Partnerships: Walking hand in hand saves time and money
A recent survey suggests that construction companies that do not offer partnering frameworks could lose out on tenders. More than a third of respondents agreed that partnering offers the best solution to ensure that budgets are not exceeded.
Construction companies that do not offer partnering frameworks will lose out on tenders according to a report published by Galliford. ‘Partnering in the construction industry,’ based on a survey of 542 senior managers and directors in both the public and private sectors, reveals that 80 per cent of companies would favour a contractor offering partnering arrangements, all other factors being equal.
Construction of a stormwater tank at Rhyl
The survey suggests that customers and their advisers do not believe that competitive tendering is delivering either the cost savings or level of quality they require. Almost 20 per cent of respondents describe the general state of their relationships with contractors as adversarial, while over 50 per cent no longer believe that competitive tendering is the only way to keep costs down.
Steve Foxcroft, director of partnering at Galliford, believes that partnering has made major advances in recent years, but he is concerned that many contractors are merely paying lip service to partnering, ignoring the fact that it will become the de facto standard in the construction industry.
“Although the majority of respondents demonstrate a strong commitment to partnering, it is clear that this working method has a long way to go before it becomes universally adopted. Contractors must not view partnering as just another competitive advantage,” warned Mr Foxcroft. “If it is to succeed, the co-operative philosophy behind partnering must be adopted throughout an organisation. This means investing time and money in establishing a framework that can be applied to a wide variety of projects.”
Galliford has already made a commitment to partnering with the development of PACT – Project Achievement through Co-operation and Teamwork – and last year Galliford’s northern division signed a five year partnership framework with Welsh Water worth £20 million on completion.
PACT is a structured framework and methodology which is designed to provide a better, more tangible approach to creating and maintaining partnering projects, enabling contractor and customer to work together towards mutual goals, setting realistic targets and sharing cost savings. It aims to remove all the worse perceptions of the construction industry, including customers’ fears of spurious cost claims.
Ultimately the system, which can be implemented at the concept, pre-tender or post-tender stage and can be applied to specific projects, longer-term agreements or strategic sourcing arrangements, promotes a better understanding of customers, their businesses and their needs.
Interest in partnering started in 1994, following Sir Michael Latham’s report ‘Constructing the team,’ when it established a set of working groups to develop the best construction business practices. Since the introduction of PACT three years ago, Galliford has completed a large number of projects using the PACT framework. “Partnering frameworks offer a real opportunity for the construction industry to re-establish credibility with the public. By their very nature they open up lines of communication between the contractor, client and suppliers and therefore facilitate a feeling of trust and openness,” explained Terry Cook, business development manager at Galliford. According to the results of the survey partnering was identified by over one third of respondents as the best way of ensuring cost control once a job is underway.
The construction of Heswell sewage treatment works was undertaken as a pilot partnering project for Welsh Water. Worth approximately £3 million, the project, which created the largest new filter beds in Wales, originally started out as a traditional tender job but by changing to a partnering project, savings of £30,000 were made, in addition to the project being within time and budget. “Savings of up to 30 per cent can be achieved which can then be invested in other projects,” explained Brian Branson, managing director of Galliford’s northern division.
Visitors to Rhyl this summer will not notice its new stormwater tank, even though at 12,500m3 it is one of the biggest stormwater tanks in the country. It was only in March 1997 when Welsh Water decided that, on the results of hydraulic analysis, the existing 6,000m3 stormwater tank required greater capacity.
Galliford’s £5.2 million contract for the construction for the tank was undertaken using the PACT principles. Reasons for this included the security of cost and the reduced time scale achieved using PACT.
“The real savings are achieved when the project is taken from design stage through to the end, said Mr Branson. “With this project we aimed to have it completed in one year. Using traditional methods for the project it was likely to be a year before we could go on site.”
Site agent Derrick Barlow agreed: “Normally on a project of this size there is a usually an 18 month lead in, in finding land and getting the project through planning and design. With partnering some of the traditional elements can be eliminated speeding up the whole process.” In this instance half the normal time.
For the first step Galliford, Welsh Water and the other participants in the project established a list of possible storm tanks for approval. The final choice was a 12,500m3 rectangular tank 100m long by 50m wide. The partnership process also allowed changes to be easily made while the project was underway. “The original plan did not include the pumping station,” said Mr Barlow. “The plan was changed to include the construction of a new pumping station and the demolition of the old station.”
The partnership survey found that within five years, over 40 per cent of respondents anticipate that at least one quarter of their construction jobs will be partnering projects.
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