The Benefits of Construc�on Project Partnering

Despite the origins of formal construc�on partnering beginning over 25 years ago, the concept is just as
relevant today. In this blog, Robbie Blackhurst, Procure Partnerships Director, explores the ever-growing
and evolving concept of partnering and discusses the benefits it can bring to the en�re project team.

By their very nature, construc�on projects rely on the input of a wide range of professionals and trades,
and as such can present a huge challenge to coordinate and control. To deal with an industry that can
appear chao�c and inconsistent, customers have tradi�onally used compe��ve tenders and tough
contracts in order to protect their own interests and reduce risk. This behaviour was also echoed by the
contractor, who historically tried to claw back money using tac�cs which were not in the customer’s best
interest, but which were seen as necessary to help alleviate �ght profit margins. Designers, contractors
and suppliers were selected almost exclusively on account of the lowest tendered price, meaning the
focus remained on the lowest cost rather than the highest quality. Customers and contractors were
trapped in a cycle of behaviour which lost sight of the overall project objec�ves and prevented either
party from achieving real value.

It was �me to ‘Rethink Construc�on’

In 1994, John Latham published a report commissioned by the UK government �tled; ‘Construc�ng the
Team’. The report recognised the change required in the construc�on industry to shi� the focus away
from cost alone and deliver value for the customer. A Partnering approach was presented as a method of
establishing long-term customer/supplier rela�onships which could help to deliver mutual benefits. The
concept relied upon teamwork between both the contractor and the customer, and also between the
contractor and their suppliers, in a process of total con�nuous improvement. This required an openness
between all par�es and a willingness to accept new ideas, trust each other and collaborate.

The ideas in this report were explored further in the subsequent 1998 report ‘Rethinking Construc�on’,
prepared by the government-ini�ated Construc�on Task Force. This report expressed a deep concern
that the construc�on industry was under-achieving, with low profitability, limited research and
development and falling levels of training. It described the industry’s customers as being dissa�sfied with
its overall performance and expressed the need for radical change to deliver improvements in quality
and efficiency. This report led to the Movement for Innova�on, which promoted an ‘open, co-opera�ve,
no-blame, non-adversarial, team approach’ to construc�on projects and sought to facilitate performance
efficiencies and improved results for customers.

The cumula�ve effect of these reports had a significant impact on the construc�on industry, and they are
widely acknowledged as being the catalyst for a cultural shi� which is s�ll delivering posi�ve effects
today.

What is Project Partnering and is it s�ll relevant in today’s construc�on

industry?
In their 1995 guide to partnering in construc�on, The Reading Construc�on Forum (which later merged
with other organisa�ons to become Construc�on Excellence) described partnering as, “a management
approach used by two or more organisa�ons to achieve specific business objec�ves by maximising the
effec�veness of each par�cipant’s resources. It requires that the par�es work together in an open and
trus�ng rela�onship based on mutual objec�ves, an agreed method of problem resolu�on and an ac�ve
search for con�nuous measurable improvements.”

This defini�on of partnering is s�ll just as relevant and important today, perhaps increasingly relevant in
our current economic climate. The Government Construc�on Strategy 2016-2020 highlights a desire to
improve overall produc�vity in the industry whilst also addressing challenging issues such as the skills
gap, climate change and the implementa�on of emerging technologies such as BIM. The need to
formally integrate the project team has never been more important and successful team integra�on
goes hand in hand with overall project success.

Partnering is not a ‘so� op�on’, it requires considerable effort to set up and hard work and commitment
to maintain. The project partnering team must include the customer together with consultants, the
constructor/construc�on manager, key specialists, and key suppliers. The team members form a ‘virtual
company’ with mutually agreed goals and objec�ves and will make all key decisions in a coopera�ve and
blame-free environment. The effects of this will be to collec�vely raise overall performance and facilitate
more efficient working.

What are the different types of Partnering?

Project Partnering

Project Partnering is usually used for short-term or one-off projects and is used to deliver specific
objec�ves.

Strategic Partnering

Strategic Partnering describes long-term alliances that span across mul�ple projects.

Framework Agreements

Framework Agreements establish specific terms for several individual projects usually within a similar
category, a supplier will be selected from a number of prime contractors.

Partnering charters are generally intended to be nonbinding statements which reflect the par�cipants’
commitment to partnering principles. There are various forms of contract which incorporate partnering
principles and clauses, including the NEC Partnering Op�on, PPC 2000 Partnering Agreement and the ICE
Partnering Addendum, and these contracts define the arrangements for the alloca�on of risk and
incen�ves for reward or penalty.

How can formal partnership agreements benefit private and public sector
customers?
Partnering contracts are designed to provide the customer with greater certainty over cost and
programme outcomes. Contracts are o�en managed on a cost-reimbursable, target-cost and open-book
basis which includes both incen�ves and penal�es for contractors. This close monitoring of cost and
constant communica�on provides greater control for the customer and more predictability over financial
outcomes. Con�nuous evalua�on of project progress also means �ghter control of the project schedule
and a chance to quickly resolve issues to get the programme back on track.

A formal partnering agreement is highly beneficial in designing and building contracts where there are
addi�onal challenges involved with the coordina�on and integra�on of a great deal of complex
informa�on, procedures and systems. Early engagement and integra�on of the design and construc�on
team allows for op�mal focus on the end users’ ul�mate requirements. An early review of buildability
and a team focus on value engineering opportuni�es allow greater scope for innova�on and efficiencies
in the building process. By se�ng mutual goals in the early stages of a project, the en�re team
understand what is required and is not distracted by adversarial rela�onships.

Through early collabora�on, project partnering means contractors are beter prepared to build a high-
quality building that achieves the customers’ expecta�ons and is delivered within the predicted
�meframe and at the expected cost.

Bringing together a diverse group of professional disciplines also allows other important issues to be
beter addressed and managed, such as environmental performance, the poten�al to deliver social value
or opportuni�es for training and development.

Essen�al factors to consider for a successful partnering rela�onship.

Early engagement

To take full advantage of each par�cipant’s exper�se, they should be brought into the process at the
earliest appropriate opportunity. The full team must be in place from concept to comple�on in order to
be totally focused on the needs of the client and users.

Workshops and team building

Partnering workshops are useful to ensure the partnering culture is understood by all and to begin the
process of integra�on. Ac�vi�es to assist in breaking down barriers between organisa�ons and to build
trust are helpful, as are joint training opportuni�es or the co-loca�on of offices to help create the right
environment.

Mutual objec�ves

Clearly defined and achievable objec�ves that meet the aims of each party are essen�al in successful
partnering rela�onships, as is a structured process for effec�ve issue resolu�on. Mutual objec�ves can
cover both hard and so� issues but must also include the alignment of important commercial objec�ves,
such as fair reward mechanisms.

Measurement and benchmarking

Measuring performance will drive con�nuous improvement and lead to greater efficiencies and
compe��ve advantage. Relevant performance indicators must be established early on in order to
demonstrate results.
Underpinning successful project partnering is a top-level commitment to drive forward a new project
culture. If the team is only willing to play lip service, the partnering arrangement will not succeed,
however, if there is real buy-in, the poten�al to achieve value for all members of the team is unlimited.