Professional Documents
Culture Documents
Pinsent Masons gratefully acknowledges the help and assistance provided by the participants in this
Report, who have generously provided their time and insightful sector expertise. These included:
Stuart Birch Volker Rail
Alexander Hewitson AstraZeneca
Dan Parish Forest Holidays
Martin Worthington Morgan Sindall
Alan Muse The Royal Institution of Chartered Surveyors
2
Collaborative Construction: More myth than reality?
Foreword
As the demand for construction and infrastructure services
increases, procurers and suppliers are looking at delivery
structures which will provide not only sustainable, long
term value to the procurers but also, more consistent,
better margins for contractors, supply chain members and
professional teams.
As BIM and data management technology drives new approaches to the
design and construction process, the need to replace traditional competitive
procurement and tendering processes with more collaborative structures and
arrangements becomes ever more acute.
This report by the leading infrastructure sector law firm Pinsent Masons goes The report
to the heart of the complex dynamics surrounding these issues and points the
highlights the
way towards a more collaborative future.
challenges and
The drivers for real change and the barriers which have held the industry back makes clear
for so long are clearly identified. The report highlights the challenges and makes and compelling
clear and compelling recommendations for fundamental change. recommendations
One of those recommendations is the need for greater commitment and
for fundamental
leadership from industry bodies and senior industry figures. As this year’s change.
President of the ICE I am pleased to endorse the themes of this report and am
grateful to the team at Pinsent Masons for giving further welcome impetus to
a subject which is not only highly topical but, in my view, crucial for the future
health and well-being of our industry.
Pinsent Masons will be working with the industry to develop some of the key themes
emerging from this report and I look forward to their second report next year.
3
Contents
05 Introduction
06 Executive Summary
09 Background
11 Defining Collaboration
18 Drivers for Change in the Industry
23 So Where Is The Industry Now?
38 Barriers to Change
42 What Needs to Happen?
45 Conclusions and Recommendations
48 References
50 Appendices
4
Collaborative Construction: More myth than reality?
Introduction
As the UK recovers from the worst of the most recent recessionary pressures
and the demand for construction and infrastructure services increases,
it is evident that some clients in the Industry are looking at new ways of
tendering for and delivering construction services which will deliver improved
long-term value to clients and more realistic margins to contractors, supply
chain members and professional teams.
We anticipate that this trend is likely to accelerate commercial structures, contractual arrangements
as the true benefits of Building Information and procurement strategies might best suit the
Modelling (BIM) begin to become more fully requirements of the new post recessionary market.
understood by clients and their advisers, as
the sector moves towards the Government’s Prompted by our extensive experience of advising
Level 2 BIM target for 2016. We also anticipate clients, contractors, consultants and the wider
an acceleration of this trend as benefits from supply chain, we remain puzzled as to why the
increased levels of foreign investment in UK pleadings of Sir Michael Latham and Sir John Egan,
infrastructure projects require more collaborative for example, have largely gone unheeded.
vehicles and contractual structures.
Accordingly, this Report represents our attempt
In some areas of the Industry, we also detect to unpick some of the key factors influencing
a move towards, in the UK at least, the the use of collaborative working methodologies
replacement of more traditional competitive and to critically review their use and key
tendering methodologies with an increasing characteristics. It is not our intention to be critical
use of frameworks, longer term collaborative of the Industry per se; rather, our ambition is to
relationships, joint ventures, partnering and offer some informed thoughts and guidance and
alliancing arrangements. These might become to stimulate constructive debate.
the norm rather than an exception.
We were assisted in the drafting of this Report
It is generally accepted that many existing by Russell Poynter-Brown from On-Pole Limited,
standard forms of contract and approaches to an independent management consultancy
contracting are not ideally suited to collaborative specialising in project and team performance
working, especially in a BIM mandated or enabled improvement in the built environment.
world. Whilst much has been written on the
subject of collaboration, we have found that
there is very little practical and commercial
guidance available. In our experience, very few
clients, contractors and consultants have turned
their minds to consider how various alternative
5
Executive Summary
If we achieve nothing else from this Report, our ambition is to reignite the
debate regarding collaboration, in all its forms, and to play our part in moving
the Industry from talking about collaboration to actually doing it and being
able to quantify and articulate the benefits.
Numerous reports and surveys have indicated that • F ragmentation within the Industry and its
the UK construction Industry clearly recognises numerous bodies and organisations makes it
the need for a more collaborative approach if new difficult for a clear lead to come from any one
technologies are to be embraced, if customer consistent source.
requirements in a BIM enabled world are to be
embraced and if low margins are to be improved. • There is a reluctance by clients and their advisers
to engage in a process which is likely to lead to a
The drivers for change have been apparent for some loss of client control if decision making becomes
time and there is no suggestion from any section of more collective, i.e. by a Project Board as opposed
the Industry that they are diminishing or likely to to the client.
diminish in the future.
• There are still insufficient commercial
On the contrary, it is generally accepted that incentives for Industry professionals and
pressure for change is mounting rapidly on contractors to change.
government and the private sector to realise the
benefits which the new technologies promise. • There is currently a lack of adequate training in
the potential benefits of collaborative working
Yet the barriers to change remain all too evident: techniques and the ingredients required. Very
• There is an inertia resulting from the comfort few professional bodies or academic institutions
of familiar commercial and contractual seem truly prepared to advocate and promote
structures which do not encourage team- new approaches.
working or collaboration.
• There appears to be a lack of strong Industry
• There is a perception that collaboration is leadership with too few high profile Industry
likely to be more costly, time consuming and professionals prepared to commit to advocating
resource hungry. real change and creating an environment where
change is encouraged.
• Some construction clients are still driven by short
term goals and thinking, especially if their own • There is an absence of standard form construction
involvement in the project is likely to be short term. contracts and professional terms of appointment
truly embracing collaborative working. Most
• KPIs still tend to be more ‘stick than carrot’, often agreements incorporating collaborative
based around one sided requirements dressed up as techniques are either bespoke or heavily adapted
Partnering or Collaboration. from existing, more traditional forms.
6
Collaborative Construction: More myth than reality?
• Existing insurance models are well established hanging the Risk Profile
C
and, for the most part, the insurance community Challenging whether a risk profile which
prefers the comfort of the familiar. normally places a significant element of risk on
the contractor is sensible in an environment
So what is the way forward? What steps need which requires innovation, participation and
to be taken and what structures need to be cooperation of all core project team members
developed if the fundamental change which the in order to maximise client value and long-term
Industry appears to recognise as necessary is cost efficiencies.
really going to happen?
I nvolving Key Supply Chain Members
This report highlights a number of Actively engaging with and involving key supply
recommendations which collectively could make chain members in the core project team and in
a very significant difference: the collaborative structures.
hanging Attitudes
C Knowledge Centres
Greater commitment to change from major Creating centres of knowledge for best practice
Industry clients, the Government and public guidance in effective collaboration techniques
sector clients and from the Industry as a whole. and structures.
7
Ultimately, change is
likely to be driven by
enlightened clients
who have long-lasting
programmes of work
and who have a genuine
incentive to achieve real
life-cycle value for money.
8
Collaborative Construction: More myth than reality?
Background
The UK construction Industry is renowned for its short-term focus and
a reluctance to take a holistic view of expenditure, often being driven
by lowest price at the expense of best value-for-money.
