S-062 - Contract Strategy for Development and Projects


The majority of any project budget is spent through contracts. The project scope needs to be packaged into optimal contract work scopes. From a single EPC contract, to a series of small contracts, no standard grouping is suitable for all projects; each project will have its own unique contract strategy. The contract strategy will also indicate the likely value of each contract, leading to a view on how the contract might be placed into the market. Detailed assessment of the tender method and payment mechanism is part of Contract Tactics; refer to the Contract Tactics service. The strategy is presented in a diagram commonly called the ‘Navajo Blanket’ from its appearance, showing the grouping of activities per contract.


Contract Strategy answers the questions ‘How should we package the work?’, ‘ Who can build this for us?’ and ‘How should we manage the contracts’, and is required as part of the feasibility assessment of a project. Therefore the contract strategy should be defined during the latter part of feasibility assessment.

  • Create a Work Breakdown Structure for the project as a matrix of asset breakdown versus development activity.
  • Set aside core activities to be retained in house.
  • Group irreducible activities that would never be split.
  • Identify where client has an existing contract that could be used.
  • Use themes to create several alternative strategies for the remaining scope.
  • Make SWOT assessment of the alternatives and select preferred strategy.
  • Make list of contracts and estimate of value of each contract.
  • A Work Breakdown Structure matrix
  • Core, Irreducible and Existing contracts set aside.
  • Alternative strategies and a SWOT analysis
  • A list of proposed contracts with value.

A 2 day workshop with the client development team will deliver the result stated.



    Contact René Snoodijk

    René Snoodijk

    General Manager


    +316 55 12 46 81