Construction partnering is a unique type of company partnering normally used in the construction, engineering and architecture industry. Partnering is designed to help project teams meet objectives, resolving conflicts and enhancing project results. However, many companies believe that construction partnering is a risky venture for a number of reasons. In this article, I will share with you some of the pros and cons involved in construction partnering to help you decide if it is right for your business.
The benefits of construction partnering are many and primarily include an increase in business opportunities, lower costs and a streamlined time line. Partnering allows construction companies to hire new contractors on a contractual basis, rather than hiring each individual contractor on their own construction staff. Contractor recruitment can be a lengthy and often complicated process, making long term contracts a key benefit to construction partnering. An effective contractor and construction partnering agreement should reduce or eliminate the need to re-hire contractors during the course of a project. It is also beneficial to any business looking to expand their range of services by allowing existing contractors to expand into new areas or specialise within existing markets.
A key disadvantage of construction partnering agreements is that they do not offer effective dispute prevention mechanisms. Agreements are typically written between the construction company and each potential contractor, providing little if any opportunity for the contractors to dispute anything in the agreement. Effective dispute prevention strategies should be explored in advance of any agreement being drawn up. In some cases, the contract could be altered to remove clauses which contain implied conditions, such as those prohibiting the contractor from working on a particular site for a set period of time. Contractors may be hesitant to challenge such implied conditions as they believe that they may end up losing their current work or facing further difficulties with a company that they do not know too much about.
A major risk of construction partnering arrangements is that they are frequently used within larger construction projects and could lead to increased costs and reduced quality. The relationship between the construction partnering company and the individual contractors can result in the contractors taking advantage of the partnership by increasing their own costs or substandard work. Also, the construction partnering companies often fail to properly monitor the performance of their contractors. This means that the construction team may actually under-perform and become less productive than they would be able to achieve if they had greater control over the project team.
There are many ways in which to reduce the risk of construction partnering and achieve greater project success. One strategy is to only use construction partnering when there is a strong business case for doing so and there is an apparent need for this strategy within the construction industry. Often, there may be a handful of construction companies bidding on a project and only one is serious about building a successful partnership. The construction partnering company could provide an effective mentor/advisor relationship with the project manager, offering the manager professional advice on how to manage the project successfully. Such an arrangement can often deliver the best outcomes, helping to build stronger teams and higher standards. The key is to partner with the right company, to ensure that you have the most effective relationship and guidance possible.
Construction partnering relationships can be the key to long-term success for construction projects, providing a proven way to strengthen partnerships and drive project delivery faster and at lower cost. However, the key to finding the right construction partnering company, and developing the right one, is to find one that can deliver synergies within your construction enterprise, and one that has the ability to take on additional partners. By partnering with a company that already has long-term construction experiences, it can help to reduce risks and increase profits.
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