Proceedings of the Institution of Civil Engineers Municipal Engineer 160 September 2007 Issue ME3 Pages 127133 doi:

10.1680/muen.2007.160.3.127 Paper 100018 Received 08/09/2006 Accepted 26/01/2007 Keywords: bridges/project management/ publicprivate partnerships

David Gullick Structures Group Director, Parsons Brinckerhoff Ltd, Cardiff, UK

Robert Cairns Acting Director of Engineering, Roads Service, Northern Ireland

Donald Pearson-Kirk Structures Technical Director, AccordMP (formerly Parsons Brinckerhoff Ltd)

Application of partnering principles to a framework contract

D. Gullick
BSc, CEng, MICE,

R. Cairns

BSc, MBA, CEng, MICE

and D. Pearson-Kirk

MSc, PhD, CEng, MICE, MASCE, FGS

Sir John Egans report on Rethinking Construction advocated long term relationships based on clear measurement of performance and sustained improvements in quality and efciency. In 2001, Northern Ireland Roads Service embarked on a three-year framework to review the work carried out on their stock of post-tensioned bridges. The contract adopted a partnering approach embodying the key principles recommended by Egan. This paper outlines the signicant lessons learned from a partnering approach between a consultant and a central government service provider. The partnership was built on an ethos of knowledge share and transfer; it developed long-term relationships that continued after the end of the original programme. It is an example of how a partnering approach to a single project acted as a catalyst for the further development of each organisation. One of the signicant factors involved is the people, their personal and professional relationships and their willingness to innovate at all times. The partnering ethos led to innovation in terms of amending the payment mechanism under the contract as originally procured, leading to potential incentives and disincentives based on performance measured using key performance indicators as advocated by the Egan report.

post-tensioning. In 1992, the UK Department of Transport placed a moratorium on this form of construction. Subsequent work involving the investigation of structures showed that the grouting operations were often ineffective, resulting in the presence of voids at locations vulnerable to the ingress of moisture and corrosive agents such as chlorides and sulphates. The discovery of this in situ voiding in built structures raised serious concerns about the possibility of hidden corrosion of tendons, adding to concerns over the integrity of the UKs posttensioned bridge stock. In 1993, the Highways Agency working in conjunction with its sister organisations (Scottish Ofce, Welsh Ofce and the Department of the Environment for Northern Ireland) implemented a ve-year programme of special inspections for the 1100 bridges of this type across the UK. 2. SCALE OF THE PROBLEM To ensure consistent implementation of the inspection programme, all the agencies agreed to use the requirements of BA50/93.1 This document implements a three-phase approach to the investigation. Phase I essentially comprises a desk study of existing drawings, calculations and inspection reports. Phase II involves a preliminary site investigation aimed at verication of the Phase I results and development of a technical plan for any proposed intrusive inspection and corrosion testing. The Phase III report is intended to be a stand-alone document that contains the results of the intrusive inspection works with advice on the likely long-term performance of the structure. Roads Service implemented their ve-year inspection programme using the requirements of BA50/93 during the 1990s. It was implemented using a framework contract with a number of recognised consultants. Towards the end of the programme, Roads Service had compiled phase I, II and III reports on all its existing post-tensioned bridges. The inspection works revealed a range of defects and deciencies within the bridge stock. The situation was complicated by the fact that the consultants did not adopt a uniform approach when assessing the in situ condition. Many of the descriptors used were vague and the majority of the reports failed to capitalise on the benets of non-destructive corrosion testing. Roads Service thus had no clear indication of the likely lifespan of the structures and what problems lay hidden within apparently sound structures. 3. THE WAY FORWARD In light of the volume of material collated on the 47 structures, the nature and range of the problems observed, and the specialist Gullick et al. 127

1. INTRODUCTION Roads Service, an Executive Agency within the Department for Regional Development for Northern Ireland, is the sole road authority in Northern Ireland, responsible for just over 24 900 km of public roads together with about 8 300 km of footways, 250 000 street lights, 370 public car parks and 5 800 bridges. These bridges range from small-span masonry arches of around 2 m span or less to long-span steel structures like the Foyle Bridge (Figs 1 and 2). Within this bridge stock there were some 47 internally posttensioned bridges that warranted particular attention. Historically, post-tensioned bridges were considered a safe and durable construction form, easily providing the required design life. However, during the 1980s, problems were identied in a number of post-tensioned bridges in the UK arising from corrosion of the tendons. Concern was heightened in 1985 with the sudden collapse of the Yns-y-Gwas Bridge in Wales. Over the next ve years over 40 bridges were found to require major repairs and remedial works associated with concerns over the Municipal Engineer 160 Issue ME3

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(c) (d) (e) (f ) (g) (h) (i)

design contract preparation and supervision supervision structural assessment principal inspection special inspection design checks planning supervision.

