Alliance Contracting in Construction provides a real opportunity for the consistent delivery of quality repair, renovation, maintenance, and new build project on time and on budget.
Alliance Contract/Contracting – A specific means of project planning, procurement, and delivery wherein the owner/principal and service provider (design-builder) work collaboratively to deliver the defined, mutually beneficial outcomes of a project. It a relationship characterized by risk/reward sharing and a no blame/no-disputes framework, and full financial transparency. The term Alliance Contract is generally synonymous with “project alliance”, as well as forms of “integrated project delivery” and “job order contracting”. Owner and service provider planning procurement, and project delivery teams work in a highly transparent and “collaborative” manner wherein commercial interests and actual project outcomes are in alignment. Alliance contracting is a form of relationship or relational contracting.
To date, most (99%) alliance contract implementations in the form of JOC and IPD are more JOC-like and IPD-like and fail to leverage all core fundamentals and associated benefits.
To gain full value from these powerful methods the following foundational elements are required:
1. Owner support, capacity, commitment, and accountability,
2. Integrated planning, procurement, and project delivery teams throughout contract life,
3. A mutually beneficial long-term contract with an integral operations manual/execution guide.
4. Current, local market, granular local market cost data (not national average data, cost factoring etc.)
5. Mandatory initial and ongoing training.
6. Quantitative performance indicators.
7. Enablement of those actually doing the work.)
Alliance Owner – Government department or agency
Competitive Best Value Procurement – Design-builders are selected based upon capability and performance as well as cost.
Early Design-Builder Involvement – Owner creates a Scope of Work for a particular need/activity and meets with contractor on-site and otherwise as needed to provide enough information to enable the design-builder to provide a detailed line item quote using a local market line item cost database.
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Note: Alliancing began in the construction industry in the 1980’s, with its roots in North Sea oil and gas projects. (Chew, S. ALLIANCING IN DELIVERY OF MAJOR INFRASTRUCTURE PROJECTS AND OUTSOURCING SERVICES IN AUSTRALIA — AN OVERVIEW OF LEGAL ISSUES)
Note: Public sector outsourcing over that past several decades has resulted in governments relying on the private sector to achieve outcomes previously conducted with ‘in-house’ capabilities. This has resulted in public sector diminished capacity and competency. Federal, State, County, and Local Government have lost key skills in planning, designing, estimating, planning and implementing projects. Management of these activities is a critical issue. (1998, Domberger, S. The Contracting Organisation, 2008, Davies, J.Alliance Contracts and Public Sector
Governance
