The Duty to Coordinate and Cooperate on Multi-Prime Construction Projects

This is the first blog post in a six-part series about an owner’s duty to coordinate and cooperate on multi-prime construction projects. The purpose of this series is to provide awareness of the owner’s duties along with case examples on the subject. This post defines and discusses multi-prime construction projects.

Introduction
In the construction industry, the owner must choose one of many project delivery programs or methods. One method is to contract with two or more prime contractors to construct a project, which is commonly known as multi-prime contracting.

The use of multi-prime contracts can have inherent problems for owners that can directly affect one or several prime contractors. In certain situations, an owner’s actions or inactions may directly or indirectly impact a contractor’s ability to enjoy a least-cost performance. Deficiencies in owner coordination and cooperation are problems that usually lead to disruption and delays on multi-prime construction projects.

What Are Multi-Prime Construction Projects?
Multi-prime construction projects are simply defined as employing separate prime contractors to perform distinct phases or parts of an overall project. The following three factors, which are present in most multi-prime construction projects, generally influence an owner’s decision to implement the multi-prime method:

• Multi-prime construction projects are generally large in size and value, with long durations;
• The owner requires a fast-paced project in which construction starts prior to the completion of the overall design; and
• The owner desires to reduce general contractor markups and fees by contracting directly to specialty contractors or subcontractors.

Multi-prime construction projects are mainly classified into three types. In the first type, the owner enters separate contracts with different specialty subcontractors, essentially taking on the role of a general contractor. In the second type, the owner breaks up the project site into complete subprojects due to the size, location, or diversity of the overall project, then contracts with separate general contractors for each subproject. In the third type, the owner hires a construction management firm or project management consultant responsible for engaging separate contracts. The construction manager or project management consultant plans, organizes, and manages all aspects of the construction process.

Some examples of large, multi-prime construction projects include housing complexes, military bases, penal institutions, oil and gas refineries, and liquified natural gas terminals.

The interdependence among contracting parties on a multi-prime construction project is crucial to the success of the project. Coordination and cooperation, therefore, are critical to the project’s successful completion.

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