the project
Australian research documents widespread amendment of standard forms and concerns about how risk allocation is decided. Studies in other markets identify connections with cooperation, tendering responses and the cost of resolving disagreements. Differences in their methods, dates and settings prevent a general conclusion that amendments cause poor performance. They do give clients reasons to examine what their proposed terms will require during delivery, alongside the protection those terms provide.
Legal protection and successful delivery are often compatible. Where a proposed protection makes a necessary decision slower or places responsibility beyond a party's practical influence, the organisation needs to understand and address that consequence. Otherwise, it may improve its claim against another party while leaving the event itself no less likely or damaging.
A contract should give effect to an informed decision about how the project will be delivered. The people who understand the legal exposure and those who understand the work need to contribute while that decision is still being made. Protecting the organisation includes giving its project a workable basis on which to succeed.
Research & commentary
Protecting the Organisation or Protecting the Project
Contract design and the governance of project delivery
Abstract
A construction contract can improve a client's legal position while making the project harder to deliver. Its provisions determine who bears financial consequences, but also influence the information people share, the decisions they can make and the effort required to administer the work. Australian studies document widespread amendment of standard forms and concerns about risk allocation being decided without sufficient involvement from those responsible for delivery. International research identifies relationships between allocation, cooperation, tendering practices and the cost of resolving disagreements. These findings support examining the delivery consequences of contractual protection alongside its legal purpose. They do not establish that amendments are generally harmful or that transferring less risk will necessarily improve performance. Drawing on that research and my practical observations, I argue for contract preparation that brings legal and delivery expertise together before the allocation is settled. A client should understand both the exposure a provision addresses and the conditions it creates for managing the project. Protection is incomplete where the contract allocates a consequence but leaves the people involved without the information or authority needed to prevent it.
The contract the delivery team receives
A client may have good reasons for every amendment it makes to a construction contract. It wants confidence in the completed asset, timely notice of emerging problems and remedies if the contractor fails to perform. Its lawyers may identify an exposure which the published form does not address adequately. Changing the contract can be a necessary part of preparing the project.
The difficulty arises when those changes are examined principally for their effect on legal exposure. A shorter notice period, wider design obligation or additional approval may strengthen the client's position if something goes wrong. The same provision can affect how information reaches the project team and how quickly it can respond. Those consequences need to be understood before the drafting is settled.
The delivery team inherits the resulting arrangements. It has to obtain the approvals, produce the reports and meet the response periods, using the authority the organisation actually gives it. A provision that appears workable during contract preparation may depend on internal decisions by people who are not required to respond within the time the contract allows.
In Are We Managing the Project or the Contract, I examined how contractual requirements become embedded in management routines (Evans, 2026). Those routines begin to take shape before award, when the contract helps determine what the team will spend its time doing and which decisions it will be able to make. Improving one party's position in a future dispute is only one part of that work.
Who shapes the risk allocation
Melbourne Law School's 2014 study received 295 survey responses describing 379 projects, alongside 47 interviews. Some respondents may have reported on the same project. Sixty-eight per cent of the contracts reported on used a standard form, and 84 per cent of those standard-form contracts had been amended. Where the decision could be identified, the principal or its lawyer selected the standard form in more than 80 per cent of cases. The main reason respondents gave for amendment was to shift risk (Sharkey et al., 2014).
Respondents also perceived benefits from amendment, including better understanding and more efficient administration, alongside increases in the need for legal advice, outturn cost and disputes. Amendment itself was not necessarily the problem. The findings show how commonly organisations altered the published allocation, with mixed views about the results.
The later report on the health of the Australian construction industry is more directly concerned with who contributes to those decisions. Its interviews recorded concerns that lawyers sometimes determined risk allocation without sufficient involvement from people responsible for delivery. Interviewees also described allocations defended as accepted market practice and clients who did not fully appreciate the risks their contracts transferred (Sharkey et al., 2020).
The interviews identify concerns rather than establish how widespread those practices are. They describe a difficulty I have repeatedly raised in NEC training: lawyers should not be the only people deciding which contract is used or how it is amended.