Fig. 1. A view of Foyle Bridge nature of the construction form, Roads Service decided to employ a specialist consulting rm to assist with the review of its post-tensioned bridge stock. In September 2001, open tenders were invited for a contract entitled Inspection of Post-Tensioned Bridges and Design & Supervision of Repair & Strengthening Works to Post-Tensioned Bridges, Northern Ireland. The contract was drawn up under the NEC Professional Services Contract2 with the intention of using main option G term contract for selection and payment of the successful candidate and the project being managed by the Roads Service Highway Structures Unit (HSU) in Ballymena, Co. Antrim. As stated in the scope of the contract documentation, the objective of the contract was to review the ndings of the special inspections already carried out, and to combine these with further work to arrive at a best-value repair and maintenance plan for each structure. Given the nature and scope of the project it was considered impractical to determine the full extent of the service to be provided during the contract. The intention was that the HSU project management team would identify all works required on any specic structure with the consultant employed on a call-off basis. Nine specic independent task areas were identied in the contract to allow tenderers to allocate resources and staff to the project (a) feasibility and scoping (b) additional investigation

All design, inspection and assessment works to be undertaken were required to be in accordance with the Design Manual for Roads and Bridges.3 The contract was evaluated on a quality/ price basis and, given the nature and complexity of the work, an 80%/20% quality/price split was adopted. The contract was intended to run for one year with the possibility of an annual extension for a further two years. A number of internationally recognised consulting houses tendered for the contract; the tender was won by consulting rm Parsons Brinckerhoff Ltd (hereafter referred to as the contractor).

4. WIDER ISSUES Roads Service, as a purchaser of multi-million pound public works programmes, has a duty to ensure best value for money for the taxpayer. To help achieve this, the Roads Service Board has stated that it wishes to ensure the retention of engineering intelligence within the client organisation. An intelligent client organisation requires staff and managers to have a sound technical background so that they are able to interpret the advice of other professionals, to make better value judgements and decisions, and to be well informed to advise ministers and departmental ofcials on relevant technical and professional issues. A best-value review of Roads Services in-house consultant highlighted its role as the primary source of this engineering intelligence. Roads Service therefore had an objective to extend the breadth and depth of their technical knowledge. Consequently, both parties aspired to gain maximum benet from any long-term future working relationships that could develop. Discussions were held to try to understand the aspirations of both organisations, irrespective of the specic details of this commission. The rst part of this commission involved the application of specialist knowledge and techniques. In accordance with Roads Services objective to remain an intelligent client, a mechanism was required for the transfer of specialist knowledge that the contractor would bring to the work. Discussions were widened to include ways in which the recommendations of the Egan report4 could be implemented. As the project developed, the scope of work carried out involved more conventional elements such as investigation (Fig. 3), assessment and strengtheningboth parties tried to ensure that opportunities for providing added value and innovation were maximised as far as possible at each stage of the project. Discussions were also held regarding how knowledge transfer could act both ways, and how the contractor and Roads Service could develop together as organisations and as people working for each organisation. It quickly became clear that there were a number of exciting opportunities for both the contractor and Roads Service and the teams were keen to apply the principles of partnering throughout the length of the commission.

Fig. 2. Bellevue Bridge 128 Municipal Engineer 160 Issue ME3

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Gullick et al.

(d ) disruption to family life, particularly for the contractors staff with young families. The key to the success of the co-location was good clear communication with staff from both organisations and planned resource allocation and management, ensuring that the personal circumstances of the staff involved were regularly reviewed.

