Reproduced with permission from The Revay Report Volume 28 Number 1 published by Revay & Associates Ltd © August 2009. Published here December, 2009.

Editor's Note | Introduction | Cash Flow | Change Orders in the Face of Recession
The Shift Away from Cost Reimbursable Contracts | Constructability Reviews
Performance Motivation | PART 2

The Shift Away from Cost Reimbursable Contracts

In many instances, particularly in the Prairie Provinces, owners and contractors who have been working with reimbursable contracts now find themselves working in a firm price environment. This change in contracting strategy necessitates a change in modus operandi. Owners must recognize that, under a firm price arrangement, contractors are wholly responsible for the means and methods of executing the work. As such, save for instances when safety and/or the environment are at stake, owners are not empowered to direct the work. To do so would be tantamount to interference.

On the other hand, contractors must carefully adhere to the change management process dictated by their contracts. Both parties will need an understanding of scope that is crystal clear. Requesting payment for out of scope work after the work is completed is not a particularly sound or successful strategy.

Creating Value for Money

The need to create value for money in the current climate is self-evident. While there are many vehicles that create value for money, in this report, Revay will concentrate on three - namely work face planning, constructability reviews and performance motivation.

Work Face Planning

Two week and three week look-ahead schedules are becoming more commonplace. In Alberta, the Construction Owners Association has developed a tool similar in concept to look ahead schedules called Work Face Planning.

This tool has been quite effective in improving productivity on a number of construction sites.

The success has been sufficiently significant to prompt several major Albertan owners to make Work Face Planning a contractual requirement on its contractors. Interested readers can find more information on this tool at

Change Orders in the Face of Recession  Change Orders in the Face of Recession

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