1.
PARTNERING
IN THE
CONSTRUCTION
INDUSTRY

2.
OVER VIEW
• Can Partnering Really Work
• What Needs to Change to Make it Work
• Case Study of Partnering Working
• Technology That Can Assist In Partnering

3.
CAN PARTNERING REALLY WORK
• In 1994 Sir Michael Latham published
Constructing The Team – know as the Latham
Report.
• 30% real cost savings
• Recognised the significant role of the client
• 1989 - Egan Report "Rethinking Construction”
• Effective partnering does not rest on
contracts.

4.
WHAT NEEDS TO CHANGE TO MAKE IT
WORK
• Establishing mutually beneficial outcomes
• Alignment in objectives
• Belief in the partnering relationship
• Training to developing the necessary frame of
mind.
• Managing behavioural change
• Understanding and adoption of Project Values

5.
CASE STUDY OF PARTNERING
WORKING
• Client - Cross Keys Homes, Peterborough
• Project – 10,000 Decent Homes Improvements
in five years
• Project Value circa £70m
• Three stage tender process
• Collaborative Working of all stake holders
• Form of Contract - PPC200

6.
Cross Key Homes
• 3-6 Months of training with selected
contractors and all key stake holders
• Client led partnering process
• Collaborative working and sharing of ‘best
practice’ across entire supply chain
• Open Book accounting through top two tiers
of supply chain.

7.
Cross Keys’ – Keys to Success
• Open and Honest approach
• Integrated delivery teams
• ‘Open Book’ accounting process established
early
• Pain/Gain mechanisms achievable and easy to
apply.
• Client driven process

8.
PROPOSED INCENTIVE MODEL
Profit
%
Gain
Above
Line
Profit
% Pain
Below
Line
Estimated
Prime Cost
Target
Cost
Agreed
Maximum
Price
Contractors
Risk
Client
Risk
‘Open Book’
Costs Paid
Savings
Shared
Costs
Shared
Costs

9.
Results
• Project delivered in 3 1/2 years instead of 5
• Prelims saving in excess of £150k
• All properties meeting Decent Homes
standards inside time and budget
• Contractors achieving year on year profit
levels above agreed values (Gain share)
• Client reinvesting Gain share back into
programme.

10.
Technology That Can Assist In Partnering
• Project Management Systems (PMS) designed
to give control to all key stake holders
• Real time cost analytical tools
• 4D programme tracking models

11.
CONCLUSION
Behavioural Change