Page 424 - Global Project Management Handbook

20-12 MANAGEMENT OF THE PROJECT-ORIENTED COMPANY

● Alignment of project management processes
● Agreement on the performance measures and targets

There are often two or three contracting companies as part of a long-term partnering
arrangement, and this requires alignment of all of them. The client’s processes will form a
benchmark against which the others will be measured, but an enlightened client will recog-
nize the need to move some way toward the contractor’s current practices and not just insist
that they all fall in with the client’s current practices. The partnership often can form a cul-
ture of its own independent of all the participants’ cultures.

Deployment. Once the partnering arrangement is underway, several things can cause
a breakdown in the relationship, including
● A focus on short-term cost reduction
● An inability to deal with setbacks
● Lack of continuity of support and participation
● Lack of meaningful feedback
● Becoming complacent with the existing relationship
● Failure of the client to deliver his or her input, leading to lack of performance by the
contractors
In order to avoid this breakdown, the working of the partnering arrangement needs to
be monitored. The following questions can help in this process:
1. Is the process of bringing people together into the wider organization working?
2. Are processes for measuring and monitoring in place?
3. Are the leaders of the partnering arrangement taking an interest and setting aside time
to deal with specific issues?
4. Is the infrastructure managed in a way that is consistent with the partners?
5. Is an environment for learning and innovation encouraged?

COOPERATIVE WORKING WITH OTHER FORMS OF CONTRACT

Partnering arrangement are a specific form of contract to encourage cooperative working
on projects between the client and the contractor, where both can make a contribution to
reducing risk. As I said earlier, this will be the case where the risk is in both the design of
the facility or asset to be delivered by the project and in the method of its delivery. Other,
more traditional forms of contracts are appropriate on other types of projects (Turner,
2003), where either the contractor or the client alone controls the risk. However, although
more traditional forms of contracts are used, this does not mean that there needs to be a
return to the old, confrontational contractual relationships. The aim still should be to
achieve cooperative working with shared objectives. However, this will work differently,
as I shall try to explain briefly. Turner (2003) suggests that there are two dimensions to a
project contract to encourage cooperative working:
1. The ex ante incentive arrangements to incentivize the contractor to deliver the client’s
objectives, appropriately compensating the contractor for the risk he or she bears. If the
contractor bears little risk, then he or she needs little additional reward. However, if the