Shard may revert to old procurement route

Sellar Properties asked Mace to build the 312m tower in London Bridge under a fixed-price deal at the end of last year after the nervousness of financial backers about the construction management route – which places greater risk on the client – threatened to derail the project.

It is now understood, however, that the project could go back to the construction management route if a fixed price is not agreed by September.

The scheme will cost an estimated £350m to build.

The news comes as it emerged that Mace is now not expected to make a fixed-price bid until between June and September, three months later than planned, owing to delays in concluding final designs on the project. Mace had been expected to provide its assessment at the start of the summer.

If a fixed price is agreed, it will be the first big deal of its type in Mace’s history. Although Mace has previously worked on small fixed-price deals, it has never carried out a major project using the procurement route.

The company was originally in negotiations to construct the building under a construction management route, before the client began talks with rival contractor Laing O’Rourke over the possibility of a fixed-price deal. This led Mace to agree to build the tower on a fixed-price contract.

Demolition work on the project fell behind last year as Sellar Property Group struggled to convince the scheme’s Kuwaiti backers that the cost of the building would not spiral out of control.

The Shard, which will be western Europe’s tallest tower, was designed by Renzo Piano.