Partnering has been shown to yield significant
savings in time and cost. Longer-term strategic partnering arrangements
have been shown to yield the greatest benefits with costs savings
of up to 40 per cent.
Commitment and clear leadership by example and
involvement are required from senior management for teamworking
and partnering to succeed. Ultimately, the success of a project
comes down to people. It is the enthusiasm, commitment and desire
for a successful outcome by every individual involved in the project
that contributes to its success. Change management and behavioural
management specialists can help to accelerate the culture change
Teamworking should be a core requirement for
every element of every project. Partnering arrangements should
be adopted as far as possible on all new and existing contracts.
Partnering arrangements, whether project specific
or longer term do not replace the need for competition at the
outset of the contract. The competition should be on the basis
of value for money over the life of the facility and not on cost
alone. It will need to address each organisation's culture and
commitment to work in a collaborative manner to drive down unnecessary
costs whilst delivering the required quality.
Incentives should be included in contracts or
in partnering arrangements, to encourage designers, constructors
and/or other suppliers to provide benefits to the client significantly
beyond those contracted for (eg by using innovation or different
working practices to deliver the same or better service whilst
yielding cost savings). Incentives should not be awarded just
for doing a good job.
It is intended that the Government Construction
Clients' Panel (GCCP) Internet web site at http://www.hm-treasury.gov.uk/pub/html/gccp/
will include a library of case studies showing how incentives
and partnering have been used with the aim of encouraging continuous
7. The EC Procurement Rules
Annex AMenu of teamworking and partnering activities
1.1 This guidance explains the concept of
teamworking, partnering and incentives and describes how they
may be incorporated into works projects to improve performance
and reduce wasteful activities.
1.2 This is the fourth in a series of nine
guidance documents that translate the recommendations made in
the Efficiency Unit Report on Construction Procurement by Government
into practical proposals for implementation. It addresses the
recommendations made in the University of Bath School of Management
Agile Construction Initiative report "The Government Client
Improvement Study" (ISBN 0947819614) and the recommendations
made in the Construction Taskforce report "Rethinking Construction"
(ISBN 1 85112 0947).
1.3 Figure 1 below shows the inter relationship
of works projects guidances and illustrates how this one fits
within the structure. Reference should be made to the other documents
in the series, as necessary, rather than relying on any single
Figure 1: Structure of
guidance notes relevant to works projects
1.4 The National Audit Office and the Northern
Ireland Audit Office recognise that active management of works
contracts is essential to achieving value for money. The auditors
endorse the general principles and good practices within these
guides and might examine how such principles were applied in practice
in any future examination.
1.5 This guidance has been kept brief to
allow the key points to be identified easily. It avoids being
unnecessarily detailed or prescriptive in this rapidly developing
area. It is intended that a library of case studies showing how
the teamworking, partnering and incentives have been used in practice
will be built up on the GCCP web site.
1.6 This guidance extends the advice given
in CUP Guidance No 57 "Strategic Partnering in Government"
and No 58 "Incentivisation" specifically for works projects.
It builds on the following codes of practice and other guidance
published by the Construction Industry Board (CIB) and other bodies
and tailors them for use by government departments. The intention
is to avoid duplicating advice available elsewhere. Users may
wish to refer to the publications lists below but should always
place precedence on the advice given in this guidance:
Partnering in the teamConstruction
Industry Board (ISBN 0 7277 2551 3)
Partnering in the Public Sector,
A Toolkit for the Implementation of post award, project specific
partnering on construction projectsEuropean Construction
Institute (ISBN 1 873844 34 4)
Constructing Improvement, The Clients'
Pact with the IndustryConstruction Clients' Forum
The Seven Pillars of PartneringReading
Construction Forum (ISBN 0 7277 2690 0)
Trusting the TeamReading Construction
Forum (ISBN 0 7049 0503 5)
Partnering Arrangements Between the
Ministry of Defence and its SuppliersA Practical Guide
to Creation Agreement ManagementMinistry of Defence (E-mail
1.7 Failure to identify risks and inappropriate
allocation of risks are often cited as reasons for disputes arising
in construction projects. To assist teamworking, partnering and
incentive processes to result in a successful project, all parties
should make their risk registers and risk management plans explicit
so that everybody involved in the construction process is aware
of the risks, how they are being managed and how they are allocated.