Fig. 3. Investigation of Bellevue Bridge

5. THE PARTNERSHIP 5.1. Getting to know each other In order to facilitate the knowledge-share approach, each organisation committed to ensuring co-location as far as possible. Fortunately, some space was available in Roads Service ofces in Ballymena and this was made available to the contractors staff. As the contractor did not have a base in Northern Ireland, this was an example of Roads Services commitment to the partnering process. Successful co-location of two separate organisations (Fig. 4) with different business cultures was dependent upon a number of key factors (a) the personalities of the staff involved (b) their commitment to the approach chosen and ensuring its success (c) the need for each individual to gain the mutual respect of team membersa function of the personalities involved and their technical abilities (d ) tolerance of each others culture and work practices. Some staff from both Roads Service and the contractor were initially reticent about whether this was a good approach and whether it would work; their concerns centred on issues such as (a) different working practices (b) lack of knowledge of cultural issues in Northern Ireland (c) interference with other work taking place in the open-plan ofce environment 5.2. Partnering workshops This was Roads Services rst foray into partnering with consultants and, although the contractor had a number of successful partnerships in place with other public organisations, many of the contractors staff involved in this work had little or no partnering experience. In April 2002, a partnering workshop was held to develop strategies and initiatives to ensure the success of the partnering approach. Both organisations committed to adopting key underlying principles to the management and operation of the framework. These principles were embodied in the signing of a partnering charter (Fig. 5). The key issues addressed were

Fig. 4. Co-location facilitates effective working Municipal Engineer 160 Issue ME3

Fig. 5. A signed partnering charter exemplied the commitment of team members Application of partnering principles to a framework contract Gullick et al. 129

(a) technical development of staff in areas related to the specialist project (b) a more technically aware client, providing benet to industry as a whole (c) development of staff in many different technical areas (d ) exposure to and appreciation of the different cultures of a private consultant and a central government service provider, with a resulting broadening of viewpoints (e) long-term friendships that have remained beyond the end of the project.

5.5. Value for money Much of the value from the partnership is contained in the immeasurable benets referred to in Section 5.4. However, in monetary terms the value obtained could be expressed as the cost of doing the work and the results obtained measured against the value of the asset to Roads Service. As an indicator, the asset value of the 47 post-tensioned bridges was 130 million (2002 estimate); the total cost of doing the work and the resulting maintenance liability associated with each bridge was estimated to be 3$5 million (2004 estimate). Before this work was carried out the maintenance liability and safety risk associated with these structures were unknown.

Fig. 6. Joint training was benecial to both organisations (a) (b) (c) (d ) (e) (f) knowledge sharing staff development gaining respect and trust building enthusiasm problem resolution key performance indicators (KPIs).

A number of key initiatives were identied under each of the headings listed above and a programme was developed along with an allocation of responsibilities. The use of KPIs to drive the process of continuous improvement was, however, left for future review as the contract had only been recently commissioned and Roads Service wished to assess the performance of the scheme using the Professional Services Contract framework that was in place. 5.3. Partnering initiatives Many partnering initiatives were undertaken throughout the commission, including (a) a rolling programme of secondment of Roads Service staff to the contractor to work on specialist areas of the commission (b) joint training seminars on a wide range of technical topics, only some of which were related to the PT bridges commission (Fig. 6) (c) entering combined teams in industry-wide competitions (for all three years of the commission, the team won the Northern Ireland round of the New Civil Engineer Powers of Persuasion competition, reaching the national nal in 2004 and 2005) (d ) submission and presentation of joint technical papers at conferences (e) mutual study tours to share knowledge with other professionals worldwide ( f ) co-operative problem solving on a range of engineering projects ( g) recruitment of the contractors staff based with Roads Service in Northern Ireland to facilitate good communication (h) publicity of the success of the partnership in magazines and newsletters of both organisations (i) social events. 5.4. Immeasurable benets Both organisations and the people involved beneted from the partnering initiatives that were adopted. Benets included 130 Municipal Engineer 160 Issue ME3

