Collaborative Contracts in Construction: A Global Perspective

NICOLAS CAYOUETTE: Good morning, everyone. Bonjour [SPEAKING FRENCH]. So hello, everyone. I will be continuing now in English. Thank you for joining us for this very interesting panel.

I'm happy to see so many professionals joining us today, both virtually and in-person. We have a great panel for you with respect to international perspective for collaborative approach. And today's panel will be divided as follow-- firstly, I will ask each participant to introduce themselves. Then we will have a brief introduction on each of the jurisdictions, and followed by an open question period in which we will answer various questions.

So maybe I would start with some of my colleagues from overseas, maybe Jessica, if you would start to introducing yourself.

JESSICA TRESHAM: Hi, everyone. My name is Jessica Tresham. I'm a partner at Gowling from the UK in the London office. I specialize in construction and engineering disputes. I've got about over 20 years experience working across a wide range of sectors and various different standard forms and bespoke contracts ranging from government to oil and gas, housebuilding, road and rail, and major infrastructure.

I suppose during my career, I've been involved in a number of quite high-profile disputes in both the courts and arbitration. I would say my real passion lies with alternative dispute resolution, so resolving disputes. I've managed to be successful in saving clients considerable sums of money in that area. I'm really looking forward to today to sharing with you some insights on the UK perspective on the collaborative contracting and licensing agreements that we've seen, and perhaps taking some questions and discussing what's good about them, and also situations where perhaps they're not the best contracts to use for that specific project.

So I'd also like to say thank you very much to my colleagues in Canada for inviting me today. I'm looking forward to our conference.

NICOLAS CAYOUETTE: Thank you.

JESSICA TRESHAM: Thank you.

PETER ANAGNOSTOU: Thanks, Jess. My name is Peter Anagnostou. I'm a partner based in Middle East based in the Dubai office. I specialize in construction disputes as well, primarily arbitration. I'm from Australia. So I practiced in Australia for a few years. I have actually lived in Montreal in the past when I studied at McGill for my last year of my law school. So it's nice to be back, and thank you for having me.

Middle East is very active right now. A lot of construction, a lot of mega projects, a lot of discussion about alternative methods of procurement and contracting. Over the last 12 years of my experience in the Middle East, based in Dubai, we've had a number of disputes, high-value disputes, and all of them related to fixed price contracts, all of them related to the typical dispute elements, and a lot of them are very adversarial.

So there's a lot that can be changed, and there's a lot of pros and cons associated with different methods, but I think it's an important conversation. And considering your options, rather than sticking with what you're used to, is always a positive way forward.

NICOLAS CAYOUETTE: And Mark.

MARK PLATTEEL: Great. Mark Platteel. I'm a partner in the Toronto office, and I work in the projects and infrastructure, and construction space. Long history of working on large-scale infrastructure projects, both traditional and non-traditional. Significant P3 activity obviously in Canada and now migrating to different contract forms as they've taken hold in Canada and looking forward as much as anyone else to hear what's happening across the world in those contracting spaces.

NICOLAS CAYOUETTE: So thank you, Mark. And myself I'm Nicolas Cayouette. I'm a partner also from the Montreal office. I do major infrastructure project and also in specialized in environmental law. So I have a practice that basically evolved over time. It started off in advocacy and litigation. I still do some of it, and I'm also now specialize more in major projects.

I don't think the clicker works. Moving along, I think that the one more detail that I wanted to add this panel is in English, but we will be accepting questions both in English and in French. So if you have questions in French, feel free to ask them or put them on the chat. So that way, we'll be able to see them. And we'll try to address them all at the end. But in both languages, it's not a problem. I'll try to translate it at best I can.

So maybe Jessica, tell us a bit more about what's happening in the United Kingdom.

JESSICA TRESHAM: Thanks, Nicolas. I always like a bit of audience engagement, and that very is much how we want to approach this today. So before I start, I'd be really interested to hear from you. And feel free to put this in the chat as well. What do you think, in the room, is the biggest threat to our global economy right now? Come on, chuck some answers out at me.

AUDIENCE: [INAUDIBLE]

JESSICA TRESHAM: Whatever you want. I'm expecting some answers here, but have a think maybe a little bit more wider than that. But that's certainly something.

AUDIENCE: There's definitely a trend toward protectionism, of course, in the US, but globally in the UK so part of it impacts businesses here as well as.

JESSICA TRESHAM: Absolutely. Anyone else?

NICOLAS CAYOUETTE: No.

JESSICA TRESHAM: OK, cool. I'll help you out. I was asked this question the other day when I was at University of Cambridge, and we were listening to a talk from a very renowned economist, and he asked this question, and what came out from the audience was probably, as you expect-- a lot of people said Trump, a lot of people said tariffs, a lot of people said war and the geopolitical situation we find ourselves in at the moment.

And that got me thinking that I knew I was coming here to deliver this talk. And I thought, well, all these things we're talking about now is relevant to the way we need to approach business and the way we need to approach contracting. Particularly, climate change came up a lot and the issues that can cause-- and when we pull that into contracting and major infrastructure projects, what struck me is all of these issues that we are facing right now in the global economy are causing risk, they are causing supply chain uncertainty, and potentially if not already, but leading to disputes and ultimately potentially project failure.

So when we take that as a backdrop and we're talking today about a different type of contracting where perhaps that risk is going to be shared more evenly, I think now is the time, more than ever, to open our minds up to looking at different forms of contracting. So I'm going to take you through a few things today. I'm going to give you, firstly, a little bit of an overview of collaborative contracting in the UK and a little bit of the history about it. Not too much. Don't worry.

Then I'm going to look at a few projects that have been successful. And then I'm going to share with you a few insights in terms of how these projects have worked well and why. So collaborative contracting in the UK involves forming alliances between the client, the project owner, contractors, and sometimes also the wider professional team, so designers and key suppliers.

And it can and does involve many different types of forms. So there isn't one particular type of contract. There's various different types of it, some wider than others. But there are some underlying ethos principles to all of these types of contract, and that is where the parties are committing to work together as one integrated team. So they're aligning their interests, they're sharing risk, they're sharing rewards of the project.

So alliances and contracts, when you hear these sort of terms, they often include mechanisms for continuous improvement, for innovation, but the aim is for delivering a better value and outcomes for the life of the project. And also, you will see, and I'll come on to this in a bit, also the legacy of the project as well. So it really is looking at a whole life cycle of a project.

NICOLAS CAYOUETTE: It works.

JESSICA TRESHAM: You've done it, OK. So I wanted to talk to you a little bit about the evolution of contracting, from talking to my colleagues. I think it's pretty much the same here in Canada as it is in the UK, is that contracting is kind of known for its adversarial approach, often with one party bearing the cost and the risk of changes in the economic climate, the examples I just gave earlier, price of materials or even tariff increases.

And as we say in the UK, it's kind of your risk, your problem, mate, and that was very much the approach. So that kind of adversarial approach can bring around a number of disputes that ultimately can delay or even bring about the end of a project. And the climate we're living in now, we're seeing in the UK more and more insolvencies, project failures, because the parties are just very rigid in their approach to the contracting. The contract says what it is, the risk allocation is formed, and it is what it is.

So the evolution of collaborative contracting represents a significant mind shift from these traditional adversarial relationships to a more integrated and cooperative approach. So the current world we find ourselves in, as I said earlier, does require, in my view, a different way of looking at risk and sharing to allow projects to continue and also for parties to have known outcomes on specific risk situations and more importantly, the way in which they may be resolved.

So the transition in the UK from the traditional adversarial approach to a collaborative one has actually been around for many years. It's been influenced by a number of academic reports. It's been influenced by the evolution of contractual frameworks, but it's also had a strong influence from industry bodies, industry initiatives that have recognized the benefits of collaboration in delivering successful construction projects. So I'll just come on to those now. There we go.

There we go. So one of the earliest and most influential reports advocating change was known as the Egan Report, and it was entitled "Rethinking Construction," great title, published in 1998. But this report really was a significant change point in the industry. It addressed and highlighted the inefficiencies of the UK construction industry, and it recommended this focus on customer satisfaction, integrated progresses and processes, and a commitment to quality and people.

Off the back of that, the government-- Sorry, I'm still on this one. Off the back of that, the government then got involved and produced something called The Government Construction Playbook, and this has absolutely nothing to do with football or hockey. It was published in December 2020, and it set out key policies and guidance for the procurement and delivery of public sector construction projects.

And again, picking up on the themes of the Egan Report, it talks about this idea of early supplier engagement. So way before you even entered into heads of terms, it was looking at long-term relationships and collaborative approaches to the performance and sustainability of public construction projects. So really, it was that influence from the government and the introduction of the playbook that really brought about and saw a shift in terms of using these types of contracts.

So I just wanted to take you through a couple of examples. I said before, there's many types of collaborative contracts. I wanted to take you through a few that we've seen used successfully in the UK. So the New Engineering Contract, the NEC, I'm not sure if you're aware of that here in Canada, but it's a very popular form of contract in the UK.

It was first published in the early '90s and is now in its fourth edition, but it's been a real trailblazer for collaborative contracting and was designed with collaboration at its core. And what's really different about the NEC in terms of the more traditional forms of contracting that we've seen is it brought about early warning systems, so an obligation on parties to actually put their hand up and say, we think there might be a problem. And the contract introduced a process in terms of time frames in which the parties, the project owner and the contractor, would work together to identify that and see if they can actually put in systems in place to see it off at the pass, I suppose, would be a way of putting it.

So essentially, the NEC encourages parties to communicate and resolve issues early, but also by being transparent, and this idea of collective responsibility for risk management. Another type of contract, and the reason I've put this one up here and this is a bit of what we call in the UK, a Marmite type of contract.

And what I mean by that is that you either love it or hate it. It's a type of breakfast spread that you have in the UK, and the advertising for that is you either love it or hate it. And that's very much the approach for the PPC2000, which is a bit of a mouthful, but the PPC is a single framework for the entire project team. So the entire project team will be working under one framework and under the same terms and conditions.

