Germany

Multi party agreements are a new tool for the German construction and plant engineering industry. However, important discussions about alliancing contracts and other means of working towards a more integrated DB collaboration are currently taking place. First model contracts are in the making and pilot projects have been set up since 2018. Given that many market players (employers, contractors, as well as investors and project managers) are very interested in developing more cooperative ways for the realization of projects and widely participate in initiatives, it is expected that multi party agreements (or at least key components) will play a much more important role in Germany than before. So far, it can be said that the ongoing discussion and implementation of these contract forms are part of a notable cultural change in the German construction industry towards a more integrated approach.

Some elements of alliancing have, however, already been in use in contracts for many years such as the principle of good faith, rules of cooperation and partnering, all-risk insurances and, in a few areas, risk contingencies.

Guaranteed Maximum Price (GMP) contracts as well as pain/gain share mechanisms are currently facing a renaissance in some sectors. There are models of high integration on the contractor side, e.g. mutual coordination and alliancing rules integrated into the contracts between the contractor and its subcontractors. There are many initiatives towards multi party agreements trying to elaborate and use contract models, particularly in combination with the application of building information modelling (BIM). Moreover, first pilot projects are underway, testing elements of alliancing and multi party components. Multi party agreements are soon expected to become part of the commonly used contract suite in the German construction market, though it is still unclear to what extent those models will prevail. Meanwhile, even those awarding state contracts are interested in trying out multi party agreements, especially testing models of early contractor involvement. However, one of the most hot topics of current discussion is the question: if and under which conditions multi party agreements and early contractor involvement are compliant with statutory procurement law.

One of the most important initiatives in this context is the "Integrierte Projekt Abwicklung" (IPA, Integrated Project Implementation), which is involved in a few prominent pilot projects and in which representatives of Arcadis and CMS take an active part. One of the primary goals of IPA is to develop a form of an alliancing model, which best fits with the requirements and demands of the German construction market.