Alliancing Thriving Post Recession

In the second part of her article on alliancing Cecily Davis examines some of the legal and cultural obstacles to its successful spread in construction. The thirst for this more collaborative way of working is strongly in evidence, she argues, despite a recent rise in disputes.

KEY POINTS

An increasing willingness to pursue relationship contracting or alliancing is evident What stunted the growth of alliancing in the UK - cultural or structural issues Heathrow T5 is now used as a learning piece by many academic institutions The Cardiff Bay fiasco is very largely recognised as being the beginning of the end of non-contractual partnering For alliancing to work, the parties must accept a no dispute concept June 2015 The end of the Great Recession has not been without difficulty for the construction industry. One curious but perhaps unsurprising side effect of recovery is that there would seem to be a return to the dispute feast that had been rested when money was in shorter supply. Those under bid contracts and over ambitious programmes have, indeed, come back to bite both employers and adjudication continues to power on. It seems fanciful then to suggest that against the backdrop of a renaissance in construction disputes there rests an increasing willingness to pursue relationship contracting or alliancing but, nonetheless, this would appear to be the case.

Alliancing as described by the European Construction Institute is a form of longer term partnership on a project in which a financial incentive scheme links the rewards of each alliance member to agreed overall objectives. A project alliance operates very differently to a traditional contractual structure and offers flexibility and adaptability.

In Australia something like a third of public sector projects are procured using alliancing as their base. This is a significant proportion and way in excess of that to which the UK is able to point. The interesting question of our time might well be what stunted the growth of alliancing in the UK and, if we believe that it can offer advantages to both public and private sector procurements, what can we do to encourage its use. Is our underlying reticence towards alliancing cultural or structural?

It is well understood and also well documented that the oil and gas industries, with BP at their forefront, used alliancing as the preferred route for procuring the delivery of North Sea oil. Testament to the success of the procurement method must be that the company has introduced it to other sizeable projects such as the Grangemouth refinery petrochemical construction project. The project had a value of over £500 million and was the first system successfully to produce higher grade synthesised ethanol.

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