Contract strategy discussions in the front-end of major public investment projects in Norway

Abstract

Since 2000, the Norwegian Ministry of Finance has implemented a state project model for large public investment projects, primarily consisting of two stages: Quality Assurance 1 (QA1) and Quality Assurance 2 (QA2). In QA1, consultants review the conceptual appraisal, including the contract strategy; in QA2, they assess the steering base. This study examines how contract strategies are addressed in the early phases of major projects under this state model, analyzing procurement approaches, contract structures, and compensation formats. The database we used contains data from 313 projects of which 229 projects had a QA2 report at the time of the study. The findings suggest that although contract structures and compensation formats are frequently discussed, procurement approaches are less scrutinized. Analysis of QA reports indicates a recurring deficiency in the depth of discussions regarding project-specific influences on contract strategy, which results in overly generic recommendations. The study underscores the need for more tailored discussions on contract strategy and the potential benefits of project-specific market surveys to enhance these strategies.