Alliancing may be appropriate where the cost to the Owner of transferring the risk to the designer/contractor(s) is particularly high, a conclusion that needs to be based on an informed analysis of prevailing market conditions. The alliance approach should result in a reduced price to deliver the project, given that the risks are shared between the Participants and managed collectively, rather than transferred and managed solely by the contractor.
For some projects, the Owner's risk profile may be greater than a designer/contractor would normally accept under a traditional contract. For example, the project may be particularly unique or rare, which means that certain risks may be unknown and stakeholder management becomes more complex. Under these circumstances, the Owner would have to pay a premium to transfer certain risks to the designer/contractor under a traditional contract. Therefore, an Owner may find it attractive to undertake to deliver such projects through alternative delivery models such as managing contractor, early contractor involvement, and alliance contracts.