Preparing for Successful Collaborative Contracts (original) (raw)
Related papers
Doctoral thesis, 2013
"Due to their complexity, construction projects involve significant risks that must be managed in order to meet the main project objectives in terms of cost, time and quality. While some risks can be foreseen at the beginning of a project and allocated among the project actors, other risks are difficult to predict. Moreover, even identified risks may change in scope and require different types of response. In order to manage such risks successfully, collaborative efforts among project actors are needed. This thesis focuses on collaborative management of risks in construction projects – joint risk management (JRM) – which is claimed to provide several advantages in comparison to separate risk management by each project actor. An overall aim is to increase the understanding of how JRM can be enhanced throughout a project’s lifecycle. The underlying studies this thesis is based upon constitute a multiple case study of nine construction projects, a questionnaire survey and a longitudinal case study of three construction projects. Empirical data were collected through interviews, observations of JRM workshops and document studies. The empirical findings show that cooperative procurement procedures, organic management systems and appropriate strategies for addressing agency-related problems enhance JRM in construction projects. Thus they require thorough consideration when organizations intend to implement JRM. This thesis provides several contributions to risk management theory. Firstly, the author extends the definition of JRM by including its core components together with associated activities and underlying factors. The extended definition better reflects, and increases understanding of, the nature of JRM. Secondly, the research contributes to discussion of serious drawbacks related to traditional procurement practices by identifying and studying procurement variables (project delivery method, form of payment and use of collaboration or partnering arrangements) that have a major influence on risk management. In addition, the results of questionnaire survey suggest that cooperative procurement procedures in general and collaborative activities in particular are positively related to the use of JRM. Finally, by framing the empirical results in an organizational theory context this research identifies two sets of factors that strongly influence the implementation and effectiveness of JRM, related to management system (organic vs. mechanistic), and strategy for responding to agency-related problems. By applying theory on mechanistic and organic organization to RM, the study pinpoints the importance of managing tensions between control and flexibility when implementing JRM. The author suggests that JRM requires a combination of formal tools (aimed at controlling identified risks) and flexible strategies (aimed at responding to unforeseen events). By investigating how strategies to handle agency-related problems can foster collaborative relationships and JRM, this research contributes to RM literature where few studies have discussed JRM from the perspective of the principal – agent relationships."
Sorting out the essence of owner–contractor collaboration in capital project delivery
Despite the relatively widespread recognition of relational-based contracting in engineering and construction projects, literature indicates a range of paradoxical issues in practice. This study attempts to reconstruct project practitioner's perspectives regarding the essence of collaborative relationships. Applying Q-methodology, subjective opinions and reflections of 30 project practitioners from 19 owner and engineeringconstruction firms were systematically analyzed. The result suggests four distinct perspectives towards effective working relationships, namely a) shared team responsibility, b) execution focused team, c) joint capability and structure; and d) senior leadership pair. Across perspectives, all practitioners shared a belief that an effective owner-contractor relationship should be based on affective trust, shared vision, and mutual attitudes such as open and honest communication, solution seeking instead of blaming, and senior management leadership. In contrast to prior research, long-term orientation and contractual functions were perceived to play a relatively limited role in improving owner-contractor relationships.
Cheung A PLANNING FRAMEWORK FOR CONDITIONS OF CONTRACT FOR USE IN PARTNERING PROJECTS
Construction projects are characterised by their participants having conflicting and different objectives. For this reason, construction conflicts and adversarial business relationships are common. In recognising the need for a more 'co-operative' and less adversarial construction environment, Partnering approach has been proposed as a means of achieving it. Evidences can be found in Australia, UK and USA that the construction industry is beginning to recognise the benefits of Partnering, including improved working relationship, programme certainty, and reduced waste. Whilst much has been reported on the Partnering process, this paper deals with another important aspect of Partnering: the conditions of contract. With the emphasis on cooperation, trust and openness in communication, the traditional form of contract featuring strong confrontational ambit is considered inappropriate for Partnering projects. This paper describes a framework for the planning of conditions of contract for use in Partnering projects. The planning framework deals with the three key aspects namely, risks , problem resolution and performance. The principles guiding the planning for the three aspects are also discussed.
Risk management assessment for partnering projects in the Malaysian construction industry
2009
The Partnering concept is not a new way of doing business. The partnering process establishes the working relationship among the parties (stakeholders) through a mutually-developed, formal strategy of commitment and communication. It attempts to create an environment where trust and teamwork prevent disputes, cooperative bonds are fostered for everyone's benefit and the completion of successful project is facilitated. The Construction industry in Malaysia is suffering constraints in the processes of construction procurement. Thus, partnering is used as an approach in procurement that could lead toward improving performance of the construction industry in Malaysia. Organizations which have used partnering for construction projects are now reporting favourable results, which include the decreased costs, quality improvement and delivery of project to programme. Partnering has reached many benefits in terms of project cost, time quality, build ability and etc. Despite the benefits in applying the partnering procurement method, there remains risks associated with this mode of construction. From the literature review it was found that the risk management process and partnering are critical to the success of the project. A questionnaire survey was conducted on the sample in order to examine the criticality of risk factors and to identify the effectiveness of risk mitigation measures applied in partnering. The opinions and techniques of risk mitigation were gathered through. It was found that the most critical construction partnering risk is the partner's financial resources, clients' problems and economic conditions and financial problems among one of the partner. It is hope that the risk management programme will help to reduce the risks in the construction project in Malaysia.
