Payne Hackenbracht & Sullivan
Partnering
PARTNERING
The following information is taken from Corps of Engineers Pamphlet IWR 91-ADR-P-4.
What Concerns Are There About Partnering?
This pamphlet describes the concepts and implementation of an innovative new program, Partnering, designed to create a positive, disputes-prevention atmosphere during contract performance. Partnering uses team-building activities to help define common goals, improve communication, and foster a problem-solving attitude among a group of individuals who must work together throughout contract performance. While Partnering can be used to improve all kinds of working relationships within the Corps of Engineers, this pamphlet will concentrate on owner/contractor relations in construction contracts.
A central objective of Partnering is to encourage contracting parties to change from their traditional adversarial relationships to a more cooperative, team-based approach and to prevent disputes. The Partnering concept, therefore, is significant because it offers the most efficient form of dispute resolution: dispute prevention. Indeed, the benefits of successful owner/contractor relations go beyond preventing disputes and include improved communication, increased quality and efficiency, on-time performance, improved long-term relationships, and a fair profit and prompt payment for the contractor.
What is Partnering?
How many times have you reached the end of a construction project only to be faced with a number of unresolved conflicts, many of them in litigation? As an alternative to litigation, ADR offers techniques for resolving conflicts, but why wait? There is a way to prevent these conflicts during construction by establishing a partnering relationship between the owner and the contractor. Partnering lays the foundation for better working relations on a project including better dispute resolution. By taking steps before construction begins to change the adversarial mindset, to recognize common interests, and to establish an atmosphere of trust an candor in communications, Partnering helps develop a cooperative management team. This team has the ability to appreciate the roles and responsibilities each will have in carrying out the project.
Partnering is the creation of an owner-contractor relationship that promotes achievement of mutually beneficial goals. It involves an agreement in principle to share the risks involved in completing the project, and to establish and promote a nurturing partnership environment. Partnering is not a contractual agreement, however, nor does it create any legally enforceable rights or duties. Rather, Partnering seeks to create a new cooperative attitude in completing government contracts. To create this attitude, each party must seek to understand the goals, objectives, and needs of the other - their "win" situation - and seek ways that these objective can overlap.
Why Use Partnering?
From the beginning of a typical construction project, the structure of the relationship promotes an adversarial attitude between the parties. There are two distinct management teams, each making independent decisions with the intent of reaching their own goals for the project. These decisions directly affect the path each party chooses to achieve its goals - but they are often made in a vacuum, without regard for the other party's interests and expectations. Communication may be limited - or non-existent! Conflicts are inevitable as paths diverge and expectations are not met. The worst stereotypes of the other side are remembered, and they seem to block the way to our goals. An adversarial management style takes over and the goals each party had for the project get lost in preparation for litigation. The stage is set for future conflict and, often, litigation.
It's as if two people are planning to travel together to a common destination, but each has his own map and refuses to show it to his traveling companion!
The bottom line is clear: The adversarial management relationship jeopardizes the ability of either side to realize it expectations. The result is increased costs for the taxpayer and declining profit margins for the contractor. This is truly a lose-lose outcome for all.
Both parties have recognized that there needs to be a better way of doing business. Efficiency and productivity must be increased. Neither the government nor contractors can afford the costly posturing that the present adversarial climate promotes. Partnering offers the chance to change from an adversarial style to a more cooperative, synergistic relationship that takes full advantage of the strengths of all team members.
Perhaps it was best summed up by Daniel Burns, Chief, Construction-Operations Division, North Pacific Division: "The end result [of current 'adversary management'] is a continuing upward spiral of risk and cost: risk of the contractor going broke, risk of projects taking much longer than necessary for completion, and risk of significant cost overruns. These costs do not go to productive facilities, but instead to overhead, litigation, and contesting experts. Partnering seemed to offer the opportunity of harnessing the capabilities, talents, and positive energies of both owner and contractor groups and focusing them on mutually agreed-upon goals. It offered the opportunity for all parties to change preconceived attitudes in order for both to win in the long run."
How Does Partnering Work?
Partnering creates a climate for success by building a cooperative management team dedicated to a win-win atmosphere. To do this, the members of the team must undergo a change in mindset and discover how it is in their best interest to cooperate. The concepts of principled negotiation, where solutions are sought that serve the fundamental interests of both negotiating parties, are introduced.