Legal expertise remains essential. A delivery team may overlook an exposure or underestimate the consequences of imprecise wording. Equally, a lawyer cannot be expected to establish alone whether an approval period matches the construction sequence, a reporting obligation duplicates existing information or an operational interface can be managed by the party receiving it.
The organisation needs those perspectives before it decides the allocation. Commercial and procurement staff can explain likely tender responses, while the planner and delivery team test the proposed procedures against the work. Technical specialists and the future operator can identify requirements that cannot be compromised. With that contribution, legal advisers can work from a more complete understanding of the project and the intended bargain.
What a risk transfer can achieve
Australian government guidance distinguishes contractual risk transfer from the client's continuing responsibility for delivery. The National Framework for Traditional Contracting explains that a client procuring an asset remains accountable for successful service delivery, even where it transfers risks to a supplier. It calls for allocation to consider who can manage the risk and recognises the benefit of mutual support in mitigation (Department of Infrastructure and Regional Development, 2015, section 3.5.3).
A latent-condition clause can determine who bears the cost of an unexpected physical condition. That allocation does not give the contractor missing ground information or the means to prevent the condition. Other risks depend on approvals from an external authority or access which only the client can provide. Some consequences can be insured or priced even where the event cannot be controlled; others are difficult to quantify or require action by several parties. The allocation needs to reflect those differences.
Infrastructure Australia's 2022 market-capacity report described government clients transferring risk in pursuit of outturn-cost certainty, while commercial strategy and risk allocation were sometimes considered in isolation. Risk could then pass further down the supply chain to organisations with less information and less involvement in the delivery team. The report favoured earlier collaboration and allocation informed by capability to manage and bear the risk (Infrastructure Australia, 2022).
An obligation may give a contractor a reason to investigate a risk and invest in avoiding it. That is a legitimate purpose of allocation. Where the contractor cannot obtain the necessary information or influence the event, the client needs to understand what it gains from the transfer and what practical arrangements are still required. Establishing who pays does not complete the work of managing the underlying issue.
What tender acceptance tells us
An organisation may defend an onerous provision by saying that the market will accept it. A signed contract establishes willingness to contract on the agreed terms. It does not establish that the transferred risk was fully priced or that the contractor can manage it efficiently.
Laryea and Hughes (2009) observed four live tender reviews in two major UK construction firms. Risks arising from amendments were addressed largely through contractual mechanisms, including qualifications and clarifications for subsequent negotiation, rather than direct price adjustments. The changes therefore did not necessarily appear in the tender price in the way a client might assume.
The Australian health-of-industry report recorded similar interview concerns about contractors accepting risk without pricing it adequately, hoping it would not arise or that the contractual position could later be improved. It also summarised a 2001 Western Australian study in which 49 per cent of respondents did not determine the financial cost of changes to risk allocation, and 35 per cent reported receiving risks they regarded as impossible to manage (Yates and Sashegyi, 2001, cited in Sharkey et al., 2020, section 10.1). These figures describe that earlier Western Australian sample, not the Australian industry today.
Competitive tendering can make the problem difficult to see. A tenderer that allows fully for a remote exposure may be less competitive than one which accepts it without an equivalent allowance. The client receives a lower price, but may also receive a contractor with less capacity to absorb the event if it occurs. The absence of an identifiable premium does not show that the risk has disappeared.
Contractors should carry construction risks within their expertise and be accountable for their performance. The client still needs to assess whether the proposed allocation is commercially workable, rather than rely on the contractor's willingness to sign.
How allocation affects cooperation
Risk allocation also affects what happens when the parties have to work together. Zhang et al. (2016) collected data from 284 Chinese project professionals and found that terms allocating risk in the owner's favour were negatively associated with contractor cooperation. Perceptions of fairness partly explained the relationship. For an Australian client, the finding raises a question about whether its proposed terms encourage the cooperation the project needs; it cannot predict how a particular contractor will respond.
