Construction projects frequently involve multiple contractors working under separate contracts. But who pays when one contractor delays another?
Crossrail demonstrates the potentially enormous financial consequences of failing to manage contractual interfaces, changes and dependencies. The National Audit Office reported that changes to design and construction schedules cost approximately £2.5 billion between 2013 and 2018. Settlements of accumulated compensation events accounted for nearly £1 billion in cost increases.
Crossrail had 36 main contracts. Crucially, the organisation did not require individual contractors to manage interfaces with other contractors, leaving Crossrail itself exposed to substantial coordination risks.
What went wrong?
Several important contract management lessons emerge:
- Inadequate allocation of responsibility for interfaces between contractors.
- Changes to design and construction schedules.
- Significant compensation event liabilities.
- Increased exposure to delay claims and additional payments.
- Difficulties managing dependencies across multiple contracts.
The contract management lesson
Poorly allocated contractual risks do not disappear. They become somebody’s financial responsibility. Organisations must ensure that contracts clearly define responsibilities, dependencies, notification requirements, change procedures and entitlement to additional time or money. The contract manager must also understand how a change in one contract can affect the cost and performance of several others.
The “live” tutor led WorldCC Contract Management Practitioner course 16 – 20 November 2026 provided by DPSS helps professionals develop the skills needed to identify contractual risks, manage change, monitor supplier obligations and protect financial value.
www.dpss.co.uk