But again, it supports this collaborative construction, joint decision making, shared responsibilities, but also this concept of mutual accountability amongst all stakeholders. So taking those two contracts in mind, I wanted to just take you through a projects in the UK that have used them and talk about the pros and cons and what actually happened on the ground.

So the first one is called Crossrail. So Crossrail is known in the UK as the Elizabeth line. It's a metro line, or, we like to call it in England, the tube. I don't know if anybody's been to the UK and been on the tube, but it can be quite an interesting experience.

So the Elizabeth line it was a brand new metro line that was going to be fast, innovative, air conditioned Wi-Fi, the kind of way that Londoners and people visiting London would want to travel. So it was designed to enhance transportation right across London, from the west, just outside the West of London, right into the city center. And it was an 18 billion pounds project. And actually, it did face significant challenges, as you would probably expect with that sort of project, tunneling operations, and coordinating multiple contractors.

But what they did with the Elizabeth line is they adopted this collaborative construction contract, which played an absolutely crucial role in its execution. So Crossrail employed the NEC contracts, and from the outset, it fostered this cooperation between stakeholders. Again, as I said before, the ethos of these early warnings, risk sharing, and open communication really did help to manage some of the risks and mitigate the disputes during construction.

An example of this would have been perhaps regular collaborative governance meetings that made sure all parties from the subcontractors through to the designers, aligned their objectives from the get go from pre-projects so that everybody understood the overall project goals. Crossrail did face delays and budget overruns, but the collaborative framework allowed that effective problem solving and actually avoided litigation in the high court or arbitration. So the multi-tiered dispute resolution mechanisms within the contract and these early warning ethoses help to actually minimize that risk.

Despite Crossrail's ambitious vision and collaborative framework, it did have setbacks, as I've said. It was initially scheduled for completion in 2018, but it faced a number of delays due to challenges with signaling and communication systems. But moreover, there were huge complications in the tunneling under historic parts of London, which contributed to the slow process. So this in turn is probably not comes as a surprise to many of you in the room. This brought about a number of budget overruns.

The original estimate of just over 14 billion actually ballooned to 18, and again stemmed from the complexities of running these multiple contractors within this project. However, it is actually known as a beacon of success in the UK because the project did finish by its planned opening phase in May 2022 in the end, and that is solely down to the collaborative approach. So it does work, but what I would say is that it's these big major projects that perhaps the collaborative approach is best suited to.

Another example, which is a project that we're very proud of in the UK, and I was actually fortunate enough to be involved in certain elements of this, noting that I'm a dispute lawyer. I can't say more exactly, but the London 2012 is seen as a beacon of success for collaborative construction. So tasked with delivering world-class sporting venues across multiple areas within London and urban regeneration within a specific time frame, the Olympic Delivery Authority relied on collaborative contracting methods in order to produce the project on time. And as we all know, with the Olympics, that is a hard deadline. You cannot miss it.

So I touched on this earlier. A lot of the contracts used in the delivery of the Olympics was the PPC2000, which I explained before is this single multi-party contract under the same Ts and Cs. Again, PPC is designed to foster partnerships amongst stakeholders in the project, and it really does adopt a proactive approach, encouraging this early engagement that I've spoken of before. And I would say in London 2012, the use of PPC2000 was instrumental in ensuring that timely delivery and achieving outstanding outcomes.

What we did see was some disputes within the project, but actually, they were resolved, usually within the framework of the project. So, for example, there's a mechanism within the project to have early dispute resolution meetings. And usually, those did resolve the disputes because everybody was working together with that shared objective to deliver an amazing Olympics in 2012.

And that's certainly what happened. I don't know if any of you were there. I was lucky enough to go to a few events, and it really was fantastic venues. Although I was more looking around at the design and architecture of them rather than the sports. So just coming on to now. So the collaborative approach has produced remarkable results that we've seen in the UK, iconic venues, and leaving a lasting legacy of regeneration.

There we go. So both Crossrail and the Olympics demonstrate the transformative power of collaborative construction contracts. And I would say whilst Crossrail highlighted the need for adaptability in large-scale infrastructure projects, the Olympics, on the other hand, which was a different form of contract in the round, showed how collective effort and shared accountability can actually achieve extraordinary results under tight deadlines.

So just to reflect on all of that, I would say if you're looking at collaborative contracting models, the ethos of promoting transparency with mutual trust, proactive risk management really do enable stakeholders across the project to overcome challenges and deliver impactful results. And in the UK, we continue to undertake ambitious projects using these forms of contract, and I think the lessons learned from these stories are still used as invaluable benchmarks for future endeavors.

I wanted to now, as I said when I introduced this talk, just as I draw to the close of my section, just have a look at some of the more practicalities, I guess, in terms of what makes them work and what doesn't. So I've just got some leadership considerations. I know we've got quite a broad cross section of people in the room and roles here, but in my view, and from my experience of seeing these contracts from the dispute side, it really does, at the end of the day, stem on how the leadership of that project actually addresses what's written in the contract.

Because I think we all can have whatever you like in a contract, if it's just put in a drawer and it's not operated properly, it's not going to work, whatever the ambitious aims of the parties were before they entered into it. So I've just got up here a few key pointers, really, and it's that building and sustaining trust. And what I've seen in these projects that have worked well is that trust-building relationship has started pre pre-contract.

So parties are already spending time together. They're more open book. They're sharing ideas and they're talking in a transparent way rather than on a closed-book way, trying to hide certain elements from each other. I've mentioned before this transparency and communication, but in terms of project leadership, this really was a vital skill, especially as it's often the leaders of the project that might be at the first tiered stages of the dispute resolution.

So if those leaders of the project haven't got the trust of the wider contracting body, those mechanisms may well not work if that trust is broken down. Another key point is this proactive risk management. So you have to adopt a really forward-thinking approach, I guess, to identify and address those risks early and have that joint decision-making. So it requires leaders to anticipate those potential challenges and coordinate the appropriate responses.

The fourth one I've got there is aligning stakeholders' objectives. And I would say that's probably the biggest challenge in this form if I'm honest, because it brings together such diverse groups of business, each with their own goals, each with their own profit margins and ideas of how things will or will not be. So where I've seen these work well, it's where the effective leadership has really worked hard at aligning these objectives with the overall vision of the project. So everyone's kind of rooting together for the same goal rather than rooting for their own specific business and their profit margin.

So I know we're going to talk about this a bit more, but it really does require this of paradigm shift in culture, and that's not easy to bring about. So it's the leadership that really has to be the glue that brings that about together. And then incentivizing efficiency and accountability. Well, all of these frameworks have incentives, targets, pain-gain sort of type share mechanisms in how they work. And as I said before, not always suitable for all projects.

And really, you've got to be flexible and adaptable because large-scale projects, whatever the form of contract we know will encounter unforeseen challenges. And you've got to have a leadership that can adapt quickly to that. And as I said, in Crossrail, there were a number of problems with signaling and communication systems, which really exemplified the need for that flexible, fast-thinking leadership that can quickly come together and realign strategies whilst also keeping all the stakeholders engaged.

So that's quite a lot of fingers in pies that you have to be having all at one time. And I said before, if you haven't put the time in to build up that trust and teamwork ethos before you even put a spade in the ground, this just isn't going to work. So that's a real key takeaway for me. So that legacy and long-term impact, obviously, the kind of projects I've talked about today in the UK are real legacy projects that are going to deliver for the UK for considerable amount of years.

And the legacy of the Olympics is all about sustainability and urban regeneration and transforming London's landscape, and that was the real legacy of that project. So, for good leadership, I would say where I've seen it work really well, it's leaders that really embed that forward-thinking perspective from the get-go into those contracts and get people working together. Me talking about it, it sounds easier than it actually is in practice, but that's when you see it working well.

So finally, just to draw together some conclusions in terms of what I've had to say today, success hinges on strategic leadership that balances technical, interpersonal, and organizational demands. You've got to build trust. You've got to facilitate communication. You've got to manage your risks proactively. And you need to make sure you've aligned all those diverse stakeholders into those shared goals.

So I hope you found this useful. Obviously, happy to take some questions at the appropriate time later on. But I wanted to now hand over to my colleague Peter Anagnostou from our Dubai office, who's going to have a look at the Middle East perspective with you. So thank you for listening.

NICOLAS CAYOUETTE: Thank you.

PETER ANAGNOSTOU: Thanks, Jess. So it dawned on me as we were listening to Jess that you're essentially where disputes, construction disputes, lawyers advocating for a mechanism that avoids disputes. So I guess the question is, why would we be doing this, and what is our motivation here?

So it's fascinating because for many years, so over 10 years, I've worked in Dubai on some significant projects, very interesting construction projects-- I can't hear. OK. --construction projects. And every time it's been adversarial, it's been the enemies on the other side. I act for the client.

And when you've got a mechanism that provides options such as sharing the project goals, risk sharing, sharing the benefits, creating Alliance, culture of mutual trust and cooperation, early contractor involvement, clear defined project scope, and also proactive risk management, it really helps the project itself achieve what it's supposed to achieve. As disputes lawyers, we love disputes and we love fighting. But I also hate turning up to a project where my client says, I didn't send any of my notices because I didn't want to upset the other side, or I didn't comply with the contract, or we didn't say anything because didn't realize how the contract was supposed to be managed.

The lack of communication on projects is one of the biggest issues we see on all of our disputes. And it's not intentional, it's just because sometimes people are too busy. Sometimes the project is too complex and there's too many working parts to focus on your claim for a variation at this point in time.

And so a lot of these things, as disputes lawyers, we love because we end up being in an arbitration for two years. It's a great experience for us. But it's a terrible experience for our client. And then the client never wants to come back to you because you're that lawyer who worked for them for two years on that terrible project. So for us, as disputes lawyers, this is a great opportunity to change the way the industry works, change the way our clients operate, and help them problem solve, as opposed to at resolve things at the end and try to pick up the pieces.

So a bit of context as well, I thought might be useful. Jess has just explained how beneficial these procurement models can be, and how useful they can be, and how they work when operated correctly. The issue we've had in the Middle East is that not a lack of appetite or desire to actually engage in these models. It's the up and downs of the economy and the up and downs of the world, the global kind of climate that have dictated how things have played out over the last 20 years.