John Glenn, the United States of America’s first when they consider it necessary to do so in order
astronaut to orbit the earth, captured the obvious to protect their commercial interests.
weakness in this philosophy in his legendary
quote “As I hurtled through space, one thought In stark contrast, contracts that also require the
kept crossing my mind: Every part of this capsule parties (including, in some contracts, professional
was supplied by the lowest bidder”. advisers, tier 2 suppliers and specialists) to
collaborate actively tend to discourage adversarial
Of course, few if any construction projects behaviours. Some go further, for example, by
commence with any conscious intent to develop including specific provisions that result in the
adversarial relationships. However, relationships parties agreeing to share financial consequences
can frequently become adversarial, often of design, construction and programme risks in
because of the ‘bilateral’ nature of many contract agreed proportions. This approach immediately
structures and the absence of any meaningful reduces the reason and scope for disputes.
attempt to introduce realistic and equitable
risk-sharing arrangements. It is still the case that One of the key purposes of a standard form
relatively few projects include specific contractual of building contract of course, is to provide a
requirements for the parties to behave differently mechanism for the parties to seek redress for
and to work together for their mutual advantage. non-performance. Many make provision for an
entitlement to additional payments or deductions
Consequently, when challenges or problems upon the occurrence of certain events. To varying
arise in “traditional” contractual structures, degrees, contracts will naturally tend to drive
there is little incentive for the parties behaviours and those behaviours can become
to collaborate to resolve them. This has negative or adversarial.
effectively fuelled the historic blame culture
that has plagued the sector for years and has If a contract were to contain specific provisions
exacerbated parties’ natural inclination to act in which actively discouraged negative or
their own separate best interests. adversarial behaviours so that the parties had
to deal with issues on a collaborative basis,
Of course, most standard forms of contract then, clearly, the parties would be much more
contain specific provisions for the parties to seek likely to behave accordingly.
redress by way of contractual claims and various
dispute resolution mechanisms. It is hardly
surprising that clients, contractors and specialists
use the contractual machinery available to them
9
It will be imperative
for clients, their
advisers and their
supply chain members
truly to believe
that collaboration
will ultimately
secure a much more
satisfactory long-term
outcome for them all, A significant majority of UK construction clients In a market where client influence remains high,
regard it as being in their best interests to pass it is easy to understand why such behaviours
even if that means risk down to their professional advisers and to are more prevalent, although it should be noted
assuming or sharing in the tier 1 contractor. Unsurprisingly, the tier 1 that in recent years, the dynamic has changed
a greater proportion of contractors then feel it necessary to further pass and that contractors are now increasingly more
the construction and that risk to their sub-contractors and specialists. selective as to which projects they bid for, the
This raises the inevitable question of whether basis on which they bid and which clients they
commercial risk.
the party bearing the risk is in the best position prefer to work with. As a result, the Industry has
to do so. There may be a cursory allusions reverted to greater use of the two stage tender
to collaborative working or partnering in the process which was prevalent until the financial
contract but in reality, the most likely paradigm crash of 2007-8, when it disappeared overnight
is something along the lines of ‘we understand virtually to be replaced by single stage tenders
why its beneficial to collaborate but we don’t with lengthy tender lists.
trust you and therefore we still want a robust
contract that best protects our position, should The literature on collaboration makes extensive
you let us down’. reference to the need to engage with the supply
chain at the earliest opportunity. However in an
In order to break this paradigm, it will be Industry riven by a culture of unsustainably low
imperative for clients, their advisers and their bids and poor margins, it is hardly surprising
supply chain members truly to believe that that the gulf between clients and their supply
collaboration will ultimately secure a much chains is exacerbated by limited investment
more satisfactory long-term outcome for them in training and development. This is especially
all, even if that means assuming or sharing in so in core skills and the behaviours required to
a greater proportion of the construction and collaborate successfully.
commercial risk.
That said, there are some notable exceptions,
However, the key inhibitor remains inertia most prominently in transport and infrastructure.
coupled with a fear of the unknown and an We discuss these in detail later in the Report.
inherent distrust of active collaboration. This is
often perpetuated by unenlightened leadership
and anachronistic behaviours. Project teams are
reluctant to step out of their ‘comfort zones’,
preferring to focus on their professional silos
and wary of engaging early with contractors and
their supply chains or transgressing the numerous
restrictions often found in professional indemnity
insurance policies, rather than harnessing their
collective expertise for the ultimate benefit of
clients and their end users.
10
Collaborative Construction: More myth than reality?
Defining Collaboration
So what do we mean by “collaboration”?
Whilst concepts such as collaboration, partnering and alliancing have been
in the construction Industry lexicon for many years, the terms are often
confused or interchanged without much consideration of their distinctive
features and characteristics.
We believe that collaborative working is not Notwithstanding the above, there is increasing
merely a vehicle for cost reduction (although evidence indicating that project teams, i.e., clients,
that is often one valuable outcome) but more contractors and the wider supply chain, are
significantly, a structured means of enhancing actively seeking opportunities to form structured
team performance and value-added returns from collaborative ‘networks’. This is typified by the
investment in construction. work of Partnership Sourcing Limited.2
There is a significant body of opinion within the But do project team members all have the same
Industry that suggests that these various forms idea and understanding about the nature of their
of cooperation and mutually beneficial working collaboration?
are well established and are delivering tangible
and significant results. It must be acknowledged, At its most basic, collaboration might be defined
however, that others take the view that such as “the act of working with another or others on
methods of working are largely discredited and a joint project, or something created by working
are either a figment of imagination or simply do jointly with another or others”.3
not deliver the benefits claimed. Interestingly, the
British Standards Institution refers to anecdotal However, it is in the numerous definitions of
evidence suggesting that up to 80 percent of partnering that we begin to see a much greater
partnering /alliancing arrangements fail to deliver emphasis on integration, mutual objectives,
the desired outcomes, due to “unclear expectations improved efficiency and effectiveness as well as
and undefined business processes that [do] not collective performance management, typified in
create an effective environment for collaboration”.1 Thomas and Thomas’s definition of partnering4:
1 BSI, 2013
2 Partnership Sourcing, Future Connections Collins, 2015
3 Collins, 2015
4 Thomas and Thomas, 2005
11
But do project team members all have the
same idea and understanding about the
nature of their collaboration?
Table 1
Key Characteristics of Collaborative Working Later in this Report, we discuss key aspects of
these characteristics and also provide some
Organisational suggestions as to how their benefits can be better
• Teamship harnessed in the future.
• Vision-driven leadership
• Commitment Collaborative Working
• Early engagement with team members and supply chain If clients and their teams at least understand
• Effective communications the characteristics of collaboration, they then
• Mutual goals and objectives need to appreciate how these playout in highly
• Equitable risk and reward structures dynamic project environments.
• Formal and informal networks
• Defined accountabilities In their paper “Which Kind of Collaboration
• Structured problem resolution is Right for You?”11 Gary Pisano and Roberto
• On-going performance management Verganti rightly highlight the temptation
• Responsiveness (agility and flexibility) for organisations to endeavour to establish
• Structured debriefing (including regular collaborative working relationships without
lessons learnt exercises) proper consideration of their purpose, structure
Relational and key objectives.
• Trust
• Honesty and openness In their “four ways to collaborate” model12
• Empathy (Figure 1), in this case based upon an innovation
• Attunement project, Pisano and Verganti very effectively
• The ability to confront issues summarise the key issues that project teams
without being confrontational should consider when deciding how to
• Avoiding the need to feel invulnerable collaborate, namely should membership of
(e.g. admitting to mistakes) the collaborative network be open or closed
• Influencing skills and should the governance structure be flat or
• Inspiration hierarchical?
• Curiosity
• Team coaching
Governance
Hierarchical Flat
14
Collaborative Construction: More myth than reality?
In the endeavour to chase often exacting In the renowned thought experiment, the
deadlines and performance targets, construction Prisoner’s Dilemma illustrates how better
Industry teams frequently overlook the need outcomes result from groups doing what’s best
to actively manage their relationships with for themselves and the group, rather than just the
the same degree of diligence as they do their individuals themselves:
operations on site. The ‘opportunity cost’ of this
in terms of increased tensions with the team, You and a friend have been arrested for a crime and
duplication and associated inefficiencies was are being held in separate cells so that you cannot
adroitly summarised by professional basketball communicate with each other. You are both offered
coach John Wooden in his famous quote “ If you the same deal by the police and have to decide,
don’t have time to do it right, when will you independently, what to do. Essentially the deal is this:
have time to do it over?” Some organisations • If you confess and your partner denies taking
in the high-volume manufacturing sector for part in the crime, you go free and your partner
example, took this principle and rephrased it as goes to prison for ten years.
“we never have the time to do the job properly • If your partner confesses and you deny
but always have the time to do it again”. participating in the crime, you go to prison for
ten years and your partner goes free.
