The Pattern That Plays Out on Most Large Traditional Contracts
The owner’s consultant produces a drawing set. The contractor bids on it — lowest price wins. Handshake. Construction starts. Then reality shows up.
The drawings do not match site conditions. The contractor sends an RFI. The designer takes three weeks to respond. Crews are standing around burning daylight. A change order goes in. The owner pushes back. The contractor files a claim. Lawyers start circling. The project finishes 14 months late and 40% over budget.
This pattern plays out on most large traditional contracts around the world. Not occasionally. Most. And it’s not because of bad people or incompetent organizations. It is a structural problem — one built into the design of the contract itself.
Failure Mode 1: Misaligned Incentives
In a Design-Bid-Build arrangement, the contractor profits by building fast and cheap. The designer’s fee is fixed regardless of how buildable the design is. The owner wanted quality but awarded on lowest price. Everyone optimizes for their own outcome — not the project’s.
The contractor who wins on lowest price has, by definition, left the least contingency in the estimate. When risks materialize, there is no buffer. The rational response — from the contractor’s perspective — is to recover through change orders and claims. The contract structure created that incentive. Blaming the contractor for using it is like blaming water for flowing downhill.
The designer, whose fee was set at appointment and who bears no financial consequence for an uncoordinated or unbuildable design, has no financial incentive to invest additional effort in coordination or constructability. Their incentive is to produce drawings that meet the technical standard of care with the resources their fee supports. What happens in the field after the drawings are issued is legally someone else’s problem.
Failure Mode 2: Late Knowledge Transfer
The contractor — the party with the most detailed construction knowledge — has zero input during design. By the time they see the drawings, the design is fully developed. Any construction knowledge they could contribute has been locked out by the procurement timeline. Every improvement to buildability after tender requires a change order, which requires approval, which burns time and degrades the owner-contractor relationship.
This is not just an inefficiency. It is a fundamental misallocation of expertise. The contractor knows how to sequence work safely and efficiently. They know what local labour can actually achieve, which materials are reliably available, where the coordination problems between trades typically emerge. None of that knowledge informs the design, which is developed entirely by a design team whose expertise is technical design — not construction execution.
Failure Mode 3: Adversarial Risk Allocation
The traditional contract pushes nearly all risk to the contractor through fixed-price lump sum structures. When risks materialize — site conditions differ from geotechnical assumptions, regulatory changes affect scope, supply chain disruptions delay materials — the only path available to the contractor within the contract framework is to file claims.
The adversarial dynamic that results is not a failure of professional character. It is the predictable output of a contract structure that gives parties no collaborative mechanism for resolving problems. Every risk event that falls within a grey zone of the contract language becomes a commercial dispute, because that is what the contract designed it to be.
Failure Mode 4: No Shared Ownership of Outcomes
When the project fails — and overruns are the norm rather than the exception on large traditional contracts — everyone points in a different direction. The designer blames execution quality. The contractor blames drawing quality. The owner blames both. Nobody owns the outcome because the contract never gave anyone shared ownership of it.
I have sat on both sides of this table — as a contractor managing rail corridors and highway programs, and as an owner’s representative overseeing billion-dollar transit programs. The adversarial dynamic is not a personality problem. It is a contract design problem. And it has a solution.
Progressive models do not eliminate disagreements. They create structures where the default response to a problem is to solve it together — not to call a lawyer. That shift matters more than most people in infrastructure delivery yet appreciate.