So, for instance, from what I understand, one of the first examples of an Alliance contract in Abu Dhabi in the Middle East was in 2007 with a developer who engaged under the NEC3 contract out of England and had a very successful project. And then after that, there was silence in the industry. There was no further examples of anything happening until in 2018, there started to be increased discussion, essentially exactly what we're talking about now, about the economic climate changing, things getting difficult.

We need to have alternative models. Things need to change because the industry is suffering. How do we progress? What is the rest of the world doing? So Dubai, unlike many other places, is a-- well, UAE is made up of 90% expats in terms of population. So the people that live there are from other jurisdictions. The participants, the global contractors who there are all from other jurisdictions.

So they all have this experience from Australia, from England, from Europe, from Canada, from America. They've seen how things can be done in elsewhere. So they try to bring their experience and their ideas to the Middle East. And there was a really useful discussion being had in 2018-19 about collaborative contracting and how it could change the industry and help. Unfortunately, just as it was gaining momentum, the COVID-19 happened and the industry completely reset again.

Everything stopped, everyone went back to square one, and everyone went back to their own old ways. What they knew, what they were used to and reverted to, the old-fashioned approach to procurement. So that's one of the biggest impediments we've seen here. The change in attitude, the shift in attitude, and relationships is a key component here. It's very, very difficult to change the way people do business.

When you've got a region such as the Middle East, where they've achieved incredible results in the space of 50 years, they've built cities from Greenfield sites. They've built everything they've done there in the last 50 years under traditional procurement models. And yes, there have been disputes lawyers like myself, in the background, very, very busy. But at the end of the day, they've achieved something remarkable through these models.

So convincing the government or the employers, or anyone in the industry to change is very difficult. And that applies to everywhere that we operate. So it is a difficult thing to sell. But the pros, I think, outweigh the cons, definitely. And it just requires a lot of effort on everyone's part.

So when you're looking at the different models now, you've got mega projects which could benefit from this. You've got major infrastructure that could benefit from these kind of models. Traditional approaches always lead to cost overruns, delay. There's a lot of data in the industries that show--

So I understand there's a study that was done in Hong Kong about 10 years ago where the government procured a number of projects, infrastructure very similar. One was done under an Alliance model, and the other two were done under traditional contract models. And under the Alliance model, they were able to determine that the works were completed early. There were disputes, there were claims, there were a number of issues, but they were resolved internally through communication, through direct dialogue between the parties.

And there was that trust that was missing from the other projects, which were essentially the classic adversarial approach to claims, which led to further defects as well, because there's less oversight, there's less cooperation, and there's less knowledge of what's happening at the time during the project, as opposed to coming on site after and finding all the issues and trying to resolve them at that time. So there's a lot to be gained from this. And that's been known in the Middle East and in the UAE for many years.

And for years, I've been discussing this with contractor clients predominantly. They're the most vocal, of course, in terms of what wanting change and wanting something to change in industry and creating a culture that encourages joint solutions or that encourages communication that aligns the commercial incentives of all parties on the project, these are all things that are pretty basic principles that aren't that difficult to understand. The biggest issue we've found is having someone on the other side who's willing to listen, who's willing to take a risk or take a gamble or take responsibility for something different that they're not used to.

And so education, I find, is the most important element of this whole process. And just making sure that people are in a room and they listen and they understand that there are other options as opposed to just one way for everything. And it's very difficult to change. So I'll skip through some of this stuff.

All of this is it's essentially what Jess was saying was. The issues in the UK they're the same everywhere you see them on your projects. You see these lowest price win kind of tendering models where, as a disputes lawyer, we know that we're going to be bidding on that project. So it's not a good model to keep repeating, but it just tends to be the way that people do business in this industry, unfortunately.

And you have poor payment terms. You have lump sum contracts, which are inevitably going to change and be full of variations and increasing cost, and increasing time. So these models offer a very real solution to some of these problems. They're very difficult to implement. They require a lot of engagement on both sides. But they can create results, and they can create an environment which kind of-- I'll just read them out essentially.

It creates an environment where everyone acts in good faith, but a contractual requirement to act in good faith. So in the Middle East, in civil law, good faith is a requirement under the law, but it's very rare to see that contractually in the contracts. Early warning risk management mechanisms these are all pretty basic. Alternative approaches to key risks of cost and quality, the pain-share gain-share arrangements that basically provide options for both sides to assess the issue and balance the risk.

Governance arrangements to facilitate collective problem solving. No blame regimes. That's important. So all of these things are benefits you can see. And these are the various models that you can-- I'm not sure if it's showing up--

NICOLAS CAYOUETTE: One more.

PETER ANAGNOSTOU: There you go, that you can implement. Like I just mentioned, there are a number of different procurement models. These aren't novel. These have been used in other jurisdictions. They can be used anywhere.

What we have seen, which is a positive sign in the Middle East recently, is the increase in the use of PPPs. So PPPs, whilst not traditional collaborative in the sense that what we're talking about, they still require collaboration between the parties. They still require a joint group of different people with different incentives and different stakeholders working together to achieve something together.

So I think it's that mindset that's very important here, that it shows you that there is a way forward. There can be many ways forward, but there's a way to change for the better if everyone considers what options are available and tries to implement it. And just to finish off, one graph that I thought was really interesting was this is a table of the procurement mechanisms and the awards awarded in Saudi over the last nine years.

And you can see here from the types of contracts and the models used, there is a distinct change in the last couple of years towards using more PPP model, which is very positive and encouraging. There's no color there for any other kind of Alliance or any other model, but it shows that there is a trend towards moving towards something different.

And I think that demonstrates that in these cultures, even in these countries where they have significant amount of money to invest, they're now looking for alternatives as well, to try to diversify, to try to change their approach, to try to manage their risk and look for alternative solutions, which is the key. So I thought I'd leave you with a few lessons that you can learn. And this is all very much repeating what Jess had to say as well in relation to the UK.

But commitment to the process is key. The parties need to commit early on. They need to agree to trust each other. They need to agree that this is the mechanism they're using, and they need to stick with it because a lot of the time we see a huge discussion and a lot of parties talking about collaboration, about alliances. They all come to the table. They sit down and say, OK, we're going to do this, and then six months later, they revise the contract to make it lump sum fixed fee. It's just too hard.

It requires a lot of commitment, a lot of engagement, a lot of communication, trust. Trust is the most important element here, which is lacking, of course, in this industry. It's very difficult to trust the people that you're trying to make money from, and that's the whole mindset here. It's the working together. It's the idea that you're working together to actually achieve something together, as opposed we're here to make a profit margin of X and then we'll move on to the next project.

So there's a mindset change there, being transparent in terms of communications, but also transparent in terms of your claims, in terms of what's happening on site, what's happening with materials supply, that kind of thing that can delay the project. Just making sure that everyone understands how the project is progressing. Education for all parties involved, even the lawyers, and have it, in my experience, employer and government-led is one of the key components here.

You need the employer buy-in. You need the government to step in and say, we need this to work. What can we do from our end to make it work? And that's very difficult because it's a lot easier to say, do what you did last time.

And then the equal distribution of risk, again, as a disputes lawyer, that's the key. And it's pretty obvious. But we always see one party with all the risk and all of our claims, and all of our matters.

NICOLAS CAYOUETTE: So final--

PETER ANAGNOSTOU: Here we go.

NICOLAS CAYOUETTE: Over to you.

MARK PLATTEEL: Yes.

PETER ANAGNOSTOU: Mark, it's your turn.

MARK PLATTEEL: OK, so maybe just before we get into this. This is intended to be a broad overview of what's happening in Canada. Big picture, I think people are aware that collaborative procurement model was not widely used in Canada five plus years ago, and now it is widely used. So there's been a transition in Canada, and that's the big picture.

So maybe just to start with, how did we get here? So before collaborative procurements became very widely used, P3s were widely used to deliver complex projects in Canada. And there's a long track record in Canada, very successful track record of delivering projects.

That doesn't mean they were not without issue, because we know that there were significant issues. And that's part of the story of how we landed with collaborative procurements. But they arrived 20-plus years ago. They were very prevalent in British Columbia in the early days, made their way to Ontario, made their way in other jurisdictions.

And there's a long track record of very successful projects that are in operation today, critical infrastructure across Canada that were delivered with private finance through P3s, and that was very beneficial if you're looking at it from a government perspective and how to get infrastructure built. If you're looking at it from a private sector perspective, and how can I participate in this infrastructure build, it worked very well.

Governments are very keen on fixed prices, fixed schedules, no cost certainty. The P3 model delivered that. It was usually fixed price, fixed schedule. And competitive procurements led to value for money, that was the perspective of owners. Competition drove prices down. Usually lowest price and lowest NPV would win, and governments are quite happy with that.

And it was dominant for a long time. And as part of that, Canada became a real hub for infrastructure. And there were many contractors and infrastructure developers and participants that came from other jurisdictions to Canada because of this model and because of the infrastructure deficit we have in Canada and the volume of projects, particularly coming from Europe, where the infrastructure market hit a level of maturity in terms of new build, there was less activity. Canada has very successfully encouraged international participation, and that's made its way here.

However, not everything was perfect, as everybody knows. So I think in part, the race to the bottom and lowest price wins created some challenges for contractors. There was a series of projects across North America where P3s led to losses for projects or for contractors and other participants on a P3 project, that led to many disputes.

I'm not a dispute lawyer. My colleagues are. But certainly there were significant numbers of disputes on P3 projects. And it reached a point where private sector participants were saying, we don't want to participate in this anymore.

And some very key contractors were leaving the space and saying, we don't want to do fixed price contracts. We don't have a good history with them. Maybe some are successful, but many are not. And we need a model that makes more sense for what we want to do here, which is to generate revenue, and ultimately make a profit and not lose money on projects.

So a lot of discussions were happening five plus years ago in the context of market soundings, in the context of CCM's projects, where bidders were asking for development phases and more time to figure out the project, to advance the design, to understand risk, to shift risk. Obviously, risk allocation is a critical piece of this discussion and of any project, regardless of the model.