There are three basic steps involved in establishing the Partnering relationship. Since Partnering is an attitude change aimed at building a new relationship, it is important as a first step to establish the new relationship through personal contact. Success in a Partnering arrangement depends on the personal commitment of the management team. This commitment is built through personal relationships that must be formed early and reinforced throughout the project. The second step in Partnering is crafting a joint statement of the goals and establishing common objectives in specific detail for reaching the goals. Achieving these intermediate objectives will lead to success for both the owner and the contractor. Finally, Partnering identifies specific disputes prevention processes designed to head off problems, evaluate performance, and promote cooperation.
Although these basic steps create the Partnering relationship, teamwork is essential to instill the Partnering spirit. Through a series of joint workshops, guided by facilitators, partnering builds team spirit. The emphasis in the workshops is on identifying shared interests and focusing on cooperative effort.
There are other factors to consider in establishing a Partnering relationship. Here's a list of some of the considerations:
Prepare early for partnering;
Secure top management support and commitment to Partnering
Identify Partnering "champions;"
Choose participants for the Partnering workshop;
Select neutral facilitators for the Partnering workshop;
Conduct the joint workshop
Create a Partnering Charter;
Arrange regular follow-up sessions;
Plan combined activities.
Establishing cooperative processes for evaluating progress and solving problems is another feature of successful Partnering. Evaluation mechanisms should be specific in measuring the achievement of the objectives that will make the project a success. A system for problem-solving, which will provide for expedited decisions, should be established.
Another essential feature of Partnering is committed people. Partnering needs "champions" at a high management level, and other champions throughout the organization who are willing to take risks, use professional judgment, and make management decisions in a new cooperative environment. Partnering is people who believe in cooperation, rather than confrontation, as the most effective and efficient way to achieve their goals.
How Do We Know It's Working?
When Partnering is working, old adversarial patterns change and a new spirit pervades the working relationship. This new spirit has many indicators. Look for these signs of successful Partnering.
Sharing - The Partners share a common set of goals.
Clear Expectations - Each partner's expectations are clearly stated, upfront, and provide the basis for working together.
Trust and Confidence - Partners actions are consistent and predictable. Trust is earned when one's actions are consistent with one's words. We must "walk the talk."
Commitment - Each partner must be willing to make a real commitment to participate in the partnership.
Responsibility - Responsibility is recognizing and accepting the consequences of our choices. Partners are accountable to each other and should agree up front on measures for mutual accountability.
Courage - Partners have the courage to forthrightly confront and resolve conflict.
Understanding and Respect - Partners understand and respect each other's responsibilities, authorities, expectations and boundaries, as well as any honest differences between them.
Synergy - The partnership is more than the sum of the individual partners. The relationship is more powerful than any of the partners working alone because it is based on the collective resources of the partners.
Excellence - Partners expect excellence from each other and give excellence in return.
These are the positive indicators of a successful Partnering effort. If you look closely at the list again, it's clear that most of these indicators are based on the ability of the partners to communicate and solve problems.
What Concerns Are There About Partnering?
Some people have expressed a concern that Partnering may place the owner and the contractor "too close," and that there is a need for distance between the parties to maintain objectivity and proper oversight. Unfortunately, this adversarial attitude leads to some very expensive and counterproductive actions. Not only is the climate of trust and communication hindered, but distance between the parties can allow room for an expensive "wall of paper" to rise between the parties. Documents are exchanged to begin building a case for litigation.
Another concern is the view that contract requirements will be relaxed in the interest of Partnering. This concern, however, is based on a misconception about the nature of Partnering. Partnering does not mean that the public interest takes a back seat to the interests of the parties. All federal procurement laws and regulations must be complied with by the parties. But this does not mean that the government and the contractor have to avoid cooperation to comply with laws and regulations. In a Partnering relationship, the contractor should understand and appreciate government regulatory requirements; and the government should understand and appreciate the contractor's expectations.
Some individuals have said that Partnering is all relationships and no substance, that the benefits are intangible and not worth the extra effort and expense. Experience has shown others that there are benefits, both tangible as well as intangible. And the expense is not great, even where a facilitated initial workshop and follow-up sessions are used. Costs are shared by the government and the contractor.
Perhaps the most telling comment, however, may be that no matter what the tangible advantages, Partnering represents the fair way of doing business. One Corps manager wrote: "I have field employees who say it's a pleasure to come to work and not be afraid to advise the contractor of any perceived problem and be proud of working on the project as a team member."
PARTNERING PROCESS
A successful Partnering program starts with an understanding of the important elements of the process and careful planning of each step. Essentially, the important elements are 1) early preparation, 2) management commitment to the concept, 3) a joint workshop, 4) a team charter, and 5) follow-up meetings and evaluation processes. These elements are more fully described below.
