There are a number of project arrangements which reduce conflict. One is target cost reimbursable forms of contract. The experience of target cost reimbursable forms of contract has been that they create cooperation through the identification of common goals. The removal from the construction process of one of the most contentious aspects, the price, allows the Employer`s representatives to adopt value engineering and the quality benefits that this allows. The result is a working environment which the participants enjoy, with reduced disputes. Another process which is said to create a similar environment but is applicable to all types of contract is partnering. The aim of partnering is encourage cooperation at an early stage so as to reduce conflict and increase the overall quality of the project. It is not a particular form of contract but an attitude and a management style. It is suggested that it also requires a particular approach to disputes - corporative adjudication - to reduce the effects of disputes that do arise.

Partnering is intended to create stakeholders in the project. Whilst this concept is easily understood and implemented in the manufacturing sector, where there is repeat and continuing business, its application is less easily understood in construction projects. Such projects are essentially prototypes, with contracting arrangements that will not necessarily be repeated. Nonetheless partnering has worked in the US and Australia on major construction projects, to the satisfaction of the parties involved, and has usually involved concentrated efforts to make sure the concept is accepted and implemented by each member of the project.

Partnering starts at the top. In projects this means that the Employer must implement the concept. This does not rule out the initiative coming from the contractor, but it must be accepted and implemented by the Employer if it is to work. Ideally the Employer`s intention to encourage partnering needs to be set out in the prebid documentation. It is at this stage that the Employer will need to make clear that partnering is voluntary and to stress to management aims of the process. These aims are to create teamwork between the participants and to reduce confrontation. The management style to achieve this is to identify common goals and to use the strengths of the participants to solve problems. The purpose of the management style is to achieve an open, trusting atmosphere. The dispute resolution process is an essential part of ensuring that the trust is maintained when there are difficulties. The essence of partnering is that it allows decisions to be made and problems to be solved at the lowest level of authority and quickly passed up the management structure where resolution cannot be achieved. There are several stages involved in the partnering process.

Pre-Bid Meeting.

The starting point is for the Employer is to instigate a prebid meeting involving the senior management of interested bidders in order to set out the details. This starting point sets the style of the approach - the need for the commitment of senior management and the openness of the approach. If the process is to succeed it is vital that top management are convinced that they can trust the Employer and that the process is not one simply to deprive contractors of their rights under the contract. In order to do this the Employer needs to show that there are procedures which will allow differences and problems to be resolved, that the contractual rights of contractors will be recognised and that the process will be for the benefit of all participants not only the Employer.

Audit.

It is important for the Employer to carry out audits of possible stakeholder organisations, so that it can produce a Project Quality Plan. This is initially by questionnaire in order to establish those aspects of the organisation`s management system and particularly the quality management system which are relevant to the project. An important aspect of the audit is to establish the organisation`s contract management procedures for reducing and resolving disputes, and the procedures for dealing with claims as well as dispute resolution. This audit will help in the selection of organisations but will also introduce the concept of partnering to those organisations with no previous experience of the process. The preparation of the questionnaire should be followed by a visit by an auditor to the organisation`s premises. He will meet the senior management and decide whether the organisation`s culture will allow it to participate fully in the partnering process. Whilst the visit will be the Employer`s audit, it is important for organisations to take the opportunity seriously to meet with the auditor to establish whether the Employer understands the partnering process and whether the project objectives and procedures are consistent with the process.

Specification.

The employer`s commitment to partnering needs to be reflected in the bid documents, usually the specification. This should state that the employer will encourage partnerships between the design Consultants, Contractors and Sub-Contractors. The employer`s objectives fir this approach should be set out and in general will be effective and efficient contract performance. The requirement for an initial partnership meeting and partnership workshops should be set out. The Dispute Resolution process should be described, one approach suggested below being corporate adjudication.

Award of contract.

Following award of contract the Employer and contractor need each to appoint a partnering leader. The leaders will need to meet and arrange the first and subsequent partnering workshops. It may be that at this point a facilitator may need to be introduced to help in the process. It is suggested that the adjudicator named in the contract should assist in this process, particularly if corporate adjudication is adopted as suggested below. This allows the adjudicator to be involved at an early stage and create the confidence that is essential if the partnering process is to succeed.

Partnering Workshops.

Early in the project all those decision-making personnel from main organisations who are involved in contract management should participate in a partnering workshop. The purpose of the workshop is to encourage discussion and communication and bring about the partnership process. This involves the participants examining the problems that are likely to occur and to develop an agreed Project Mission Statement and the common objectives. Particularly important is the agreement to an issue resolution policy and process. The initial partnering workshop may conclude with a partnering agreement.

Partnering Agreements.

One mechanism for establishing the commitment of the parties to partnering is to have the parties enter into a Partnering agreement. This should record the agreement of the parties to work together as one team and with an attitude to achieve the stated common objectives. The agreement should also record the agreement of the parties to communicate and cooperate in solving problems and problem resolution procedures. These objectives may include those in Figure 1. The agreement although important as a formalization of the parties agreement is more than symbolic, it can be used to evaluate the implementation of the process.

Evaluation.

It is essential to carry out evaluations of the partnering process to ensure that the objectives agreed at the partnering workshop are being achieved. This should involve not only appraisal of performance but also the preparation of a forward action plan.

Dispute Resolution.

At some stage of any dispute, the parties have to consider realistically the likely outcome of the dispute and the acceptable settlement level. The earlier this occurs in the dispute, the more difficult it is to assess the appropriate settlement level. Developments internationally are towards the appointment of Disputes Review Boards. Usually a three man board, it is involved from the commencement of the project and is available to deal quickly with disputes. Examination of the procedures by the World bank and the FIDIC form of contract show that they follow the inquisitorial style used in civil code jurisdictions as opposed to the adversarial approach of common law jurisdictions. The inquisitorial style is more suited to early resolution of disputes, an essential part of the partnering process. One way to achieve this with the maximum flexibility is by corporate adjudication. This requires the participants to appoint a company as adjudicator. Such a company must be multi-disciplinary such as the Engineering Division of James R Knowles, with experienced engineers, delay analysts and lawyers and adjudicators. When a dispute is referred to a corporate adjudicator, the necessary factual analysis can be carried out by a suitable expert appointed from within the company, based on information presented by the parties and based on open discussions with the parties. In this way disputes on matters of fact are avoided. Legal and contractual issues are decided by the adjudicator who will have legal training and will understand the concepts of natural justice and the rules of evidence. In this way the experienced adjudicator can avoid unnecessary formalities whist at the same time ensuring that the parties feel they have been fairly heard. This is an essential element of the partnering process. The participants must have confidence that their contractual rights will be upheld. If the adjudicator can assist in creating this confidence then the participants are more likely to trust the partnering process.

 Figure 1 Possible Common Objectives