Effective Team-Working • If you both confess you will serve six years each.
Valuable lessons as regards collaboration can • If you both deny taking part in the crime, you
be learnt from other sectors, not least of which both go to prison for six months.
are the military and elite sport. For example, in
his book “Winning!13” Sir Clive Woodward refers McChrystal argues that the Task Force faced a
to the principle of ‘teamship’, defining it as “the real-life prisoner’s dilemma. Each agency within
collective standard of behaviour understood by the Task Force feared that sharing intelligence
everyone in the team environment”, in essence would work against its own interests. Sharing
the “skills in interacting as a group”. that intelligence was vital and so McChrystal
set about beating the dilemma by instigating
In his book “Team of Teams”14, General Stanley highly structured collaborative working founded
McChrystal turns to game theory to explain on transparency and trust, culminating in the
how his experiences with the Joint Special concept of a “Team of Teams”.
Operations Task Force graphically illustrated
how effective teamwork produces superior Notwithstanding the collaborative logic of the
results as opposed to more insular competitive Prisoner’s Dilemma and the robust economic and
or non-collaborative working. Specifically, game theory that supports it, one would have
McChrystal cites beating the ‘Prisoner’s to acknowledge that, where there is a strong
Dilemma’ as a significant contributor to the commercial imperative (such as the need to protect
Task Force’s superior performance. Balance Sheet performance), there might also be a
significant inhibitor to collaborative working in the
absence of other tangible incentives.
Lencioni also cites the military adage of “better In contrast, teams that emphasise the status
to make a decision than no decision” as an and performance of the team as opposed to that
illustration of the fact that better performing of individual members, utilise tools such as the
teams unite behind decisions, even if there is Balanced Scorecard16 to establish and monitor a
some uncertainty about the outcome. Such range of collective measures such as:
commitment also promotes a greater degree of • Financial performance
confidence amongst those outside the project • Internal business processes
or programme team that the team is willing to • Learning and growth
sacrifice some entrenched positions in favour of a • Customer satisfaction and feedback (internal
collective commitment to resolve a fundamental and external)
problem or conflict for example.
In summarising the Construction Industry
Avoidance of Accountability Board’s Working Group 12 report “Partnering
Notwithstanding the fact that most standard in the Team, Bennett and Jayes17 highlight
forms of construction contract have mechanisms that effective team working (partnering in
to monitor and measure the performance of the this instance) is “only appropriate between
tier 1 contractor and supply chain, very few apply organisations whose top management share
the same rigour to the project team. the fundamental belief that people are honest,
want to do things that are valued and are
Too many construction project teams are motivated by challenge”.
reluctant to openly hold each other to account
in terms of their behaviours or performance, The importance of Lencioni’s dysfunctions
for fear of jeopardising established working therefore, although not directed specifically
relationships and rapport; this can breed at the construction Industry, lies in helping
frustration and resentment. teams and leaders to better understand the
fundamentals of effective team performance
In highly developed project teams the members and how to realise their full potential, both for
form a coalition, any one member of which is their and their clients’ benefit.
reluctant to let its peers down; this encourages a
healthy respect amongst all team members. The lessons for the construction Industry
extend far beyond the battlefield and sporting
Inattention to Results stadia of course and in the following Sections
Lencioni further argues that inattention to we describe where the Industry is now, the
the collective results of the team, encourages benefits and challenges it faces in achieving true
individual team members to focus only on collaboration and what needs to happen to bring
their own position to the detriment to the about a fundamental cultural shift.
performance of the team as a whole.
On a similar theme, Sir John Egan in “Rethinking Central government has continued to encourage
Construction”, identified five key ‘drivers of the Industry to improve its performance and public
change’ that are as valid today as they were perception with a number of further initiatives,
nearly twenty years ago: typified by the publication of ‘Construction 2025’21,
• Committed leadership (driving an agenda for a report which recognises that in order to deliver
positive change and improvement) the Government’s strategic priorities for the
• A focus on the customer (placing the client Industry, fundamental changes will be required
and end-customer at the centre of all project throughout the delivery and supply chain. The
activities; eliminating activities that add no value) report identifies key drivers of change:
• Integration of teams and processes around
a specific product or service (addressing the 1. Improved image of the Industry:
fragmentation that is inherent in the Industry • A coordinated approach to engaging
and reducing waste and duplication) young people
• A quality-driven agenda (significantly reducing • Increasing focus on occupational health and safety
defects and adopting a ‘right first time’ approach) and improving standards on smaller projects
• Commitment to people (improved learning • Relaunch of ‘TrustMark’ scheme
and training as well as career progression
opportunities; improving retention rates) 2. Increased capability in the workforce:
• Development of action plans to address
Drivers for Change capacity issues
In 2009, Constructing Excellence published a • Investigation of mechanism for ‘pooling’
review of progress since Rethinking Construction apprenticeships
entitled “Never Waste a Good Crisis”20. This • Common entry and career pathways
review identified a series of “blockers” that • Review of approach to the identification of
were considered to be frustrating change in the development needs
Industry; these blockers were summarised into the • Review of ‘card schemes’
following four interrelated Industry themes:
• Business and Economic Models (“Business and 3. A clear view of future work opportunities:
Economic models in the sector determine the • Encourage more non-Government owned
pace of change”) pipelines to better document future demand
• Capability (“we need to attract, retain and • Identify specific areas where regulatory risk is
develop more of the right people to improve creating concern
Industry capability”)
•D elivery Model (“A lack of integration in 4. Identify local champions to develop
the delivery process impedes continuous regionally focussed pipelines
improvement”) • The creation of a demand map for construction,
• Industry Structure (“the diverse and infrastructure and repairs and maintenance
fragmented structure of the Industry creates
competing agendas”)
6. A strong and resilient supply chain: This is particularly evident for example as
• Develop a construction supply chain charter regards repairs and maintenance contracts in
• Better promote the range of access to the Affordable Housing sector where there is a
finance-based products available to SMEs notable trend towards the use of more schedule
of rates and/or lump sum contracts with little
7. Effective research and innovation: or no requirement or incentive for the parties to
• Improve the awareness of the R&D agenda collaborate. These contracts are seen as heavily
in the wider Industry, together with funding biased towards the client and therefore ‘safer’ and
and collaboration opportunities more robust in their ability to penalise contractors
• Trail the use of “innovation exchange for poor performance.
discussions” between clients and together
with their supply chains Others have gone a stage further and have taken
• Explore options for improving post-project these repair and maintenance functions in-house,
evaluation standards setting-up internal contracting organisations in
the belief that such arrangements protect those
A number of the above drivers are reflected in clients from the cost and disruption associated with
the Crown Commercial Service’22 negotiated insolvencies and also as a further ‘hedge’ against
reforms including: inefficiency and poor performance.
• The Competitive procedure with negotiation
is now described more clearly with particular Nevertheless, a significant minority continue to
emphasis on: take an opposing view, preferring to maintain
- The client must indicate (and cannot change) or enhance their commitment to collaboration,
minimum requirements and award criteria encouraged by their experience and tangible
- The client must negotiate with those feedback indicating that such relationships
suppliers submitting initial offers (unless it ultimately provide the means by which waste and
reserves the right to accept tenders without inefficiency can be significantly reduced and the
further negotiation) construction team’s efforts can be focussed on
- The client must seek a final tender from delivering a project that best reflects the client’s
suppliers following completion of the objectives and is commercially viable for the
negotiations contractor and its supply chain members.
