A marriage made in heaven

After the transfer of local authority homes to a registered social landlord, there is often a period of construction and repair work on the stock. A number of different types of contract can be used to procure this work, but the most successful are those that involve strategic partnerships at the heart of the works process from before start on site and throughout the construction phase.

Landlords are already familiar with such partnering arrangements as they are increasingly moving from a paternalistic model in the way they relate to their tenants, and developing effective approaches to tenant involvement through the formation of partnerships with tenants.

In construction, too, increasingly, the practice of opposing sides (such as with the developer client on one and the contractor on the other; or with the employer client or contractor client on one and the consultant on the other) is being overtaken by a strategic relationship between all the key parties involved in the works programme, including key specialist subcontractors. Such an approach is essential, ensuring an integrated approach to procuring a programme of works, by drawing on the roles of all the key team members or "partners".

Much has been written about the need to promote innovative relationships and strategic partnerships: as long ago as 1994, in his seminal report on construction working practices, Sir Michael Latham promoted partnering as a method of procurement; in 1998, the Egan report identified partnering as a mechanism to achieve best-practice procurement in the construction industry.

The ACA standard form of contract for project partnering is the first standard form contract for project partnering and housing associations may find it very useful. It accords with the Latham recommendations, with best value initiatives from the then Department of Transport, Local Government and the Regions, and with the recommendations of the Egan Report.

In construction, the practice of opposing sides is being overtaken by a strategic relationship between all the key parties

The PPC2000 contract is considered to be the blueprint for partnership contracts. One of its first applications was with housing association Whitefriars, after the transfer of 21,000 homes from Coventry council. This involved a strategic alliance agreement with all the key parties as signatories. Separate PPC2000 contracts have been signed by the relevant parties for specific areas of work. The tangible benefits that have transpired from the strategic partnering relationships under these contracts include:

• standard documentation, which has simplified the cooperative creation of successive contracts
  
• a shared supply chain, with the result that kitchens available more cheaply to one partnered constructor were acquired from the same source by the other partnered constructor – with substantial savings to the client
  
• reduced time on site because of long-term arrangements for efficient working, minimising disruption to tenants and saving money in on-site costs
  
• commitment by members of the constructors' supply chain. Main contractors and subcontractors are providing training of up to 12 months for long-term unemployed people.

The combination of the above has produced a substantially accelerated programme with savings that have brought it well within the client's cost targets.

Our experience shows that strategic procurement through the use of PPC2000 can have many benefits, for example improved efficiency, elimination of waste, maximisation of best performance, elimination of blame culture and promotion of a consensus building forum. The partners can enjoy as a result reduced costs, time, defects and accidents; and increased predictability, productivity, turnover and profit.

Techniques to bring this about include a transparent and cooperative exchange of information between all parties, best use of common supply chain, creation of a core group to review and stimulate performance, and the benchmarking of achievements with incentives to encourage each party to maximise its performance.