The Advantages And Disadvantages Of Partnering Construction Essay

The Advantages And Disadvantages Of Partnering Construction EssayPartnering can be a very efficient way to commission the design and build of formula projects, from the unique to the more(prenominal) common and repetitive build.This base provides an overview of the cost, benefits and the potential drawbacks of partnering, also describing and comparing the three types of partnering (1) I.EProject partnering objective driven, tactical and short barrier in approach used on a single projectstrategic partnering long term alliances that continue across a series of project opportunities simulation covenants a hybrid, which packages a series of projects having a known life span. (2)Traditionally the construction industry had a structure based on the apparent attitude of various professions and trades. But it provided no explicit coordination or control. Clients dealt with an industry that appeared chaotic by using competitive tenders and tough contracts to protect their own interests .(1)The fact that partnering has arrest so popular in recent years construction has seen a variety of tender contracts emerge and some expansions on the more traditional ones to accommodated partnering, this paper will also look into these. partnering is a management approach used by two or more organisations to achieve specific business objectives by maximising the effectiveness of each participants resources (Bennett and Jayes (1995)When looking directly into project and strategic partneringResearch shows beyond reasonable doubt that, properly applied partnering reduces the price leaf nodes digest for a given building. At the same time consultants, contractors and specialists earn better than normal profits and the industrys workforce find their work more rewarding in every sense (1)Typical benefits from partnering would beReduced exposure to litigation.Improved project outcomes in terms of cost, time and quality.Lower administrative and legal costs. change magnitude opportuni ty for innovation and value engineering.Increased chances of financial success.The cost of setting up partnering strategic, and the procurement issue is one to be addressed. This will bring to more and more addressed as the economies and levels of client satisfaction diminish if the lessons learnt and the benefits of a close working relationship on one project the learning curve cannot be carried across projects.The answer to this is move away from project partnering towards strategic partnering which sees partnering in use for many projects and gives significantly improved results includingContinuing cost reductionsTailored overhaul provisionClient satisfactionRepeat businessImproved turnover and profitabilityPerformance improvements over traditionally and management approaches by project teams using partnering successfullyConstruction CostsConstruction timesTraditional Approaches100100Management Approaches8570Project Partnering7060Strategic Partnering6050Strategic Collaborat ive working5020(fig 1) source 1Drawbacks of partneringGiven the nature of change it can draw-out criticism from experts and academics and partnering is no different. The following criticisms identify by older managers.Organizations trying to establish partnering culture for specific projects face severe problems when they have to use cut-throat competition to win some other projects.Modern forms of decentralized decision-making undermine partnering as decisions by one department are contradicted elsewhere.Commercial realities that require firms to have alternative suppliers and many customers, inhibit the emergence of deep partnering relationshipsThe open communication required by partnering is inhibited when one partner also works with anothers competitors.Partnering relationships inhibit firms from developing more profitable new businesses.These are just some of the drawbacks associated with partnering and senior managers and academics have many more criticisms but this should serve as a reminder that partnering is not easy and essential be worked hard at by all snarled, though the evidence is there to prove the massive advantages archived through successful partnering.costsAn initial coronation must be made before any benefits can be reaped by any party. These costs include time spent by senior management establishing the approach, careful team selection procedures, and training and partnering workshops. This is another reason strategic partnering is such an advantage though it makes sense for partnering relationships to develop on littler projects in order to keep costs down.When entering into a partnering agreement all parties should discuss how the project should be run, they should all be positive and sure about working cooperatively and any concerns should be discussed before entering into a partnering agreement. parties should all be clear on their own interests and concerns they may have, this may occasionally mean missing out on bad project s but by only being honest and clear from the outset can partnering be a success.When all parties are decided on a partnering workshop should be held, this is the basis for establishing cooperative relationship and teamwork. Any party that could have a bearing on the end result should attend these workshops. It should be held by a specialist partnering facilitator as it help to broaden view and focus on the projects overall success.A set of mutual objectives should be drawn up by all parties this helps to adopt a win win attitude, this encourages all involved to focus on hitting targets achiving goals and producing value for each other. Meaning all parties will make more profit and the client will pay less. round mutual targets would beValue for moneyGuaranteed ProfitsReliable