Spurred by rising global demand, the world’s suppliers of energy and energy-intensive commodities are greatly increasing their investments in power stations, chemical plants, oil rigs, steel mills, and other capital projects. Many of these undertakings are larger and more technologically complex than ever. The result is heated competition for the basic materials, equipment, and talent that all asset-intensive industries need to deliver multibillion-dollar capital projects successfully.

Skillful management and oversight of the contractors who supply the goods and services that a project requires has always been crucial to maximizing its economic value. In power generation or petroleum, for example, up to three-quarters of a typical budget goes to the contractors that supply engineering, procurement, construction, and project-management services. By raising the cost of delay and missed opportunities, today’s supercharged environment has elevated the importance of first-rate contracting.

Many asset owners, however, are struggling. Some companies approach every capital project as an isolated, individually tailored undertaking and fail to align the contracting efforts of individual project teams with their long-term capital strategy. Others hastily lock themselves into agreements; choose inappropriate contracting models; or misjudge the risks, organizational resources, or skills that capital projects involve. Such mistakes generate missed opportunities, significant delays,...