Early Preparation
Introduce the Concept to Bidders
After an internal commitment has been made to use Partnering in a contract, the Corps should state its intent to use the concept in its solicitation for bids. This will introduce the concept to the bidders. Points to be stressed are that Partnering is a voluntary relationship designed to improve cooperation and communications during construction.
Possible wording for a general statement of intent to use Partnering is found in Appendix A.
Management Commitment
Secure Top Management Support and Commitment
Partnering requires a personal commitment between contracting parties to accept a new relationship and a senior management decision to commit resources to the effort. Top management of both the Corps and the contractor must be supportive.
Visible top management commitment sends the vital message that Partnering is acceptable and will be supported. Management support, instilling enthusiasm and overcoming obstacles, empowers people to act. Top managers can most visibly show their support by attending the Partnering workshop and introducing the concept in person.
A Partnering program can be implemented without a huge commitment of resources. The additional costs (for the workshop and facilitators) are relatively small and are shared by the parties. There is a commitment of management time, and there must be a willingness to "go the extra mile" for the benefit of the team.
Identifying Partnering "Champions" for the Project
Partnering needs "champions" to foster the new relationship. There are two kinds of champions that an effective Partnering program needs: a top management champion who will instill the Partnering ethic within the organization, and a "managing partner" champion who will carry out the nurturing of the Partnering relationship throughout the course of the contract. Top management support is vitally important to provide the favorable environment for Partnering to grow. Operational level champions for Partnering are important in the day-to-day managing of the process by providing administrative and logistical support, encouraging communication, and promoting problem-solving. The Resident Engineer is the natural choice for operational level champion.
The Joint Partnering Workshop
Choose Participants for the Partnering Workshop
A Partnering workshop is the starting point for the new relationship. The participants in the Partnering workshop should be key stakeholders in the success of the project. On construction projects, the Corps Area or Resident Engineer, the contractor project manager, and their principal assistants are key stakeholders. The personal involvement of key stakeholders is vitally important. Other considerations for the Partnering workshop are the size and complexity of the project, since these factors will control the number and specialties of participants at the workshop. Also consider including Corps District and home office personnel.
In large projects, before the Partnering workshop, the Resident Engineer and the Project Manager may attend a training center that specializes in principle-centered leadership training. This is an opportunity for these two key leaders to establish a respectful, trusting relationship and plan for the Partnering workshop.
Select Neutral Facilitators for the Workshop
Partnering depends on developing relationships and committing to cooperation toward common goals. The change in mindset from the adversarial to the cooperative does not come automatically, simply by talking about it. An effective way to develop this new attitude is to use a neutral facilitator to guide the workshop.
A neutral facilitator is a third party who manages the process of the workshop and who can guide the participants to discover for themselves the benefits of cooperative action. Professional facilitators provide expertise in organizational development, communications, group dynamics, and team building. As an outsider, the facilitator can devote attention to guiding the workshop in developing the Partnering structure. Because the facilitator has no association with either party, the impartial status allows the facilitator to be the focus of comments or criticism from one side to the other without the resentment or conflict that may be the result of a direct confrontation.
A facilitated workshop is recommended for larger projects. However, it may not always be possible to employ a professional facilitator. As an alternative, consider a facilitator from another District to serve at the Partnering workshop. Remember it is important that the facilitator should not be directly or indirectly involved in the project. The parties should develop their own goals with the impartial facilitator assisting.
Conduct the Workshop
The Partnering workshop helps participants establish open communications, develop a team spirit, set long range Partnering goals for the project, and gain commitment to the implementation plan. A combination of group activities, lectures, and experiential learning exercises has been effective in helping groups reach these goals in the workshop setting.
Suggestions for a successful Partnering workshop include conducting the workshop as soon as possible after contract award; scheduling the workshop for several days since new working relationships take time to develop; using a locating away from the office or project site to allow participants the chance to get away from their daily duties and concentrate on Partnering.
The Partnering workshop should mold a single-minded joint management team for the project. To build an effective team, the workshop must strengthen the ability of the participants to communicate as a team. Team members must also develop and practice the skills and attitudes required of teamwork. At the workshop, one of the important activities will be to learn from the past and create for the future. This involves an honest evaluation of the strengths and weaknesses of past experiences and the strengths and weaknesses of the project team. The team then makes a group decision about positive strategies.
Since no project can be completed without the need to solve problems and resolve conflicts, conflict management and problem-solving skills should be a part of the workshop as well. The team must develop a problem-solving strategy that enables managers to address problems quickly and efficiently. "No action" on a problem is not an option! Problems that are not addressed sow the seeds of discord and division for the team. Expedited negotiations and alternative dispute resolution (ADR) techniques offer methods for successful resolution of problems.
