The choice of a shipyard is based on a variety of criteria. Here is some of them:

• Price. The price is one of the most valuable criteria. It is recommended to obtain at least 3-5 offers from different sources to get a reasonable price. But even doing market research, you have to understand the price basis for a specific vessel to filter and decline non-realistic offers.
• Specialization. Each entity is doing something for the first time. But it's always better to place the shipbuilding offer on the shipyard specialized on your ship type and sizes. So there will be fewer unpleasant surprises, and the price should certainly be more attractive. All shipyards have specialization in size, type, and complexity of the fleet. If they will deviate significantly from their specialization, then at best, the offer becomes non-competitive. At worst, the execution of the contract is at risk.
• Technical capabilities. If there was no previous experience of cooperation, then it is critically important to inspect shipyards' production facilities. The shipyard must have sufficient lifting and transportation equipment, launching facilities, and other production means suitable to construct the required vessel. Also, must have the package of necessary recognitions and certificates issued by the required classification society. Regardless of the shipyard promises, your technical expert must independently assess the enterprise's real capabilities, labor intensity, and construction time. The low price and fast delivery are always intriguing but often end up in scandals, courts, and abandoned unfinished projects. Monuments of overestimated capabilities can be found in almost every shipyard.
• Workload and reputation. It is important to collect feedback about the shipyard from its customers or even from competitors. If we are not talking about the global economic crisis, the low load of the plant may indicate its low reputation or existing financial problems. High utilization is unambiguous evidence of a good reputation and low risks of non-fulfillment of the contract. However, the risk of delay of delivery is still high in the high load of production facilities.
• Location. Transportation costs should not be a significant part of the construction cost. It is evident that the construction price itself can not be competitive if ship delivery cost to the appointed location will exceed the price difference between more expensive but closer shipyard.

It is hard or even impossible to overvalue the importance of a careful approach to drawing up a multimillion-dollar shipbuilding contract. If you have just received a proforma of shipbuilding contract from the shipyard, then you have a month of work ahead. It is recommended to use not self-made but recommended proformas of shipbuilding contracts. Better yet, contact us for assistance.

Speaking of shipbuilding contracts shortly, it is worth mentioning that they come in two types: fixed cost and open type. The last is the so-called open-book. The open-book contract sets only the cost of construction. The cost of materials and equipment, which can be either yard or customer's supply, is determined jointly by the shipyard and the customer during construction.

The above is just the tip of the iceberg. To pass this stage safely and not fall into the numerous tricks awaiting the customer, we suggest contacting us for consultancy and support when choosing a shipyard and drawing up a shipbuilding contract.