Tang et al. (2020) studied 226 projects reported by Chinese construction firms. Allocating more risk to contractors was associated with higher costs of negotiating conflicts. Detailed client control over how the contractor worked strengthened that relationship, while control focused on outcomes weakened it. The distinction concerns how control is exercised, rather than whether the client should supervise its contractor at all.
That combination deserves attention during contract preparation. A client can allocate a consequence to the contractor while restricting the choices through which the contractor might manage it. Detailed approval requirements may be justified, but the client needs to consider their effect on the contractor's ability to carry the allocated risk.
Perez, Gray and Skitmore (2017) surveyed contractors and consultants involved in medium to large commercial projects in South-East Queensland. Approximately half regarded their contractual risk allocation as unfair, and respondents perceived increasing arbitrary transfer of risk downstream. The survey records those perceptions; it did not independently assess the fairness of individual contracts.
Firm contractual obligations can support cooperation. Poppo and Zenger (2002), studying information-service exchanges, found evidence that formal contracts and relationships based on trust and cooperative working can complement one another. Their findings help explain why clear expectations and cooperative relationships need to be considered together, although the study was not specific to construction.
The cost of contractual protection
A protective provision may be justified and still have a price. Zaghloul and Hartman (2003) examined mistrust and contracting in the Canadian construction industry and reported risk premiums associated with commonly used clauses excluding or limiting a party's liability. Their estimates concerned particular clauses in a seller's market and cannot be used as percentage allowances for Australian projects today. The study does, however, illustrate a cost the client needs to consider when seeking additional protection.
There can also be a cost in understanding and administering the wording. Rameezdeen and Rodrigo (2014) compared 281 modified clauses with their originals in FIDIC-based infrastructure contracts in Sri Lanka. About 60 per cent became harder to read, while the remainder improved. More than half of both sets fell in the study's most difficult readability category. These were formula-based measures of readability, not a direct test of practitioners' comprehension or project performance.
The findings support reviewing the clarity of amendments without assuming that every modification makes a contract less readable. A necessary change can improve clarity. Several individually defensible changes can also leave overlapping procedures or inconsistent obligations which the team must reconcile during delivery.
For each additional requirement, the organisation should establish who will use the information or exercise the control and what it is expected to achieve. If a programme revision, cost forecast and internal report reproduce the same information, their separate preparation and review need a reason. If an approval protects against an exposure, the decision needs an owner and a response time consistent with the work it controls.
The cost of drafting is therefore only part of the assessment. Tendering effort, administration during delivery and the effect of slower decisions also need to be considered. Those costs may be justified, provided the client understands them when it chooses the protection.
Corporate contracts and project scale
In practice, I encounter another difficulty where organisations standardise their amended contracts. A form developed around the exposures of the largest or most complex projects becomes the corporate form. Smaller projects then inherit reporting and approvals designed for work of a very different scale.
Standardisation has real benefits. Staff know the procedures, advisers do not have to start again and lessons from earlier projects can be retained. The difficulty is deciding which requirements should remain common and which need to vary with the project. A technically demanding interface may require the same care on a small project as on a large one. The full reporting system from a major programme may not.
In my experience, people faced with repeatedly impractical requirements may bypass them or develop informal alternatives. The written procedures then become an unreliable account of how the project is managed. The wider prevalence and cost of that problem would need further research.
For NEC4 users, the distinction is particularly important. A team may experience extensive reporting and approval requirements as part of administering NEC, although some of that burden comes from the organisation's amendments or internal rules. As I discuss in What I've Learned Teaching NEC4 in Australia, explaining the published procedure cannot resolve an organisational obstacle which the people attending training have no authority to change.
Before attributing excessive administration to the contract form, the client should separate what the published form requires from what it has added. It can then consider whether the combined requirements are useful and proportionate to the particular project.
The client remains involved in delivery
Australian infrastructure research also records concern about contractual allocation. Businesses responding to Infrastructure Australia's 2024 Industry Confidence Survey ranked allocation of risk in contracts as the greatest threat to delivery, particularly for larger contracts. The accompanying report described concerns about complex contracting models and low government risk appetite. It called for a better balance of risk to reduce unnecessary cost and improve value for money (Infrastructure Australia, 2024).
