National Academies Press: OpenBook

Alliance Contracting—Evolving Alternative Project Delivery (2015)

Chapter: Glossary of Terms and Acronyms

« Previous: Chapter Six - Conclusions, Effective Practices, and Suggestions for Future Research
Page 62
Suggested Citation:"Glossary of Terms and Acronyms ." National Academies of Sciences, Engineering, and Medicine. 2015. Alliance Contracting—Evolving Alternative Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/22202.
×
Page 62
Page 63
Suggested Citation:"Glossary of Terms and Acronyms ." National Academies of Sciences, Engineering, and Medicine. 2015. Alliance Contracting—Evolving Alternative Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/22202.
×
Page 63

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

63 GLOSSARY OF TERMS AND ACRONYMS GLOSSARY Actual outturn cost (AOC)—“The sum of actual direct proj- ect costs and overhead and profit fees.” (ADIT 2011) Actual project cost—The sum of the contract amount plus the cost of changes authorized and agreed during the project. Alliance—“A delivery model where the owner(s), contractor(s) and consultant(s) work collaboratively as an integrated team and their commercial interests are aligned with actual proj- ect outcomes.” (ADIT 2011) Capital Improvement Program—The agency’s future work load. The state transportation improvement program (STIP) is an example. Client—The entity that owns the completed infrastructure. May be either a public or private entity. Collaborative Alliance—An alliance where work is allocated to NOPs recognizing that “[the] relative performance between delivery teams fluctuates. The system allows for poorer per- forming delivery teams to improve their performance and increase their share of work accordingly. Likewise, high- performing delivery teams must continue to improve or risk being outperformed by another delivery team and losing their share of work.” (NZTA 2012) Commercial Framework—“This sets out the structure and principles that govern the NOPs’ remuneration for the project.” (ADIT 2011) Competitive alliance—“An alliance where tenderers are selected primarily on the basis of price competition. Typi- cally two tenderers are funded by the alliance owner to develop a design, target cost, and schedule for a project. The [TOC] . . . is used for the selection of the preferred tenderer after which an alliance is entered into for the delivery of the project.” (Queensland 2008) Construction manager/general contractor (CMGC)—“. . . the contractor is selected during design and furnishes precon- struction services” (DBIA 2009). The CMGC contractor is normally selected later in the project design process than it is in ECI. Also called CM-at-Risk. Design-bid-build (DBB)—“The ‘traditional’ project deliv- ery approach where the owner commissions a designer to prepare drawings and specifications under a design ser- vices contract, and separately contracts for construction by engaging a contractor through competitive bidding or negotiation.” (DBIA 2009) Design-build (DB)—“The system of contracting under which one entity performs both architecture/engineering and construction under a single contract with the owner.” (DBIA 2009) Early Contractor Involvement (ECI)—“A two-stage relationship-style delivery model, generally structured to resemble a project alliance model during the first stage and a D&C [DB] model during the second.” (Casey and Bamford 2014) Forward Works—A program can be sub-divided into a num- ber of projects after which contractors can be selected. (VDTF 2006) Gainshare/Painshare—“. . . the profit of the parties would be reduced in the case that the Project Target Cost is exceeded and increased in the case where the actual costs are less than Project Target Cost, in accordance with agreed for- mulae.” (ACA 1999) Guaranteed maximum price (GMP)—Same as international term. However, if the owner chooses to change the scope of work the GMP will also change to match it. Incentive/Disincentive (I/D) scheme—“. . . a contract provi- sion which compensates the contractor a certain amount of money for each day identified critical work is completed ahead of schedule and assesses a deduction for each day the contractor overruns the I/D time.” (FHWA 1989) Independent Cost Estimator (ICE)—“A peer reviewer that must be independent of the organization and the proj- ect, unless otherwise formally agreed with the NZTA.” (NZTA 2012) Industry parties to the contract—Those entities that are sig- natories to the given contract and with whom privity is established with the public owner/agency. Integrated Project Delivery—“a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results, increase value to the owner, . . .” (AIA 2007) Key performance indicators (KPI)—“Jointly developed and agreed performance scores measured on a scale between -100 and +100, with zero designated as the neutral per- formance score, and +100 representing an outstanding performance outcome for a NOP. KPIs measure spe- cific and defined aspects of performance within KRAs.” (ADIT 2011) Key result area (KRA)—“A performance-related bonus or penalty payment based on actual performance outcomes achieved by the NOP, compared with pre-agreed perfor- mance targets. There are cost and non-cost KRAs; e.g., timely completion, safety, quality, environmental out- comes, community outcomes, and traffic management.” (ADIT 2011) Non-owner participants (NOP)—“Non-owner participants that form part of the direct project stakeholders who repre- sent the commercial/legal framework of the project orga- nization. Generally, the owner is a government backed enterprise and the NOPs comprise one or more private sector service provider delivering the capital works proj- ect.” (ADIT 2011)