This is most evident in relation to large and/ Mosey goes on to illustrate his proposition via
or complex infrastructure projects where many three principal and interrelated themes:
clients actively engage with their contractors and • All too many projects are plagued by
specialists very early and throughout the project inefficiencies, claims and disputes that can be
initiation and delivery process in order to best directly traced to the late appointment of the
harness their knowledge and experience. lead contractor and their key specialists and
subcontractors, which in turn hampers their
In contrast, there is notable pressure from a ability to contribute towards design, specification
contractor and supply chain perspective towards and ‘buildability’ considerations;
more pro-active engagement with clients and • The absence of early contractor involvement
design teams. This is undoubtedly due, in part, also frustrates the effective development of
to the desire to mitigate the adverse impact of works and supply packages, the analysis and
competitive pressures and the all too evident management of project costs and risks as well as
legacy of unrealistically low bidding that continues the development and agreement of construction
to pervade the sector (encouraged in no small part phase programmes, and
by a significant body of clients and their advisers). • The use of conditional preconstruction phase
agreements codify such benefits and can
That said, some contractors are genuine in their “operate as a valuable tool for project managers,
belief that effective collaboration delivers more particularly if they are subject to agreed
successful projects and that the earlier they can be preconstruction phase programmes and to the
involved in the design and specification, the more systems of open communication and collaboration
effective their contribution can be. known as ‘partnering’ [or similar arrangements]”
In his seminal book, ‘Early Contractor Involvement Supporting these principles, central government
in Building Procurement’23, David Mosey discusses has latterly openly advocated the use of more
this very issue and convincingly argues that “the collaborative working methodologies. This is
most effective way to add value and to challenge seen, for example, through its endorsement of
the risks of excluding contractor contributions the NEC suite of contracts and also the JCT’s
is for clients, consultants and contractors to Constructing Excellence Contract and the
form a full team at an early stage of the project, PPC2000 suite of contracts.
establishing the roles of all parties under integrated
conditional preconstruction phase agreements”.
The survey reinforces anecdotal evidence that During 2016, the Government is expecting the
‘traditional’ procurement methodologies with Industry to fully embrace BIM, with all project
fixed price or lump sum tenders, are most and asset information being documented in an
often used by a significant proportion (47%) electronic format (see below). As the NBS states,
of those used by respondents, with design and “BIM now provides us with the information, tools,
build next with 39%. Other methodologies, standards and structures for greater collaboration.
including partnering and alliancing, are only used Indeed collaboration is a precondition for
by a maximum of 3%. Interestingly though, a achieving the higher levels of BIM”.
significant majority of respondents are using
two-stage tendering and an increasing number However, the NBS survey found that only 18% of
are utilising various forms of negotiation as part respondents utilise any form of collaborative tools
of their tendering activities. or techniques on all of their projects. In contrast,
some 62% claim to collaborate on some or all
The 2015 survey showed that the NEC suite of their projects, although 38% stated that they
of contracts (with their mutual trust and co- did not employ collaborative working on any of
operation provisions) was becoming increasingly the projects that they worked on in the last year.
popular, rising from 16% to 30% as the contract Not surprisingly, where collaboration was used, it
most often used from the 2011 survey to the 2015 tended to be most prevalent on high value projects.
survey. The usage of JCT had declined from 60% Of those utilising collaboration, the various
to 38% as the most used contract during the methodologies were summarised as follows:
same period. In the £5-£25m band, the survey
indicated that NEC was most used. • ‘An ethos of mutual trust and cooperation’ (67%)
• ‘Formal partnering agreement’ (33%)
• ‘Non-binding partnering charter’ (20%)
• ‘Alliancing agreement’ (13%)
27 NBS (2015)
23
It is disappointing to note that significant numbers cite
their client as a negative influence on the adoption of
collaboration, together with an apparent inability to reconcile
the fact that the parties have differing aims and objectives.
The NBS was keen to explore the reasons why Further encouragement for the use of
respondents adopted collaborative working or collaboration appears to come in the form of
not. The proponents of collaboration cited these BIM, with the NBS survey indicating that 47%
principal factors for their usage: of its respondents mentioned BIM as an enabler
• ‘Enables information sharing’ (81%) of collaboration. Only 9% stated that it was
• ‘Reduces the number of disputes’ (65%) not. That though, leaves a significant minority
• ‘Improves the delivery of the client’s apparently either not knowing of or apathetic
objectives’ (64%) towards, BIM’s ability to promote collaboration.
Those indicating some concern regarding the use The Economist’s Intelligence Unit study entitled
of collaboration mentioned these factors: “Rethinking productivity across the construction
• ‘Makes responsibility less clear’ (32%) Industry”28 also provides some valuable insights
• ‘Exposes me to greater risk’ (19%) into current thinking on collaboration, not just
• ‘Makes me feel uneasy’ (15%) from a UK perspective but also globally.
These responses prompt one to ask the Published in 2015, the study examines “causes
obvious question, namely whilst collaboration of the current productivity gap and on the
is recognised as having many positive tools and strategies that leading companies are
attributes, why is it that the majority of adopting to address and overcome these issues
respondents seem reluctant to work together around the world”. Whilst the study is primarily
in a collaborative manner? The NBS survey has focussed on the examination of factors affecting
some revealing answers: productivity, it has a core proposition that is
• ‘The client did not want to use collaboration especially relevant to collaboration, namely that
in projects’ (42%) inefficiency and ineffectiveness have their roots
• The parties involved have different aims and “across the stakeholder community”.
objectives’ (33%)
• The projects we work on are too small’ (27%) When asked “which of the following project
• ‘Concerns about liability’ (24%) partner-related obstacles present the biggest
• ‘Concerns about risk’ (24%) single hurdle to improving your organisation’s
• ‘Established divisions between the different productivity?”, 32% of respondents cited poor
professionals’ (22%) communication and collaboration (exceeded only
• ‘Resistance or concerns in my organisation’ (11%) by a lack of investment capital at 36%).
• ‘Previous negative experience of collaborative
projects (6%) Looking at potential sources of improvement,
the Intelligence Unit posed the question,
It is encouraging that relatively few respondents “which of the following actions by clients and
mention differences between professionals or an investors would contribute most to improving
inherent resistance in their respective organisations productivity in the construction sector over
as reasons for not collaborating. However, it is the next three years?”; 40% of respondents
disappointing to note that significant numbers cite stated a “willingness to engage in long-term
their client as a negative influence on the adoption collaborative relationships with contractors”.
of collaboration, together with an apparent
inability to reconcile the fact that the parties have
differing aims and objectives.
So, whilst there has been progress towards the Standard From of Contract for Project
more widespread adoption of collaboration in Partnering (PPC 2000)
some sectors of the Industry (most notably First published in 2000 by the Association of
transport and infrastructure), many project teams Consultant Architects (ACA) (and subsequently
remain unaware of how to collaborate effectively updated on a regular basis), ‘PPC 2000’ is a multi-
and/or unconvinced of its benefits. However, we party contract focused specifically on the use of
believe that the increasing use of a two-stage partnering. Its principal features include:
approach to procurement, described elsewhere
in this Report, coupled with more effective client • A multi-party contract primarily between
leadership, is one means by which project teams the ‘client’, ‘constructor’ and the ‘client
will become convinced of the need to work representative’; other parties such as specialist
together better and more effectively. contractors and consultants can also join the
contract and become part of the partnering team
The Contractual Perspective • A partnering ethos runs throughout its terms,
In parallel with the ‘softer’ behavioural aspects e.g. provisions dealing with incentivisation,
of collaboration, the construction Industry has continuous improvements, performance
made efforts, significant in some instances, to indicators, co-operative and transparent
address collaboration from a contractual or exchange of information and a painshare/
organisational perspective. gainshare mechanism
• Varying levels of design responsibility,
Early initiatives to address collaboration in including fitness for purpose
standard forms of contact have included the
following: The contract has achieved widespread use by
central and local government, for example on
New Engineering Contract prisons, schools, healthcare and social housing
The ‘NEC3 Engineering and Construction projects in the UK and abroad.
Contract’ for example contains provisions such as:
• A requirement for the Employer, the Contractor, A derivative entitled ‘TPC 2005’, reflects many
the Project Manager and the Supervisor to act characteristics of PPC 2000 but is primarily
in a spirit of mutual trust and co-operation focused on term partnering and is used
• Early warnings and risk reduction meetings extensively in repairs and maintenance contracts,
• A Compensation Event regime so that additional most notably in the affordable housing sector.
entitlements to payment and time are agreed
within defined timescales as the project proceeds
• No final account mechanism
• In Options C and D, the facility for target price
contracts (with a pain/gain share regime)
• An Option X12 – Partnering, which can be used
by more than two partners
25
Most alliancing arrangements are based
upon bespoke contract management and
administration documentation. The drafting
of such documentation to reflect the discrete
requirements of individual projects or
programmes has many obvious advantages.
