In offshore wind, the biggest risks aren’t always in the contracts, they are in what the contract overlooks. As projects expand into new markets and technologies, organisations must rethink not just their legal frameworks, but how their teams are equipped to navigate them.
Ulrik Bang-Olsen, Partner and Co-founder of JUMBO Consulting Group, is a Danish-qualified lawyer with extensive experience in EU procurement, contract negotiation, and offshore wind project delivery – particularly through FIDIC and BIMCO contracts and offshore civil works.
He shares insights on how organisations can adapt contracts for emerging offshore wind markets, the limitations of current standard forms, and why targeted training is essential for building capability across project teams.
What advice would you give to companies adapting their contracts to emerging offshore wind markets?
A key issue when working in a new market is to achieve an understanding of local requirements (both legal, technical and commercial) which are required to be incorporated into your organisation’s contracts. There can be a tendency to focus on the contractual legal requirements and whether the organisation’s standards existing wording is contrary to local law. But often the real dangers lie elsewhere e.g. in local requirements regarding licenses or in the tax and custom system of the new market. It is therefore necessary to find good advisors who will not only review what is already in the contract but will also be able to identify those additional issues required to be addressed on a project with a presumably extensively international supply chain.
Further – and that advice does not only apply in emerging markets – it is a good idea to consider whether the contracts reflect the current market situation and a risk profile that you and your advisors do not only hope for but which your contract party will also be able to accept, and which contain a fair distribution of risk and benefits. Too much energy is otherwise used on fruitless discussions and the focus of the important tender phase is diverted away from the real issues and on to Potemkin discussions.
How are FIDIC and BIMCO contracts evolving to accommodate newer offshore wind technologies and global expansion?
No current standard form – including the FIDIC and BIMCO form – adequately address the needs of the parties working on offshore wind project. The task of adapting the contracts to new technologies (including floating offshore wind) and making the contracts suitable for new markets thus remain with the industry and the individual parties including the developers and contractors. While there is a in my opinion positive spill over or influence over time between the different project and developers/contractors such development of contract provisions and standards remain very much dependent on the persons involved unless the developments have been captured by the templates etc. in the bespoke organisations. This means that in many cases the individual project will to a large degree have to rely on the actual persons involved in the project and their knowledge of market standards including the scope split and risk distribution. In that context it is worth remembering that many organisations on both contractor and employer side are conservative and have a confrontational risk perception and for those reasons prefer to use the same contractual starting point as in their latest tender package or tender submission even though the organisation might very well know that it does not conform with market standard. This unfortunately leads to a lot of wasted time and unnecessary discussions in the tender phase.
How do live and self-paced training formats support professionals in mastering contract management for offshore wind projects? And what makes your training so unique?
The need for educated and experienced personnel also in the procurement and contract management phase is obvious as the success of the induvial project is to a very large degree dependent on the personal skills, dedication and experience of the teams trusted to undertake the work in the development and construction of the offshore wind project. The Renewable Construction Academy (RECOA) platform and education modules makes knowledge sharing based on the experiences of senior experts in the offshore wind industry possible. As such it provides a real short cut for those students who have the skills, and the dedication but perhaps do not have the necessary experience with offshore wind projects yet. That the learning is based not only on one organisation’s perspective and is not developer or contractor biased makes it possible to form a better understanding of all involved parties’ interests and perspectives. In my opinion that is truly unique.
JUMBO Consulting Group offers a suite of structured, self-paced online courses – such as Renewable Contract Manager (RCM) and Procurement from a Project Development Perspective (RPM-D) – through our partnership with the Renewable Construction Academy (RECOA). In addition, JUMBO provides in-person customised and confidential training to major offshore wind developers, which ensures knowledge isn’t just transferred, but applied to real project challenges.
Reach out to Ulrik Bang-Olsen to hear more about tailored training for your organisation: https://jumbocg.com/services/