The implementation of segmented contracting
A study on the legal and organizational aspects of segmented contracting in infrastructure projects
J.M. Versantvoort (TU Delft - Civil Engineering & Geosciences)
A. Straub – Graduation committee member (TU Delft - Design & Construction Management)
E.M. Bruggeman – Mentor (TU Delft - Design & Construction Management)
L.P.I.M. Hombergen – Graduation committee member (TU Delft - Integral Design & Management)
D. Dortmundt – Graduation committee member (AT Osborne)
W.J.P. de Rooij – Graduation committee member (AT Osborne)
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Abstract
In recent years, large infrastructure projects have increasingly struggled with limited market capacity,
contractors unwilling to bear excessive risks, and the ambition to involve small and medium-sized
enterprises (SMEs). These challenges force, and at times motivate, public clients to divide projects
into separate segments that can be tendered individually. Such segmented contracting offers
flexibility and makes projects accessible to a wider range of contractors, but it also fragments
responsibilities and creates numerous interfaces between contracts. This raises a fundamental
question: how should contractors collaborate across segments, and how can the client ensure that
coordination is effectively organised?
This thesis investigates how clients address these challenges by making segmentation and
coordination choices. Specifically, clients can opt for horizontal (geographical) or vertical (technical)
segmentation, and decide whether design and execution are tendered in parallel or phased over
time. In addition, they must determine whether coordination remains a responsibility of the client or
is delegated to one of the contractors. The research combines a literature review with four case
studies of Dutch infrastructure projects and a series of interviews with legal experts. Together, these
sources provided insights into how these choices shape the division of design and execution
responsibilities, the organisation of planning, and the allocation of risk.
The case studies showed that horizontal and vertical segmentation often create complex technical
and geographical interfaces, requiring careful management to avoid disputes. Phased and parallel
segmentation affect the alignment of schedules and information flows, with parallel strategies in
particular demanding strong coordination to manage interdependencies. Clients employed both
formal mechanisms, such as coordination agreements, overarching covenants, and escalation
procedures, and informal mechanisms, such as steering groups and joint decision-making. The
interviews with legal experts showed that without legally enforceable coordination agreements, the
risks of fragmentation and conflict increase substantially for the client.
The findings demonstrate that segmentation choices cannot be considered in isolation but must be
supported by a contractual and organisational framework that enables effective coordination. This
thesis contributes by clarifying how clients can adopt segmented contracting effectively, by analysing
how their choices in segmentation and coordination influence responsibilities and risks, and by
formulating key elements for structuring coordination agreements. In doing so, it provides both
theoretical insights and practical recommendations for clients seeking to implement segmented
contracting in complex infrastructure projects.