For further information on risk management, see Procurement Guidance
No 2 "Value for Money in Construction Procurement".
1.8 Teamworking, partnering and incentives
are not soft options that create a cosy environment to work within.
They are hard-nosed management techniques that deliver the aspects
that are of value to the client by minimising or eliminating wasteful
activities not directly contributing towards those aspects of
value. They require leadership, commitment and continued involvement
from the top down.
2.1 This guidance should be read by investment
decision makers, project owners, project sponsors and project
managers as well as procurement, finance and internal audit staff
in departments involved in works projects.
2.2 The concepts contained within this guidance
should be applied to all new projects. There are also likely to
be benefits in applying the concepts to existing projects.
3.1 Ultimately the success of a project
comes down to people. It is the enthusiasm, commitment and desire
for a successful outcome by every individual involved in the project
that contributes to its success. Particular attributes required
of individuals include:
continuously searching for improvement;
actively listening to and learning
identifying what personal attributes
we each need to improve, to allow us to work better with others.
3.2 Change management and behavioural management
specialists can accelerate the process of culture change by providing
personal coaching and team coaching to help the parties work together
in the most effective manner.
3.3 Those individuals that do not have the
necessary attributes and who are unwilling or unable to change
to acquire them, can intentionally or unintentionally undermine
those that do have them and prevent a project from having a successful
3.4 When selecting project team members,
either from in-house or from external organisations, the personal
attributes of the individuals should be taken account of. Where
it appears that even with training, an individual is unlikely
to be able to work constructively as part of the team, that person
should not be selected.
3.5 To prevent confusion and the potential
for misunderstandings, the roles and responsibilities of each
individual should be clearly set down at the outset and made know
to the other members of the team.
4.1 For the purposes of this guidance, teamworking
is defined as working together as a team for the mutual benefit
of all by achieving the common goals whilst minimising wasteful
activities and duplication of effort. When problems or difficulties
are encountered, all parties should work together as a team to
overcome those problems rather than blaming each other.
4.2 Teamworking is simply common sense.
It is the starting point on which relationships with other parties
should be based and applies just as much to the internal relationships
between the members of the client's in-house project team as to
the working relationship between members of the client organisation
and those of the supply side.
4.3 Teamworking does not replace proper
and appropriate management structures and procedures. It is a
pragmatic manner of working together to find ways of delivering
the project to the required quality within budget and within programme.
It should promote greater openness and encourage earlier involvement
by the supply side.
4.4 The benefits of teamworking include
understanding each other's objectives;
use of collective brain power to
reduced numbers of personnel required
to monitor progress and prepare or counteract claims;
reduction in correspondence and thereby
reduction in duplication of effort;
elimination of "man to man"
marking (only one person should do each task and it should be
on behalf of all parties);
improved working environment where
the focus is on co-operation rather than conflict;
enhanced reputation of individual
when associated with successful projects;
reduction in litigation, arbitration
and dispute resolution and thereby unnecessary cost;
enhanced reputation of client and
supply side organisations when associated with successful projects.
4.5 A teamworking culture depends on the
commitment and effort of each individual member of the team. Teamworking
can be encouraged or enhanced by holding project specific teamworking
workshops with the team members (including members from consultants,
contractors and other suppliers) and by arranging for the team
members to undergo teambuilding training. Anybody subsequently
joining the project would attend an induction course on the project
and in particular, on the principles and workings of teamworking.
4.6 Teamworking can also be encouraged by
co-locating all the members of a project team, whether in-house
or external. Where that is not practicable, members of a team
should be connected together through the same computer network
or through the Internet or an Intranet.