The ACA is in the process of publishing a suite of The contract expressly underpins collaborative
contracts and associated documentation aimed working and the formation of integrated teams
at providing a common ‘template’ for alliancing when used with the Project Team Agreement,
contracts, based upon its successful suite of PPC providing for the use of a risk register, risk
2000 and TPC 2005 contracts. allocation schedules, and performance
This documentation includes: indicators. However, there is little evidence of
• Framework Alliance Contract its widespread use thus far.
• Project Alliance Contract
• Term Alliance Contract To accompany the ‘JCT Constructing Excellence
Contract’, a ‘Project Team Agreement 2011’ has
been published which can be utilised to formalise
JCT and Constructing Excellence the integration of the project team and includes
The JCT and Constructing Excellence (the options that provide for risk and reward sharing
cross-sector, cross-supply chain, member- arrangements between team members.
led organisation working to produce a better
built environment) jointly published the ‘JCT It is interesting to note that the JCT has recently
Constructing Excellence Contract’. provided some insights into its proposed updates
for the 2016 editions of its suite of contracts,
The contract can be used to procure a range of which include further provisions relating to BIM
construction services and is specifically tailored and amendments to reflect the Public Contracts
for use in partnering and where participants Regulations 2015. In addition, it appears that the
wish to engender collaborative and integrated procedures relating to the ascertainment of loss
working practices. Its terminology is such that and expense claims will be revised to encourage
it is designed for use throughout the supply prompt assessment and settlement.
chain for the appointment of main contractors,
sub-contractors, and consultants and can be As previously discussed, most alliancing
used as part of a framework agreement. This arrangements are based upon bespoke contract
creates an integrated suite of obligations which management and administration documentation.
can be passed through the various tiers of the The drafting of such documentation to reflect the
supply chain. It can also be used whether or discrete requirements of individual projects or
not the supplier is to carry out design, and the programmes has many obvious advantages.
supplier’s design input (as either contractor or
consultant) can vary. An explanation of the degree to which the most
common forms of contract reflect and/or support
the key principles of collaborative working is
included at Appendix A.
26
Collaborative Construction: More myth than reality?
Forms of Collaboration
Collaborative working in the construction Few, if any, project teams set out with the intent
sector takes many forms, ranging from informal of initiating adversarial relationships but some
relationships and protocols to highly structured find it difficult to overcome the constraints of
arrangements such as those typified by inflexible forms of contract that place the parties
alliancing agreements. in opposition and discourage any meaningful
contribution from the contractor and supply chain
Whilst these collaborative working until works commence on site.
arrangements share many common themes,
each has a number of distinctive characteristics Joint Ventures
which are explored in greater detail below. On larger projects, a number of parties may join
together in a joint venture. This can be to benefit
Informal Relationships from a wider skill set at tier 1 level or because
Informal or more unstructured relationships have the project would be too large for a single
their place in the panoply of collaborative working organisation bearing in mind its capitalisation
relationships. Even in the context of the use of and turnover.
more traditional standard forms of contract, with
their inherent adversariality, a strong emphasis Joint ventures can be integrated where the
on appropriate values and behaviours between participants form a company. Its constitution will
the client and project team can overcome such then be structured to reflect the shareholders’
barriers to collaboration. stakes and how the joint venture will organise
itself in terms of board membership, voting rights.
In such arrangements, it is often the client that Often the joint ventures are unincorporated.
‘sets the tone’ for collaboration, sometimes
extending its commitment by appointing an There will be a joint venture agreement setting
independent adviser to promote effective team- out the provision of capital, constitution of the
working and cooperation, together with the use of board, voting rights, dispute resolution, and
binding or non-binding team ‘charters’. the contribution of key staff, profit share and
dissolution upon the completion of the project.
However, as discussed elsewhere in this Report,
the Industry frequently underestimates the The decision as to whether to incorporate or
continuous effort required to maintain such remain unincorporated will often be driven by
relationships, eschewing guidance and examples tax considerations.
of best practice from other sectors in favour
of historically entrenched positions, thereby
perpetuating a highly divisive blame culture.
27
It is important that the framework
contractors are incentivised to deliver
improvements not only through being
rewarded by an increased share of the
framework business but in receiving a
share of the savings.
Partnerships
A partnership is “the relationship which subsists Many clients are drawn to framework
between persons carrying on business in agreements as they offer a significant degree
common with the view of profit”29. The partners of flexibility as regards when and to which
are jointly and severally liable to organisations organisations, call-off contracts may be awarded.
with which they contract and in the absence of Properly structured, a client can gain substantial
a cap on liability within a contract, their liability benefits. Key features of a well organised
is unlimited. It is for this reason that limited framework will be obligations upon the parties
liability partnerships were created30. to the framework to share information so that
efficiencies can be derived during the life time
Whilst joint ventures and partnerships are a of the framework. Innovative ideas from one
collaboration between contracting organisations framework contractor can be shared for the
or individuals, a contract between a client and benefit of the wider project. Obligations around
a joint venture or partnership does not imply continuous improvement will encourage the
collaboration. The collaboration is solely on the contractors to seek to work in a manner which
supply side and has no bearing on the form of benefits the client throughout the framework.
procurement used. Allied to this regime, it is important that the
framework contractors are incentivised to deliver
Frameworks improvements not only through being rewarded
The EU Procurement Rules define a framework by an increased share of the framework business
as “an agreement or other arrangement but in receiving a share of the savings.
between one or more contracting authorities
and one or more economic operators which Other benefits might include:
establishes the terms (in particular the terms as • Reduced procurement and mobilisation costs
to price and, where appropriate, quantity) under • The opportunity to build longer-term
which the economic operator will enter into one relationships with tier 1 contractors and their
or more contracts with a contracting authority supply chain members
in the period during which the framework • Improved value-for-money
agreement applies”.31 • E nhanced opportunities for stakeholder and
community-based engagements
Importantly, a framework agreement is not
of itself a contract to undertake works but is
a general term for agreements that set out
the contractual terms and conditions upon
which future works, often termed a ‘call-off
contract’ for example, will be undertaken. In the
public sector, frameworks are permitted to be
established for a maximum of four years, with
an option to let call-off contracts for a limited
period thereafter.
Figure 2
Employer
Project Board
Selects
Alliance Manager
Alliance Project Team
Integrated Project
Selects Organisations
Must include Owner
Alliance Management Team
Participant’s nominee
One per participant
Alliances
With their holistic approach to procurement and Alliances can take many forms typified by that
delivery, alliances are increasingly considered shown in Figure 2 above.
to be the ultimate form of collaborative project
and programme delivery. This is not just in the At this point, it would be reasonable to pose
UK but across the world and most particularly in the question, ‘so what’s that different about
the infrastructure sector. alliances and what distinguishes them from
other similarly advanced forms of procurement
HM Treasury in its publication entitled and project or programme delivery?
“Alliancing Best Practice in Infrastructure
Delivery”32 is confident enough to say that in Many alliances are characterised by a conscious
even the most complex and challenging project dilution of client control. For example, many
delivery environments, alliances “have delivered aspects of management and key decision-making
more value than traditional procurement are devolved to a ‘project board’ or similar
arrangements with collaboration underpinned alliance leadership team. Decision making of
by common goals and integration”. the leadership team is generally on a unanimous
“best for project” basis. Clients therefore have
Anecdotal evidence suggests that in the most more limited rights to ‘influence’ than they might
successful alliances, integration applies across otherwise have in more traditional arrangements.
the whole of the extended supply chain, not just
to tier 1 contractors. Considerable efforts are Typically, in relation to the day to day
made to ensure that each member’s goals and management of issues, the client’s rights and
outcomes are correctly aligned. obligations are limited to reserved powers. These
can be those matters which a client considers
are fundamental to the functioning of its assets
or operations. If there were circumstances which
meant that there would be an impact on the
ability of the alliance to deliver to the client’s
32 HM Treasury (2014), Improving Infrastructure Delivery brief and requirements, the client would have
29
the ability to issue directions to the alliance. The In addition to the “no dispute” provisions, the
client’s rights will be in relation to issues which reduced ability to claim extensions of time and
are potentially wider than the successful delivery variations and emphasis on collaborative working,
of the design and construction of the project. eliminate the major areas of dispute which, from
By way of example, on Network Rail’s alliancing the NBS34 survey, were found to be extensions of
projects, Network Rail reserves to itself decisions time, valuation of the final account and valuation
on issues which will potentially cause a “Network of variations.
