Implementing relational contracting in a public client organization: the influence of policy clashes, resources and project autonomy

Relational contracting models are increasingly being used for large and complex public infrastructure construction projects, but both practices and outcomes still widely vary. When analyzing the causes of failures and successes, most studies have focused on practices at the project level. In this paper, we add to the current understanding of relational contracting in public construction by examining the influence of factors at the organizational and institutional levels. We develop a framework based on theories of policy implementation and analyze two projects piloting a new Early Contractor Involvement model in a large public infrastructure client organization. In this case, a previous marketization policy, prescribing low client involvement in project processes, interfered with the relational contracting policy. This policy clash was not openly acknowledged from the start, despite causing significant confusion and frustration at the project level, but became recognizable largely through its consequences for resource allocation and managerial attention. We conclude that policy ambiguities, combined with a project-based implementation context, produce local interpretations and variations in relational contracting models. When project autonomy is high, industry-level agreements, standards and resources are important to align practices also between projects within the same client organization

Samverkan och kunskapsintegration i vårdbyggande - en studie av Tehuset

I byggprojekt där det finns ett behov av ett närmare samarbete mellan olika kompetenser hos beställare, projektörer och entreprenörer blir det allt vanligare att använda uttalad partnering. Då ingår ofta särskilda åtgärders för att bygga relationer, nya mötesformer och system för att kontinuerligt utvärdera och förbättra samarbetet. Man talar ofta om betydelsen av förtroende mellan olika parter för att lyckas, men det är heller inte självklart hur ett samarbete som involverar många olika deltagare från olika företag rent praktiskt skall organiseras. I den här rapporten beskrivs och analyseras samarbetsformerna i Tehusprojektet, en vårdbyggnad vid Södra Älvsborgs sjukhus i Borås. Två frågor behandlas i rapporten: 1. På vilket sätt har partneringprocesserna påverkat projektgenomförande och resultat i Tehuset? 2. Vilka aspekter behöver man fokusera i utvecklingen av bredare partneringsamarbeten som involverar även konsulter och entreprenörer? Studien baseras på intervjuer med representanter för sjukhuset, beställaren, arkitekten, VVS-projektören, byggentreprenören och ventilationsentreprenören. Bakgrunden till att välja ett partneringkoncept för Tehuset var att sjukhuset ville ha en byggnad som var modern och verksamhetsanpassad vid inflyttningen, optimerad för att uppnå lägsta livscykelkostnad för vårdverksamheten och byggnadsdriften samt uppfyllde höga krav på energihushållning. Med partnering kunde man uppnå både en ökad integration av olika kompetenser och möjlighet att anpassa lösningar till utvecklingen inom sjukhusteknik och SÄS organisation långt fram i byggprocessen. Sjukhuset och beställaren Västfastigheter är mycket nöjda med resultatet: man tycker att man har fått en fått en mer anpassad byggnad med betydligt högre kvalitet. Alla intervjuade uppfattar samarbetet som mycket bra, och de relationsbyggande åtgärderna i form av bland annat workshops, partneringdeklaration och tillhörande bonussystem har haft stor betydelse, liksom det faktum att man haft öppna böcker. När det gäller utvecklingsbehov är en övergripande slutsats att när antalet medverkande ökar så blir det också en större utmaning att förena relationsutveckling med effektiva processer. I studien finns flera exempel på att det uppstår en balansproblematik där det gäller att hitta en rimlig avvägning mellan olika mål. En lösning kan vara att arbeta mer medvetet med att integrera relationsutveckling i projektets kärnprocesser. Exempelvis har även andra möten än workshops en relationsbyggande roll, och en bred delaktighet i planering och utvärdering av processupplägg kan utnyttjas för att minska behovet av direkt deltagande i själva processerna. Centralt är att planera de tidiga skedena med projekteringssamverkan noga, så att inte viktiga och komplexa beslut hämmas av att relationerna i gruppen inte kommit så långt att de klarar konflikter. Det finns också anledning att utveckla samarbetet mellan partneringledare och projektledning

Client-Contractor Relationships in Building Projects: Co-Operation, Conflict and Social Influence

The division of responsibility in the client-contractor relationship and the formal contractual arrangements has long been a question of considerable debate and concern, in the Swedish construction industry as well as in construction management research.<p /> Due to uncertainty and incomplete contractual documents, many negotia-tions continue between the parties during the contract period. These negotia-tions are often performed by the client's and contractor's repre-sentatives on the construction site. The aim of this thesis is to gain an increased understanding of informal aspects of the client-contractor relation-ship and of the role of the client during the contract period. The discussion is based on two case studies of the interaction between the parties during the production phase of building projects. The focus is on the individuals who participate in the decision making, and an ethnographic, interpretative approach is used. Theories of human decision making and social influence form the basis of the analysis.<p /> As there is a great need for joint problem-solving during the execution of the work, it is important to the parties that the relations between the interacting individuals are kept co-operative, and that perceptions of unfair-ness are avoided. A main finding is that the contractor has a naturally strong informal position. In part, this is due to intuitive norms of justice, according to which it is considered unfair that a seller makes a loss. Also, the contractor's organization involves many people, while the client's representative often works autonomously in close contact with the contractors. This can explain why contractors often prefer informal decision making and communication.<p /> Clients tend to improve their position by organizing the interaction so that the contractors' informal power is neutralized.<p /> Conceptions formed on the industry level are important determinants of informal power relations. This is because perceptions of fairness are social constructs, and are influenced by explanations as well as by expectations. Publicly expressed conflicts and antagonistic attitudes should, therefore, be viewed as ways of promoting interests without harming relations on the project level. An improved understanding of informal aspects of client-contractor relationships, thus, suggests novel explanations of general cultural aspects of the construction industry

