Is the P3 design-build model becoming obsolete? Mark Crane weighs in with Lexpert

Since the COVID-19 pandemic, Canada's rising inflation rate, coupled with high financing costs and unpredictable pricing of goods and services, has significantly impacted infrastructure construction over the past few years. These economic challenges have led to numerous disputes within the industry.

Mark Crane, a member of the Infrastructure and Construction Group at Gowling WLG, spoke to Lexpert about the ongoing disputes in infrastructure projects driven by the P3 design-build model. In this model, the owner, typically a government entity, goes through a request-for-proposal (RFP) process to find contractors for the project.

“With these large projects, the bidders tend to be contracting joint ventures. One of the frailties with the model is that parties responding to the RFP are bidding to construct the project at a time when the project is only designed to roughly 30 percent,” said Mark.

“The ability to forecast and estimate what a complex project is going to cost to build would be, in many cases, a Herculean task to do at any point, even if it was at 100 percent design.”

Crane believes that owners are shifting towards a progressive design-build model where fees are not finalized until the design has advanced to a later stage.

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About Gowling WLG’s Infrastructure and Construction Group

When it comes to choosing lawyers to handle large, complex projects anywhere in the world, Gowling WLG offers a winning combination of experience and know-how. We advise on the most challenging and complex infrastructure and PPP projects being undertaken internationally. Our lawyers are established advisers to government bodies, contractors, sponsors and funders, and have a strong track record of delivering strategically important and high value projects. Learn more.