Alliance Contracting Key Aspects

The fundamentals of alliance contracting are not new.   While alliance contracting is typically a term applied in the  Australia and the UK to a model applied to large complex projects, its core aspects have been in place for both Integrated Project Delivery (IPD) for major projects, and LEAN, Open Job Order Contracting for years, if not decades.

Alliance Contracting / Alliance Partnering in Construction, when properly designed, implemented, and managed, drives innovation, collaboration, and best value outcomes for all parties.

While most real property owners, designers, and builders, are aware of the issues associated with Traditional Planning, Engineering, Procurement and Construction strategies such as Design-Bid-Build, Design-Build, CM@R, etc. few have  operational and holistic knowledge of IPD, Open Job Order Contracting  frameworks that integrate internal and external  planning, procurement, and project delivery methods and teams.

The following are requisite components of a best value approach to all forms of Alliance Contracting.

1. Owner leadership, commitment, capacity, and accountability
2. Integration of planning, procurement, and project delivery teams
3. Alignment of interests for all participants and stakeholders
4. Granular construction task data that is current, locally researched, presented in a standard data architecture, and replete with labor, material, and equipment data and productivity information  (Note:  A major flaw and problem with traditional construction delivery methods is the lack of transparency and visibility by the owner into project cost, as planned, detailed contractor costs are not reported to the owner, and in many cases these costs are not fully auditable for comparison and cost management purposes.)
5. Mandatory intitial and ongoing training for all
6. Quantitative metrices
7. Consistent programmatic process and workflow applied to all projects/workorders.
8. Regular and independent third-party audits

When properly designed, implemented, and managed, alliance contracting drives innovation and collaboration among all  on an early and ongoing basis.   The knowledge of those doing the work is appreciated and participants are enabled to make decisions that support common goals.    Fully transparent technical and cost information and targets ensures commercial alignment, while also mitigating contractual disputes, cost overages, time delays, and quality issues.

Focus is upon People, Process, Information, and enabling Technology.   The granular local market cost book and enabling technology provide all parties with real-time access to detailed project scope, schedule, status, and issues, providing a “single source of truth.”

Alliance partnering is perhaps a better term than “alliance contracting” as all aspects of repair, renovation, maintenance, or new construction lifecycles are considered, planning, procurement, and project delivery.  Owners and design/builders  develop, define, and deliver  projects jointly, applying both robust processes and innovation broadly to reduce project costs and improve performance.

Learn more about how Owners and Design/Builders can learn to engage in an open culture and behaviors that support the achievement of mutually beneficial outcomes.

Note:  Owners MUST be an active participant and be deeply involved in managing in projects.  The excessive reliance upon “consultants” will severely limit the knowledge and cost saving benefits provided by alliance partnering.    Owners must embed staff into the alliance team across all professional domains (construction, engineering, quality, safety, environment, commercial, and project services) and be involved in day-to- day decision-making, while also avoiding micro-management or excessive command and control.  It is equally important to enable independence and autonomy to drive efficient processes and decision making to deliver “best for project” outcomes.