Multi-contracting
Multi-contracting

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Multi-contracting
  • What is multi-contracting?
  • Advantages of multi-contract procurement
  • Disadvantages of multi-contract procurement
  • Funder’s view of multi-contracting

What is multi-contracting?

Multi-contracting is a procurement option that involves a number of contractors being engaged separately in respect of the various work packages that comprise a project—they are engaged directly by the employer to deliver those separate work packages. This form of procurement is commonly used in relation to energy projects (power plants, wind farms etc) as an alternative to using an EPC contract structure (see also Practice Note: EPC, split EPC and multi-party contract projects).

The employer will co-ordinate all the works packages and manage the interface between them.

This diagram illustrates the contractual structure of a project procured using the multi-contract route (this structure may change from project to project, although the diagram details the contractual matrix):

The contractors are typically employed on target cost contracts.

This contractual structure is suited to projects where the employer is the most appropriate party to bear some of the project specific risks and the risks associated with the interfaces between the various contractors.

Multi-contracting is best suited to experienced employers who are comfortable retaining a greater degree of risk in order to also retain control over the management of the project and who are therefore confident that they have the necessary skills and resources to properly and effectively manage both the risks associated with multi-contracting and those arising out of the type of complex project for which it tends to

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