Operation Issue”. Clearly the overriding reason
for a project is to enhance the client’s ability to This reduction in the ability to claim for
deliver its business and only the client can see the extensions of time and variations ought to drive
full wider implications of an event ( whether on a number of considerations in structuring the
the project or externally) and its impact on both procurement of an alliance. The first is that the
its business and the project. target price should be set at a realistic level so
that beating the target is not an easy option
The loss of control does not mean the alliance but not too low such that it is likely from the
and its board has a completely free hand as to outset that the project will end in painshare. The
how it performs. The client will retain the right to tender and pre- construction periods need to
terminate for significantly poor performance and be sufficiently long so that a robust target price
suspend the works. can be set, the design developed sufficiently and
enough surveys undertaken that all parties have
Is this loss of control something which clients confidence in the target.
should resist? The NBS33 survey would tend
to suggest that it isn’t. The most often cited Because of the limited scope for obtaining
matter impeding project progress was employer extensions of time and variations, a sufficient
variations (66%) and third most prevalent factor element of the target price needs to relate to
was provision of employer information (40%). design development. This enables the alliance to
Both of which are likely to lead to the fourth absorb additional costs and design development
and fifth most frequent impediments, namely changes which fall short of scope variations and
assessment of delay and extension of time and which would have an impact on the target price.
scheduling and construction programmes.
However, as can be seen from the description
It seems that potentially by moving project, of the setting of the target price, alliances are
strategic and day to day decision making not a soft option. In addition, alliances require
away from the client and its advisers to a fundamental cultural and behavioural change that
collaborative structure, in which the client has a can only be achieved through a truly collaborative
seat on the delivery board, there is the potential effort from all parties and supply chain members,
to eliminate the major causes of delay on often backed by ‘best for project’ unanimous
construction projects. decision-making protocols. In the event of
disagreement, one option is for the parties to
In addition, a central theme of alliances is the provide for any deadlock to be resolved by the
collective development and application of highly use of independent expert determination. Whilst
structured and robust incentive or pain/gain share this has some attraction, in reality, alliances often
mechanisms, mirrored by shared risks. There is a shy away from adopting this route as it means
true alignment of interests between the parties. devolving ultimate decision making responsibility
In the parlance of alliancing contracts, “everybody to a third party. This can engender inappropriate
wins or everybody loses”. ‘No-dispute’ provisions behaviours and detracts from the emphasis on
are common, with the parties only able to sue the parties agreeing everything themselves. Some
each other in very limited circumstances. Many alliances have been known to go further by utilising
alliances contain provisions whereby all costs psychometric testing to ensure the ‘best-fit’ of key
are fully reimbursable, supported by open-book personnel with their counterparts and the ultimate
documentation and reporting. project or programme deliverables.
33 NBS (2015)
34 NBS (2015)
30
Collaborative Construction: More myth than reality?
32
Collaborative Construction: More myth than reality?
The contractual structure will follow the alliance Against this background, the benefits of IPI are
model described above with a project board. frequently summarised as follows:
The IPI model requires a target cost contract. • The project team are discouraged from
The insurers appoint technical and financial adopting a defensive approach; there is a
advisers at the outset who will assess the known maximum liability and the availability of
bids before confirming that the project can suitable insurance coverage is known
proceed at various gateways by ensuring the • It avoids the inequities that can flow from joint
bid demonstrates best value for money. These and several liabilities and also the need for
advisers are retained throughout to provide input collateral warranties
on the progress of the project. • The presence of the latent defect element of
the insurance may enable professionals to be
Here, all the construction-related risks able to join alliances at tier 1 more easily
conventionally held separately by the client, • Given that the assessors remain involved
its principal contractor(s) and supply chain with the project, there is a degree of on-going
members are packaged into a single, third party technical audit
assured, policy. In addition however, the insurer • For the time being, the cost of IPI has been
also takes that proportion of any cost over-runs fixed at 2.5% of the project cost
that exceed a pre-agreed ‘pain-share’ threshold.
Effectively, the excess on the insurance policy is That said, many experienced project board
a fixed sum commensurate with the alliance’s members will not welcome perceived interference
painshare cap. To prevent parties bringing claims by outside assessors. Many boards wish to be
(except in limited circumstances), the insurance autonomous and to control the strategic direction
contains a latent defects component. of the project. Since the excess on the insurance
will be equivalent to the maximum amount of
From a collaboration perspective, the proponents painshare payable by the alliance, it is questionable
of IPI highlight that it much reduces the how useful the cost overrun component will be
potential for a ‘blame culture’ based on a bearing in mind the philosophy of alliancing is to
perceived need to offset liability, to detract from drive unnecessary cost out of the project. Perhaps
a project or programme team’s performance, the key issue is the benchmarking of projects such
given that payment of any claims is based that the target cost should be 20% less than the
upon demonstration of loss rather than the cost of similar projects.
assignment of culpability or liability.
The IPI approach is currently being trialled on a
project commissioned by Dudley College at its
Centre for Advanced Building Technologies.
33
“The combination of BIM, The RIBA 2013 Plan of Work
and Two Stage Open Book can offer a procurement and
delivery model that is collaborative, transparent and
commercially robust”. David Mosey
Through collaborative pre-construction phase Nearly half (47%) of respondents to the survey
processes, using contracts such as PPC 2000, an considered that they were more likely to view BIM
adapted NEC ECI clause or JCT PCSA, the two and an enabler of collaboration than not. Whilst
stage open book approach can mitigate bidding only 9% did not, that still leaves some 44%
costs and enables clients and project teams to uncertain as to their views on BIM. On the face of
work far closer together in order to ensure that the survey, it is evident that many in the Industry
the stipulated project deliverables can be met are either unaware of the requirements of BIM
within realistic and equitable targets. and/or are yet to be persuaded of its benefits.
Table 2
36
Collaborative Construction: More myth than reality?
Spotlights
The Latham40 and Egan41 reports both
acknowledged that the construction Industry
could and should learn from best practice
adopted in other industry sectors.
So why has relatively little happened in the The diverse nature of the Industry also
intervening years? frustrates the communication of policy and
the dissemination of feedback from initiatives
The reasons are numerous and undoubtedly and success stories relating to performance
complex but all too often Latham and Egan’s improvement in general and collaborative
views are seen as being too abstract or of marginal working in particular.
relevance to those at the furthest reaches of the
supply chain. In an Industry that is renowned Inertia
for being largely cynical about looking beyond The Industry has traditionally been resistant to
its immediate ‘comfort-zone’ it should perhaps embrace change. Whilst this is, in part, a reflection
come as little surprise that exemplars from other of society as a whole, it might be also be due to
sectors are treated with some suspicion or as the legacy of standard forms of contract which
simply not relevant. were overtly ‘client-biased’ and inadvertently
44 Surowiecki, J (2004)
39
Academia and the Professions Leadership and Followership
A number of academic institutions are It would be hard to deny that the calibre of
noted for their research into and promotion leadership within the Industry must improve in
of collaborative working. However many order that the benefits of collaborative working
graduates seem unaware of what it really takes can be fully exploited. There are simply too
to collaborate effectively from the commercial, few high-calibre leaders that can create and
legal and relationships and behaviours maintain the environment within which teams
perspectives. and key individuals can work effectively towards
a common purpose, free from judgement and the
Whist many of the associated professions such commercial distractions that pervade so many
as the Royal Institution of Chartered Surveyors project teams. As former US Navy Seals Jocko
(RICS), the Royal Institute of British Architects Willink and Leif Babin emphasise in their book
and the Institution of Civil Engineers etc. have ‘Extreme Ownership’, “there are no bad teams,
each commissioned research and guidance only bad leaders”46.
