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Horizontal Directional Drilling: Utility and Pipeline Applications

Chapter 9: HDD Contracts

9.1 General Information

As briefly discussed in Chapter 2, the contractual feasibility of HDD projects is an important issue and can have a major impact on whether the project should be performed with this method of construction. Once it has been determined that a HDD project is technically and economically feasible, the contractual feasibility must be determined. This task can often be performed based on experience with past projects and close coordination between the engineers and qualified HDD contractors. If the project appears to be contractually feasible, a set of contract, or bid, documents must be prepared. The contract documents are used to solicit bids from contractors and to govern construction of the crossing. Contract documents clearly present the technical, commercial, and legal requirements of the project. Most HDD projects are bid as turnkey (lump-sum), footage, and/or daywork (per-diem) contracts.

9.2 Turnkey Contracts

Many HDD projects can be economically bid using standard turnkey contract forms. Often owners prefer this type of contract due to the fixed costs. However, owners should be aware that there is an associated risk with turnkey contracts. If the project becomes economically unfeasible for the HDD contractor, he or she may walk away from the project before completion. Assuming that project completion is required by the owner, this is certainly a risk. Methods of sharing risks between the owner and contractor are discussed later in this chapter. Risk sharing greatly reduces the chances of a contractor walking off the job.

To reduce the chances of...


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