The E&P market transforms significantly as EPC contractors shift away from traditional lump-sum (LS) contracts. Increasing risk aversion, supply chain uncertainties, and skilled labour shortages have made LS contracts less viable. In response, unit rate contracts are becoming the preferred choice, offering greater flexibility and transparency in cost control.

Why the Shift?

• Risk Management: Unit rate contracts allow contractors to account for actual work quantities, reducing the need for significant risk premiums.
• Market Conditions: Projects' complexity and unpredictability make LS contracts unattractive for contractors, especially when supply chains and schedules remain volatile.
• Owner-Contractor Collaboration: Unit rate models promote shared responsibility and adaptability, leading to better alignment between owners and contractors.

How rhi Can Help

At rhi, we specialize in adapting contract strategies to meet evolving market dynamics. With decades of expertise in cost estimating, benchmarking, and project execution planning, we support owners in:

• Structuring Unit Rate Contracts: Ensuring clarity, transparency, and alignment with project objectives.
• Risk Assessment & Allocation: Identifying and addressing high-risk areas to reduce project uncertainties.
• Benchmarking & Validation: Leveraging rhi's global database to validate unit rates and ensure competitive pricing.
• Optimizing Contract Execution: Providing real-time support in contract administration, scope validation, and change management.
• Systems & Tools: Utilizing advanced systems and tools like rhiCOMS and other cutting-edge cost management platforms to enhance transparency, efficiency, and collaboration across all project phases.

Unit rate contracts are not just a response to current challenges—they represent a long-term strategy for navigating a more uncertain project environment. Let rhi guide you in making the most of this transition and delivering value and control for your next project.

Let's discuss how we can help you adapt to this changing landscape.

Please get in touch with us at: mail@rhi-group.com