And that led to the introduction of collaborative contracting. Obviously not as simple as that, but started emerging in the market. And I think it was sort of twofold. It's interesting to hear that in the UK, it was very report and government-driven.

I think people in Canada will have a different perspectives on who drove it to where it is. I can say from my prior life in as a developer, we felt like the market was sort of a ground-up request. The market was requesting us to say, if you'd like us to participate on large, complex projects, then we need a shift in how we procure these projects. We need to know more about the project. We need to advance the design. We need a better risk allocation before we lock in a fixed price and a fixed schedule.

And governments who want to deliver value for money and to do that, they need competitive procurements with good number of bidders felt the need to adjust and, to their credit, made adjustments to take a lead and introduce-- And this is evolving. So it's not like this is an accomplished end game that we've reached. This is an evolving market. But certainly, some leading procurement authorities in Canada have embraced collaborative procurements, and it is now widely used in the market.

It is generating interest from contractors who, a number of years ago, said, we do not want to participate in some of the projects that we were otherwise participating in, and some of those contractors have come back into the fold and now have interest because of how collaborative procurements are rolling out in Canada. So, yeah, it's a fundamental shift.

And now, when you look at market pipelines and pipeline reports, you see a lot of progressive procurements. In Canada, the collaborative contracting model is focused a lot on progressive procurements and less so on Alliance. That's shifting and evolving today. And we'll talk about that today.

But certainly, the history of the last three to four years has been progressive design builds and other progressive procurements with the development phase, and that is very responsive to what contractors are asking for. Alliance projects have been used to a much lesser extent, although they do have some history, certainly in British Columbia and Ontario.

So in terms of why collaborative procurements? First and foremost, it's about ensuring that the number of bidders is appropriate and you're having a competitive procurement. We'll talk about it more, but one of the challenges has been parties deciding in a traditional procurement that the risk allocation and the demand for a fixed price and a fixed schedule at an early stage is not satisfactory.

There have been a number of projects where bidders have dropped out, or the number of bidders who are bidding on a project are fewer than three, for example. And sometimes there's only one. And so those have actually evolved into progressive procurements.

Another reason for collaborative procurements is to lessen the workload of my colleagues to the left in theory. We'll see how that plays out. I mean, we'll talk about this more again. But these are early days in Canada. We don't know exactly how this is going to play out.

But in theory, one of the targets, one of the intentions of a collaborative procurement, is to identify risks, develop the design, have a proper conversation about the scope of the project, and then lock yourself into either a target price or a fixed price. And by the time you've done that-- and a fixed schedule. By the time you've done that should know more about the project, and you should be in a better position to price a project and to schedule a project, which, in theory, should lessen the potential for disputes at a later stage.

Again, this is early days in Canada with these procurements. And there's a lot of development phases today, with very few projects that have reached the execution phase that used to progressive procurement. So time will tell you whether that bears itself out.

Obviously, one of the key advantages is to advance the design. And this is something contractors were demanding in the Canadian space, the North American space, because we were contractors were providing fixed prices on very limited design development. And then you're playing a bit of a guessing game. Your cost estimators have a very high value to what you're doing, and you're hoping that they're going to be accurate.

Obviously, if you have a 80% design, 90% design, or completed design, you're going to have a much better sense of what the project needs to look like and what the cost of that will be. So that's certainly one of the intentions with moving to a collaborative procurement. Project risks and risk allocation. A lot of times, it's about eliminating risk during the development phase. So identifying what the project scope is, identifying risks, figuring out if there's an early work capacity to eliminate the risk, or something else that can be done, rather than just say, this is a risk, you're going to take it at a contingency and we'll see how it unfolds.

The development phase grants an opportunity to try to address those in a more meaningful way, and contractors are keen for that. Incentives and pain share gain share regimes there's a hallmark of collaborative procurements in Canada, certainly in the PDB space, and also with Alliance as well. Obviously, different in the Alliance context, but we'll talk about that as well.

So we talked about in Canada, it's really the progressive design-build model that has really taken a hold and is widely used. Alliance projects are used to a lesser extent. And there are new procurements with Alliance projects, so hopefully those are used more.

We talked about the fact that some have transitioned to a PDB model. So some projects in Canada have come out as a DBFM and then have evolved into a progressive DBFM by circumstance it's because there was one bidder. It's still critical infrastructure that the government wants to build, and trying to reconcile budget constraints with the sole bidder you have.

You're trying to understand the pricing of the sole bidder, and some of those have transitioned into a progressive DBFM with the development phase, to have those conversations, figure out scope, figure out price, and ultimately reach a conclusion on a project that makes sense for both the owner and the contractor. I'm not going to repeat too much of what my colleagues have talked about.

Collaboration and transparency is obviously part of the culture change in Canada with these procurements. Certainly, in the first progressive design-build projects, there was some shock on the contractor side when you see the open book and transparency provisions. If you think of a fixed price P3 project, which had been a dominant procurement model for some time, you do all of that internally.

You develop your financial model and break it down to a certain extent, but you don't break down the construction price to the level and provide the transparency that you provide to an owner on a progressive procurement. So that is a culture shift and a new concept for many contractors that they need to get their head around that owners aren't signing a blank check for the reimbursement of eligible costs on a progressive procurement. They want to know those costs the basis for them, the subcontractor costs. And that is a hallmark of this shift to collaborative procurements.

It's also very resource and time-intensive. If you think of a P3, in theory, it is a shifting of risk to one party to deliver a project on a fixed price and a fixed schedule. And the independent certifier in the past would monitor that project and report to the owner.

An owner didn't have to have a level of resources and commit the amount of time that it needs to now for a collaborative procurement. If you're going to do a development phase properly, you need to be invested in developing the project with your selected contractor. That involves individuals. It involves time. It involves understanding the project well, seeing the information that is being provided to you on an open-book basis.

And we hear often from owners about that challenge, the resource challenge. And it's a shift at an owner level, for sure, that they need to staff up or hire consultants to contribute meaningfully to a development of a project that's procured in a collaborative manner. And obviously, just noting here at the end, the jury is still out on how this is going, because this is really early, really dense.

So the Alliance model in Canada is less settled. I mean, the PDB market isn't settled. It's still evolving, but there's been an evolution. There's been a number of conversations on projects. You can see some evolution of documentation. And the Alliance model is less widely used.

There's a hospital project in DC and some road projects in BC, and sorry, just to be clear, I'm talking mostly in the public infrastructure space. We'll talk about the private infrastructure space a little bit as well. In Ontario, Union Station is the big example of an Alliance project that was signed, I think, in 2022.

There are a couple of new Alliance projects coming out now, North York General Hospital in Ontario, and Hamilton LRT has a civil works project. The RFP was just issued this week or last week, and there are four bidders for that project that were shortlisted. So there is interest in Alliance model, but that is again early days. The Alliance model is pretty new.

And you can think almost like a PDB as being a half-measure collaborative procurement in the sense that the Alliance model is a full partnership between the owner, designer, contractor, sharing of all risks. Sharing of upside, sharing of downside. A PDB is a little bit different than that in the sense that during the development phase, it's collaboration, developing the project.

But ultimately, you're signing an execution phase agreement where you are taking on risk as a contractor, as a designer of the design continues to be evolving, with a target price or fixed price, with a schedule with a risk allocation. So very different end result, all part of the collaborative contracting model, but to different degrees. And yeah, really emphasize the cultural shift, particularly with an Alliance model, is a significant ongoing discussion and challenge.

Although I'll say it's very interesting to see in Canada how quickly people did shift their mindset. Maybe not necessarily for an Alliance, but the collaborative training consultants are having a wonderful time bringing people up to speed on how to talk with each other, how to focus on collaboration, how to demonstrate collaboration.

And honestly, it filters down to us as external counsel. We often are participating on some of that training so that we are right there with our clients to be collaborative and to be seen as collaborative. Just a couple other slides here. So just noting that we're borrowing heavily from the UK and Australia, both of which have some considerably more experience on the collaborative contracting side, this is not unlike the P3 development in Canada 20-plus years ago that borrowed heavily from the UK experience.

It was interesting when one of the first eligible cost schedules came out in Canada. It was very closely looking like a UK schedule from 10 years ago. It really was clearly the starting point, and then it evolved from there. And there are a lot of people in the Canadian market who have come from the UK or Australia, or projects from the UK and Australia, and obviously, their experience is very beneficial to carrying out these projects here in Canada.

Just noting that the private infrastructure space uses these models as well. The focus here, I think, is on the discussion of the public infrastructure space, but there are certainly private owners who have used collaborative procurement models or development phases for many years, including some that use them before they were embraced by public procurement authorities in Canada. So just wanted to note that.

And then in terms of wide use documentation, CCDC, which produces template documentation for construction projects in Canada, has just come out with an integrated project delivery form and is developing a PDP form. So this is really trickling down in Canada, and I think we'll see a lot of uptake with different levels of size of contracts and size of projects.

Maybe just quickly finishing here before passing it off to Nicolas. So to summarize, continued appetite from the public and private sector for collaborative procurement, this is really taking hold here in Canada. And, for the foreseeable future, I think we'll see continued use of collaborative procurements and collaborative contracts.

Evolving pressure points. Well, maybe we'll talk about that a little bit more in the discussion. But certainly in the PDB market, we've now gone through a number of projects, and the documents are evolving. And on every project, there will be tension and pressure points between the owner and between contractors. And that's changing.

The same issues that we were talking about three years ago may not be the same issues we're talking about today because some of these issues have matured. But there's certainly ongoing discussion. This is not a settled form yet. We'll continue to see that evolve.

And then again, highlighting the cultural shift continues to be a significant thing for owners and for contractors, particularly where you have parallel disputes on P3 projects historically, and many of the same people are involved in those projects. And then you're having discussions in the context of a collaborative procurement and how we have to all work together and be one team and change our mindset. So that is an ongoing challenge and probably will be for some time.