Those views are relevant to clients choosing their procurement arrangements, although they do not establish why particular projects failed. A position that appears protective in one contract may also affect which capable suppliers tender and how they approach the work.
The Major Road Projects Victoria Program Delivery Approach offers a useful example of a client deliberately reconsidering its role. Parr and Greenham's (2023) case study describes integrated project risk reviews, early use of technical expertise and an active-client culture. The client remained involved in helping resolve delivery problems rather than treating construction as the contractor's responsibility and concentrating on non-compliance.
The researchers associated the arrangements with improved collaboration, trust and cost certainty. Their study was undertaken under a commercial research agreement with MRPV and drew on interviews with its staff, documents it supplied and publicly available material. The authors state that MRPV did not control their analysis or conclusions. At the time, no project using the model had reached practical completion, so the report could not assess final project outcomes across the programme quantitatively.
The case provides an account of how a client organised its contribution, with the limits of the evidence stated. Its relevance extends beyond the particular commercial model: continuing client involvement can be built into procurement and the arrangements for delivery.
Reviewing the contract for delivery
A client does not protect a project by retaining every risk. Poorly defined responsibilities can weaken accountability, and a contractor should bear risks it is engaged and equipped to manage. The organisation also has to protect public or shareholder funds. The research supports examining how that protection is achieved, rather than replacing demanding obligations with an expectation of goodwill.
During preparation, the organisation needs to understand the exposure each provision addresses and what it will require of the people delivering the work. The people assessing liability and those testing the construction sequence or approval route need to contribute to the same decision.
This does not require a committee to redraft every clause. A standard form and a considered set of organisational amendments can provide a sound starting point. Significant departures, unusual risks and requirements that depend on client action need a review proportionate to their consequences. That review should happen early enough to change the proposed arrangement, rather than invite the delivery team to comment after the position has been approved.
The practical assessment should identify the party able to influence the risk and the information it will need. It should examine how tenderers can assess the exposure and what happens if it materialises. Where the contract names a person to make a decision, the organisation's delegations need to permit that person to act within the required period. Reporting and approvals should support identifiable decisions without duplicating work for which there is no clear use.
The client can then make an informed choice. It may retain a risk, transfer it, share it or obtain more information before deciding. It may accept a demanding obligation because the delivery implications are understood and manageable. Legal advice is essential to expressing and testing that choice, while delivery and commercial expertise establish consequences which the wording alone cannot reveal.
Protecting the project
Australian research documents widespread amendment of standard forms and concerns about how risk allocation is decided. Studies in other markets identify connections with cooperation, tendering responses and the cost of resolving disagreements. Differences in their methods, dates and settings prevent a general conclusion that amendments cause poor performance. They do give clients reasons to examine what their proposed terms will require during delivery, alongside the protection those terms provide.
Legal protection and successful delivery are often compatible. Where a proposed protection makes a necessary decision slower or places responsibility beyond a party's practical influence, the organisation needs to understand and address that consequence. Otherwise, it may improve its claim against another party while leaving the event itself no less likely or damaging.
A contract should give effect to an informed decision about how the project will be delivered. The people who understand the legal exposure and those who understand the work need to contribute while that decision is still being made. Protecting the organisation includes giving its project a workable basis on which to succeed.
This paper provides general commentary and research discussion on construction, commercial and project delivery matters. It is not legal, contractual or professional advice and should not be relied upon as such. Specific advice should be sought for individual projects and circumstances.
References
Department of Infrastructure and Regional Development (2015) National Framework for Traditional Contracting: Topic Specific Guide 1 – Project Definition and Tendering. Canberra: Commonwealth of Australia, September. Available at: https://www.infrastructure.gov.au/sites/default/files/migrated/infrastructure/ngpd/files/NFTC_TSG1_Project_Definition.pdf (Accessed: 22 October 2026).
