COLLABORATIVE CONSTRUCTION CONTRACTS - With energy-related projects focus

Sep 12, 2026

Construction projects across Canada face escalating pressures, including pandemic impacts, supply-chain disruptions, environmental disasters, geopolitical conflicts, and rising dispute-resolution time and costs. These conditions have tightened pricing availability under traditional risk-based procurement. The article examines how collaborative contracting models—such as early contractor involvement, progressive design-build, integrated project delivery, and alliance arrangements—can support delivery on budget and schedule, especially for Canadian energy-related projects, by reducing disputes and aligning incentives.

LanguageEnglish

CategoryLetters

FormatPDF

Pages46

Reading Time16 min

AccessFree to download

INTRODUCTION TO COLLABORATIVE CONSTRUCTION CONTRACTS

Goals of construction contracts

Resurgence of collaborative contracts in Canada and worldwide

TABLE OF CONTENTS

Traditional delivery methods

Traditional contracting models

Traditional pricing models

Problems inherent to the traditional approach

Common characteristics of energy-related contracts

Trends leading to collaborative contracting in the global public marketplace

COVID-19

Supply chain

Inflation

Lack of bidders

A busy energy industry in Alberta

ESG on the rise

Types of collaborative contracts

Early contractor involvement (ECI)

Progressive design build (PDB)

Alliance

Integrated project delivery (IPD)

Key features of collaborative contracts

Projects well suited for collaborative contracts

Success stories

Collaborative contracts do not always work as intended

COLLABORATIVE CONSTRUCTION CONTRACTS BILL WOODHEAD, THERON DAVIS, * AND ROBERT WALKER In recent years, construction projects across Canada have encountered significant challenges, including a global pandemic, disruptions in the supply chain, environmental disasters, geopolitical conflicts, war, protests, volatile financial conditions, and the everincreasing time and costs associated with dispute resolution. These challenges have contributed to a scarcity in competitive and reliable pricing under traditional project risk profiles in some regions and sectors. Canadian construction industry stakeholders are increasingly interested in collaborative contracting models like early contractor involvement, progressive design build, integrated project delivery, and alliance models. These models aim to achieve on budget and on schedule project completion, while minimizing disputes and incentivizing cooperative behaviours. Major projects in Ontario and British Columbia are proceeding under collaborative contracting models. Meanwhile, the energy sector in Canada appears to be one of the few industries slow to adopt collaborative contracting models. It is common to see traditional fixed price or costplus design-build or engineering, procurement, and construction contracts on large industrial projects, particularly in Alberta. But the energy sector isnot immune to the market factors shifting the tides in various other construction sectors in Canada. If energy projects wish to attract bidsfrom an experienced and varied pool of potential participants and take advantage of some innovative contracting strategies, change may be warranted. This article assesses the features and suitability of these collaborative contracts for the construction of energy-related projects in contrast to more traditional delivery models. The authors provide commentary on their risks and benefits and identify relevant opportunities for the energy sector in Canada to embrace collaborative construction contracting models. TABLE OF CONTENTS I. INTRODUCTION TO COLLABORATIVE CONSTRUCTION CONTRACTS .................... 308 II. TRADITIONAL DELIVERY METHODS ............................. 309 A. TRADITIONAL CONTRACTING MODELS ...................... 310 B. TRADITIONAL PRICING MODELS ........................... 313 C. PROBLEMS INHERENT TO THE TRADITIONAL APPROACH ......... 315 III. COMMON CHARACTERISTICS OF ENERGY-RELATED CONTRACTS ....... 320 IV. TRENDS LEADING TO COLLABORATIVE CONTRACTING IN THE GLOBAL PUBLIC MARKETPLACE .......................... 322 A. COVID-19 ............................................ 322 * Bill Woodhead and Theron Davis are lawyers at Borden Ladner Gervais LLP whose practices focus on front-end construction contracts; Robert Walker is Legal Counsel at Suncor Energy who works in the Projects & Supply Chain Management Group. This work is licensed under a Creative Commons Attribution-NonCommercialNoDerivatives 4.0 International License. Authors retain copyright of their work, with first publication rights granted to the Alberta Law Review. B. SUPPLY CHAIN ......................................... 322 C. INFLATION ............................................ 323 D. LACK OF BIDDERS ...................................... 323 E. A BUSY ENERGY INDUSTRY IN ALBERTA ..................... 324 F. ESG ON THE RISE ....................................... 325 V. TYPES OF COLLABORATIVE CONTRACTS ......................... 326 A. EARLY CONTRACTOR INVOLVEMENT (ECI) ................... 327 B. PROGRESSIVE DESIGN BUILD (PDB) ........................ 329 C. ALLIANCE ............................................ 330 D. INTEGRATED PROJECT DELIVERY (IPD) ...................... 331 E. KEY FEATURES OF COLLABORATIVE CONTRACTS .............. 334 VI. PROJECTS WELL SUITED FOR COLLABORATIVE CONTRACTS .......... 339 VII. SUCCESS STORIES ........................................... 341 VIII. COLLABORATIVE CONTRACTS DO NOT ALWAY

FAQs

Why are collaborative construction contracting models becoming more popular in Canada?

They have gained renewed interest due to significant local and global challenges and they offer opportunities to improve delivery outcomes. The models aim to share risk, reduce disputes, and support on-budget and on-schedule completion while incentivizing cooperative behavior.

Why does the energy sector in Canada appear to adopt collaborative contracting more slowly?

Traditional fixed-price or cost-plus delivery and design-build approaches remain common, particularly in Alberta. The article notes that the energy sector is still affected by shifting market factors, suggesting change may be needed to attract experienced and varied bidders and use innovative contracting strategies.

What collaborative contract types are discussed for energy-related projects?

The document covers early contractor involvement (ECI), progressive design build (PDB), alliance models, and integrated project delivery (IPD). It also summarizes key features that distinguish collaborative contracts from traditional delivery.

Sep 12, 2026

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