Is a dual FEED project execution the best strategy for low-carbon projects?

As low-carbon projects become more complex, a dual FEED (front-end engineering and design) strategy can help owners improve cost certainty, strengthen design options and make more informed investment decisions.

The value of this strategy depends on getting the basics right, from governance and competition to scope alignment and contracting strategy. 

As capital projects in the energy and natural resources sector become more complex, owners need a clearer view of the options in front of them. 

Dual FEED, sometimes known as Competitive FEED, supports this by asking two contractors to independently develop designs for the same scope. This allows owners to compare technical, commercial and delivery options before selecting the preferred design and contractor.

Building cost and schedule certainty

A major benefit of running two FEEDs simultaneously is the competition it generates between contractors. This competition can encourage better pricing and more refined execution strategies, offering owners greater certainty in both cost and schedule projections.

“By requiring FEED contractors to submit binding EPC proposals, project owners can reduce uncertainty before making a final investment decision (FID).”

Early engagement with contractors also provides the opportunity to incorporate their expertise into the initial design phase. This leads to stronger ownership of the designs. It also minimizes the likelihood of change orders once the award is made and it supports a smoother transition into the execution phase.  

The dual FEED process can support more predictable outcomes and improve efficiency across the project lifecycle.

How can you encourage technical innovation?

One of the most significant advantages of the dual FEED model is its ability to foster technical innovation. By enabling the exploration of multiple technical pathways, project owners gain flexibility and adaptability. This is crucial in sectors like low-carbon energy, where technologies evolve rapidly.

“To maximize the benefits of this innovation, it’s essential to define contracting strategy early. Clearly outline the transition mechanism and include binding proposals at the completion of the FEED phase.”

This ensures that innovative solutions developed during the design stage are carried through to delivery, safeguarding the value added during the initial phase of the project. 

Managing governance risks

While dual FEED offers significant benefits, maintaining fair governance throughout the process is critical to its success. A level playing field must be preserved to avoid disputes and ensure the integrity of the competition.

“This requires strict confidentiality protocols and dedicated owner teams for each FEED package to prevent cross-contamination of information or favoritism.”

Governance weaknesses are a common source of disputes in dual FEED projects. By implementing equal treatment audits and maintaining clear boundaries between the two competing teams, project owners can minimize risks and ensure that the competition remains fair and transparent.  

Strong governance isn’t just a regulatory necessity – it’s a cornerstone of an effective dual FEED process.

Maintaining a competitive environment: the road to success

For dual FEED to succeed, especially given the additional costs of carrying a second FEED contractor, it’s crucial that the competitive environment is maintained throughout the process.  

If one contractor withdraws or becomes the clear favorite early on, the competition can falter, undermining the benefits of the model. This risk is particularly pronounced in busy markets where top-tier contractors may be selective in choosing which projects to bid on.

“To mitigate this, owners must actively manage contractor participation. Establishing a structured and transparent evaluation framework is key to keeping both parties engaged.”

Use weighted scoring across multiple criteria, such as cost, schedule, technical compliance, constructability and innovation. This is to ensure assessments are consistent and unbiased. This approach not only keeps contractors motivated but also preserves the integrity of the competitive process.

Standardizing your design basis

One challenge of the dual FEED model is ensuring that bids remain comparable. Inconsistent technology assumptions can lead to significant variances in EPC bids, making it difficult to assess options effectively.

“To address this, it’s critical to align common assumptions, vendor lists, plot plans and modularization requirements early in the process.”

Proactively managing these elements ensures that the scope remains standardized, protecting the competitive value of the dual FEED process.  

By minimizing scope divergence, project owners can avoid major pricing variances that might otherwise complicate their readiness for FID.  

Consistency in design basis isn’t just a technical requirement – it’s a strategic necessity for leveraging the full value of the dual FEED approach.

Securing your project outcomes

While dual FEED isn’t a one-size-fits-all solution, it can be a powerful strategy for balancing risk and strengthening investment readiness when applied correctly. The process demands discipline, strict oversight and a well-defined contracting strategy to deliver its full benefits. 

Owners who embrace a well-governed dual FEED process will gain more predictable outcomes, make better-informed decisions and experience a smoother transition into project execution.  

By fostering competition, encouraging innovation and maintaining strong governance, the dual FEED model offers a robust framework for tackling the increasing complexity of today’s capital projects. This is particularly the case in emerging sectors like low-carbon energy.