Kamal Dubey works at the intersection of commercial judgment, contract strategy, and leadership decision-making across complex construction and infrastructure projects. With a civil engineering foundation and over two decades of experience, he helps clients navigate uncertainty, protect long-term value, and make confident decisions throughout the project lifecycle.
Complexity of splitting a large project in multiple construction packages requires complex interfaces and prove to be very tricky. If it is a case of single construction package, owner awards the project to one contractor whereas in case of splitting the project into multiple construction packages, the owner divides the contract (based on size, cost, location etc.) and awards to various contractors. For an effective and successful programme management, its vital for owner to lay out a distinctive road map to establish a model for contractual relationship.
Does packaging of large projects into smaller contracts increases the construction cost? Well, there are various theories advocating the single contract vs the multiple contracts or vice versa. In my opinion, it depends on the preferences driven by particular interest of the owner. Owner shall create strategy and look for key drivers to execute the construction under single contract or multiple contracts. The driving factors could be cost, dependency, contractual relationship, diversification, and risk distribution.
Below tables outlines few of owner’s priorities/ key drivers and its associated effect on a single contract vs multiple contract.
| Key Drivers | Single Contract | Multiple Contract |
| Cost | Low cost compared to multiple contracts | High tender price due to allocation of risk of working with different contractors not known at the time of bid. Big contractors generally do not want to bid for multiple contract model leading to less competitions and increased price.Increased design and administrative costs as multiple contracts are administered |
| Time | Single contractor can optimize the schedule, permits and construction activity with a smaller construction duration | Due to multiple contractors, the construction duration will be ideally more |
| Diversification | Only suitable for the big companies | Promote and encourage small companies to participate |
| Competitive Bid | Less competitive as big scale contractors will participate.Big contractor even can form joint venture leading to less competition | Multiple small bidders can attract more competition |
| Dependency | Dependent on Single contractor will have more risk toward the project. | More flexible and less risky as the single contractor dependency is eliminated |
| Co-ordination and Management | Easy to administer because of its centralization of responsibility | Requires careful co-ordination and Management as multiple contractors are involved and no single contractor is responsible for the entire project. |
| Owner in house expertise | Single contract model does not really require owner’s in-house expertise for management | Requires owner’s in-house expertise to manage multiple contractor’s |
| Claims and Change Order | No cross contractual claims. | Prone to cross contractual claims as delay from one contractor affects another contractor schedule.Multiple contract results in more change orders. Multiple change order will lead to extension of supervision services (consultant/Engineer) due to effect of contractor’s EOT |
| Interface | No interface complexities between various contractors | Interface risk will be more which can undermine the proper execution of the project |
A suitable packaging and contract strategy shall create a balance between all the key-drivers.
Key Takeaways for Multiple Contract:
Kamal Dubey works at the intersection of commercial judgment, contract strategy, and leadership decision-making. With a civil engineering foundation and over two decades of experience, he helps clients navigate complexity, make sound decisions, and protect long term value across the full project lifecycle.
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