Risk and Success Factors in Construction Collaborative Relationships
2008
Collaborative relationships including joint ventures, strategic alliances, project and strategic partnering, partnership are now used in many industries including manufacturing, retailing, construction and service sectors. This has brought many advantages to companies where a balanced collaborative relationship is achieved. This paper presents a result of investigation into the risk and success factors involved in construction collaborative relationships from construction contractors perspective. This is based on a content analysis of open-ended questions in which UK construction contractors are asked to list and rank in order of importance five major risks success factors and assessment criteria for collaborative relationships in construction development. The main risk involved in collaboration for construction development are lack of trust (abuse, breach); complacency (over familiarity, fail to honour agreement, lack of drive); dependence (lost of control, interdependence), exploi...
Using a case study approach to identify critical success factors for alliance contracting
Engineering, Construction and Architectural Management, 2014
Construction projects are dynamic, ever changing and most crucially inherent with risks. For instance, states that these levels of risk and the growing size and complexity of projects has attributed to the adversarial and fragmented nature of the construction industry. Traditional forms of contract, such as Construct Only or Design and Construct, consist of project risks being allocated to the party believed best placed to manage the risk. Subsequently, the terms and conditions of traditional contracts aim at predicting all possible outcomes and assigning liability, so when changes or alterations occur, the result often ends in dispute. By comparison, relationship-based contracts, such as Alliancing, are built on a partnering ethos in order to embrace collaboration, change and innovation in project delivery .
Project Partnering in the Construction Industry: Theory vs. Practice
Clarification of what partnering is and its practical implications may help the construction industry to achieve the full benefits of this concept. The purpose of this study is to shed more light on how the partnering concept as practiced in real-life projects compares with the way partnering is described in the literature by exploring the hard (formal/contractual) elements of this concept. By this, we aim to identify discrepancies between theory and practice and help clear up the confusion that results from conflicting definitions of partnering. This investigation is based on a literature study and 39 interviews with respondents from 44 construction projects classified as partnering projects. Findings reveal that the discrepancies between theory and practice are remarkable: either the practitioners have misunderstood what partnering entails or the minimum requirements are too stringent and do not reflect the real-life use of the concept. Observation from case projects shows that no partnering hard element is applied in all studied projects. Partnering projects may share the partnering label, but use different sets of hard elements. Partnering can be identified as being present through a range of features, characteristics and interaction behaviors. This concept should be studied as an enacting strategy that can be adopted by various contract models rather than simply as an alternative contract form.
2019
This research examines the relationships between the tripartite of Client, Consultant Engineer, and the Contractor during construction project implementation. It examines contract behaviour and how collaborative practices build inter-organisation Trust in construction contracts. Five projects were selected for the study. Three were trust-based Public Private Partnership contracts, while two were Traditional standard contracts. The initial research question was: How do inter-organisational Trust relationships affect construction project management with respect to Cost, Time and Quality? This qualitative research identified the threefold nature of Trust as Contractual Trust, Competence Trust, and Goodwill Trust. By analysing and clustering of respondent themes, two overarching concept themes emerged on how to build Trust between the Client, the Consultant, and the Contractor. The first theme was on financial matters, which included Working Capital Advance payment and Materials pre-purchase schemes. Addressing this theme created inter-party collaboration and Trust which positively affected project Cost, Program and Quality. The second theme was on creation of tripartite Trust by aligning Contractor and Consultant skills, capacity, and experience.
Contingency Perceptions of Traditional Versus Collaborative-Based Construction Contract Clauses
Proceedings of International Structural Engineering and Construction, 2020
Although contracts are viewed mostly as legal documents whose main objective is to manage risk, its clauses reflect the collaboration level expected between parties. The objective of this paper is to empirically investigate the contracting parties’ perception of collaboration in contract clauses and their correlation to the risk allocation (depicted by the contingency percentage allocated by contracting parties). Through surveys administered to both owners and contractors, survey participants were presented with different project scenarios, including varying degrees of 1) risk allocation in contract clauses (contract collaboration level), 2) project site conditions (project risk level), as well as, 3) prior working relationship with the other contracting party (trust level). Based on these scenarios, participants were asked to allocate a contingency percentage (perception of risk). Results show that clauses identified as low-level collaborative clauses are highly correlated with hig...