Overview Partnering principles by alicejenny


									Partnerships and Frameworks: working effectively together   Overview
                                                            • The philosophy of collaborative working
            Leading the Way for RSL’                        • Partnering: principles, benefits and
                                                              pitfalls, key provisions, forms of
                 Mark Macaulay                                partnering and good faith obligations
              Head of Construction
                                                            • Frameworks
           Maclay Murray & Spens LLP
                                                            • Competing interests
                                                            • A case study on effective collaboration

The philosophy of collaborative working
                                                            Partnering principles
• Collaboration is defined as “ work[ing] jointly on an
  activity or project” (Source: Oxford dictionary)          A partner is someone who works collaboratively with
• This can be achieved through: (1) Partnering and/or       others towards a common goal, sharing risks and
  (2) Frameworks.                                           rewards in achieving that goal.
• Both involve developing successful strategic
  relationships based on achieving best practice and
  sustainable competitive advantage.
Partnering: a structured management approach

   Used to bring about a closer co-operative                      Achieving a positive outcome for all
   working relationship, it requires definition of
   its components
                                                                  with partners sharing risks and rewards   Partnering: benefits (1)
                                                                                                            1.   No blame culture.
                                                                                                            2.   A reduced exposure to risks.
                             Problem                 Management          Continuous                         3.   Expedited decision making.
                            Resolution                                  Improvement
                                                                                                            4.   Savings due to economies of scale.
   Emphasis on non-adversarial attitudes
                                                                                                            5.   Time and cost savings.
   and use of dispute escalation                                   Improving value for money by use of
   procedures                                                                            s
                                                                   benchmarking and KPI’ for measurement

  Partnering: benefits (2)                                                                                  Partnering: pitfalls (1)
  6.    Innovation.                                                                                         1. The management time required to
  7.    Improved quality.                                                                                      make it work is significant.
  8.    Continuous improvement.                                                                             2. Unreasonable demands can be placed
  9.    Improved levels of cash flow.                                                                          on partners.
                                                                                                            3. It can discourage competition and
                                                                                                               reduce the likelihood of continuous

  Partnering: pitfalls (2)                                                                                  Key partnering provisions (1)
  4. Partners are susceptible to having their                                                               1. To act in good faith and in the spirit of
     profits forced down (and employers                                                                        trust and openness.
     their costs forced up).                                                                                2. Setting out the structure of the alliance.
  5. Lines of responsibility and liability for                                                              3. Identification of common goals.
     defects can become blurred.                                                                            4. Identification of targets for continuous
  6. Breakdown of partnership can be                                                                           measurable improvement.
 Key partnering provisions (2)                                     Manifestations of partnering
 5. A mechanism for encouraging                                    • Term partnering.
    innovation.                                                    • Project-specific partnering.
 6. A process for learning and sharing                             • Supply-chain partnering.
                                                                   • On a one-to-one or multiple basis.
 7. Agreement of suitable incentives.
 8. Identification of a suitable dispute
    resolution process.

                                                               Forms of partnering (2)
Forms of partnering (1)
                                                               “Marriage is (or at least is intended to be) a contract for life
“Effective partnering does not rest on contracts. Contracts    with no break clause. A party bringing it to an end
can add significantly to the cost of a project and often add   prematurely finds him, or her, subject to a highly complex
no value to the client. If the relationship between a          set of legal obligations and faces potentially huge financial
constructor and employer is soundly based and the parties      penalties. Get the relationship right, of course, and you
                                                               never have to get the marriage contract out of its
recognise their mutual interdependence, then formal
                                                               metaphorical drawer. Get the relationship wrong, and the
contract documents should gradually become obsolete.”          law intervenes regardless. Partnering is much the same.”
         Rethinking Construction” Sir John Egan)
(Source: “                      ,                              (Source: “                                   ,
                                                                         Partnering: the mission impossible?” Dr. Julian
                                                               Critchlow and Karen Gidwani)

                                                               Partnering in good faith (1)

                                                               Birse Construction Ltd v St David Limited
 Forms of Partnering (3)                                        To
                                                               “ produce an exceptional quality development within the
                                                               agreed time frame, at least cost, enhancing our reputations
 1. No contract                                                through mutual co-operation and trust… .
                                                               •   To complete all aspects of the scheme within the agreed programme…
 2. Partnering charter and no contract
                                                               •   To promote an environment of trust, integrity, honesty and openness…
 3. Partnering charter (binding or non-                        •   To promote clear and effective communication…
                                                               •   To complete the entire project by mutual support…
    binding) and contract                                      •   To enhance the ethos of Partnering…
                                                               •   To build long term profitable relationships with all parties.”
 4. Partnering contract (incorporating
    partnering intent and contractual
Partnering in good faith (2)                        Frameworks (1)
• The terms of the charter were not legally         • Frameworking is a long term relationship with
  binding                                             contractors/suppliers to improve productivity on a
                                                      continuous basis.
• The decision of Judge Lloyd QC in Birse           • Agreeing targets for improvement and benchmarking
  suggests that the existence of a partnering         performance in order that improvements can be
                                                      measured is key to successful frameworking.
  charter leads to a more lenient view on claims    • Work under a framework is usually instructed by: (1)
  put forward under a construction contract.          direct call-off; and (2) mini-competition.
                                                    • Frameworks often allow work to be awarded on an
• Careful thought needs to be given to how any        off-framework basis
  partnering charter may impact on the
  underlying construction contract.

                                                    Competing Interests
Frameworks (2)                                      When creating partnerships and/or frameworks:

• There can be substantial time and cost            • They should be procured using OJEU
  savings in repeat bidding.                          procedures and set out the terms of award.
• It creates a working environment to support       • Multi-supplier frameworks should have a
  continuous improvement.                             minimum of three providers.
• One such improvement is often better whole        • There is a presumed maximum four year
  life costs.                                         duration.
• It offers the structure needed see that lessons   • They must not be used “   improperly or in such
  are transferred from project to project.
                                                      a way to prevent, restrict or distort
                                                      competition” .


“The concept [of collaboration] means that
                                                                        Mark Macaulay
ideally all partners should benefit from the                                Partner
success of their collective efforts, and                         Maclay Murray & Spens LLP
conversely be prepared to share the                           1 George Square, Glasgow G2 1AL
                                                                      DDI: 0141 271 5691
consequences of failure.”                                     E-Mail: Mark.Macaulay@mms.co.uk

RIBA’ Guide to Sound Practice

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