6. PROBLEMS WITH THE PROFESSIONAL SERVICES CONTRACT FRAMEWORK After one year of the commission it was evident that its operation could be improved and the partnership strengthened by looking at the contractual form that was in place. The review highlighted that there were no issues with the core contract clauses. However, it was judged that the payment mechanism could be improved to the benet of both parties. The tendered payment mechanism involved the use of daily rates inclusive of certain expenses. The contractors staff were paid on this basis irrespective of the actual cost incurred. During the tender period, the contractor took a commercial view regarding certain daily rates involving an assessment of the likely input from certain grades to achieve an overall prot margin whilst ensuring that the rates were competitive in comparison with other tenderers. Therefore, at tender stage, the cost of the scheme and the nal prot margin were uncertain. Under the original arrangement there was no formal incentive for the contractor to use its best staff, and the cheapest resources would have maximised the prot in any one grading band. However, this was never the modus operandi as the contractor provided the top-quality staff outlined in their tender. This led to uncertainty regarding their nal prot margin. There was also no incentive under the original contract for the contractor to maximise efciency as the contract ensured that every hour spent on the scheme, irrespective of productivity or programme, would be paid. Roads Service had the veto that the funding could be stopped and the appointment terminated. The situation could thus be improved for both parties. In light of the above issues, both the contractor and Roads Service agreed that revisions to the existing payment mechanism would be in their best interests. In revising the existing arrangements, the principal objective was to ensure that the Gullick et al.

Application of partnering principles to a framework contract

KPI no. 1 2 3 4 5 6 Total maximum points

KPI Variation of budget against forecast Client satisfaction Health and safety Adherence to programme Defects Contribution to partnership

Weighting 6 3 2 6 2 2

Points 5 5 5 5 5 5

Maximum points 30 15 10 30 10 10 105

Table 1. KPIs adopted for the contract Roads Service achieved best value. There were also a number of complementary objectives (a) the approach had to be transparent and readily auditable (b) PB would be incentivised towards maximum efciency and delivery, including budget and programme (c) both parties should have improved certainty of outcome. It is worth mentioning at this point that the partnering ethos had already proved to be successful and it was readily accepted by all parties that the commission was running very smoothly with a strong joint team ethos evident across the project. Some of the KPIs were directly measurable and those for programme and budget were given a much higher weighting than others. Other KPIs were more subjective and the KPIs for client satisfaction and contribution to the partnership were therefore assessed quarterly. In each case where a KPI was not directly measurable, KPIs were jointly agreed upon completion of discrete tasks (e.g. completion of all work on any one structure). Table 3 and Fig. 7 give a summary of the overall KPI performance achieved at completion of the commission.

7. OUTCOMES The partnering approach and change to the payment mechanism was benecial to both parties and the project in the following ways.

6.1. Key performance indicators To meet the stated objectives, it was agreed that fees paid should be based upon actual costs incurred, with prot being linked to performance through KPIs. This approach ensured (a) Roads Service would pay for rolled-up costs only when necessary (b) the arrangement would be transparent (c) the contractor was incentivised to perform better (d ) removal of the reverse incentive against the use of the contractors more highly qualied and hence highly paid staff, giving a greater certainty of prot level if performance was maintained. Prot variance was established between a minimum prot margin of 2$5% and a maximum margin of 10% above breakeven costs. The actual prot was based on a sliding scale depending on achievement of the KPIs. As the contract had been operating for a year, the prot levels achieved by the contractor were known. The minimum and maximum prot levels were therefore set above and below the previously earned prot. Table 1 lists the KPIs adopted for the contract, showing the calculation of points based on a weighting system to be used as part of the prot calculation. Table 2 shows an example of how the prot percentage was calculated (PB was paid auditable cost C2$5%C (69/105)!7$5%Z7$43% prot). KPI no. 1 2 3 4 5 6 Total Weighting 6 3 2 6 2 2 Mark (out of 5) 2 3 5 3 5 5 23 Score 12 9 10 18 10 10 69 (a) The issue of nancial matters was important to all but the nancial risk to both organisations was limited by the change of payment mechanism, allowing them to focus more closely on getting the job done. (b) Continuous improvement was facilitated by the use of KPIs. (c) A realisation that delivery of the project was a primary objective for both organisations. (d ) The partnering approach ensured that seamless teams of individuals from PB and Roads Service worked towards common goals for the benet of the project and each other. (e) Roads Service is now equipped with knowledge regarding technical matters that it did not possess before the commission. Some of this knowledge is not possessed by other consultants in Northern Ireland and therefore allows Roads Service to develop best practice in Northern Ireland through its procurement process. ( f ) Roads Service achieved its objective of remaining an intelligent client. (g) Staff from both organisations learned new skills and developed professionally and technically. (h) Although the commission is now complete, Roads Service and the contractor have continued to work together in jointly funded research looking at the effects of above-ground salt and alkali contamination in highway structures.