NICOLAS CAYOUETTE: Thank you, Mark. There you go. Now moving to Quebec. I'll be a little bit briefer to my colleagues. Some of you know Quebec is relatively new to the alternative mode and collaborative contracting.

A bit of context, I'll give you a bit of brief context, as some may know here. Before 2005, there was very little or no collaborative contracting or PPPs in Quebec. Mid-2000s, then we became more and more present, mostly in PPPs namely highway A25, A30. And afterwards late 2000s, the law was changed to allow PPPs.

And these initial projects were more pilot projects evolution, and generally these. These project evolved as DBFOMs or PPPs. And the more we progress, in early 2000, still again, the law allowed for PPPs but not for all other types of alternative contracting. So basically, have to understand that in Quebec, you have the General Procurement Act, which dictates what type of contracts that public bodies can do.

And just for this introduction, I would say like public bodies are more like ministries and some public bodies, not necessarily municipal bodies and cities. Those are addressed by different laws. But now they added the provisions to have these PPPs in the act respecting contracting by public bodies in late 2000, and then it started gradually having more and more project.

Overall, the objective was the same as what my colleague explained-- build faster, build more efficiently, more on cost, on budget. There were some projects that had some issues, but generally these projects were more of a outliers. But Quebec has always been trying to see what other provinces do also, and with respect to major projects.

And another note also is that these projects were more targeting larger infrastructure projects, more in the $1 billion to $4 billion range or $5 billion range, and not necessarily smaller projects. So they were more of an exception to the actual rule. So if we keep on going forward in time, basically mid-2000, you see more and more projects coming up like [INAUDIBLE], the REM, the shim hospital.

And here again, you see the province moving a bit away from the O and M aspect of the DBFOM and keeping closer to the DBF, Design, Build and Finance or Design Build. There's less appetite in the province for operation and maintenance. And this led to problems in the late 2000 where there was less appetite in the market for these major projects only in the design, build or design, build, finance format. So this is why that in 2024, Bill 62 was introduced to open more broadly the act respecting public bodies to allow different types of contracts.

So now what the province did was to open, actually to include in to the public procurement act the possibility to do partnership contracts. Now, it doesn't define per se what a partnership contract is, but we are to understand that it's collaborative alliancing. But it doesn't define all of these contracts. It puts in a concept that the parties can collaborate, the parties can speak to each other during the procurement phase and under certain circumstances.

Also, the objective is to enhance transparency, share the risk reward, but it doesn't go into detail as to what risks should be shared or what financial information should be shared, or even define, for example, like the alliancing or the progressive, should be no fault. It doesn't include these concepts. So it's more of a conceptual approach that includes these concepts into our act. So it leaves a lot of freedom to the various ministries and public bodies.

So here again, like my colleague said, the objectives are to build faster and better on time. And just for an example, because what you have to take away from the Bill 62 is that Quebec's collaborative model are not exactly the same as those in the rest of Canada or the rest of the world. They're different. And basically, it's the modifications that were made to the Contracting of Public Body act are modifications. So these alternative contracts or collaborative contracts are within the existing scope and the framework of the act. So the framework of the act remains almost the same.

So it can be rigid in some cases. And there's still a lot of possibility for the public body to have to maintain a certain amount of control. So for example, it does not give or does not impose a multi-party decisional factor to so that decisions are made collectively. That's not imposed. That framework is not there, so it's generally more-- Like I said before, it's a concept that the parties can collaborate and the public body will decide what exactly are the parameters of the contract, it wants to have for the public tendering.

So that's different from the rest of the world. And so the key takeaways from the models in Quebec is really like I'm putting up on the screen now. It may be less complex. It still allows a certain degree of control by the public body. It doesn't impose multi-party governance or those structure, but it's more of a concept to encourage people to collaborate.

So it's not exactly imposing the typical collaborative framework that my colleagues detailed, and it doesn't even discuss, like I said before, the level of financial transparency that could be exchanged between the parties. So that's to the stakeholders to determine. So it can be a full disclosure, partial disclosure, or only very limited disclosure. So that's also an element.

So the potential issues, like my colleague said before, I think it's going to require a major, major institutional change and cultural change in both public bodies and stakeholders and trying to move away from a transactional type of contract to relational contracts, where a relationship and trust will be essential versus to have an adversarial approach. And one detail, like I said before, it does not remove the existing framework of the [SPEAKING FRENCH] or the public procurement act.

So again, potential issues that may arise, like question with risk sharing responsibilities, profit sharing, all of these aspects are all what my colleagues discussed pretty much in detail. Those are all also we'd say, up for grabs and to be determined by the public body once it begins its procurement project. The thing that you also I briefly mentioned before that right now, this act, this Bill 62, is enforced. It's the law of the province.

And the province also tabled a new project on April 16, 2025, for the municipal bodies in the cities. So they want to open these partnership contracts to all other pretty much all other public bodies, municipal bodies and the cities. So that will, of course, will keep you posted of these once this is actually adopted by the National Assembly. But that's also to be on your radar.

So now we will be a bit more interactive and basically have a few questions for the panel. So the first question we have for the panel today is, can you briefly explain what are the key takeaways for each jurisdiction and perspective? I know we discussed it already, and partially so, maybe Mark, since--

MARK PLATTEEL: Sure. Yeah, I mean, I think we're at different stages. I mean, if you hear UK started some time ago and is now mature to the point of having disputes on collaborative contracting. It sounds like the Middle East hasn't quite got to the place where it has that data. And those points, you can develop that and it's exploring and looking at the market.

Canada is early days of embracing collaborative procurements. And Quebec isn't quite there yet as well. So in terms of having a track record of doing them, so in the balance of Canada, you've got a number of projects in the development phase, a number of projects in procurement, very few have emerged from a development phase. And matured to the point of knowing whether people will be happy with the outcome.

I think it's still early days to know. A lot of the discussions on P3 projects in the past were based on data. Like, hey, we know that this is an issue. We need to change the risk allocation for this reason, or we need to change the provision in the agreement for this reason.

The progressive design build discussions that are happening in procurements today are conceptual in nature as it relates to Canadian data points because we don't have a lot of data. We know what's happened in other jurisdictions, and we can anticipate how issues may arise, but I think it's still so early that we don't know exactly how things will play out.

Each jurisdiction here is just at a different level of maturity. And it'll be interesting to know whether the UK experience bears itself out in Canada, whether the adoption in Canada, in the non-Quebec Canada jurisdictions, is what maybe emerges in the Middle East or emerges in Quebec.

It's the same kind of conversations we're having on P3s. And you think of the UK handbag experience is becoming a big talking point in the UK, and people are turning their mind to what it means in Canada, and we're 10 years behind or 15 years behind. So yeah, just everyone's at a different level of maturity.

NICOLAS CAYOUETTE: Peter, Jessica, any comments?

PETER ANAGNOSTOU: Yeah, I agree with that recap. I think very much it's a very difficult thing to change the way you do business, change the way you operate. So it requires a huge commitment from everyone. It's not easy.

And taking that leap is required in order to get that data in order to understand whether it is a positive solution or whether it's a further impediment to the industry. So it's not going to work everywhere and for every project, but there are options. And I think the key is there are options.

And rather than just going for the same fit every single time, it's important to consider what the project is, who the participants are, what's the goal and how do we achieve it.

MARK PLATTEEL: I'll just add, before we go, sorry--

NICOLAS CAYOUETTE: Yeah, go ahead.

MARK PLATTEEL: Two observations. One is this whole idea that a turn to collaborative procurements is government-led or not government-led. I think in Canada, it goes both ways in the sense that I think it did come from the ground up, and it was a contractor demand.

However, it's been championed by government. And leading procurement authorities like Infrastructure Ontario Infrastructure BC are using the model, are developing an approach to the model. And based on what I'm hearing from the Middle East that may or may not exist today, that's a very important step for how it's becoming embraced in Canada. Certainly, the public infrastructure space.

If you have leading procurement authorities who have a significant infrastructure pipeline, who are being responsive to the market and are implementing collaborative procurements and collaborative contracts, that's going to have a significant positive impact in terms of bringing these to the market, because if they heard all the feedback from contractors but said, no, we're just going to do it the way we've always done it, we're not in the same place we are today if they had done that.

NICOLAS CAYOUETTE: Let's move on. Why collaborative contracting? I know we touched this, I think, individually, but I think collectively, I think it's built better, faster on time, respect budgets, and also attract. One big element is to attract potential bidders.

That's been a problem, I believe, in Ontario and Quebec to have at least three bidders, or at least two bidders in those processes and procurement processes. I think that's a big element that's been on the table for various owners, and it's an issue. So I tried making the risk, sharing the contractual aspects of the projects more attractive for both regional and international and national players. It is a big element.

Anything else?

JESSICA TRESHAM: I would say collaborative contracting isn't for everyone. I think probably not that every project that message has got across. But just from a disputes point of view, I would say we see less disputes in the courts, at least. Obviously, if there's arbitration courts clauses, you wouldn't necessarily see those or you wouldn't see those reported.

But the disputes are less and the projects tend to finish much more on time with a lot less legal spend. So if that is one of your drivers for that project, that's something you really need to consider. And as I mentioned when I started this, in our current geopolitical climate where there are so many known unknowns, if you've got the type of project that could be influenced by those known unknowns, and this is the contract that you should be thinking about, but it does require a lot of buy in.

PETER ANAGNOSTOU: And I think the climate as well is one of the driving forces here. So when you've got a rigid fixed price contract and you have supply chain issues, increased costs, tariffs changing daily, it's very, very difficult for all parties to price and commit to anything. So having a model that's rigid like that is very difficult to negotiate, to change, to operate, just generally anywhere.

Collaboration and these kind of models do offer a potential solution in the sense that they're a bit less rigid, they're agile, and you can sit down at any time with all the parties in the room and try to have that conversation and try to deal with these issues as they arise, as opposed to after the fact.

JESSICA TRESHAM: Yeah, I mean, it allows for that deeper dive into risk allocation and then risk mitigation strategies.

