Voltex - HV Power Transmission

Why do contracts often misalign with project realities?

January 22, 2024

It is unacceptably common in recent times, to hear of projects not going to plan. A successful project would be one that meets three critical criteria:

  • Time
  • Cost
  • Quality

When any of these criteria are not being met, the designers or project managers are often reproached. But the real issue can be traced back to the way that project contracts are written. Contracts are usually written by lawyers, not engineers. That’s not to suggest the lawyers are at fault, it is just a chain of events in project delivery that project teams try to control.

“How are we going to control the delivery of the project, in line with milestones (i.e. progress payments), legal and compliance requirements, and unexpected events (bad weather for example)?”

“Will the contractual milestones line up with the planned schedule of construction requirements for this project?”

When Voltex Power Engineers are acting as Client Representative engineers, we are often asked why the contractor may energise a substation, while none of the outgoing feeders are yet connected. It doesn’t appear to achieve anything, and in reality, it can now complicate access to a live switchroom.

The likely reason is that the contractor is seeking a milestone payment in line with the contract (not necessarily in line with the project’s practical construction requirements). This is just one example of the “missing links” in the chain of delivery.

Another very common mistake is the “planning fallacy” (Kahneman, Daniel, Thinking, Fast and Slow, 2011). There is a natural human tendency to overestimate benefits and underestimate costs. This is amplified on complex technical projects, where design and execution are linked through critical paths, and a delay on one can impact the other, with the redesign and further information now necessary with the delays then compounding.

Another potential for failure lies in the typical project methodology:

  • Concept design (maybe a FEED study – Front End Engineering Design)
  • Estimated budget
  • Approval (FID – Financial Investment Decision, from Corporate or Government)
  • “Great, we have a design and approval, let’s start construction !”

What is the missing link this time? The Detailed Design! Much more than just a concept.

This may now take months if not years of attention to all of the finer points from many disciplines – Civil, Process, Instrumentation, Electrical, Communications…

If this brief explanation resonates with your recent experience with HV Electrical projects, take a look at Voltex Group’s HV Project Management methods, and turn around your next project to meet time cost and quality objectives.

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