7.1. Best practice Many of the initiatives outlined in this paper are examples of best practice as advocated by Egan.4 However, a key issue that should be highlighted is the way in which personnel worked as an integrated team, learning and developing together. The use of the contractors global knowledge base and the adoption of online collaborative working processes are additional examples of best practice. In addition, the joint capabilities of team members drawn from both organisations meant that those staff with the best experience and skills and organisational and operational Gullick et al. 131

Table 2. An example of calculation of KPIs Municipal Engineer 160 Issue ME3

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KPI no. 1 2 3 4 5 6

Principal inspections 4$6 3$0 5$0 5$0 4$0 4$0

Special inspections 5$0 3$0 3$0 5$0 4$0 4$0

Assessment and design 5$0 5$0 5$0 5$0 5$0 4$0

Average 4$9 3$7 4$3 5$0 4$3 4$0

Target 5$0 4$0 5$0 5$0 5$0 5$0

Table 3. Summary of overall KPI performance

Northern Ireland Roads Service - Partnering Agreement KPI Evaluation October 2004 Budget 5 4 3 Contribution to partnership 2 1 0

Client satisfaction

Principal Inspections Special Inspections Assessments Average Target

Defects

Health and safety

Adherance to programme

Fig. 7. Joint development of KPIs for encouraged continuous improvement knowledge were chosen to carry out specic tasks. The team thus worked effectively and efciently. Roads Service and the contractor were not content to be constrained by the traditional client/consultant relationship and early discussions highlighted the opportunities that were available. The underlying ethos and approach to the partnership was one of taking opportunities together a phrase adopted as the title to the partnering workshops held. Each of the key drivers in the Egan report was successfully implemented and addressed throughout this project. The project was delivered on time, on budget and at the best quality. There were additional benets to everyone involved at all levels of both organisations and both organisations achieved their corporate goals.

7.2. What would we do differently? This commission ran for over three years with many benets to both parties. With the benet of hindsight, however, it would have been advantageous to have tried to integrate the teams earlier in the process, moved to the incentive/KPI-based payment mechanism earlier and reviewed KPIs to show that they were appropriate and achieving the objectives.

8. HOW DOES THIS COMMISSION ALIGN ITSELF WITH THE EGAN REPORT? The Egan report4 recommends ve key drivers for change in the UK construction industry (a) (b) (c) (d ) (e) committed leadership a focus on the customer integrated processes and teams a quality-driven agenda commitment to people. 9. CONCLUSIONS The partnership approach adopted by Roads Service and the contractor ensured that the requirements of this project were delivered in a timely manner, were of good quality and demonstrated value for money. Additionally, this approach gave staff at all levels within both organisations development opportunities that they otherwise would not have had. Both organisations developed corporately by adopting this approach. This partnering commission is an example of what the UK construction industry can achieve when the people involved are willing and able to inuence the ways the industry has previously procured and managed projects. However, success will not be achieved unless the people involved at all levels are Gullick et al.

Egan recommends long term relationships based on clear measurement of performance and sustained improvements in quality and efciency. The report also advocates a non-adversarial approach, leading to closer working relationships for the benet of the project. 132 Municipal Engineer 160 Issue ME3

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committed to the process and willing to seek innovation and added value at all times. REFERENCES 1. DEPARTMENT FOR TRANSPORT/SCOTTISH OFFICE DEVELOPMENT DEPARTMENT/WELSH OFFICE/DEPARTMENT OF THE ENVIRONMENT FOR NORTHERN IRELAND. Post-tensioned Concrete Bridges; Planning, Organisation, and Methods of Carrying Out Special Inspections. DfT/SODD/Welsh Ofce/DENI, 1993. BA50/93.

2. NEC. Professional Services Contract, 2nd edn. Thomas Telford, London, 1998. 3. DEPARTMENT FOR REGIONAL DEVELOPMENT, NORTHERN IRELAND. Design Manual for Roads and Bridges, Vol. 3, Highway Structures Inspection and Maintenance. DRD, Belfast. 4. DEPARTMENT FOR TRADE AND INDUSTRY. The Report of the Construction Task Force to the Deputy Prime Minister, John Prescott, on the Scope for Improving the Quality and Efciency of UK Construction. DTI, London, 1998.

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