4.7 Teamworking should be a core requirement
for every element of every project. The commitment of an organisation
to work constructively as part of a team could be included amongst
the stated evaluation criteria, where relevant under the EC procurement
4.8 Good clear records must be maintained
to demonstrate how the parties have worked together to reach decisions,
how best value has accrued to the department and that probity
and propriety have been maintained. It is essential to be able
to demonstrate proper accountability.
4.9 Teamwork does not develop to its full
potential until all of the parties, including individuals, have
been open about their expectations and returns, the objectives
of each are truly aligned and there is mutual benefit from the
agreed outcome. This is where teamworking moves into partnering.
4.10 The Construction Industry Board's Model
Project Pact is one of several practical tools for teambuilding
and greater collaboration at project level. Where the EC procurement
rules apply, users of such tools must ensure that the rules are
5.1 For the purposes of this guidance, partnering
extends the definition of teamworking by adding the need for a
more formal structure to be agreed by the parties which:
identifies the common goals for success;
sets out a common resolution ladder
for reaching decisions and solving problems;
identifies the targets that provide
continuous measurable improvements in performance;
sets out gain share and pain share
arrangements (incentives) where these are not included within
the formal contract.
These are normally set down in a partnering
charter which is signed by all of the individuals who are a party
to the partnering arrangement. Annex A lists a number of activities
that are commonly included in partnering arrangements. Some of
these activities are appropriate to teamworking.
5.2 The partnering arrangement and charter
do not replace the need for a formal contract. Although there
might be a number of fairly standard separate contracts between
each supplier and the client, there might be a single partnering
arrangement developed and agreed by all of the parties. A partnering
arrangement developed in this manner is more likely to be appropriate
to the specific circumstances and drawn up in a form that the
parties to it are happy to sign up to. The alternative of adopting
"off the peg" partnering arrangements to fit over each
of the more formal works contracts in a prescriptive manner is
less likely to result in success.
5.3 The resolution ladder should require
problems to be resolved and decisions reached by individuals at
the lowest possible level within the respective organisations.
It should set a time period by which a decision must be reached
at that level before the issue is moved up to individuals at the
next level in the respective organisations and so on up to the
most senior levels.
5.4 For partnering arrangements to be successful,
they need the full and visible support from very senior management
of each organisation. Partnering is not just a bolt-on extra that
delivers results through one partnering workshop. It is a continuous
process that needs sustained effort by all of the parties to deliver
measurable benefits. Partnering arrangements are likely to fail
if efforts to contribute to their success are not sustained.
5.5 An important goal of partnering is finding
ways of doing things differently by accessing the know how of
all of the people and companies involved in the project to deliver
improved performance. This requires flexibility, leadership and
significant management skills.
5.6 The parties to some of the more successful
partnering arrangements have retained an independent coach/facilitator
to help them form and then work together with the partnering arrangement.
The coach, who might be an individual or an organisation, is available
on call at all times. The coach may be reimbursed in part through
a success fee.
5.7 Two key types of partnering arrangement
strategic partnering (longer-term
partnering for agreements involving more than one project);
project specific partnering.
5.8 Strategic partnering arrangements can
be included in one or other of the following:
framework agreements (covers both
binding contracts and non-binding agreements);
contracts specifically written to
cover a number of projects.
5.9 The Reading Construction Forum report
"The Seven Pillars of Partnering" notes that Strategic
Partnering has been known to deliver cost savings of 40 per cent
and time savings of more than 50 per cent. In comparison, the
cost savings for post award project specific partnering lie in
the range 2 per cent to 10 per cent.
5.10 The greater benefits from strategic
partnering arrangements arise because the lessons learnt from
one project can be applied to further similar projects through
a process of continuous improvement. Strategic partnering arrangements
should be adopted in preference to project specific partnering
arrangements wherever possible.
5.11 An important aspect in keeping together
teams successful at delivering projects with ever increasing value
improvements, is continuity of work. This is particularly relevant
to strategic partnering. It takes considerable planning on the
client side to smooth out the peaks and troughs in work load.
5.12 Project specific partnering is described
in detail in the publication "Partnering in the public sector,
a took kit for post award project specific partnering" by
the European Construction Institute.
