Can you share the pain? Doosan, Interserve and the TCC

By Kate Jones 2019-12-12T06:00:00

Kate Jones explores a new ruling which highlights potential issues with target cost contracts under joint ventures

A recent decision by the Technology and Construction Court (TCC) in Doosan Enpure Ltd vs Interserve Construction Ltd has provided valuable insights into the implications of joint-venture contracting under target cost arrangements.

Target cost contracts are a form of cost reimbursable contract under which the contractor is paid the “total cost” it incurs in carrying out the works, plus a fee to cover overheads and profits. The parties agree a target price at the start of the project and any savings or overrun on completion are allocated according to a predetermined formula known as a pain/gain share mechanism.

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