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  1. Partnering

  2. Definitions • WHAT • ADR Technique and Business Relationship • Voluntary, Non-binding Process • WHO • All Parties • WHY • Development of a Synergetic Atmosphere • Conflict Reduction and Objectives Alignment • HOW • Definition of a Strategy • Training of Participants • Building of the Partnering Atmosphere • On-Site Meetings and Progress Reviews • Project Close-out and Reflection on Effectiveness

  3. Museum Project • Publicly Funded Museum in the Northeastern United States Suffering from Insufficient Operating Revenues and Lack of Funding • Expansion Project with a Government Subsidy of $900,000 • Delivery System Adopted for Public Projects: Design-Bid-Build • Proposed Bids ($1.2, $1.25, $1.4, $1.5 million) Exceeding the Engineer’s Estimate and the Available Fund • Owner Hiring a New Consultant to Find a Solution

  4. Case Study: Important Issues • With No Extra Money Available, How Might the Owner Go About Lowering the Cost of Constructing the Design? • If the Owner Asks the Designer to Make Changes to Reduce the Cost, Should There Be Another Competition to Decide the Lowest Bidder? • Should It Be Awarded to the Lowest Bidder and Then Value Engineered With the Designer? • The Second Lowest Bidder Submitted a Close Competitive Bid, If the Design Is Awarded, Then Changed, Can the Bid Be Protested? • How Might Bringing Together the Designer and the Contractor on the Same Team Affect the Price?

  5. Outline • Definition and Benefits of Partnering • The Partnering Process • Key Components of Partnering • The Partnering Continuum

  6. Definition and Benefits of Partnering • Voluntary, Non-binding Teaming With One Set of Goals • Core Components: • Alignment of Objectives • Clear Communication • Integration Among Team Members • Incorporation of DART

  7. Partnering Experiences • Pedestrian Bridge (Sherbrooke, Quebec) • Central Artery and Tunnel (Boston, Massachusetts) • Bus Garage (Cleveland, Ohio) • Correctional Facility (San Diego, California)

  8. Pedestrian Bridge • Project: Footbridge Over the Magog River in Sherbrooke, Quebec • Partners: Bouygues SA, the University of Sherbrooke, Quebec, and the US Army Corps of Engineers • Main Objective: Promoting the Use of Reactive Powder Concrete in Structures

  9. Central Artery and Tunnel • Advantages of Partnering in the Central Artery and Tunnel Projects in the Following Areas: • Cost Growth • Schedule Growth • Number of Change Orders • Value Engineering Savings • Communication

  10. Bus Garage (Cleveland, Ohio) • Direct Result of Partnering • Problems Solved at Jobsite Levels • Reduction of Arbitration and Litigation

  11. Correctional Facility (California) • 21-story Facility in Downtown San Diego • Partnering Between the Tenant, the State Agency and the Main Contractor • Benefits From the Input of the Tenant, the End-User of the Facility

  12. Partnering Benefits • Improved Communication • Objective Alignment • Cooperation • Trust

  13. Outline • Definition and Benefits of Partnering • The Partnering Process • Key Components of Partnering • The Partnering Continuum

  14. The Partnering Process • Phase One: A Long Term Strategy • Phase Two: Training • Phase Three: Team Building • Phase Four: On-site Implementation • Regular Partnering Meetings • Periodic Assessment Evaluation and Feedback • Issue Resolution Process • Innovation and Creative Project Solving • Phase Five: Project Close-out

  15. Outline • Definition and Benefits of Partnering • The Partnering Process • Key Components of Partnering • The Partnering Continuum

  16. Key Components of Partnering • Project Charter: Mission Statement and Joint Objectives • Team Assessment: Periodic Meetings and Surveys for Quality Control and Improvement • Issue Resolution Process: Dispute Resolution Ladder • Job Closeout: After-the-fact Review

  17. Sample of a Project Charter • “PARTNERING AGREEMENT • We, the Bon Fouca Superfund Project Team, commit to work together with a spirit of openness and trust, and to respect the goals and needs of the stakeholders. • OUR TEAM IS FOUNDED ON PRINCIPLES OF: • Teamwork, Mutual Respect, Openness, Honesty, Trust, Professionalism, Understand One Another’s Positions, Walking the Talk” • WITH THE OBJECTIVES OF: • Completing the project on schedule • Completing the project within budget • Developing and maintaining good community relations by minimizing impact to the community at large and coordinating actions through EPA head • Pursuing shared savings through value engineering • Developing an maintaining an awareness of safety – daily throughout the project – in order to achieve zero lost time accidents • Establishing a forthright approach to modifications and claims in order to avoid litigation • Remediating the site in accordance with the National Contingency Plan • Implementing total quality management concepts, specifically in administration, engineering, construction, and operations • Providing contractors the opportunity to make a reasonable profit • Enhancing reputations of the stakeholders with respect to public perception of remediation/superfund efforts • We, the undersinged, in an effort to achieve the intent of the partnering process, commit the above principles and objectives.” • Project Charter signed and stamped by each stakeholders Ellison, 1995

  18. Outline • Definition and Benefits of Partnering • The Partnering Process • Key Components of Partnering • The Partnering Continuum

  19. The Partnering Continuum Coalescence (Synergistic Strategic Partnering) Collaboration (Value-Added Integrated Team) High Cooperation (Collaborative) Potential Benefits of Partnering Competition (Adversarial) Low High Low Degree of Objective Alignment Partnering Thompson et al.,1998