NICOLAS CAYOUETTE: And also maybe to rethink of for example like the supply chain. The fact that the contract is more allows for more freedom I would call it like that could also think that you could change your technical requirements for a certain part while instead of supplying it from this country, I'm going to supply it from X country and avoid tariffs or avoid additional costs or supply chain issues. That also can open some doors.

If you're in a rigid, typical contract, then you have your specification, and that's the specification, you have to supply part A from wherever. But it's your problem. So as you say, it's your problem, mate. So let's move along.

MARK PLATTEEL: Just on that point, though, what led to this? Why collaborative contracting? I think at its base form, it really comes down to decisions of procuring authorities because procuring authorities will think we need to deliver a new hospital or we need a new jail, or we need a new LRT system. How are we best going to deliver that and show value for money?

And usually, it comes down to how are we going to elicit competitive bids? How are we going to attract interest to this project? What do we need to do to ensure we have a competitive procurement that we can ultimately demonstrate value for money? And procuring authorities are hearing from the market that if you want us to participate, this is what we would like you to do.

And market soundings happen all the time, whether as a recurring general market sounding or for project-specific market soundings, and they're getting the feedback from contractors on a project-specific basis. So there are many large infrastructure projects in Canada today coming to market without a competitive without a collaborative procurement. And it's probable that feedback was derived in market soundings that suggested we're OK to give a fixed price on that project, or they confirm that there's sufficient interest in the market and they don't need to go to a collaborative procurement.

We do know that some authorities will only use collaborative procurements if they need to generate interest in the project. That's not their default position. So I think that's a critical piece here is what this all comes down to. What is the decision-making process for a procurement authority for an owner on how to deliver a project? I think today in this environment, based on all the feedback from contractors and from other parties, and based on the experience on other projects, the answer is more and more, a collaborative procurement is what's needed to do it.

The other thought here is there are many people that will tell you it doesn't matter what the contract says. It's all about how parties manage that contract, so the relationship. You don't need a collaborative contract to be collaborative. A P3 is a public-private partnership. You can be a partnership that is aligned to deliver infrastructure in a meaningful and reasonable way, and not be so adversarial within a P3 contract.

But the market has-- not always, because sometimes that happens, and in very successful projects that are not adversarial. But too often, they were adversarial. So the change to a collaborative contract is intended to put in writing what should be happening anyway on a large infrastructure project. And as we talked about in Canada, we don't have the data that will play itself out, but hopefully the culture change is meaningful and the contract and the behavior of parties is aligned.

NICOLAS CAYOUETTE: How is collaborative contracting going? We touched it a bit already, so let's skip that one.

PETER ANAGNOSTOU: Yeah, let's skip that one.

NICOLAS CAYOUETTE: I think there's more interesting ones like this one. I think I'm going to have a lot of interest on it. How does risk allocation and risk mitigation work in a collaborative contract? So based on everyone's experience.

I think we mentioned earlier the share the gain, share the pain.

JESSICA TRESHAM: Gain-pain, yeah.

NICOLAS CAYOUETTE: Exactly. This is something we've seen in the contracts we've worked on, both on the public side. And the private side also. And sometimes, it's more of a targeted approach to allow for certain materials to have, let's say, for example, a percentage plus 2% minus 2%. And then within that range, it's going to be on the general contractors risk.

Afterwards, there can be a sharing of the risk or a different agreement with the owner to say, well, if it's positive, then we share at this percentage each. If it's negative, we share at such a percentage. So there's various approach, and maybe Jessica, if you or Peter, or Mark, if you have examples or--

JESSICA TRESHAM: I think risk allocation is really just broadly just clearly defining who bears the financial risk and burden of those specific risks. And the mitigation is the strategy to minimize or prevent them. I suppose from my experience, in terms of getting more engagement, I think one of the issues for the project owner is that when you've got these reduced liability structures, it often means ultimately when you do hit a problem like the tunneling, for example, in Crossrail it's often the owner who has a minimized recourse.

So it's sort of taking that on board that it's going to cost both parties when you've got these risk allocation and mitigation strategies in place. There's not an ultimate winner.

PETER ANAGNOSTOU: And only works when you change the mindset from saying that person is liable for everything that happens on this project, as opposed we are liable and we will address this as we go on. So it's difficult because with a lot of these contracts where you try to place the risk on the other party completely, because why wouldn't you? It just creates an issue where nothing gets solved.

No one party can solve everything, and it doesn't matter how experienced they are, how much they try. It requires the buy-in from everyone, from the subcontractors, from the owner, from the consultants to work together to try to solve a problem.

JESSICA TRESHAM: I think historically, that's why governments like them, especially for these big legacy projects, because they don't want that legacy to be riddled exactly with disputes and conflicts.

PETER ANAGNOSTOU: They're quite large mega projects that need a lot of cooperation and collaboration, and it's the risk management there that resolves the issue. It helps deal with it.

MARK PLATTEEL: I guess in the Canadian experience, there's a real distinction in terms of this question between alliance and progressive procurements. So, in an alliance, risk allocation is shared. It's a joint responsibility to execute a contract with shared risk and reward pain, share gain, share and exposure. You may have some tools that refine the exposure cap from a pain share perspective on the contractor, and some in excess of a certain threshold may be absorbed by the owner. So that's a risk allocation discussion in the context of alliance project.

In the context of a progressive, it's more about process. Just by virtue of selecting a collaborative procurement or progressive design build model or progressive DBF or DBFM, and going through the development phase, is itself a risk mitigation because you are identifying the scope, the project, refining the scope, and the project. You are having the conversation about, we're going to put X dollars for this risk, and the owner is going to say, that's too much. Why don't we take that risk and come back to us? And you're going to reduce your cost by that much.

And so, just the risk mitigation is selecting the collaborative contract approach itself. But in terms of risk allocation on a progressive DB, you ultimately land in a place that's not too dissimilar from a P3 project. You have that conversation about risk. You have that conversation about contingencies and your price, and then you lock in to an execution phase agreement.

After having had that the benefit of that development phase and you do have a target price and/or fixed price, you have a fixed schedule and you have a risk allocation that is not too dissimilar from a P3 project with adjustment events or supervening events that is a risk sitting with the contractor or is a risk sitting with the owner and you're landing in the same type of place that you would land on a traditional P3. Hopefully, having eliminated more risk and understood risk better, so that issues don't materialize and disputes are less likely to materialize. But on a PDP, the risk allocation question is not too dissimilar in terms of final landing place from a traditional.

PETER ANAGNOSTOU: It's important to remember as well. These concepts aren't novel like nothing here is new to the industry. Everyone knows that these are the things you need to do to avoid disputes. The problem is, it requires a significant buy-in up front from all parties to invest the time and the money to actually do and go through this process, which is very difficult to convince anyone to do because they're looking to start a project quickly. They want to get on with it.

Both parties want to start commencement of construction as soon as possible. They don't have time to finalize design or get everyone on the same page. Let's just go for it and see what happens.

JESSICA TRESHAM: I think a lot of those cost as well, so persuading parties to invest millions, usually, in the pre-design, pre-construction phase. I mean, I've seen that dealt with by way of side letters and bid cost letters and things like that, where there'll be a reimbursement if the tender doesn't ultimately get awarded. There's always ways around it. That's what we're for. But it is a big blocker in for a lot of contractors really wanting to engage with the project.

PETER ANAGNOSTOU: It might not be a budget for it either. So it's hard to--

MARK PLATTEEL: Yeah, that's an evolving conversation in Canada because during the development phase, some projects have reimbursement of all eligible costs, and some projects have a fixed price for the--

JESSICA TRESHAM: Sliding scale. I've seen lots of different. I mean, as I said, there's ways around it, but I think that's been one of the key breaks, I suppose, to the advancement, the advancement of it. It costs a lot. We might not get the project anyway, and then we might end up having to share too much risk.

MARK PLATTEEL: It's also a distinction between designers and contractors in that phase because the designers are doing the bulk of the actual work, and the contractors are developing the project, but not doing a lot of work in the development phase. And contractors will tell you, we're not here to do a development phase, we're here to execute a project, and we need to get through the development phase and make sure we have an executable contract at the end. But really, our reward is to have an execution phase and do the work.

JESSICA TRESHAM: That's the whole mind shift piece.

PETER ANAGNOSTOU: But also, we don't have the resources to commit to our A-team sitting in this side office trying to develop this project before we've even been awarded the project. So it is very difficult. It's not an easy process. It's not an easy solution. It's a solution or an option.

MARK PLATTEEL: Yeah, there's only so many A-teams.

PETER ANAGNOSTOU: Yeah, exactly.

MARK PLATTEEL: Absolutely.

NICOLAS CAYOUETTE: The interface agreement Canada.

MARK PLATTEEL: There's very few progressive DBFMs and DBFOMs in Canada. There's a lot of progressive DBs. The interface agreement, we've done interface agreements on procurements that have turned into progressive DBFMs and procurements that are progressive DBFOMs. And it hasn't proven to be a challenge, except that you may park some things till later.

So a lot of the same conversations that are happening on just for the benefit of those. Someone asked about interface agreements during a progressive procurement and whether it's more challenging to do that. I think a lot of the principles will apply. You can have an interface agreement executed early during the development phase or even at bid stage, depending on the nature of the project.

But in terms of items that are to be determined and discussed, and concluded during the development phase, you can't reflect that in your interface agreement until that has happened. So it'll have to come at a later date, maybe at the time of execution, phase three execution.

NICOLAS CAYOUETTE: Should we open up the floor? Ask some questions. Does anyone want--

JESSICA TRESHAM: We got a couple on there.

NICOLAS CAYOUETTE: I've got a couple more? OK. Next one is what issues have you seen in collaborative contracting? I think this is going to be very interesting for everyone. Anybody wants to jump in?

MARK PLATTEEL: Yeah, happy to talk about what I've seen in Canada. So it's evolved. There's been a number of projects. I think early on, people were hyper-focused on making sure they're reimbursed for their costs. I think that continues to be a key consideration for contractors.

