Contractor series 03 (retraining delivery teams after alliance projects: avoiding “alliance hangover” on fixed price jobs)

Recognising the warning signs

When teams transition out of alliances without appropriate recalibration, the warning signs tend to follow common patterns. Delivery staff hesitate to issue notices for fear of appearing adversarial, even when the contract requires prompt notification to preserve entitlement. Principals are provided with levels of cost visibility that may be entirely appropriate in alliances but dangerously open in fixed price delivery, weakening the contractor’s position on variations.

Record keeping standards deteriorate. Claims are prepared retrospectively on incomplete evidence because contemporary documentation was not prioritised. The pragmatism and flexibility that characterise alliance working rhythms begin to influence fixed price delivery, with teams assuming that informal agreements, scope adjustments and sequencing changes will be resolved cooperatively only to later discover that such assumptions have no contractual foundation. All these behaviours trace back to the underlying problem: alliance habits applied uncritically in a risk environment that functions on entirely different principles.

Resetting mindset: returning to contractual discipline

The first and most important reset is behavioural. Teams must understand that the commercial logic governing fixed price contracts is fundamentally different.

A key shift concerns the role of rights and notices. In alliance environments, issues are generally raised and resolved openly without relying on formal notification. Under fixed price contracts, entitlement often turns on whether the contractor issued the correct notice, in the correct form and within the required timeframe. Notices, far from being adversarial, are the contractor’s primary means of preserving rights and avoiding time barred claims. Teams must be explicitly encouraged and expected to use notices as routine operational tools.

A further shift involves information discipline and escalation. Alliance models reward transparency, including openness about cost structures, risk allowances and contingency usage. Fixed price projects do not. Early disclosure of internal cost pressures or margin exposure can significantly weaken a contractor’s commercial position when variations or delays arise. Similarly, alliance governance processes often rely on consensus building and accommodate slower escalation. In fixed price environments, unresolved issues rapidly crystallise into entitlement risk. When access is delayed, design information is late, sequencing is affected or instructions conflict, early escalation, internally and contractually, is essential.

The final behavioural shift is recognising that records, not relationships, underpin entitlement. Alliance teams are accustomed to fluid problem solving and informal agreements. Under fixed price delivery, undocumented understandings create vulnerability. Disciplined contemporaneous records, such as daily diaries, delay logs, confirmed instructions, meeting minutes and photographic evidence, form the backbone of any defensible claim or extension of time. Alliance style reliance on good faith and shared objectives finds no traction in an environment where the contract defines entitlement.

Structure around the reset

Behavioural changes alone are not enough. A structured re entry programme is strongly encouraged for personnel transitioning from alliance projects to fixed price delivery. This can be delivered as a focused workshop before mobilisation, covering notice regimes, valuation processes, liquidated damages, key risks, claim pathways and entitlement mechanics.

Responsibility for notices and claims should be unambiguous. Teams must understand who drafts notices, who approves them, and what happens when a deadline is at risk. A live claims and issues register, jointly maintained by commercial and delivery staff, ensures emerging disputes are visible early and evidence is captured contemporaneously. Weekly programme updates, with clear attribution of delay causes, help realign commercial and planning functions so that entitlement and scheduling remain synchronised.

Contractors should also set clear expectations regarding informal dealings. Undocumented agreements with principals, consultants or subcontractors should be prohibited. Simple confirmation templates can help ensure instructions and understandings are documented immediately, preventing scope drift or retrospective disagreements.

Conclusion

Alliance habits do not immediately disappear, and these habits can expose contractors to risk when delivering fixed price projects. Alliance hangover is real, but entirely manageable with the right preparation.

References

¹ National Alliance Contracting Guidelines – Guide to Alliance Contracting (Australian Government Department of Infrastructure and Transport).

² Alliancing Best Practice in Infrastructure Delivery and Alliancing Code of Practice (UK Government / Infrastructure UK).

Relevant articles

• Contractor series 01 (internal contract review & risk governance for contractors)
• Contractor series 02 (alliance behaviour and no-sue cultures: what teams should understand)
• Contractor series 04 (subcontract alignment)
• Contractor series 05 (claims hygiene and notice discipline)

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Disclaimer: The content of this article is general in nature, does not constitute legal advice and should not be relied upon for that purpose.  Parties should seek specific legal advice tailored to their circumstances before acting on any of the matters discussed.