The Partnering Charter
Define Goals and Objectives
At the conclusion of the Partnering workshop, the parties need to create a blueprint for their new relationship, which can be summed up in a Charter. The Partnering Charter defines the long-term goals and objectives for the project. This is a win-win charter. It is a collaborative effort written at the workshop by all participants and therefore includes the overlapping goals of the project team. Common goals are: a quality project carried out safely, in a timely and cost effective manner. To achieve these goals, the team must transform them into concrete objectives and action items which can be measured at follow-up sessions. If all the goals and objectives are achieved, both contracting parties will win.
The Partnering Charter should include objectives that will provide measurable milestones for success on the project. These objectives should be specific and should be the framework for a Partnering implementation plan. As an example, the following is a list of some project objectives:
- meet the design intent;
- encourage a maximum amount of value engineering savings;
- limit cost growth;
- cause no impact to follow-on projects;
- lose no time due to job-related injuries;
- encourage a fair sharing of contract risks;
- use ADR methods;
- avoid litigation;
- finish ahead of schedule;
- include an implementation plan.
The implementation plan fills out these objectives by including measurable details. For example, the implementation plan can call for a specific number of value engineering submittals or a target dollar amount of savings; a specified cost growth percentage; or a joint safety awareness program. These are just a few examples of how specifics can be added to the objectives to make them part of a viable plan for ensuring project success.
Follow-up Meetings and Evaluation
Arrange Regular Follow-up Meetings
The importance of following up on the initial Partnering workshop cannot be stressed enough. The lessons of Partnering need continued reinforcing so they do not fade with time or under the stress of the job. On-going evaluation of Partnering goals and objectives is essential. The best method is to conduct regularly scheduled follow-up sessions between the key leaders.
Develop Evaluation Processes
To evaluate performance, successful Partnering efforts have included a jointly developed evaluation form. The evaluation form assigns weights to the Partnering objectives relative to the overall project. Ratings are determined for each evaluation period, and then compared to an agreed-upon standard. Corps and contractor leaders jointly rate performance. The result is a numerical score as well as a narrative evaluation. Such an evaluation can be the focus for a team meeting where problems are addressed and the values of partnership are encouraged and reinforced. Evaluation is important for good management of a project and encouragement of Partnering values.
Plan Combined Activities
There are other ways to advance the Partnering relationship through combined activities. Follow-up workshops could be scheduled to nurture the lessons and skills of Partnering. Debriefing sessions following significant milestones in the project could be the occasion for review of achievement. Awards ceremonies jointly conducted could recognize and reinforce cooperative effort. Professional development programs such as lectures, workshops, and breakfast seminars could be scheduled to emphasize job skills as well as team work.
Partnering relies on identifying and working cooperatively to achieve a jointly-defined set of goals and objectives for a project. These guiding principles are embodied in a written document drafted at the partnering workshop. This is one of the most important products of the workshop. Sometimes called a Partnering Agreement, a Partnering Charter, or a Mission Statement, it is signed by the key people who attend the Partnering workshop. It then becomes the touchstone for reinforcing cooperative relationships and the basis for evaluating the success of the Partnering team.
What follows are two examples of Partnering Charters. One is a broadly-worded statement of principles followed by a list of goals; the other is a statement which includes a series of measures for success in the text. These examples are not intended to be "forms" to be filled out and should not be used verbatim at any Partnering workshop. They are a suggestion of some of the subjects that might be considered by the people at the workshop when they draft their own Charter.
Statement with Goals Listed
Partnering Charter
We, (the organization), the partners in the construction of (project name), are a trusting and cooperative team, committed to quality work, safety, on-time delivery, within budget so that all are proud to contribute.
Complete the project so that it meets the design intent.
Complete the project without litigation.
Achieve Value Engineering savings of $ __________.
Control cost growth to less than __________ :.
Finish the project __________ days ahead of schedule.
Suffer no lost time injuries by promoting a safe job site.
Ensure fair treatment for all parties.
Solve problems at the first opportunity, at the lowest possible management level.
Use Alternative Dispute Resolution (ADR) if needed to aid problem solving.
(Other objectives as defined by the parties at the Partnering workshop.)
Statement and Goals Combined
Partnering Charter
Our Charter for success in construction of (project name) is our commitment to work cooperatively and in harmony and to communicate openly in an atmosphere of confidence and trust. We will work as a team to build action plans, to break down communication barriers, resolve conflicts at the lowest possible level, to streamline the paperwork process, and build a team spirit to achieve maximum success for all: a quality project, a safe job site, on time completion, within budget with a fair profit for the contractor.