Project Alliance Agreement

Project Alliance Agreement Template for Denmark

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Document background

The Project Alliance Agreement is designed for complex infrastructure and construction projects in Denmark where traditional contracting approaches may not be optimal. It creates a formal framework for collaborative project delivery, typically used for projects valued above DKK 500 million where innovation, risk sharing, and joint problem-solving are critical success factors. The agreement aligns with Danish contract law principles while incorporating international best practices in alliance contracting. It is particularly suitable for projects with significant technical challenges, stakeholder interfaces, or where early contractor involvement can add substantial value. The document includes comprehensive provisions for governance, commercial arrangements, and performance management, structured to promote collaboration while ensuring compliance with Danish legal requirements and EU regulations. This type of agreement has become increasingly popular for major Danish infrastructure projects, offering a more collaborative alternative to traditional contract models.

Suggested Sections

1. Parties: Identifies and provides details of all alliance participants, including the owner/client and non-owner participants (NOPs)

2. Background: Sets out the context of the project, its objectives, and the rationale for using an alliance delivery model

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Alliance Principles and Commitments: Establishes core alliance principles, including good faith, trust, collaboration, and 'best for project' decision-making

5. Formation and Operation of the Alliance: Details how the alliance is established and operated, including legal structure and relationship between parties

6. Governance Structure: Defines the alliance leadership team, project team, and decision-making processes

7. Roles and Responsibilities: Outlines specific roles and responsibilities of each alliance participant

8. Commercial Framework: Details the three-limb compensation model, including reimbursable costs, fee, and pain/gain share mechanisms

9. Performance Framework: Establishes key performance indicators (KPIs) and performance measurement approach

10. Risk and Opportunity Sharing: Describes how risks and opportunities are shared among alliance participants

11. Insurance Requirements: Specifies required insurance coverage and responsibilities

12. Intellectual Property: Addresses ownership and usage rights of project IP

13. Dispute Resolution: Sets out processes for resolving issues within the alliance framework

14. Term and Termination: Specifies agreement duration and circumstances for termination

15. General Provisions: Includes standard legal provisions such as notices, governing law, and assignment

Optional Sections

1. Early Works: Used when certain works need to commence before full project definition, outlining scope and compensation for these works

2. Interface Management: Required when project interfaces with other contractors or projects outside the alliance

3. Community Engagement: Included for projects with significant community impact or stakeholder management requirements

4. Environmental Management: Detailed section needed for projects with significant environmental considerations

5. Innovation and Value Engineering: Specific provisions for projects emphasizing innovation and continuous improvement

6. Legacy Objectives: Used when project has specific long-term community or industry development goals

7. BIM and Digital Engineering: Required for projects utilizing Building Information Modeling or advanced digital tools

Suggested Schedules

1. Schedule 1 - Project Brief: Detailed description of project scope, objectives, and requirements

2. Schedule 2 - Commercial Framework Details: Detailed calculations and mechanisms for the three-limb compensation model

3. Schedule 3 - Key Performance Indicators: Detailed KPIs, measurement methods, and targets

4. Schedule 4 - Governance Structure: Detailed roles, responsibilities, and procedures for alliance governance

5. Schedule 5 - Alliance Team Structure: Organization chart and key personnel

6. Schedule 6 - Project Management Systems: Details of systems, processes, and procedures for project delivery

7. Schedule 7 - Cost Element Definitions: Detailed definition of cost elements and their treatment

8. Schedule 8 - Risk and Opportunity Register: Initial risk and opportunity assessment

9. Schedule 9 - Forms of Warranties and Certificates: Template forms for various project warranties and certificates

10. Schedule 10 - Insurance Requirements: Detailed insurance specifications and certificates

11. Schedule 11 - Project Program: Detailed project timeline and milestones

12. Appendix A - Standard Forms: Templates for various project documents and reports

13. Appendix B - Site Information: Detailed information about project site and conditions

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