Background & Challenges
A global petrochemical company partnered with a leading engineering contractor under a four-year alliance contract to manage 40–50 small and medium-sized projects across five process facilities. The portfolio, valued at approximately $100M, aimed to streamline execution and optimize costs.
The collaboration quickly became adversarial due to:
- Misalignment in execution culture – The contractor specialized in large-scale projects but struggled with the dynamics of multiple small projects.
- Project control gaps – No dedicated cost control team on the owner’s side, leading to inconsistent oversight and mistrust.
- Incentive contract disputes – The cost-plus-incentive contract meant profits depended on performance, fueling budget disputes and accountability concerns.
- Initial project failure – A major shutdown project (the largest in the portfolio) overran the budget by 110%, escalating tensions.
Strategic Approach
To resolve conflicts and optimize execution, Uruk led the following strategic initiatives:
- Established a Project Support Office (PSO) – A dedicated team monitored cost control, schedule compliance, and forecasting.
- Integrated Project Control Teams – Bridged the gap between owner and contractor teams, fostering collaboration instead of blame-shifting.
- Implemented Transparent Budget Reviews – Joint estimate feedback sessions resolved perception gaps in cost-setting.
- Developed Trust-Building & Training Programs – Educational sessions and structured offsite team-building workshops aligned all stakeholders.
Key Outcomes & Results
- Enhanced cost control & project oversight, preventing future overruns.
- Transformed adversarial relationships into a high-functioning, integrated team.
- Established a model for contract collaboration, leading to a four-year contract renewal.
- Improved transparency & trust, eliminating misalignment in budget-setting practices.