constructionCosts within agreed cypherHandover on timeCost reductionExcellent site facilitiesSafe constructionShared risksImproved efficiency for usersNo cl luffsEffective meetingsShared use of computer syste msTimely design schoolingShared InformationFast constructionIn order to maintain successful partnering throughout numerous projects its a good idea to hold workshops throughout the project and hold i final workshop that identifies problems and lessons learned by the previous project.Partnering case studies.Partnering for social housing refurbishment.Case study Reference admit Forum HF175The London borough of Camden used partnering for the refurbishment of 2,500 properties, teaming up with Willmott Dixion and Llewellyn.The main befits wereThe client saved over 500,000 from a 7.8m budget. Time scale was more accurate with 74% starting on time and 70% finishing on time. Tenants were a lot happier with less that 1% making complaints. There were no formal disputes or claims, unavoidable extensions of time and the costs of necessary additional work were agreed quickly in the spirit of partnering.The contractual risks are also reduced by partnering.Case study reference 010A high risk pro ject for the construction of the Tunstall Western bypass was completed 10 weeks early within budget and to a high standard of quality thanks to strategic partnering.Claims as high as 6M were avoided by risk management and problem solving, Project was delivered approximately a 1m under budget and all final accounts were resolved within a few weeks of completing construction work, improving cash flow and budget control.Types of contracts.Since idea of partnering has become so popular in the UK contracting scene that there are now several standard form partnering agreements available, for single projects (project partnering ) as well as for multiple projects overtime (strategic partnering). An example of the former type is the ACA standard form of project partnering PPC 2000 (Mosey 2003). Here, the key stake holders of a project i.e. the client contractor, consultants and key specialists, sign only one single integrated contract ( no other contracts are needed, such as appointments of professionals or building contracts). other standard forms for partnering, such as x12 of necrotizing enterocolitis 3, do not create a muti-party contract. Strategic partnering in contrast, involves developing long-term commitments from both parties in the contract. The aim is to move the focus of attention away from getting the cheapest or quickest solution for a particular job, and towards developing a longer term understanding of the purposes of the project, and understanding from both parties about what each other whats to get out of the project. These polices have their roots in widespread business practice where long term relationships enables buyers and sellers avoid litigious disputes because the relationship becomes an important part of the process. The essential feature of strategic partnering is that it provides a method of for selecting a contractor (or other supplier) other than the more traditional approaches of competitive tendering. Examples of a standard -form ar rangement for strategic partnering are the JCT FA 05), NEC 3 framework Contract and the ICE Partnering Addendum. (Construction contracts law and management by john Murdoch and will Hughes pg 95Any contract used should be partnering bias, most standard contracts dont facilitate for the idea of partnering, traditional contracts require terms that need negotiating this often destroys partnering attitudes.Even so many firms require the protection a contract gives, if this is the case its reasonably well established that the project partnering contract (ppc2000) and the NEC engineering and construction contract with the partnering option are the best to go for.FrameworkFramework agreements are used by major clients, they provide a resource pool of competent consultants, contractors and specialist. They establish a foundation for negotiations over future contracts with a limited count of firms. These are standing offers that remain sensible over the life time of the agreements.Framework agreements can take a variety of forms they dont have to be binding and dont hold the promise of work for the firms in the pool. The offers can be terminated at any time but contractual agreements must be completed for any individual project already undertaken. If a contract has been entered to purchase a volume of goods or provide a service over a period of time then this must be honoured.AdvantagesEstablish long-term relationships (advantageous for partnering)Allows specialist buyers to negotiate best value for money on goods that can be used over a number of projects, but used any timeGives firms better buying powerReduces time spent on procurement and tenderingMakes reliable after-sales betterDisadvantagesFW agreements can be unresponsive to change, there may be a better solution developed after the agreement was set up. Often can be a one size fits all approach, however most FW agreements dont place any obligation on any parties so if their is a better deal to be had then ther e is nothing to stop them. This in turn can be another drawback as there is no guarantee of business so a lot of money may be wasted getting a company into the resource pool of the framework. (http//blog.tendersdirect.co.uk/2010/05/27/answering-your-questions-on-framework-agreements/)When the comparison of a partnering agreement and a framework is made a FW Agreement is a step toward partnering but no work is guaranteed its more of a root to secure a pool of reliable resources that are likely to gel once in a partnering agreement, this makes the tendering process faster giving more access. (may need changing)