on collaborative working, the majority of
their respective members seem reluctant to However, the success of collaboration is not
advocate such methods, sometimes in the face wholly dependent upon leaders of course; those
of client opposition. that are led, especially key team members, have
a similarly important role to play. The principle
In one respect this is perhaps not surprising, given of followership is the reciprocal of leadership
their ‘fragmented’ nature (a very similar situation and summarises the required behaviours and
to the contractors and supply chain members). competencies of key subordinates. In his Harvard
However, despite a core of very notable Business Review article “In Praise of Followers”47,
exceptions, the reluctance of many professional the noted scholar, Robert Kelley suggested four
firms’ to constructively challenge their clients, main qualities of effective followers:
as well as offer timely and proactive advice, • Self-Management: The ability to apply critical
undoubtedly inhibits collaborative working. thinking and work on one’s own initiative
• Commitment: An unambiguous commitment
The RICS ‘Futures’ report45 does though to the collective goals of a group or organisation
contain some valuable prompts for Chartered • Competence and Focus: Possessing skills
Surveyors in the context of collaboration and and competencies that complement the
in particular, around cross-cultural working achievement of project goals and objectives as
and the avoidance of silo working. One notable well as the willingness to maintain and improve
statement stands out: “People who can such competencies over time
collaborate with others from outside of their • Courage: Maintaining the required ethical
specialism will become increasingly important, standards and behaviours and also being
as will those able to understand value creation prepared to constructively challenge where
for clients’ businesses”. necessary.
There are simply too few high-calibre leaders that can create
and maintain the environment within which teams and key
individuals can work effectively towards a common purpose,
free from judgement and the commercial distractions that
pervade so many project teams.
41
What Needs to Happen?
Commitment
The concluding chapter in the ‘Rethinking Construction’ report48
is entitled “The Way Forward”.
However, as Shona Frame warns51, “it would In his book “Performance Coaching for Complex
be dangerous though to consider that BIM Projects”52, Tony Llewellyn makes a compelling
is a panacea and references in some of case for the following team coaching model:
the literature to it leading to ‘zero defects • Assess the project environment
construction’ tend to be met with incredulity • Set-up ( a critical phase where the team
from those in the Industry”. coaching interventions are defined and
planned for greatest impact)
Frame highlights that “the BIM model is only as • Enable execution: Facilitating correct
good as the people using it, the information put behaviours and interpersonal communications
into it and the communication of other relevant • Build resilience: Working with teams to
information….”. Here then is the nub of the “withstand disruption and unexpected
issue; BIM can be a major contributor towards change” by enabling them to embrace risk,
the successful design, procurement, delivery and uncertainty and ambiguity
operation of built assets but in order for it to • Learning: Harnessing lessons learnt and
be fully effective, the project team must work embedding them throughout the client and
together in a highly disciplined, structured and project team’s organisations to improve
collaborative way. future performance
In addition, those leading project or programme Lencioni describes the critical importance
teams must be acutely aware of the importance of of building “vulnerability-based trust and
understanding how highly effective teams really overcoming the fear of conflict”. One of the key
work and be prepared to become just as confident dysfunctions of a team is an absence of trust
and capable in managing the dynamics of multi- predicated on people’s need to feel invulnerable;
disciplinary teams as they are in managing the in other words, they feel compelled to defend
commercial, legal and operational aspects. a position or line of argument, for fear of losing
face or a negotiating position, or simply being
Effective Team Working judged by their peer group.
As discussed at length elsewhere in this report,
effective team working is paramount to the In the course of our discussions when researching
success of any attempt at collaborative working. this Report, a major client in the pharmaceutical
sector described how one of its project teams had
Few would disagree with that proposition. transformed from being largely dysfunctional to
However, the challenge comes when clients highly effective through fundamentally reviewing
and project teams face exacting deadlines or its structure and behaviours, removing the need
significant problems that must be overcome; it to feel invulnerable and using an independent
is all too easy to sacrifice the team ethos in the chair/coach to lead its regular project and
search for solutions or indeed ‘someone to blame’. progress meetings.
For just these reasons, we argue that clients Removing the need for such a defensive stance,
and their project and programme teams would by crafting complementary commercial and
benefit from on-going coaching interventions legal provisions such as those found in the
to help them on a journey from occasional more advanced forms of alliancing described
dysfunctionality, through working as a group to earlier, teams’ attention can move to a focus on
operating as a highly effective team. delivering ‘best for project’ outcomes.
Too often, completing a project within budget is the As BIM becomes more prevalent and if it is to
key driver and prior to commencement of a project, succeed, we foresee that contractual structures will
compromises are made between the original brief need to change so that parties can contribute fully
and concept for the asset with the budget. This to their role so that the benefits of collaborating
leads to compromises in terms of specification and and sharing in the success of a project are enhanced
quality to meet the budget. This is a short term and the litigation risk of poor performance is
saving when considered against the life time of a reduced. Those structures need to enhance team
building which, not untypically, will be expected to working and sharing of information.
last for a minimum of 20 years.
This tends to suggest some element of risk reward
Better measures of success will be whole life cycle needs to be included in all substantial BIM projects
costs, sustainability and energy savings which pay and to alleviate concerns for clients about how they
for themselves over the lifetime of the building. can recover the cost of defects where individual
responsibility for that defect is not easy to establish,
The impact of BIM latent defect insurance may become more widely used.
BIM requires the design team to collaborate and
contribute in a collaborative way. With the design New Structures
becoming more integrated, there are significant The traditional structure of a client and its project
implications for the traditional approach to manager controlling the project needs to be reviewed.
establishing liability. There will be a blurring of the Client control and directing the contractor and
roles of designers so that being a team member is professionals by instructions is not the most efficient
more important than the badge of each individual means of procuring a building. The design and
profession. In the event of a design issue, it will be construction processes are complex. An integrated
more difficult to identify if one consultant was solely approach to designing the building, involving both
responsible for the error. Responsibility under BIM professionals and contractors from an early stage is
will, by definition, become shared and how designers’ to be encouraged as it leads to a more efficient and
insurers will react to the new culture and approach to seamless design and construction process.
negligence claims will be interesting to follow.
With that in mind, the use of single stage tendering
It seems that where there is the potential for for a fixed price design and build contract does not
joint liability, all consultants will be brought into drive value. The contractor is appointed late in the
proceedings by clients. This could lead to claims process, cannot have a full understanding of the
for contribution between defendants but with the design and is generally expected to take all of the risk
lines of who is actually responsible for what breach of design errors and will have limited ability to obtain
and damage being very difficult to establish. If that additional payments. This is a recipe for the supply
is the case, there will be a down side to the biggest chain compromising on quality by attempting to find
enabler of collaborative working. savings in an attempt to balance the books.
45
Changing the Risk Profile
If the intention is to place all design and The client’s checks and balances in this structure
construction risk upon a contractor, it should are that it has a representative on the core group
be done in circumstances where it can fully and decisions need to be made unanimously. If
understand those risks, can influence the choices the client’s representative feels that a decision is
prior to entering contract and is incentivised to not going to be made in the best interests of the
achieve savings without compromising on quality. project, it can withhold its consent and alternative
Even within a fixed price contract, some incentive solutions which are acceptable to all parties will
mechanisms should be included to encourage the need to be found.
contractor to find innovative solutions which create
either capital savings or long term efficiencies. It should be noted that the previously quoted NBS
survey found that client changes and instructions
With that in mind, fresh thinking needs to be were amongst the major delaying factors on projects.
applied around the following areas and roles:- It may be counter intuitive but devolving power to a
• Contract forms with core groups core group may reduce delay and create efficiencies.
• Quantity surveyors and cost managers
• Structures and issues to enable consultants and Quantity Surveyors and Cost Managers
specialist sub-contractors to participate and If there is to be a change in the emphasis of what
share in collaborative structures constitutes success and value, the role of the
• Key Performance Indicators quantity surveyor and their mindset will need to
• Insurance alter. If projects are looking at longer term value
and are based on a target cost arrangement, the
Contract forms and core groups role of a cost consultant needs to be reviewed.
