Both the Client and the Contractor are governed by the same goal – to build an Object. However, the Client tries to bring the expenses to the minimum, while the Contractor is the one who is always pulling the price up!

There are many factors that lead to an increase in works value – insufficient elaboration of design decisions, vague requirements of the Client, change in approved course of action, technical and legal flaws in the contract, absence of Contractor’s guarantees and liability, third-party companies, including state ones, force majeure…

Let’s take the typical case: the budget of the project has been determined at the stage of concept and business–plan development. It slightly increased after design works and Tender procedures. Further on, at the stage of works execution it turns out that certain “unforeseen” works have not been taken into account, the designed equipment cannot be utilized and is to be substituted with more expensive devices, etc.

As a result, the Contractor requests to raise the price, minimizing in such a way the project cost-effectiveness. Effective project management brings such risks to zero.

Verification of design documentation as to its compliance with the Client’s requirements to the Object of construction, issuing the expert statement as to the possibility of construction according to the developed design, verification and additional analysis of BOQs as well as the Contractor’s proposals as to their compliance with Tender Conditions – those are just several steps on the way to effective price formation.

If the risk of “unforeseen” works is unavoidable, then it becomes the responsibility of the Contractor as a professional market player, able to accurately evaluate the risks and neutralize them.