Project Rescue Begins at the Contract

The best way to rescue a project is to prevent it from needing rescue in the first place.

Rethinking Project Rescue: A Preventative Approach

When we hear “project rescue,” we typically envision emergency interventions once a project is already in distress. But my experience managing complex construction projects has taught me something counterintuitive: the most successful rescue operations begin before the contract is even signed.

The Third-Party Neutral: Your Project’s Insurance Policy

The single most effective rescue mechanism I’ve seen implemented is “baseball arbitration” with a third-party neutral (TPN). On a $15B fabrication facility build-out, this approach proved transformative:

• TPNs evaluate claims in real-time, like an umpire calling balls and strikes
• Disputes get resolved quickly before they fester and grow complicated
• Contractors can focus on what they do best—safely building the project
• All parties have confidence in a fair, unbiased resolution process

While traditional claim resolution can take months or years, baseball arbitration resolves issues in days or weeks, preventing the compounding effect of unresolved claims.

Crafting Contracts That Prevent Crisis

The contract phase offers a unique opportunity to establish mechanisms that prevent the need for traditional rescue later:

• Clearly define the TPN selection process and scope of authority
• Establish timelines for addressing claims (faster is always better)
• Create communication protocols that encourage transparency
• Define documentation requirements that don’t feel punitive
• Include provisions for regular alignment meetings focused on issue resolution

Overcoming Resistance to Preventative Measures

The most common pushback I encounter regarding TPN provisions is cost. Decision-makers often question the value of paying for something they hope never to use, and owners particularly resist when TPNs decrease their project budget predictability. My response:

• Compare the cost of a TPN against potential schedule delays (which are always more expensive)
• Present the TPN as providing cost predictability because it prevents the unpredictable spiral of claims
• Position the TPN as insurance against disruption of the project’s critical path
• Emphasize that the mere presence of a resolution mechanism often prevents disputes
• Share examples where early resolution saved millions in delay costs

Lump sum contracts and builds with dynamic scope require the strongest preventative measures.

Balancing Protection with Partnership

Robust contract protections shouldn’t create an adversarial relationship. During project kickoff, I always:

• Align on how we’ll work together, emphasizing mutual success
• Remind all parties that contract protections benefit everyone
• Establish that seeking help isn’t weakness—it’s good project management
• Demonstrate my commitment to contractor success by responding quickly to their needs

Moving Forward: The New Project Rescue

The key to successful projects lies not in heroic rescue efforts but in thoughtful prevention:

• Build resolution mechanisms into contracts before problems arise
• Deploy these mechanisms at the first sign of disagreement, not when disputes escalate
• Remember that every dollar spent on prevention saves ten in rescue costs
• Focus on enabling contractors to do their best work through clear processes

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After managing billions in construction projects, I’ve learned that the best project rescue doesn’t look like rescue at all—it looks like smart contracting and early intervention that keeps everyone building instead of arguing.