In the education space, a construction project is rarely just a construction project. It must be delivered around students, staff, teaching programmes and an operating campus, often against immovable dates such as the start of a new school year.

That makes managing construction risk particularly important. Decisions made before the building contract is signed can have a significant impact on cost, programme and disruption once works commence.

As schools plan capital works for 2027, we look at five practical lessons that can help schools manage those risks and achieve better project outcomes.

Existing school campuses can present significant unknowns.

Older buildings may contain asbestos or other hazardous materials. Existing services may be poorly documented. Available drawings may not accurately reflect what has been constructed. Access restrictions, ground conditions and connections into existing infrastructure can also create problems once works begin.

A building contract can transfer much of this risk to the contractor, but contractual risk transfer does not make the underlying problem disappear. If contractors are asked to accept risks they cannot properly investigate, they may price a contingency into their tenders or seek additional time and money when an issue arises.

Schools should therefore consider what investigations can reasonably be undertaken before tender, including surveys, investigations of existing services and hazardous materials assessments. Tender documents should also clearly identify the information available to bidders and how it can be relied upon.

The lesson for 2027: Investing in information before tender can reduce uncertainty, improve pricing and minimise disputes during construction.

Programme is often one of the most important considerations for a school.

A project may need to reach a particular stage before students return from holidays. Works may need to stop or change during examinations. Noisy activities may be restricted during teaching hours, while shutdowns of power, water or other services may only be possible during weekends or holiday periods.

Missing one of these windows can have consequences far greater than the number of days of delay involved.

These requirements should not simply sit in a project brief. They should be properly reflected in the building contract through access arrangements, staging requirements, milestones or separable portions and, where appropriate, the contractual consequences of failing to achieve them.

Schools should also understand what happens when their own requirements change. A direction to defer work, alter access arrangements or accommodate a school event may have consequences for both time and cost.

The lesson for 2027: Identify critical operational dates and restrictions early and make them part of the contractual programme.

Schools understandably focus heavily on what the finished facility will look like and how it will function. However, it is equally important to understand who is contractually responsible for delivering that outcome.

On a design and construct project, there may already be substantial architectural, engineering and specialist design work before the builder is appointed. Consultants may subsequently be novated to the builder.

That can create uncertainty about responsibility if something in the earlier design proves inadequate.

Before entering into the building contract, the school should understand which party is responsible for the existing design, what responsibility the builder assumes for developing or completing it and whether the contractual performance requirements accurately describe what the school expects the completed facility to achieve.

Changes to the educational brief during construction can also be costly. Involving teaching staff and other key stakeholders in the design process early can reduce the need for late adjustments once construction is underway.

The lesson for 2027: Ensure the contract clearly allocates design responsibility and that key users have had meaningful input before the design is locked down.

Schools may only undertake a major construction project occasionally. The contractor and consultants, by contrast, deal with construction contracts every day.

It is therefore important that the school has an appropriate project team and governance structure in place before construction starts. The contract should clearly establish who can give directions, approve variations and make decisions on behalf of the school, with internal delegations aligned to those contractual arrangements.

The contractual timeframes should also reflect the school’s governance requirements. Adequate time should be allowed for the school to review submissions, seek consultant input and obtain any necessary internal approvals before responding or issuing a notice under the contract. This is particularly important for matters involving significant variations, extensions of time, design approvals or other decisions that may need to be referred to a governing body, committee or other delegated decisionmaker.

Without this alignment, the school may find itself contractually required to make decisions within a timeframe that its governance processes cannot practically accommodate, potentially leading to deemed approvals, delays or unnecessary disputes.

The lesson for 2027: Establish clear decision-making authority and ensure the contract provides realistic timeframes for the school’s governance and approval processes.

There can be a tendency to start with a familiar form of construction contract and negotiate from there. A better starting point is to ask what procurement model best suits the project.

A new classroom building on an unconstrained part of a campus may lend itself to a relatively conventional design and construct model.

The answer may be different for the staged redevelopment of an operating school involving existing buildings, uncertain services, significant design development and construction occurring metres away from students and staff.

Schools should consider early:

1. how developed the design should be before approaching contractors;

2. whether the contractor should have early involvement in design, buildability and staging;

3. which consultants should remain engaged by the school and which may be novated;

4. whether the works need to be delivered in stages;

5. which risks the school genuinely wants the contractor to price; and

6. whether early works or long-lead items need to be procured separately.

The objective should not simply be to transfer the maximum amount of risk to the contractor. Some risks become significantly more expensive when transferred to a party that cannot properly control or assess them.

The lesson for 2027: Start with how the project needs to be delivered, then develop the procurement strategy and contract around it.

For schools planning capital works in 2027, successful project outcomes will often be determined well before construction begins.

Understanding existing conditions, incorporating the academic calendar into the programme, settling design responsibilities and establishing clear governance can significantly reduce uncertainty during delivery.

Perhaps most importantly, schools should approach the building contract as a tool for delivering the project, rather than simply a mechanism for transferring risk.

A contract that reflects how the school operates, identifies the risks that matter and establishes clear processes for dealing with change gives the school, its consultants and the contractor a much better foundation for successfully delivering the project.

If you are planning capital works in 2027 and would like to discuss any of the issues raised in this article, please contact a member of our Construction & Engineering team.