The client’s commercial model
The National Audit Office found that the quality of a project’s initiation is highly predictive of its success [7]. Commercial failure is usually set up before a contract is signed: a vague objective, a procurement route that does not suit it, or a contract that cannot be delivered through the route chosen.
This model sets out the whole commercial system a client runs, from objective to outturn: six stages, seven threads that run through every stage, and the test that has to be passed before going to market.
Select a stage heading for its question, test and gate, or any cell for what the client must answer and produce at that point. The red band is the strategy gate before going to market.
Eight rules the model follows
- Decide the objective before the solution. Objectives describe outcomes, have a measured baseline, and are few enough to prioritise.
- Settle procurement before contract. The route decides what the contract can assume, so the procurement strategy is set first.
- Test the three together. Objective, procurement strategy and contract strategy are only sound if each serves the next. The gate tests them as one.
- Price a range, not a point. Early estimates carry their uncertainty; budgets and contingency state their confidence level.
- Place each risk where it can be managed. Transferring more risk is not the aim. What the client keeps, it must be able to manage.
- Use the market before you commit to it. Early engagement tests appetite, packaging and terms while change is still cheap.
- Control against the baseline you set. Delivery reporting uses the same measures as the objective, so the thread holds from start to finish.
- Close the loop. Outturn returns to the benchmarks and should-cost models that the next project starts from.
- Cabinet Office, The Construction Playbook, v1.1, September 2022: pipelines and market health (ch.1), early supply chain involvement (ch.3), opportunity framing (ch.4), delivery model assessments and should-cost models (ch.5), effective contracting and outcome profile (ch.6), risk allocation, payment and the pre-tender check (ch.7), financial standing (ch.8), resolution planning (ch.10), lessons (ch.12).
- HM Treasury, Guidance on Developing Business Cases for Projects and Programmes, 2026: Five Case Model (ch.2), stages and gates (ch.4, table 2), objectives (para 7.7), critical success factors (table 6), commercial case (ch.9, including para 9.22 on risk transfer).
- NISTA (formerly the Infrastructure and Projects Authority), Gate Reviews 0 to 5, assurance review toolkit, updated August 2026.
- Infrastructure and Projects Authority, Project Development Routemap: Procurement Module, 2023 (six pillars; typical findings, p.12).
- Procurement Act 2023, ss.12, 15-18 (objectives, planned procurement notices, preliminary market engagement, lots), s.52 (KPIs) and s.93 (pipeline notices).
- NEC, Procurement and Contract Strategies, 2013: procurement route, contract strategy and the allocation of financial risk across the ECC main options.
- National Audit Office, Initiating successful projects, December 2011.
- National Audit Office, Lessons learned from Major Programmes, HC 960, November 2020 (paras 12, 16-17, 32-33).
- National Audit Office, Lessons learned: Governance and decision-making on mega-projects, HC 545, March 2025 (para 9).
- National Audit Office, Managing the commercial lifecycle, good practice guide, February 2025.
We use this model to review a client’s commercial set-up before it goes to market, and to run commercial control once it has. Discuss a commercial strategy review →