5.13 Project specific partnering arrangements
have been entered into successfully at various stages of construction
and even after the construction stage has been completed. Some
notable successes have been achieved by the parties to a construction
contract entering into a partnering arrangement when significant
difficulties were encountered. It should be emphasised that the
benefits of partnering will be maximised from commencing the process
at an early stage in the project.
5.14 The partnering arrangement and charter
should not create a contract or a legal partnership and should
contain an express provision making it clear that it is not intended
to be legally enforceable. The charter normally includes a statement
to the effect that the arrangement only remains operative so long
as all parties to it wish it to remain in place.
5.15 Strategic partnering is evolving at
a rapid pace and detailed guidance written here could soon become
out of date or might become unnecessarily restrictive. The Reading
Construction Forum report "The Seven Pillars of Partnering"
provides a number of case studies showing recent advances.
5.16 Strategic partnering arrangements should
be checked from time to time to ensure that they continue to provide
value for money. Such checks might include:
comparison of performance against
other contracts (total value for money of outputs and not just
initial tender price);
clear demonstration of a regular
increase in value for money from the start of the contract;
rebidding the contract after a given
5.17 It is intended that the GCCP web site
will include a library of case studies showing how strategic partnering
and project specific partnering arrangements have been used.
5.18 Irrespective of the type of partnering
relationship that the client enters into with a primary supplier
(such as the main contractor or main consultant), significant
benefits (in achieving overall value for money) can be obtained
where a primary supplier has entered into strategic partnering
arrangements with secondary suppliers (such as sub-contractors
or sub-consultants). Supply chain relationships of this type are
essential to obtain the maximum benefits from partnering.
5.19 When considering whether to enter into
a partnering arrangement with a successful bidder, it might be
appropriate to ask the organisation if there are any conditions
that they would require before entering into a partnering arrangement.
It might not be unreasonable for them to expect the client's Chief
Executive/Permanent Secretary to be personally committed to the
success of the partnering arrangement.
5.20 It is important that everybody is rewarded
when significant successes are achieved. This does not necessarily
involve financial rewards but should include the public acknowledgement
6.1 Incentives should encourage the parties
to work together to eliminate wasteful activities that do not
add value to the client and to identify and implement process
improvements, alternative designs, working methods and other activities
that result in added value. CUP Guidance No 58 "Incentivisation"
was written for service contracts but much of its content is relevant
to works projects.
6.2 Incentives should not be given merely
for doing a good job (ie meeting the contractual requirements)
nor should they be made for improvements in performance that are
of no value to the client (eg for completing a building contract
three months early when the client is still committed to paying
rent, rates and other charges on the existing premises).
6.3 For every contract or partnering agreement
for consultancy and construction work, consideration should be
give to how incentive arrangements will deliver greater value
for money. The presumption should be that incentives will be included
unless there are exceptional circumstances where it is clearly
apparent that they are not appropriate. It is intended that the
GCCP web site will include a library of case studies showing how
incentive arrangements have been used.
6.4 Incentives can be built into the binding
contract or into the non-binding partnering arrangements. Some
of the greatest improvements have occurred where they were incorporated
within the partnering arrangement.
6.5 Incentives should be arranged as far
as possible so that the party (eg sub-contractor or sub-consultant)
primarily responsible for significant improvements in performance,
is rewarded accordingly rather than the main contractor or main
6.6 Performance targets on which incentives
are based must be measurable. Departments will need to weigh up
the benefits of proposed improvements, exercising appropriate
judgement before agreeing to them. Quality must not suffer as
a result of accepting proposed improvements.
7. THE EC PROCUREMENT
7.1 The EC procurement rules must be complied
with. For further information on them please refer to:
Procurement Guidance No 3 "Appointment
of Consultants and Contractors".
CUP Guidance 51 "Introduction
to the EC Procurement Rules".
CUP Guidance 57 "Strategic Partnering
CUP Guidance 58 "Incentivisation".
Your legal adviser for an interpretation
of the rules.
The Procurement Policy team at HM
Treasury on 0207 270 1651.