  20. Tomlinson Bridge (New Haven, CT) • Adversarial/competition Approach • Main Reasons for Failure of Partnering: • Unbalanced Risk Allocation by the Owner • Non-alignment of Parties’ Objectives • Lack of Trust Between Parties

  21. Intel (Portland, Oregon) Process Owners Team Facility Operations Teams Facility Construction Team Client Local Codes Architectural Team Project Design/ Const. Engineering Teams Authorities/ Utilities State Codes Consultants Material & Equipment Manufacturers Federal Agencies Trades Utility Suppliers Independent Testing Agencies Miles,1996

  22. Museum Project • Value Engineering of the Design by the Consultant • The Two Lowest Bidders Repricing for the Design Alternates and Selection of the Lowest Bidder ($1.0 million) • Implementation of Partnering to Further Reduce the Cost : Collaboration between Consultant and Contractor for More Value Engineering • Startup of Construction Before Finishing the Design • Changes Implementation on an Ongoing Basis • Synergetic Atmosphere: Cost Savings, Work on Schedule

  23. Success Keys in the Museum Project • Weekly Meetings between Participants • Openness and Commitment of all Participants • Upper Level Management Commitment and Cooperative Field Crew • Claims Resolution on a Daily Basis • Trade Contractors Involved in Value Engineering • Results • On-time Project Completion • Total Cost:$890,000 • Contract Signed at the End of the Project

  24. Outline • Definition and Benefits of Partnering • The Partnering Process • Key Components of Partnering • The Partnering Continuum

  25. Summary • Partnering, a Complete System of Operation, not a DRL Stage • Advantages: • Less Exposure to Liability Through Open Communication • Early Identification and Resolution of the Problems • Risk Sharing • Increased Productivity • Better Quality Through the Empowerment of Workers • Better Cash Flow and Reduced Costs • Commitment of all participants • Synergy and Objectives Alignment • Win/win Philosophy • Problems Associated with Partnering • Demand on Everyone Committed to the Partnering Process • Difficulty with Taking the Risk of Trusting Others • Tendency to Believe in the Win/lose Approach

  26. References • [AAA, 1996] : American Arbitration Assiociation. Building Success for the 21st Century: A Guide to Partnering in the Construction Industry. Dispute Avoidance and Resolution Task Force of the American Arbitration Association. 1996. • [CII, 1991] : Construction Industry Institute. In Search of Partnering Excellence. Special Publication 17-1, Partnering Task Force. 1991. • [CIOB, 1999] : UK Department of the Environment, Transport and the Regions. Rethinking Construction: The report of the Construction Task Force to the Deputy Prime Minister, John Prescott, on the scope for improving the quality and efficiency of UK construction. July, 19 • [Cowan et al., 1992] : Cowan, C., Gray C., and Larson, E. (1992). "Project Partnering."Project Management Journal, 22(4), 5-11. • [DRT, 1997/1998] : Dispute Resolution Times, (1997/1998). AAA Partnering Boosts Jail Project in San Diego. p. 7 Winter • [DRT, 1998] : Dispute Resolution Times, (1998). AAA Cleveland VP Eileen Vernon. Partnering Aids RTA Project in Ohio. p. 8 April • [Ellison et al., 1995] :Ellison, David, and Miller, David, (1995). Beyond ADR: Working Toward Synergistic Strategic Partnership. Journal of Management in Engineering, Vol. 11 (6), pp. 44-54, ASCE 0742-597X. Nov-Dec, New York • [ENR, 5/27/1996] : Daniel, Stephen. System Approach Pays Big Dividends. Engineering News Record. McGraw-Hill, New York.Vol. 236 (21) p. 39. May 27, 1996. • [ENR, 5/4/1998] : Angelo, William. Project Management, Partnering Goes Awry on Connecticut Bridge Job. Engineering News Record. McGraw-Hill, New York. p. 17, May 4, 1998. • [ENR, 9/9/1996] : Engineering News Record. High-Strength Mix Tested. McGraw-Hill, New York. p. 21, September 9, 1996. • [Groton, 1997] : Groton, James. ADR in the Construction Industry. Dispute Resolution Journal Vol. 52 (3) pp. 48-57, Summer, 1997. • [Hoffman, 1999 ] : Hoffman Construction, (1999), Downloaded from the web on April 11, • [Hunter et al., 1995] : Hunter Keith, and Hoening, James. Construction Dispute Prevention Comes of Age. Dispute Resolution Journal pp. 53-54, January 1995. • [Larson et al., 1997] : Larson, Erik, and Drexel, John, (1997). Barriers to Project Management: Report from the Firing Line. Project Engineering. Vol. 28 (1) pp. 46-52. March • [Miles, 1996] : Miles, Robert. Twenty-First Century Partnering and the Role of ADR. Journal of Management in Engineering Vol. 12 (3) pp. 45-55. May/June 1996 • [Peña-Mora et al, 2002] : Peña-Mora, F., Sosa, C., and McCone, S. Introduction to Construction Dispute Resolution. Prentice Hall, New Jersey, 2002. • [Thompson et al., 1998] :Thompson, Paul J. and Sanders, Steve. Partnering Continuum. Journal of Management in Engineering. Vol. 14 (5). September/October 1998.