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The concept of partnering is no strange to the construction industry nowadays. It has been advocated as a means to improve working relationships and project performance in terms of quality, cost, and time. Successful applications of partnering in construction contracting have been reported in the United Kingdom, the United States, and Australia. In Japan, partnering is regarded as a normal way of working in the construction industry .To successfully implement partnering, it has been suggested that the competence and skills of senior management are instrumental.
The case study:
The Mass Transit Railway Corporation (MTRC) is one of the pioneers in the industry to implement partnering in the delivery of construction projects in Hong Kong. After months of studies and field trips of investigation, the working group came to a conclusion that the introduction of partnering would improve cost effectiveness, give greater program certainty, result in better communication, more cooperation and greater responsiveness to problems.
The TKE 604 contract is the sixth operational line of MTRC. Immediately after the award of the contract for TKE 604 , partnering was introduced.
The TKE project consists of 13 civil contracts, four building service contracts and 17 E&M contracts.
How partnering was implemented in TKE Contract 604:
Executive partnering workshop
Contract specific partnering workshop
Monthly partnering review meetings
And the above partnering tools will effect on the contract elements and contract partnering spirit;
The Contract Elements
Communication : level of correspondence to/from the contractor
Cost : variations, commitment to settle;
Claim : time taken to settle
Quality : non-conformance reports and time taken to rectify
Environment : prosecutions by the Environmental Protection Department
Safety : accident types and rates, and severity rate
The Contract Partnering Spirit
Instilling the partnering spirit
To instill a partnering spirit at the contract level, senior management at that level plays a pivotal role. Additionally it must have faith in partnering.
Fostering the partnering spirit
Fostering the partnering spirit includes all steps taken by the management at the contract level to ensure the partnering message infiltrates the organization's hierarchy, together with the action plans and policies that manifest the partnering spirit.
During the interviews, it was highlighted that not only should senior management be well-versed with the partnering principles, it was of equal importance that the working and site level fully understand partnering. On Contract 604 both parties agreed that openness and trust were substance to the partnering.
Maintaining the partnering spirit
To maintain the partnering spirit, there is a need to continually emphasize the partnering ethos and reinforce the partnering principles. It has been suggested that, constantly monitoring and checking remain important at all stages of the contract.
Two most instrumental partnering mechanisms in the TKE Contract 604:
According to the feedback obtained from the interviews and the evaluation results of TKE project, the partnering review meeting and the incentivisation agreement were identified as the two most instrumental partnering mechanisms.
Partnering Review Meetings:
Partnering review meetings were also regarded as a useful channel for the exchange of important information and ideas. For MTRC, it was a way of learning about KG's view of the contract. For KG, they saw it as an effective means of voicing their concerns and dissatisfaction. In fact, it was through constructive debates that problems could be resolved promptly. Communication has been never one-way or one-sided, meetings of this kind helped to maintain active and open communication in the potentially hostile construction contracting environment. The open discussion helped parties to develop trust and establish a communication network. The monthly review meetings together with the partnering score charts proved very useful as a tool to reflect the current partnering status.
The (IA) was regarded as a critical element to the success of the partnering venture in TKE Contract 604. The IA reduced uncertainty and promoted active and open partnering commitment. Both parties strongly believed that the IA was particularly useful in resolving claims. In addition, the interviewees agreed that the success of the IA relied on the shared risk provision, which provided for a target cost set against an agreed list of risks. Any savings against the target cost were to be shared between MTRC and KG. They believe that the IA very useful in bringing the parties together to focus on a common objective.
Trust Concept is an issue of incentivisation agreement:
In fact, trust has been named as one of the most important pillars supporting the success of partnering.
Trust is a fundamental ingredient or lubricant of social interaction and its positive impact on communication, leadership, management, negotiation, game theory, performance, labor relations, self managed work teams, construction project management and owner/contractor relationships has been well documented. Although, rust is central to every transaction that demands contributions from the parties involved. In construction, trust has been identiï¬ed to be the key driver in fostering cooperation. Supporting view on the appropriateness of the trust framework and the potential uses of the trust inventory were obtained from a conï¬rmatory qualitative study with two senior construction professionals.
