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Wednesday, June 19, 2024

From partners to allies: The future of contract strategy

Gordon Wakeling, Operations Director at fit out and refurbishment specialist Overbury, discusses contract strategy


Partnering has proved to be an effective way of encouraging project teams to work more closely, but such agreements can still falter when they are needed most. Enshrining these contracts in law could be the key to turning casual partners into firm allies.


Maintaining consistent and honest communication between all parties is one of the biggest challenges of a complex project. And with so many teams involved, from cost consultants, architects and builders, it can often be difficult to get everyone pulling in the same direction. 


As such, the type of contractual arrangement chosen at the start of a project can prove to be the difference between a harmonious team and relationship breakdown. 


In it together?

Existing partnering agreements go some way in building goodwill and trust by getting a commitment from all parties to work together to improve communications and avoid disputes. 


But with a punitive approach that penalises participants for perceived defects and overruns, traditional contracts can create a blame culture within teams. By fostering an ??every man for himself?? attitude, such agreements don??t allow for positive and successful collaboration.


At Overbury we??ve responded to these challenges with a different form of partnering contract: tailored to the specific needs of fast track fit out projects, this new approach requires a legal commitment from all project parties. The Alliance Agreement also ensures disputes and issues are resolved among participants and adjudicated by an Alliance Board. 


We completed our first project under an Alliance contract at Ropemaker Place, the flagship London office of Macquarie Bank. The Alliance Board ensured every position was filled by the person best placed to deliver and teams were organised by roles within the project, not by the companies they worked for. 


A united effort was needed to meet the demanding schedule of this complex and innovative scheme. Under the Alliance Agreement, Macquarie and Overbury had joint ownership of delivery and shared the savings generated. Asking all participants to share in risk and reward equally means it??s in everyone??s interests to resolve issues as quickly as possible. The longer disagreements continue, the smaller the rewards would be for all. Despite aggressive timescales and objectives, with the safety net of a legal agreement, we successfully delivered a project based on true partnership and collaborative relationships. 


The trend for the Alliance style approach is growing and with it the building of allies


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