1.5 Decide on Contracting Approach

A preliminary review of various contractual approaches and potential financing scenarios for new NPPs should have been done as part of the site-specific detailed feasibility study. These contractual approaches should have been impartially examined, together with the possible procurement models and the project management styles. Various partnership models with a variety of capital injections should have been examined. Typical models for new NPP contracts include turnkey contracts (e.g. EPC engineering, procurement and construction contracts; “normal” and “super” turnkey contracts), split package approaches, multi-contract approaches, or arrangements often based on country-to-country agreements where the NPP vendor takes on an equity share (BOO build own operate, BOT build own transfer, DBF design build finance, or similar arrangements).

More infomation on contracting approaches can be found in the references below and here.

For repetitive work, the negotiation of master service agreements (MSAs) with regular suppliers can speed up contracting for individual work items and save costs. With an MSA in place only the work-item-specific tems and conditions (often scope of work and pricing) would need to be finalized prior to work proceeding. To maximize cost savings, MSAs should be established through a competitive process, be time limited, and allow for second-stage competition among vendors for significant purchases.