So that goes to very granularly what is the list of defined costs or eligible costs. What is the list of exclusions? What is intended to be covered by overhead to ensure that you're going into the project, knowing that you're going to be paid for your costs and that you'll be paid profit and overhead? Ancillary to that has been a lot of discussion of what is at risk. What is the pain-share exposure? Is it profit? Is it overhead? Is it some of your eligible costs?

A lot of discussion has centered around overhead. Overhead is viewed by contractors as a cost. Owners may view it as something that is subject to being clawed back if you're over your cost, your target cost, or if you are delayed. So there's been a lot of discussion about that. I think when these projects first came out, the collaborative behavioral assessments was a bit of not a shock, but something to get your head around.

It's certainly was perceived when it first came out as being very subjective and would potentially grant the right of an authority to select a bidder that they wanted, regardless of anything else in your bid. I think the market is maturing on that and collaborative behavior and embracing the collaborative model generally, but that's been a point of discussion for sure.

Off-ramps has been a big point of discussion. Who can exit a development phase, and for what reason, and what is the consequence of that? Obviously, an owner always wants the right to terminate for convenience, but a contractor also doesn't want to be considered to be in default if you just can't come to a commercial deal with an owner for a project. So the off-ramps are typically a discussion point to ensure that the contractor designer group has the ability to exit a project without material consequences if you just can't come to a resolution with on the deal, on the project.

PETER ANAGNOSTOU: And not just to exit, maybe pursue a different delivery strategy. So the option there to change course if it's not working out, rather than just giving up and canceling and walking away. So being flexible is really important, and it's a key issue that we see.

NICOLAS CAYOUETTE: And what we've seen in the province, of course, Quebec is more limited with progressive contracting. And the echoes we've heard back from the market were more, for example, if you have the owner and the contractor have a progressive contract track together, then for them, there's no fault. There's open book, there's the whole process.

But for subcontractors underneath, sometimes they take issue, and there's problems the way the subcontractors are treated because they don't necessarily have the same provisions as the progress of the main contract. So these subcontractors can sometimes have a bad experience because, well, they don't want to necessarily have a no-fault application, and they feel a bit squeezed within this process because the main contract is a progressive, but everything below it can be lump sum, can be traditional, can be everything else.

So that can raise some issues also. And that's some of the echoes we've heard back from the market, of course. There's also some reluctance to change in there because it's new. It's entering the market. So there might be some of that that's also coming out in that fashion. But, generally, it's starting to be accepted. But for the subcontractor, it's completely new, and they might not fully understand the scope of it.

MARK PLATTEEL: Yeah, I agree. Subcontracting has been a big issue. Subcontracting with affiliates, how that's treated, different types of subcontracting. Whether you need to pass down all of the upstream agreement provisions in a downstream contract that may be of small material value, and I'll just note from a macro perspective, because I was really focused on the micro there, from a macro perspective, it's not all perfect.

The ongoing implementation of progressive procurements is faced are facing challenges. I think we're seeing development phases that are longer than expected. Some of the original scheduled timelines will have 8, eight months or 12 months, or 16 months of a development phase. Almost all of those are being extended. They're probably being considered more costly than anticipated in terms of time often equals money. So if you thought you were going to have an eight-month development phase and you end up with a two-year development phase, it's probably going to cost more than anticipated.

And we've seen some parties exit during the development phase for various reasons. We have seen some progressive procurement stall and/or be postponed in the development phase. There's a perception that sometimes the development phase conversation on price is a bit of a reality check for an owner that may have an outdated budget. And with cost escalation and supply chain issues, costs have only increased over the last few years. And so if you had a project budget of X and then you enter into development phase two three years later, it made a shock to the owner to hear what costs are coming back.

So it's not all roses. It continues to be the model that people are wanting, but there's tension both in the micro level in terms of actual provisions, but also at the macro level in terms of how it's going to.

NICOLAS CAYOUETTE: So this question also is probably very interesting. What are we seeing on the tariffs? Maybe start with the UK.

JESSICA TRESHAM: In terms of disputes, remembering I don't do the drafting, just the unpicking, not seeing a huge amount of issues coming through yet. I think we are seeing market uncertainty, and I think that's global, obviously. But I haven't seen that filtered down into specific, for example, delay disputes, or the kind of things you'd expect tariff or pricing fluctuation creation causes. But it's coming.

I mean, it's going to because the cost of materials and putting aside the Ukraine-Russian war, the cost of materials in the UK is generally ballooning, and with the tariff uncertainty and it's going up, it's going down. Nobody knows. It's suddenly up, and then it's paused. It's really difficult to price things. And it's also difficult to know if you can deliver a project on budget.

So it's a watch this space, I guess.

PETER ANAGNOSTOU: So we're not seeing any direct impacts from tariffs, but we're seeing a change in materials and where they're coming from. So I think we're expecting to see a lot more Chinese construction materials coming into the Middle East, because there's less market in the US now for them. And so, a change in where materials and things are coming from.

Currency fluctuations. Everything all over the place right now, and that's very difficult when you've got a global supply chain on a global project with many participants from different jurisdictions. So that's going to create issues as well from a cost perspective. And so just the level of uncertainty is it's unprecedented. So we're just dealing with that as we go. But nothing direct yet we've seen.

I guess you're much more directly exposed.

MARK PLATTEEL: Yeah, very much more directly exposed in Canada, and it's obviously a significant issue. Contractors are demanding protections from owners for tariff volatility. And we've seen a number of P3 projects close where you're committing to a fixed price, and owners have offered tariff protection, and included tariff protection.

It's not unconditional protection. Sometimes there's a buffer where you need to absorb some cost impact below a certain percentage. You may have an obligation to source supplies or materials from another place if you can, at a competitive rate, and demonstrate that you've tried to do that. Usually, tariff protection goes both ways, so if you are seeking protection for increased tariffs, you may have to hand some money back if tariffs go down.

If you price that tariffs were at 50% and you knew that was a significant part of your cost, and on a progressive, you've got open book, transparent pricing, and now the tariff is reduced to 10%, there may be a cost savings. The other challenge is demonstrating tariff impact. That's not necessarily a linear line between a 10% tariff imposition and a 10% increase in costs. There's going to be some absorption somewhere up and down the supply chain. So that's part of the conversation as well, and in the relief.

And some progressive procurements it's being punted to the development phase. It's easy to do that. Like, if you're doing a new procurement, you can say we'll talk about tariffs during the development phase. It's what happened with escalation provisions, during hyperinflation period a few years ago.

I didn't know how that would play itself out. And rather than lock yourself into a regime, why don't we just take the benefit of the added time we have and see how this plays out, and see by the time we actually need to address this, we'll address it based on the information at that time. But if you've got a P3 project that is being submitted and/or closing, we've seen a couple of those in the last two months. You need to address it.

And contractors expect protection. And I think there's sympathy from owners for that. I don't think owners are taking the view that, no, you're the contractor. You got to take tariff risk. But I also don't think there's been a unified policy decision or implemented approach in Canada yet to say, this is how we're going to deal with tariff risk.

JESSICA TRESHAM: I suppose as well, the tariff risk potentially in terms of risk has a finite period of time, either by way of a change of administration or a change in policy. One would hope so. I guess, depending on the lead-in phase for a project, it might be a good idea to bump it to kick it into the long grass, the expression was. But certainly in the UK, we're seeing it being included as an amendment in relation to loss and expense provisions.

NICOLAS CAYOUETTE: And what we've seen also in not necessarily only in collaborative contracting, but in even traditional contracting, any project that's intensive in, let's say in steel intensive project, there's an expectation from contractors and subcontractors to that the owner will take on this risk, especially if it's foreign source components. That's an element that--

It's almost to the point to be a deal breaker for certain suppliers to say, well, the steel cost risk is going to be, the owner's risk, and the supply chain, and not only for the tariffs, but for sourcing them foreign countries. And that's also an element that we've seen. And for certain material, it's critical, for example, like steel and copper, and some other aspects like that. But well, I haven't seen like a broad tariff adoption, say, well, for all tariffs applicable to this project, the owners don't go that far, that what we've seen yet. But again, it's more limited what we've seen here in the province.

And now, on the last question, what do we anticipate going forward with collaborative contracting in our respective jurisdictions?

JESSICA TRESHAM: More of it. Smarter, we'll see more of it.

PETER ANAGNOSTOU: I think there's a change now in the region, especially with Saudi investing so much money in infrastructure projects, especially. I think there's a lot more understanding of what it is and what can be gained. And so it's just having that discussion and making sure all the parties are involved. Everyone buys into it.

MARK PLATTEEL: Yeah, in Canada, certainly we're going to see continued buy-in, continued rollout. I think the interesting pieces for me are seeing the data come in from progressive design builds, progressive procurements, and how that impacts new procurements. And where the pressure points on those projects evolve based on what happens during actual development phases and actual execution phases of progressive procurements.

And then the other one to watch for is continued use of alliance projects, and installed for a period of time. Union Station was a big project. Cowichan Hospital in BC came out. There were some emergency road projects in British Columbia, and then we just weren't seeing it at all, and now we're seeing two come out. And I don't know if that's indicative of a shift from a procurement authority perspective to say this is a model we really want to move towards.

And the PDB is a halfway collaborative contract. We want to go the full way, or whether this is just let's be diverse in our contracting approach, and try this out, and we'll see if it gets more traction. So that's still uncertain in Canada.

NICOLAS CAYOUETTE: And then in Quebec, I think it's very similar to my colleague said. I'm sorry, in Quebec, it's very similar to the jurisdiction. I think this is the way that at least the province decided to go. It's not going to be a one-size-fits-all solution. Is going to be, I think, for some contracts, but not for all of them.

There's still going to be traditional contracts, and I think the majority of contracts are still going to be traditional. But for some more complicated ones, as we've seen in other jurisdictions, they're going to be more and more introduced. And I think gradually, as they become more and more accepted, I think they're going to take a larger share of the market. But it in my view, I don't think it's going to be 100% or more than 60%, 40%, 50% maybe.

But it's going to take some space, but not all of the space. So there's still going to be traditional contracts, but for specific contracts, complicated ones, this is going to be an avenue. It's a one more option for the owners, basically. So is there any questions?

