CORPS OF ENGINEER'S PERSPECTIVE ON PARTNERING
Charles R. Schroer
U.S. Army Corps of Engineers
Partnering is a term commonly used by people in the construction industry, but, like “quality,” it is not one fully understood or practiced by many. The U.S. Army Corps of Engineers recognized the benefits of partnering as early as 1988 when the Corps Mobile District entered into a partnering agreement with FRUCON, the successful bidder for the construction of Oliver Lock and Dam. The philosophy of partnering has since been fine tuned/embraced and is now a way of doing business for most Corps offices.
Why partner? What are the benefits? What does it take? Are there lessons to be learned from other experiences and what have been the actual outcome of partnering efforts are the focus of this paper.
Firm fixed price contracts competitively bid are the primary acquisition method used by federal agencies. Such process is driven by the federal acquisition regulations which preclude, except in very limited circumstances, limited competition or sole source procurement. Construction by its nature is time sensitive, weather sensitive, claims prone, etc. Over the years relationships had become adversarial to the detriment of what should be the focus of everyone's efforts—a successful project. It therefore makes good business sense to effect a change from an adversarial/litigious to cooperative and disputes avoidance mode of operation.
What Are The Benefits?
Partnering results in an overall reduction in paperwork and a reduction in resources needed to “fight battles.” It provides an environment which encourages collaborative problem solving without regard to organizational boundaries in a non-exploitive manner. Improved quality, timeliness, cost, and safety have consistently been observed and work is fun! The bottom line is owners and contractors seek win-win solutions to what before had demanded win-lose problems.
What Does It Take?
For many it takes a major cultural change from their traditional relationships to create an owner-contractor team for the mutual benefit of the parties and the project. The relationship must reflect trust, shared vision, common goals, equity (profit is good for contractor and value good for owner), open communication, and objective critique (periodic evaluation of relationship and course correction).
What It's Not?
Partnering does not create a legal partnership or legal obligation beyond that created by the basic construction contract. It is not a quick fix to a troubled contract or relationship and therefore takes commitment by the entire team from top management down along with attention to business.
The Corps include an offer, in its contract solicitation, to partner with the successful bidder. Partnering is voluntary on the part of the contractor since we believe it would be impossible to create the relationship necessary for successful partnering if the contractor is not so committed. Given that both parties agree to partner the Corps system is as follows:
Preparation—Internal partnering is a pre-requisite. The owner's (Corps') team must understand the philosophy process and be committed to the project goals.
Secure top management endorsement—Leadership in the Corps District must set the example, memorialize their commitment in writing (policy statement), and participate in key partnering activities.
Hold partnering or alignment meeting with contractor immediately after contract award. On major contracts a two or three day retreat is planned and conducted by an outside facilitator. The cost of same is equally shared by the Corps and the contractor. On more routine projects the alignment meeting can be combined with the pre-construction conference. Participants should include all of the key stake holders (e.g., customer, construction manager, architect-engineer, prime contractor, key sub-contractors and suppliers, regulators). During the meeting participants get to know the interests and personalities of their counterparts, identify roles and responsibilities, list critical issues, develop action plans, agree to disputes avoidance and alternate disputes resolution methods, develop evaluation criteria and methods, arrange for follow-up meetings, and finally create partnering charter which identifies their common vision and objectives.
Hold follow-up meetings to review performance, make adjustments, and reinforce the team relationship. Follow-up meetings are also held when key personnel changes are made.
Celebrate success holding team breakfasts, lunches, ceremonies, etc. at key milestones in project, etc.
We know that for partnering to work, the top management of all organizations must endorse it and assure such message is clearly communicated to all. In addition, other key lessons include:
Avoid complacency—some will ask the question “why partner since we've successfully constructed projects in the past without it.” The fact is even if our performance was good without partnering it can and will be even better with it.
Be alert to internal stove-pipe rivalries/turf battles. Internal partnering within the owners' and the contractors' organization is the first order of business.
Responsiveness to the others needs and interests is essential.
Risk must be assigned to the party that can best control the condition. Contract documents must be purged of exculpatory clauses used by owners and designers to shed all responsibility/liability.
The Corps has identified many success stories as the result of partnering. One example is the recently completed J-6 solid rocket test facility. This $170M hi-tech, state-of-the-art project was completed 4 months ahead of schedule, with a cost growth of 0.2 percent and an accident frequency rate of only 0.23 (industry average 6.8).
Application of Partnering To Other Business Relationships
Partnering with construction contractors has been so successful, the Corps has applied the process to its Architect-Engineer design contracts and will carry the team relationship through the construction process. The Corps has also developed long term partnering relationships with the National Society of Professional Engineers, the American Consulting Engineers Council, the Hazardous Waste Action Coalition, and the National Association of Women in Construction.
The U.S. Army Corps of Engineers has partnered with hundreds of construction contractors and in every case the contracting parties, the customer, and the project have benefitted. Success does however require commitment, sensitivity, and an all out effort to achieve the common goals agreed to at the project's inception.