After Bottom-Line Hits, More Firms Exit Fixed-Price Projects

摘要

Three large, publicly held contractors-SNC-Lavalin Group Inc., Fluor Corp. and Granite Construction Inc.-are exiting fixed-price contracting as a business-growth strategy in the wake of megaproject risk imbalance, the companies said in disclosing their second quarter results. After announcing a $1.6-billion quarter loss on Aug. 1, Canada design-builder SNC-Lavalin said it will not bid on future "lump-sum turnkey" projects and will reorganize its infrastructure, oil-and-gas and mining units into separate businesses. That compares to $62.7-million profit a year earlier. Fixed-price contracts are the "root cause ... of performance issues," said interim CEO Ian Edwards. "The current model within our industry is broken."