>>> Jonathan Hosie joined the chat
>>> David Mosey joined the chat
Justin McGuirk We're here to talk about partnering contracts. David, you were instrumental in drawing up PPC2000 and are one of its chief advocates. Rudi and Jonathan aren't so sure about it. Rudi, would you like to say why?
Rudi Klein My view is that partnering contracts do very little to promote partnering, as partnering is about relationships and not contracts. If anything, partnering has more to do with procurement than contracts.
Jonathan Hosie Partnering in my experience means different things to different folk. Used carelessly, or even cynically, it can add to problems and cost rather than reduce conflict.
It's about relationships but I believe we need a contractual framework to facilitate and (dare I say it?) regulate those relationships.
David Mosey Predictably, I largely disagree with Rudi's view. I think it is dangerous to divorce procurement from contracts. If a contract can't accurately describe procurement processes and partnering relationships, then it is not doing its job. I think we have moved on from proving the value of partnering relationships in a contractual vacuum and now need to establish partnering as the logical approach to integrated procurement. The right forms of contract have a major role to play in achieving this.
Rudi David, I am sorry, you are absolutely wrong! Contracts follow procurement strategies and decisions. It is never the other way round. Partnering fails because the relevant parties have messed up their own procurement approaches. As a result, partnering can become exclusive rather than inclusive. It works when all members of the team are selected at the earliest opportunity so that there is an integrated approach to design, planning and development.
Justin Rudi, do you think partnering relationships can be represented in a contract?
Rudi Yes, but there just isn't the appropriate trust and understanding. Old attitudes persist. A specialist contractor once said that partnering was where all contractors get in bed together but the main contractor has all the bedclothes!
David That is my very point. If we stick with traditional contracts that create separate two-party relationships, that works against an inclusive, integrated approach. More importantly, the appointment of the main contractor and its key subcontractors under traditional contracts is postponed until the construction phase, which inevitably excludes them from key design development and risk management activities.
The building of personal relationships can only really start when all the key players have been appointed and know what is expected of them.
Rudi But David, your point is, essentially, concerned with making the right procurement choices. If it is suggested that partnering contracts are necessary to bind the team together. I'd have thought that fact, in itself, suggests a lack of commitment from those involved.
David Your concerns illustrate the need for active client involvement, again something that is played down in traditional procurement approaches and contracts. If an integrated contractual structure requires the client to deal direct with specialist subcontractors on an equal footing with consultants and main contractors, then that should help the bedclothes be more evenly distributed.
Justin Jonathan, we seem to have a chicken-and-egg situation here. At what point do you see the process failing?
Jonathan The process fails because the industry doesn't understand how to deliver the early integration advocated by David. The trouble is that it's still common practice to select members individually and on lowest tendered cost but to call it "partnering" because the parties agree to work together in a spirit of mutual trust and co-operation … not, in my experience a guarantee of anything other than conflict! David describes an aspirational position, not the industry we have.
Rudi Partnering contracts won't sort out the problems Jonathan has highlighted.
David Rudi, your view of contracts doesn't seem to recognise their value as project management tools. If instead the partnering goes on at one level with the contracts "kept in the drawer", that is a high-risk strategy that could encourage team members to jump ship and revert to the adversarial use of contracts at the first sign of a problem – and problems arise on every project. Contracts need to offer systems that encourage an intelligent approach to solving problems.
Rudi Perhaps the use of partnering contracts simply reflects the fact that there remain substantial levels of mistrust and mutual suspicion in the industry. I once asked an audience at a conference whether anyone used partnering contracts. One person with his hand up answered that he rolled the contract up and used it to hit the other parties to remind them they were partnering.
Old attitudes persist. A specialist contractor once said that partnering was where all contractors get in bed together but the main contractor has all the bedclothes!
Jonathan David talks about the need for clients to partner. Some clients have the experience and resources to actively partner with the supply chain but many do not. The public sector has taken a lead, encouraged by the government's procurement guidance, which in essence advocates integration, but even in the public sector, honest feedback indicates that only a handful of agencies are geared up and able to partner effectively. The strategic forum's toolkit should help, but let's be realistic, David, about the industry's appetite for confrontation even within partnering projects procured under PPC2000!
David Okay, I admit it, there are some project teams we have encountered that only pay lip service to partnering and can therefore do more harm than good. However, against this should be balanced a good deal of much more positive experience than you have encountered. For example, the several hundred demonstration projects described in Accelerating Change achieved significant improvements in client satisfaction plus cost/time/quality.
Justin Rudi, if we accept the value of partnering, then how would you achieve it?
Rudi I believe that we should put in place other elements to facilitate and promote teamworking, eg policies of project insurance to underwrite the team rather than individuals, funds for the project should be secure and kept separately from the team members, and, most importantly, massive improvements in communication (using IT) should be put in place if partnering relationships are to succeed.
Jonathan I think those who partner just need to do so with a different mindset. The industry needs a guide.
Rudi An excellent guide or toolkit has been produced by the Building Services Research and Information Association. It was launched in June. Their website will have details.
Jonathan But it still talks in terms of selecting on the credentials of individual team members rather than what the team can do as a team. Isn't that missing the point?
Rudi The guide does emphasise the need for assessing the ability of firms to teamwork. But your point relates to one I made earlier about procurement. There is little to be achieved by appointing prospective members of a team with little experience of working together. This is why government procurement strategy is now emphasising the need for the appointment of teams rather than individuals. But in practice it has been difficult for the industry to demonstrate a history of genuine teamworking.
David I entirely agree that we need a greater commitment to IT and other communication media. We also need a major initiative in industry training on approaches to procurement. Rudi's point about the value of teams that have experience of working together brings us to the distinction between project and strategic partnering – there is undoubtedly far more value to be gained from the latter and a greater justification for investment in new approaches if there is more than one project to play for.
Rudi I suggest partnering contracts should be minimalist. They should be drafted on two sides of A4 and should simply deal with risk sharing arrangements, scope of responsibilities and procedures for dealing with costs transparency, performance measurement, processes and information flow etc. Relationships break down because of lack of clarity on these matters, especially the scope of responsibilities.
Jonathan I agree that more words in any form of contract adds scope for disputes as to the parties' intentions but I remain to be convinced we can or should seek to shoehorn a contract for a partnering project on two sides of A4!
Justin Any points you'd like to make in closing?
David Nobody in the industry will commit money or resources without contractual clarity, still less undertake major innovations in the procurement process. I agree with Rudi that the shorter the contract can be the better because people are then more likely to read it.
Rudi There's a lot to be done to facilitate integrated teamworking, particularly in integrating the design process. Partnering should lubricate teamworking and contracts should concentrate on the essentials, particularly risk and scope of responsibilities. I've got to grab a taxi now to take me to lunch.
Jonathan Lunch is for wimps!
Rudi Jonathan, "wimp" is spelt with an "h".
Justin Thanks Rudi (spelling is clearly not your strong point).
Jonathan … and nobody likes a smart arse!
Justin Thanks everyone. I think we're done.