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PETER ANAGNOSTOU: We have a microphone.

MARK PLATTEEL: But we have a couple of questions in the Q&A.

NICOLAS CAYOUETTE: I don't see--

PETER ANAGNOSTOU: We've got someone here in the room as well.

NICOLAS CAYOUETTE: Yes.

AUDIENCE: You talked to flexibility. I'm wondering-- and you just spoke about [INAUDIBLE], that was really my question. You spoke of changing the method of procurement after deciding or after starting. Would that be possible, or how do you do that in other jurisdictions? Because in Quebec, traditionally, when you get government approval, it comes with the government-led method that you shouldn't change along the way.

I understand why we have to do it, and then we get an approval for a project without specifying which procurement method, and just leaving that bit vague and flexible. Can we do that? And how did you do that elsewhere?

MARK PLATTEEL: Do you want me to maybe speak to the first part?

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MARK PLATTEEL: I'm not sure if people online heard the question. The question of whether is there flexibility in Quebec to shift a procurement approach mid-procurement, having heard that has happened on other projects in Canada. I could just speak to some of the projects I've worked on outside of Quebec.

It is a consideration for the procurement authority whether they can do it. So I think the question for an authority is, can we evolve a traditional DBFM into a progressive DBFM within the confines of this RFP, and not need to go procure the project with an RFQ and an RFP? And I've seen cancellation of projects, and I've seen them come back with one bidder.

I've also seen within the context of an existing RFP one bidder be the sole bidder by the end of the RFP phase, and the authority shift to a development phase agreement with that bidder within that RFP, and ultimately sign an agreement at the end of that development phase.

JESSICA TRESHAM: That also means probably in the initial RFP.

MARK PLATTEEL: I don't know that the original-- I mean, an RFP would generally grant broad discretion to an authority to do what it wants. Now, whether that means that it's compliant with its procurement policies and procurement laws is another question. These authorities concluded they could exercise that broad discretion. For Quebec, I can't speak to whether that--

NICOLAS CAYOUETTE: That's a good question. I think it could theoretically be possible, as long as all of the potential bidders are treated equally and have this exact same chance in the process. So as that's why I say theoretically could be possible, but it wouldn't necessarily be easy.

And at first glance, I think you would need to have a lot of reflection on it and a lot of thinking of to make sure that everybody is treated equally. Everybody has the same chance, and everybody who has an interest and willing to participate in this new format be allowed to bid on it, so it might be faster and simpler to use to cancel, to start again, than to actually trying to modify it in between.

So that's why, in theory, maybe. In practice, I doubt it. So

MARK PLATTEEL: I'll just add there are other projects that have evolved with quasi development phase like characteristics. So they didn't change into a development phase or a development phase agreement. But of often it comes down to how does an authority benchmark pricing. And that requires some transparency, some level of open-book pricing.

And if you don't have competitive bids, you only have one bidder, how do you get a how do you get comfort that you're delivering value for money? So you may bring in some characteristics of a development phase to have those kind of conversations. You're not fundamentally altering the nature of the procurement, but you're bringing in some things to get yourself comfortable that you're achieving value for money.

NICOLAS CAYOUETTE: So I believe there was a question on the chat.

PETER ANAGNOSTOU: Yeah, so one here from Aria. Is there standardized documentation or a recognized framework that outlines the criteria for selecting various contracting models, particularly collaborative contracts, on when to use what?

NICOLAS CAYOUETTE: There is some documentation on that. We did some research a few months ago, and there's various articles and there's documentation and that is available. If this person contacts me directly, I can give him the list. These are publicly available articles from Australia, from Singapore, from the US, from UK, so yes, there is some documentation available on this. So please contact me and be able to circulate that.

MARK PLATTEEL: Sorry, did the people online hear the question?

PETER ANAGNOSTOU: Yes, yeah.

MARK PLATTEEL: OK, sorry. I think from I don't know that Infrastructure Ontario or Infrastructure BC publish formal guidelines that dictate how they select a model. I think they speak to the considerations they have to how they select a model for a particular project. Often driven by a desire to have a competitive procurement and achieve value for money, and then everything else sort of flows from that.

But I don't know that there's anything formal that is available to the public on how they run through that process, as an example, or two procurement authority examples.

NICOLAS CAYOUETTE: It's the same for public bodies in Quebec. The documentation I'm talking about is mostly third-party models and consideration and analysis that's been done by the not in Canada but outside of Canada.

AUDIENCE: I have a question.

NICOLAS CAYOUETTE: Yes.

AUDIENCE: In terms of binding requirements, what would be the difference between target price in a PDB with target outturn cost in an Alliance model?

MARK PLATTEEL: I'm happy to take that.

NICOLAS CAYOUETTE: Mark.

MARK PLATTEEL: I mean, I think the key distinction is a target price, and a PDB is the risk of the contractor. And the contractor needs to build the project within that target price. Otherwise, it will face paint chair and be exposed to some removal of profit, potentially some removal of overhead if the cost for delivering the project are in excess of the target price.

I think in the context of an Alliance, that is shared with the authority, and so different Alliance projects will share the pain share differently. There may be a cap for the contractor, and the owner may take pain share risk above a certain threshold, but otherwise the owner and the contractor share that risk on the pain share side and on the gain share side. So if you had savings relative to your anticipated cost, the owner and contractor would share that often on a 50/50 basis.

So it's a matter of whether you're sharing that risk or not sharing that risk. But otherwise, the concepts are substantially similar.

PETER ANAGNOSTOU: One last question from our very prolific question-and-answer. This is a specific question. Collaborative contracting models, are there structural, legal, or financial constraints that limit their adoption in privately-funded projects?

NICOLAS CAYOUETTE: For private companies, no. There's no limitation. For private procurements between a private company and contractors, as long as the bidders are treated equally, equitably, and there's general concepts, but in private procurements, there's a lot of elements that we are-- there's more freedom. There's more openness for collaborative contracting.

We've done all sorts of types of designs and contracts, and tailor-made contracts for projects. Any other questions?

PETER ANAGNOSTOU: One final one. This is from a Perry Anonymous.

NICOLAS CAYOUETTE: Anonymous, OK.

PETER ANAGNOSTOU: What is the difference from the Canadian perspective between IPD versus the progressive design?

MARK PLATTEEL: I think IPD is more aligned with Alliance in the sense of true risk sharing between designer, contractor, and owner. So IPD contracts like the CCDC 30 that just came out is a contract with designer contractor owner, all assuming a shared risk profile, and is distinct from a PDB that again, has that process of a development phase, but lands in a place where the contractor is taking risk and is not technically sharing that risk with the owner.

NICOLAS CAYOUETTE: So is there any other questions? Well, thank you very much. Oh, maybe one. Yes.

AUDIENCE: And I think I'd like to hear the do's and don'ts of dispute resolution clauses in contracts, especially when it comes to a cascading internal resolution model. And sometimes it can be quite timely and complex, and can turn into an internal trial where each party can actually lawyer up. And I'm wondering, how can we prevent doubling on costs while trying to solve the issue internally and speed up in the process?

JESSICA TRESHAM: Should I start with that one?

MARK PLATTEEL: Yes.

JESSICA TRESHAM: Do's and don'ts--

AUDIENCE: For the successes and failures.

JESSICA TRESHAM: Yeah, I mean, I suppose looking at the NEC form of contract, which I talked about earlier, there's a tiered dispute resolution process in that, some of which is mandatory and some of which is optional. So I suppose it's thinking about where you want to say shall or may in order to free up the parties.

I mean, I would say that in terms of attending initial meetings or representative meetings, as they're called in there, that's a mandatory step before you can go to another ADR solution. In the UK, we use adjudication a lot, for example. So within the NEC, that's an option to then adjudicate the dispute once you've had those initial representative meetings.

And what I found in reality is that it can either be one meeting just because people are using it as a stepping stone, because they know they want to adjudicate, and then they want to litigate, and they have to go through that process. Or when it's working well, actually, I've actually found the representative meetings for several of them, and it's more the concept that you were just talking about.

So it just makes it happen. And then it's up to the parties to try and use that process. You can have more than one meeting. We're actually getting somewhere. Let's not move to adjudication, which is the next step before-- So yes, you can draft for it, but I think also it's about the attitude of the parties.

And when I was talking earlier about it's that whole paradigm mind shift in terms of how you're going to approach these things. So I think a lot of it is back to the leadership and the people, and that trust helps.

PETER ANAGNOSTOU: And in my experience, we have a similar thing. So the tiered regimes are great, but if you're starting to rely on that, you're already in a dispute. So it's one of those things where it's like in Middle East, for instance, most of that is a stepping stone. So we'll do the we'll do the meetings, we'll do the attempted and amicable resolution meeting. We'll then skip over DABs because no one wants to do that, and we'll head into arbitration.

And it's one of those things where if you're discussing that and you're in that meeting, there's already an issue that hasn't been resolved properly through the contract. So it's all about making sure that you understand how the contract works, formulating your claim, putting your notices in properly, informing the other side of what's actually happening at the time, and keeping everyone abreast of the situation on the ground and trying to sit down at that point and resolve or get to some kind of resolution before implementing whatever dispute resolution clause you have because once you're in that mechanism, it's usually very unlikely to resolve amicably.

You've already pulled that--

JESSICA TRESHAM: That situation you're talking about is a traditional procurement where you don't have that. Where you haven't bought into the whole collaborative mindset, have you? So yeah, you see it all the time where it is just a stepping stone.

PETER ANAGNOSTOU: This is a fixed price.

JESSICA TRESHAM: Yeah, but if you've got a collaborative model and you've agreed to ethos and concepts, then actually I find those processes work well and they do save costs and they do save litigation. So, I don't know. I don't know if that answers your question or not, but we can talk about it later if you like.

NICOLAS CAYOUETTE: Any further questions? [SPEAKING FRENCH]. So thank you very much, and thank you, Mark, and thank you, Peter and Jessica, for this great panel. I think it was very interesting. And if there's anything, we can continue the discussion while eating. And thank you very much for everybody that was online. It was truly a pleasure. So, thank you.

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