IPA-Contracts

At its core, IPA-Contracts are about team building: clients sign multi-party contracts with several planning and executing companies in order to realise complex construction projects. All project participants pursue common goals on the basis of this joint contract, which may consist in particular of meeting deadlines and budgets. If this is achieved, the companies jointly earn a bonus; if the targets are not met, a penalty is due. Bonus and penalty thresholds are defined in advance and reflect the companies' willingness to take risks, but are also intended to ensure that the costs are reimbursed even if the project fails. In this way, a common culture of co-operation and mutual support is created between the companies, in which the focus remains exclusively on measures to achieve the project objectives rather than mutual apportionment of blame ("no blame, no shame").

For their part, clients already benefit from the possibility of using this type of contract to motivate companies to submit bids that would otherwise only approach comparably complex projects with extreme caution and only by including considerable risk buffers in the contract price. The intrinsic motivation of the contractor to achieve the target also contributes significantly to meeting the target costs and target deadlines.

The lawyers at our law firm advise companies on the negotiation, drafting and signing of multi-party contracts. Our experts in private construction law have supported major infrastructure projects in the IPA model with integrated project management, e.g. the construction of the A-Nord direct current connection, a 300 kilometre long underground cable route of Amprion GmbH. They have found that, on the basis of multi-party agreements, it has been possible to win over competent and willing companies as contractors, to agree ambitious project goals with them and to create a harmonised construction site as a fundamental basis for further joint construction projects.