Partnering in Construction Part 2: Construction Partnering

Salam and dear all,

1. The following notes (abridged) are taken from Khairuddin, 2002, Construction procurement in Malaysia: Processes and systems, constraints and strategies, IIUM, Chap. 10, pp155-167.
2. The concept of 'Construction Partnering' for the PWD was developed in 1999-2000 by a Special Committee in the PWD, headed by Khairuddin (when Khairuddin was serving the PWD).

   Partnering

3. Partnering is a concept based on co-operative efforts for mutual benefits.
4. Construction Partnering is neither a form of construction procurement system nor a form of project management technique or tool.
5. Construction Partnering is more of a management approach that focuses on promoting and creating positive working relationship amongst the key players of the processes of construction procurement. It encourages teamwork and avoids dispute, enhances trust and shares goal.

   Why partnering?

6. Many past disputes and problems associated with construction procurement were attributed to barriers that exist between clients and the constructors. This is because they represent 2 distinct organizations with separate aims and objectives and each makes decisions based on their own goals and objectives.
7. In partnering, efforts are made to design for each project a problem-finding and problem-solving team comprising of members from both parties and recognizes and honours the objectives of all parties and that of the project.
8. Its key purpose is to align and unite the parties – client and constructor – with a shared goal of completing the project in a cost effective and timely manner.

   Benefits of partnering

9. The benefits may include: 1. Greater certainty of the outcome in cost and time, 2. Reduced wastage, 3. Improved communications amongst the parties, 4. Improving safety, 5. Reduced costs associated with disputes, and 6. Potential for continuous improvement.
10. The application of partnering during the construction of the Kuala Lumpur International Airport (KLIA) is said to be among the key factors that enabled the mega airport to be completed in record time.

    Elements of partnering

11. The 3 key elements of partnering are: 1. Mutual objectives (to be agreed and committed at the outset of the project), 2. Problem resolution, and 3. Continuous improvement.
12. Provisions for partnering must be incorporated into tender advertisements and into the tender and contract documents (if partnering is to be made contractual).
13. The provisions may include: 1. The intention of the parties to partner, 2. Workshops and a 'partnering charter', 3. Monitoring performance, 4. Continuous improvement, 5. Resolution of disputes, 6. Good communication, and 7. Definition of roles of key personnel in the partnering arrangement – Facilitator, Client and Contractor's representatives.
14. One of the key elements in "Construction Partnering" that was developed by the PWD then was to encourage and facilitate the contractor to propose innovation.
15. If the contractor's proposal is accepted by the government, the contractor benefits by retaining savings in costs (one-half) and other non-monetary rewards (such as earlier completion date if there is saving in time). The government benefits from value added to the work, reduced costs and earlier date of occupation.
16. Consequently, the concept calls for a partnering contractor to have special characteristics including 1. Commitment, 2. Vision (continuous improvement, dispute avoidance, etc), 3. Quality conscious, 4. Innovative and active in R & D, 5. Experienced and possess the necessary financial and technical capabilities, and 6. No or minimal record on confrontation.

    Partnering and VECP

17. In my earlier postings I said that VECP (see The Star, 8^th June 2010, pN25) and Partnering are similar. The key similarities relate to win-win situation for the government and the contractor, sharing of the money saved and that they both require contractors with the necessary qualifications (see items no 14-16 above).

    Conclusion

18. This posting pointed out the similarities between VECP and Partnering.
19. Notwithstanding whatever is the initiative called or labeled, VECP or Partnering, the effort by the Ministry of Works to reduce costs in the procurement of public sector infrastructure and facilities is commendable.
20. The aim of this blogger in publishing this and the earlier postings is simply to highlight that a similar effort has been initiated and put in place in 2000, and that it is worth a re-visit.

    Records of workshop and seminars on Partnering held by the PWD include:

    Seminar on the Concept of Partnering in the Construction Industry, JKR Kuala Lumpur, 7^th September 1999.

    Workshop, Procurement via Partnering for the Construction Industry, Melaka, 14^th-15^th October 1999.

    Seminar on the Implementation of the Concept of Partnering in JKR, Penang, 21^st March 2000.

    Seminar, Introducing the Concept of Partnering in the Construction Industry with Specific Reference to Project Based Partnering in JKR, Putrajaya, 22^nd April 2000.

Wassalam.