Supply-chain collective action towards zero CO2 emissions in infrastructure construction: Mapping barriers and opportunities

Successful decarbonisation of the supply chains for buildings and infrastructure, including the production of basic materials, will involve the pursuit - in parallel - of measures to ensure circularity of material flows, measures to improve material efficiency, and to radically reduce CO2 emissions from basic materials production. Emphasis in this work has been on how “intangible” factors such as implicit or explicit constraints within organisations, inadequate communication between actors in the supply chain, overly conservative norms or lack of information, hinder the realisation of the current carbon mitigation potential. Although this work draw primarily from experiences in Sweden and other developed economies we believe the focus on innovations in the policy arena and efforts to develop new ways of co-operating, coordinating and sharing information between actors (SDG17) and on practices and processes that could enable more sustainable resource use in infrastructure construction may be of relevance also elsewhere. Not the least, since there are still many regions of the world where much of the infrastructure to provide basic services remains to be built (SDG6-7, SDG9, SDG11) a challenge that must be handled in parallel with efforts to reduce/erase the climate impact from infrastructure construction (in line with the Paris Agreement and SDG13)

Public procurement for carbon reduction in infrastructure projects - An international overview

Carbon emissions emanating from infrastructure construction projects are substantial and stem primarily from production of construction materials and use of energy for construction transport and site activities. In recent years, public infrastructure clients world-wide have begun to include carbon reduction goals in their procurement requirements. This is however a new and complex field where practices vary and are still developing. In this paper, we compare models for carbon reduction requirements in infrastructure construction projects based on case studies of large projects in Australia, USA, the Netherlands, Sweden and UK. We found that open, functional carbon reduction requirements were considered innovative but entailed costs for calculating baselines and risks for speculation. Also, high time pressure in projects limits contractors\u27 opportunities to explore reduction opportunities. Thus, specific, prescriptive requirements may play an important role in client-led, long-term innovation processes. Organizational competence and resources on the buyer side are essential, and policies for carbon reduction should aim to increase client capacity. Further, procurement practices are developed in mutual interaction between clients and suppliers over longer periods of time, which limits possibilities to transfer procurement policies and requirements between contexts

Procurement research: Current state and future challenges in the Nordic countries

Purpose - The purpose of the study is to map previous and current construction procurement research to further develop the research in the Nordic counties. Design/Methodology/Approach - Mapping of previous and current research based on search in national database. The analysis is based on research perspectives, empirical contexts and research methods. Findings - That the blind spots are partly overlapping, but that there is potential for knowledge transfer in some areas. There is also the potential for a Nordic research program on one or several of the blind spots. Research Limitations/Implications - The study is limited to PhD and licentiate-thesis reports in Norway and Sweden. Further research should include the other Nordic countries and a more extensive literature review including journal articles to broaden the scope. Findings have implications on collaborative Nordic research initiatives, knowledge transfer and in a longer perspective on the level of procurement knowledge in industry and society. Practical Implications - Findings provide a base for future research collaborations, initiatives and applications. Originality/Value - Findings provide a comprehensive understanding of construction procurement research in the Nordic countries, starting with Norway and Sweden. This understanding is needed for developing research collaborations and applications

ORGANIZING COLLABORATION IN CONSTRUCTION PROJECTS – FORMAL

There is a call for new project management approaches that are able to deal with increased flexibility and put people aspects more in focus. In construction projects, formal models for relationship management are increasingly being used. Based on a case study of a Swedish hospital partnering project, this paper discusses how project managers approach this new challenge of integrating systems for relationship management with core project processes, and if the partnering systems are effective in supporting collaboration and knowledge integration in a multiparty partnering environment. The findings indicate that partnering processes influence project processes in a favourable way, but that project managers also rely strongly on their personal experience in managing collaborative processes. The practices they introduce are often successful, but also tend to be patchy and related to collaboration problems in traditional contracts. The formal partnering processes, on the other hand, seem to be important in providing a basic structure for collaboration and to communicate collaborative intents, but are too general and infrequent to address more specific and pressing problems of process design and organization. Bringing in professional behavioural knowledge may be needed to achieve a more consistent and adequate relationship management that makes use of both formal partnering processes and core project processes

Trust and Contract in Facilities Management

Both public authorities and private companies increasingly outsource facilities management services to external suppliers. A new service industry with its own culture and contracting practices is developing. This study discusses factors that influence trust and relationship culture in the Swedish FM sector. A multilevel perspective is taken, so that processes on institutional and market levels are discussed in relation to contract principles and management as well as interpersonal relations. The study is based on a review of FM literature and interviews with leading clients, consultants and service providers. The findings are analysed using general theories on sources of trust and the relationship between trust and contract. A general background on the development of FM is included, and the empirical section outlines views on trends, market structure, contract models, procurement, contract relationships and management, differences between clients, etc. The discussion focuses more specifically on trust issues. It is concluded that while industry level efforts to develop standard contract and create trust in contracting out FM services have been successful, contracting practice is slower to harmonize because of the influx of first time clients. Although there does not seem to be a straightforward relation between contract design and relationship quality, it was found that detailed service specifications and active monitoring may support both learning and trust since they entail mutual understanding and focused discussions. Less extensive contracts may, paradoxically, result in less innovation because of lower client and supplier engagement. This risk is higher when FM services are perceived as support services compared to when they are seen as strategic service relations. Further, it is concluded that since relational trust develops between client employees and supplier employees who interact closely, services need different kinds of management depending on the interaction patterns they entail. Typically, low level interaction relations such as technical property services may need a focus on fostering trust, while soft services call for formalization and distance