Monthly Archives: August 2020

Collaboration and Partnering Principles

Clearly, the best dispute resolution is dispute prevention. Acting to prevent disputes before they occur is key to building new cooperative relationships. ” – Lieutenant General H. Hatch, Commander, U.S. Army Corps of Engineers[2]

What is Partnering?

Partnering approaches have been used for many decades, bringing customers and suppliers together to deliver outcomes and move away from transactional and adversarial relationships. Partnering promotes common goals, timely communication, effective disputes resolution, and a commitment to excellence as illustrated in Figure 1 below:

Figure 1: Partnering Concept[3]

We must recognise that partnering is a process that helps align goals, encourages teamwork, and fosters joint problem solving. Partnering operates outside of the contract but should only be pursued where the commercial arrangements are consistent with partnering principles. To realise partnering outcomes, we typically rely on a non-binding partnering charter. The partnering charter has no legal force. As observed by Briggs, the partnering charter is more of a ‘moral commitment’.[4]

Partnering can be used in conjunction with most forms of contract, though partnering will be more successful where contracts allow parties to work collaboratively. Partnering does not mean that risks must be shared or that fixed price arrangements will not work. Stephenson makes this point clear:

“The basic partnering concept is relatively simple and is not intended to give rise to a change in the legal structures, which regulate the risk of the participants to the project.[5]

The Alberta Infrastructure and Transport Partnering Guidelines also provide valuable insights into what partner is not:

“Partnering is NOT about relaxing the contract terms or circumventing the processes, it is NOT about expecting service providers to do “extra” work for free, it is NOT simply about dispute resolution.”[6]

Is Partnering Successful?

Numerous studies have shown that where partnering principles are applied, superior project outcomes are more likely to emerge.[7]  We should be alert to a correlation fallacy here though in that buyers and suppliers who are committed to reasonableness, cooperation, and reject adversarial behaviours are more likely to select partnering approaches. Consequently, it is more likely that a collaborative culture and mindset will drive superior outcomes and selection of the partnering process is a natural symptom of these positive behaviours.  Conversely, we should not expect exceptional performance where adversarial and transactional participants tack a partnering charter onto their project.

When to Use Partnering

There are no hard rules that state when and when not partnering should be used. The following procurement features should inform us of when partnering is appropriate:

  1. Projects involve a relatively long-term commitment,
  2. Complex and high-risk projects,
  3. Delivery quality is of paramount importance,
  4. Significant scope exists for innovation, and
  5. Success will be underpinned by close collaboration between buyer and supplier (interdependency).

We also need to recognise that partnering is not just for acquisition activities but may also be applied to sustainment activities.

Crafting a Partnering Charter

The partnering charter must be developed collaboratively with all relevant stakeholders. Typically, workshops will be conducted well before contract signature to ensure the parties can reach agreement on the scope of the charter, protocols, and mutual objectives.  The charter must be consistent with the proposed commercial framework.  The United Kingdom, Joint Contracts Tribunal offers a useful template for drafting a partnering charter here.

The following are examples of partnering charters from various jurisdictions:

  1. Alberta Infrastructure and Transportation Projects (Page iv)
  2. Australian Department of Defence Frigate Enterprise Sustainment Charter (page 32) 
  3. Queensland Government Bruce Highway Upgrade Project (page 77)
  4. US Army Aviation and Missile Command CH-47 helicopter upgrade
  5. US Army Corp of Engineers Human Performance  Wing Construction Project (appendix F)
  6. United Kingdom Happisburgh to Winterton Sea Defences (page 6)

Commercial Arrangements

In some instances, we may wish to import some of the partnering principles into our head contracts. This requires careful consideration as some of the partnering ‘goals’ could create significant risks in terms of liability, indemnities, and insurance. Some of the lower risk partnering principles that could be incorporated into a head contract include:

  1. transparency provisions with obligations to report issues in a timely fashion,
  2. internal dispute resolution mechanisms that require internal resolution prior to seeking arbitration or litigation, and
  3. express good faith obligations.

We also need to consider the broader commercial framework including tender selection processes. Partnering will likely fail if we select suppliers purely on the basis of lowest price and we subsequently deal with suppliers in a clinical, arms-length fashion prior to contract signature.

Conclusions

Partnering offers substantial benefits provided the parties to the agreement have a suitable mindset and culture. Partnering alone will not realise exceptional performance but will assist in driving the parties towards the achievement of common goals, and reasonableness in projects.  A partnering charter is best crafted within a joint workshop environment, well before contract signature. We must also ensure our commercial framework is consistent with the partnering approach.


[1] US Army Corp of Engineers ‘Partnering’ https://www.iwr.usace.army.mil/Portals/70/docs/cpc/91-ADR-P-4_Partnering.pdf

[2] US Army Corp of Engineers Policy Memorandum 11, 7 August 1990.

[3] Adapted from Queensland Department of Transport and Main Roads ‘Transport Infrastructure Project Delivery System’ Volume 1 (2020)

[4] Briggs I., ‘Alliancing: Reshaping Infrastructure Delivery in Australia’ (2007).

[5] Andrew Stephenson, ‘Alliance Contracting, Partnering, Co-operative Contracting – Risk Avoidance or Risk Creation’ (paper presented to Clayton Utz Major Projects Seminar, Melbourne, October 2000).

[6] Alberta Infrastructure and Transport Partnering Guidelines (2007) at http://www.bv.transports.gouv.qc.ca/mono/0968447.pdf

[7] Weston D and Gibson G ‘Partnering-project performance in U.S. Army Corps of Engineers’Journal of Management in Engineering. 1993 Oct pp 410-425; Black, Akintoye, Fitgerald ‘An analysis of success factors and benefits of partnering in Construction’ International Journal of Project Management 18 (2000) 423-434. Contra R. Quick who claims that partnering has not been successful in Australia since ‘ the law gets in the way’ R. Quick ‘Queensland’s ECI Contract’ The International Construction Law Review 4 (2007).