Deciding on the correct commercial approach is critical to achieving the intended benefits and wider value. The commercial approach should be linked to the delivery model, the desired outcomes and type of relationship you want to have with the supply chain. Depending on the commercial approach and nature of the works, this will impact the procurement procedure and contracting strategy.
One of the most effective ways to deliver outcomes is to create contracting environments that promote collaboration and reduce waste. Contracts should create positive relationships and processes designed to integrate and align multiple parties' commercial objectives and incentives.
"One of the most effective ways to deliver outcomes is to create sustainable contracting environments that promote collaboration and reduce waste."
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Experience shows that while alliancing arrangements are not always appropriate, they should be considered on more complex programmes of work as the effective alignment of commercial objectives is likely to improve intended outcomes as well as drive greater value for money. Alliancing models also provide more effective integration, which leads to effective and aligned arrangements, and enables engagement with the wider supply chain and platform delivery.
It is necessary to develop the commercial approach and the procurement strategy before making the decisions needed for the contracting strategy.