If parties in the construction supply chain do not trust each other, their skepticism may not completely paralyze the operation but will certainly create unnecessary checking procedures, resulting in serious bottlenecks.
In construction contracting, trust has been generally operations as the willingness of project team members to share information. This deï¬nition highlights the mutual dependence of contracting parties and a trusting environment can foster appropriate information sharing so that both can honor their commitments.
The impact of incentivisation agreement on the commercial:
The number of claims submitted reduced significantly as KG was more concerned in not expanding the shared-risk portion of the IA;
The % of payment submission certified increases;
The time taken to resolve claim reduces
The result according to the real case study of (TKE Contract 604):
From this case study, it can be observed that, Partnering concept has been used as one of the strategies to improve project performance. Partnering in construction re-orients the attitude of contract participants from confrontational to cooperative. This requires the commitment of both the contracting parties. To facilitate effective partnering, MTRC employs a range of tools to instill, foster and maintain the partnering spirit. The monthly review meetings and the incentivisation agreement are identified as the most effective tools to effectuate the partnering approach. A partnering arrangement advocates a 'win-win' approach. TKE Contract 604 is a solid example of how partnering can be introduced and maintained.
Some changes are need to take place to enable the successful implementation of partnering :
Successful applications of partnering in construction contracting have been reported in the United Kingdom, the United States, and Australia. In Japan, partnering is regarded as a normal way of working in the construction industry .To successfully implement partnering, it has been suggested that the competence and skills of senior management are instrumental.
To enable the successful implementation the partnering concept there are some more characteristics to do such as;
Culture must be changed
Common project objective and goal
Collocation of team member
Leader to act as coordinator
Modify the contract to suit the collaborative teamwork environment
The team is forming from the beginning of the project
Team member comprises of all from different function of the group such as; Contractor, Architecture, Engineers, and etc.
Among the above, the characteristics of culture are much more important to partnering on the project, and it needs to have more investigation and observation in construction projects.
Partnering, Contracting, and Culture Change:
Underpinning the case for partnering is the presumption that the key to effective change within the industry lies in developing an appropriate culture of relations to support the contracting mechanisms needed for a partnering approach to work. Therefore essentially partnering is seen as about changing behavior and/or attitudes encouraging clients and contractors to transgress the conflicting interests that lie at the heart of their exchange relationship by appealing to common interests centered around specific project goals and/or more strategic long term relationships.
However, the problem with this conceptualization of the relationship between partnering and culture is that it can be easily forgotten that there is a real tension between, on the one hand, the need for the development of trust between clients and contractors and, on the other hand, surrounding economic conditions that predispose contractual partners to act (for very rational economic reasons) in more `traditional' , adversarial and even exploitative ways.
Even if one can presume some basic unity of interest, this does not necessarily mean that aligning attitudes are straightforward. Much of the literature tends to presume that cultural alignment (where organizations share some basic values, attitudes and beliefs) is a prerequisite for partnering. Consequently, unless there is some compatibility between organizations to begin with, organizations need to change their ways of working. The problem here is that it is well established that it is difficult enough effecting cultural transformation within organizations, let alone between them. The reason for this is that organizational culture is by no means a unitary and consensual phenomenon whose management involves a simple, top down' process of senior figures manipulating the key variables (structures, reward systems) in order to effect change. Instead, culture is a complex and multi-faceted phenomenon that arises and develops through on-going social interaction among members of a community.
From all above and studying the other case studies related to the partnering with the construction industry, it seems that, the concepts of partnering ,especially the review meeting and the incentivisation agreement, are very important in this kind of industry. And by observing the around the lack of culture could be found as the most important aspect that are needed to involve in partnering. Due to that the best changes that are needed nowadays for improving a company is changing the culture of accepting the partnering characteristics in industries.