Rethinking risk
Too many clients are leaving opportunity on the table when it comes to procurement
We ask Jake Bush, RLB’s Head of Supply Chain and Procurement, for his observations on our survey data and how some clients are responding.
Why is contracting becoming riskier, especially for large-scale construction projects?
In today’s construction environment, the risk profile of contracting has intensified – particularly for larger projects. These contracts often involve complex scopes and geographically dispersed supply chains, making them more vulnerable to global volatility. Fixed-price contracts, once a staple of predictability, are now harder to sustain, so it is no surprise that our survey shows that for projects over £100m the fixed price duration offered has decreased by nine months. This is because the consequences of getting it wrong are magnified, and after a series of high-profile failures, larger contractors are taking notice and recalibrating their approach to risk.
How are contractors and clients responding to this shift in risk?
We’re seeing a clear behavioural shift. Our survey shows that a quarter of contractors now report clients are increasingly willing to share risk. This is more than a trend – it’s a signal that clients are beginning to recognise that pushing all risk onto contractors doesn’t just inflate costs; it can also reduce or eliminate bidding interest altogether. For clients managing large-scale programmes and portfolios, this means rethinking their market engagement strategy. They’re no longer just buyers – they’re competing to attract the right delivery partners to create value.
Is the conventional approach of a single main contractor being responsible for all aspects still practical for large projects, programs, and portfolios?
There will likely always be a place for it, and it will remain a significant part of the market. While its simplicity is appealing, it’s increasingly seen as limiting. In some circumstances, there’s greater opportunity in exploring alternatives – not just for financial upside, but for building deeper, more resilient supply chain relationships, as we see when clients procure equipment directly. This is especially relevant as our data shows contractors delivering projects over £30 million now cite supply chain robustness and trade wars among their top three concerns. These aren’t theoretical risks – they’re operational realities that shape delivery capability.
What does a more strategic procurement approach look like?
Clients who embrace outcome-based procurement and collaborative contracting models can unlock significant value. By shifting from transactional relationships to strategic partnerships, they can create a value chain aligned to long-term outcomes – not just project completion. But this requires a mindset shift. It means looking beyond the individual project and toward holistic solutions that span programmes, portfolios, and enterprise-wide procurement as shown in the graphic. Navigating this complexity demands expert guidance and a willingness to engage differently.
What’s the urgency for clients to act now?
The market is already moving. Larger contractors are shunning inflation risk and demanding more equitable risk sharing more broadly. This isn’t just a pricing issue – it’s a strategic one. Clients who fail to adapt risk being left behind. But those who lead with a balanced risk profile and a clear alignment to outcomes will be better positioned to secure the right partners and deliver successful projects. Ultimately, effective supply chain management is the difference between a viable project and one that fails to deliver.
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