Evans, S.C. (2026) 'Are we managing the project or the contract?', Concordia Resolution. Available at: https://concordiaresolution.com/articles/are-we-managing-the-project-or-the-contract/ (Accessed: 22 October 2026).
Infrastructure Australia (2022) Infrastructure Market Capacity 2022 Report. Canberra: Infrastructure Australia, December. Available at: https://www.infrastructureaustralia.gov.au/sites/default/files/2022-12/2022_IA_Market-Capacity-Report_LR.pdf (Accessed: 22 October 2026).
Infrastructure Australia (2024) Infrastructure Market Capacity 2024 Report. Canberra: Infrastructure Australia, December. Available at: https://www.infrastructureaustralia.gov.au/sites/default/files/2024-12/2024%20Infrastructure%20Market%20Capacity%20report_2.pdf (Accessed: 22 October 2026).
Laryea, S. and Hughes, W. (2009) 'Commercial reviews in the tender process of contractors', Engineering, Construction and Architectural Management, 16(6), pp. 558–572. https://doi.org/10.1108/09699980911002575
Parr, K. and Greenham, P. (2023) Major Road Projects Victoria and its Project Delivery Approach: A case study of procurement reform. Melbourne: Melbourne Law School, University of Melbourne, September. Available at: https://law.unimelb.edu.au/__data/assets/pdf_file/0004/4759672/MRPV-and-its-Project-Delivery-Approach-September-2023.pdf (Accessed: 22 October 2026).
Perez, D., Gray, J. and Skitmore, M. (2017) 'Perceptions of risk allocation methods and equitable risk distribution: a study of medium to large Southeast Queensland commercial construction projects', International Journal of Construction Management, 17(2), pp. 132–141. https://doi.org/10.1080/15623599.2016.1233087
Poppo, L. and Zenger, T. (2002) 'Do formal contracts and relational governance function as substitutes or complements?', Strategic Management Journal, 23(8), pp. 707–725. https://doi.org/10.1002/smj.249
Rameezdeen, R. and Rodrigo, A. (2014) 'Modifications to standard forms of contract: the impact on readability', Australasian Journal of Construction Economics and Building, 14(2), pp. 31–40. https://doi.org/10.5130/AJCEB.v14i2.3778
Sharkey, J., Bell, M., Jocic, W. and Marginean, R. (2014) Standard Forms of Contract in the Australian Construction Industry: Research Report. Melbourne: Melbourne Law School, University of Melbourne, June. Available at: https://law.unimelb.edu.au/__data/assets/pdf_file/0008/4815098/Research-Report-Standard-forms-of-contract-in-the-Australian-construction-industry.pdf (Accessed: 22 October 2026).
Sharkey, J., Greenham, P., Bell, M., Jocic, W., Korolkova, J. and Hu, D. (2020) The Health of the Australian Construction Industry: Research Report. Melbourne: Melbourne Law School, University of Melbourne, September. Available at: https://law.unimelb.edu.au/__data/assets/pdf_file/0007/4815097/Health-of-the-Australian-Construction-Industry-Research-Report2.pdf (Accessed: 22 October 2026).
Tang, Y., Chen, Y., Hua, Y. and Fu, Y. (2020) 'Impacts of risk allocation on conflict negotiation costs in construction projects: Does managerial control matter?', International Journal of Project Management, 38(3), pp. 188–199. https://doi.org/10.1016/j.ijproman.2020.03.002
Zaghloul, R. and Hartman, F. (2003) 'Construction contracts: the cost of mistrust', International Journal of Project Management, 21(6), pp. 419–424. https://doi.org/10.1016/S0263-7863(02)00082-0
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This article is intended to provide general commentary and insights on construction, commercial and dispute resolution matters. It is not legal, contractual or professional advice and should not be relied upon as such. Specific advice should always be sought in relation to individual projects and circumstances.
Steven Evans
Further reading
All articles →Construction Contracts: Risk Allocation Is Not Risk Management
NEC4 Early Warning in Practice
NEC4: When the Project Manager Lacks Authority