64 ACRONYMS AND ABBREVIATIONS A2 Autobaan 2 (NL, State highway) AU$ Australian dollar (~0.93 U.S.D) ADIT Australian Department of Infrastructure and Transport AMA Auckland Motorway Alliance AOC Actual outturn cost ATC Alternative technical concepts AU Australia Austroads Association of Australian and New Zealand Road Transport and Traffic Authorities CAN Canada CII Construction Industry Institute CMGC Construction manager/general contractor CMR Construction manager-at-risk DB Design-build DBB Design-bid-build DOD Department of Defense DOT Department of transportation DPS Delivery performance score DTMR Queensland Department of Transport and Main Roads € Euro (~1.38 U.S.D) FAR Federal Acquisition Regulation GDP Gross domestic product iAA Interim alliance agreement I/D Incentive/Disincentive iPAA Interim Project Alliance Agreement IRMO Infrastructure Rebuild Management Office KPI Key performance indicator KRA Key result area MHX Manukau Harbor Crossing MCOS Minimum conditions of satisfaction MOT Ministry of Transport (CAN) NGTR Northern Gateway Toll Road NOP Non-owner participant NL Netherlands NZ New Zealand NZ$ New Zealand dollar (~0.86 U.S.D) NZTA New Zealand Transport Agency OAG Office of Auditor-General (NZ) P3 Public-private partnership PAA Project alliance agreement QBS Qualification-based selection RFP Request for proposal SCIRT Stronger Christchurch Infrastructure Rebuild Team SH1 State Highway 1 TOC Target outturn cost UK United Kingdom USACE U.S. Army Corps of Engineers VfM Value for Money VDTF Victoria Department of Treasury and Finance (Victoria, AU) WSDOT Washington State DOT Partnering—“. . . long-term agreements between companies to cooperate to an unusually high degree to achieve sepa- rate yet complementary objectives” (CII 1991). Similar to international definition but not considered a project deliv- ery method in the U.S. Performance specifications or performance criteria— Standards or goals that are established in the contract to describe the required outcomes. These are measured in qualitative terms more often than quantitative terms. They are also less formally controlled than KPIs. Procurement—The combined functions of purchasing, inven- tory control, traffic and transportation, receiving, inspec- tion, store keeping, and salvage and disposal operations. (Minnesota 2011) Project Partnering—Project delivery system that differs from project alliancing in that it is both a relationship manage- ment system and a project-delivery system but where part- nering encourages closer relationships and shared goals, alliancing mandates them. (Casey and Bamford 2014) Risk allocation—In traditional methods of project delivery, specific risks are allocated to participants who are individ- ually responsible for best managing the risk and bearing the risk outcome. (Casey and Bamford 2014) Risk management—“. . . an ongoing, continuous process of monitoring and managing all kinds of risks.” (FHWA 2012) Risk sharing in alliances—In alliancing, all the parties either benefit together or not at all; parties consent to their level of contribution and risk and jointly incur rewards or losses. This may be the most significant difference between tra- ditional contracting methods and alliance contracting. (Casey and Bamford 2014) Shared savings incentive—In projects where a GMP is used as a pricing structure, some contracts contain a clause where the owner and the contractor split any savings if the actual cost is less than the GMP. There is no known shar- ing of cost overruns in the U.S. system. Strategic or Program Alliance—“A long-term business strat- egy linking together client, contractor and supply chain. Establishment of inter-organisational relations and to engage in collaborative behaviour for a specific purpose.” (Queensland 2008) Target outturn cost (TOC)—“The agreed target cost set at the start of the project. In the project the AOC is compared with the TOC to determine cost underrun or overrun. An AOC close to the TOC demonstrates value for money.” (ADIT 2011) Value for Money (VfM)—AU—“Value-for-Money is a mea- sure of benefits (which covers quality levels, performance standards, and other policy measures such as social and environmental impacts), balanced against the price and risk exposure of achieving those benefits.” (ADIT 2011) Value for Money (VfM)—U.S.—“A project is said to have positive VfM when, relative to other procurement options, it is forecast to deliver and/or is demonstrated to have delivered the optimum combination of life-cycle costs and service quality that will meet the objectives of the project.” (VDOT 2011)

Next: References »
Alliance Contracting—Evolving Alternative Project Delivery Get This Book
×
 Alliance Contracting—Evolving Alternative Project Delivery
Buy Paperback | $55.00
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

TRB’s National Cooperative Highway Research Program (NCHRP) Synthesis 466: Alliance Contracting—Evolving Alternative Project Delivery synthesizes current practices related to the use of alliance contracts around the world, and explores the procurement procedures that have been used to successfully implement alliance contracting on typical transportation projects.

READ FREE ONLINE

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!