Creating a core group to steer a project is a key to
project success. The essential features of the core Apart from the initial setting of budgets and
group are that it should include one member from assisting in assessing the financial aspects of
the client and each key participant from the supply tenders, the traditional role of the quantity
chain. Decisions should be made unanimously and surveyor needs to change and may be usefully
should be accepted by the client. reduced. Aggressive cost control and disallowing
of costs will not be conducive to creating the
In many contracts, we feel the core group is not collaborative culture. In collaborative contracting,
fully empowered and that its recommendations the quantity surveyor’s role should become more
can be reviewed by the client and its advisers creative by looking at issues around long term
and not implemented. Full control of the project value of the asset and life cycle costing.
is not devolved to the core group. Unless core
group recommendations are accepted, save in Structures and issues to enable the supply chain to
limited circumstances, the core group is not fully participate and share in collaborative structures.
empowered and whilst it will be useful, providing The traditional shape of a construction supply
technical and strategic insight, the contract chain is similar to a pyramid. If there is to be
which reserves all instructions to the employer collaboration there needs to be some means of
and its supervising officer will still be largely integrating collaboration and creating a flatter
traditional in nature. structure so that all key players can contribute
and share in a project’s success.
For collaboration to succeed, clients need to
devolve the management of projects to a core At present, on significant projects, key sub-
team. This may mean that there is a reduction in contractors may be incentivised by using a target
control as the client will only reserve key issues form of sub-contract but it is unlikely that for
such as payment, suspension and termination to their own suppliers, similar arrangements are in
itself. It will also require though, a significantly place. The further down the chain, the more likely
improved understanding of team dynamics and traditional contracts will be placed.
the principles of team-working. This, in turn, will
also necessitate an improvement in the calibre Consideration needs to be given to overall project
of leadership in core teams as well as client risk share pots so that all key contractors and
organisations. consultants have a stake in the project’s success.
46
Collaborative Construction: More myth than reality?
47
References
Bennett, J and Jayes, S, (1998) Hawkins, Peter (2014), Leadership Murphy, James D (2006), Flawless
The Seven Pillars of Partnering, Team Coaching: Developing Execution, Harper Business
Thomas Telford Services Ltd. collective transformational
Never Waste a Good Crisis (2009),
leadership, Kogan Page
Cabinet Office, New Models of A Review of Progress since Rethinking
Construction Procurement, July 2014 HBR’s 10 Must Reads (2013), On Construction and Thoughts for Our
Collaboration, Harvard Business Future, Constructing Excellence
Collaboration That Works, Harvard
School Press
Business Review OnPoint, Spring 2014 Office of Government Commerce
HM Treasury (2014), Improving (September 2008), Framework
Collaborative Building Information
Infrastructure Delivery: Alliancing Best Agreements: OGC Guidance on
Modelling (BIM), RICS, February 2015
Practice in Infrastructure Delivery, Framework Agreements in the
Collins English Dictionary, 2015, Revision 1 Procurement Regulations
Construction 2025 (2013), Kaplan, R S and Norton D P (1996), Partnership Sourcing Limited; Future
HM Government The Balanced Scorecard, Harvard Connections: Business Relationship
Business School Press Management in 2020
Croft, A and Ledger, N (June 2015),
Beale and Company, BIM promotes Katzenbach, J.R and Smith D.K Rethinking Construction, (1998),
collaboration, Construction Law (1993), The Wisdom of Teams, (the ‘Egan Report’), Department of
McGraw-Hill and Harvard Business the Environment, Transport and the
Crown Commercial Service (2015), School Press Regions: London
Reform of the EU procurement
rules – public sector; Briefing for Katzenbach, J.R and Smith D.K Surowiecki, J (2004), The Wisdom of
Procurement Practitioners (2008), The Discipline of Teams, Crowds; Why the Many Are Smarter
Harvard Business Review Classics Than the Few, Little, Brown
Davidson, S (November 2014),
What is BIM?, RICS Latham, Sir M (1994), Constructing The Economist Intelligence
the Team, (the ‘Latham Report’), Unit Limited (2015), Rethinking
Doz, Yves L and Hamel, Gary (1998), HMSO productivity across the construction
Alliance Advantage; The Art of Industry
Creating Value through Partnering, Lencioni, Patrick (2002), The FIVE
Harvard Business School Press Dysfunctions of a Team: A Leadership Thomas, G and Thomas, M (2005),
Fable, Jossey-Bass Construction Partnering and
Frame, S (April 2012), Is BIM the way Integrated Teamworking, Blackwell
forward?, Construction Law Llewellyn, T (2015), Performance
Publishing
Coaching for Complex Projects;
Government Construction Strategy Influencing Behaviour and Enabling Walker, D.H.T. and Harley, J Program
2011, Cabinet Office, May 2011 Change, Gower Publishing Limited Alliancing in Large Australian Public
Government Construction Strategy Sector Infrastructure Projects,
Malleson, A (2015), National
2016 – 20 March 2016, Infrastructure Construction Contracts and Law Melbourne RMIT University, Centre
and Projects Authority for Integrated Project Solutions
Survey: Summary of Findings, NBS
Hawkins, D.E. (2013), Raising Woodward, C (2005), Winning! ,
McChrystal, General Stanley
the standard for collaboration: Hodder & Stoughton
(2015), Team of Teams: New rules
Developing effective collaborative of engagement for a complex world, Willink, J and Babin, L (2015),
relationships through the Portfolio/Penguin Extreme Ownership, St. Martin’s
implementation of BS 11000 to Press, New York
enhance business performance, The Merrow, E.W (2011), Industrial
British Standards Institution Megaprojects: Concepts, Strategies
and Practices for Success, Wiley
Hawkins, David E (2013), Raising
the Standard for Collaboration: Mosey, D (2009), Early Contractor
Harnessing the benefits of BS 11000 – Involvement in Building Procurement,
Collaborative Business Relationships, Wiley-Blackwell
The British Standards Institution
Mosey, D (May 2014), A Quiet
Revolution, Construction Law
48
Collaborative Construction: More myth than reality?
Contact details
For further information relating to this
report please contact:
Martin Roberts
Partner, Pinsent Masons LLP
T: +44 207 490 6222
M: +44 7770 596 947
Russell Poynter-Brown
Chief Executive, On-Pole Limited
T: +44 1761 221030
M: +44 7775 433 320
This note does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered.
Pinsent Masons LLP is a limited liability partnership registered in England & Wales (registered number: OC333653) authorised and regulated by the
Solicitors Regulation Authority and the appropriate regulatory body in the other jurisdictions in which it operates. The word ‘partner’, used in relation to the
LLP, refers to a member of the LLP or an employee or consultant of the LLP or any affiliated firm of equivalent standing. A list of the members of the LLP,
and of those non-members who are designated as partners, is displayed at the LLP’s registered office: 30 Crown Place, London EC2A 4ES, United Kingdom.
We use ‘Pinsent Masons’ to refer to Pinsent Masons LLP, its subsidiaries and any affiliates which it or its partners operate as separate businesses for regulatory
or other reasons. Reference to ‘Pinsent Masons’ is to Pinsent Masons LLP and/or one or more of those subsidiaries or affiliates as the context requires.
© Pinsent Masons LLP 2016.For a full list of our locations around the globe please visit our websites: www.pinsentmasons.com and www.Out-Law.com.
49
Appendix A:
Procurement Routes and Collaborative Features
More
Alliancing Integrated
with Project
Integrated Body Insurance
Partnering
Term/
Framework
Agreements
Management Construction
Contracting Management
Traditional Traditional
(lump sum) (Remeasurement)
Public-Private
Partnerships
Design EPC
& Build Contracting
Less
50
Collaborative Construction: More myth than reality?
More
New PPC
Alliancing
Framework
Contract
JCT
Constructing
Excellence
NEC3 ICC
ECC Target Cost
C ollaborative
CIOB Contract
JCT JCT
for use with
Management Construction
Complex
Contracting Management
Projects
Less
51