Selection of Third-Party Relationships in Construction
Publication: Journal of Construction Engineering and Management
Volume 140, Issue 4
Abstract
Construction projects involve intensive and constant interaction among the parties involved. This interaction requires an efficient use of collaborative processes focused on the fulfillment of the project’s objective. Traditional types of relationships have proven ineffective in developing successful projects, and can generate adverse relationships between the parties negatively influencing performance. Using primarily an exploratory and descriptive approach, the following research has developed a tool to improve the relationships between those involved in the course of a construction project. Based on an extensive literary review in which the principles of Partnering, Alliancing, Lean Project Delivery, and Relational Contracts were analyzed, and considering interviews with project management experts, three types of relationships were identified that can be used to establish contractual relationships: (1) traditional/transactional, which operates on risk transference; (2) partnering/transactional with agreements, which promotes a win-win relationship between parties, supported by good faith and agreements outside the original contract; and (3) alliancing/relational, which uses a formal agreement to align objectives and interests of the parties in mutual benefit for the project. These types of relational/contractual interactions are implemented in an informal matrix that supports the selection of the optimal type of interaction for a determined project. There is also a discussion of the potential consequences of the correct selection of a relationship type so as to improve the project performance and the relationships of the parties involved.
Get full access to this article
View all available purchase options and get full access to this article.
References
Alarcón, L. F., and Ashley, D. B. (1999). “Playing games: Evaluating the impact of lean production strategies on project cost and schedule.” Proc., 7th Annual Conf. of Int. Group of Lean Construction, Univ. of California, Berkeley.
Ballard, G. (2000). “The last planner system of production control.” Ph.D. thesis, Faculty of Engineering, School of Civil Engineering, Univ. of Birmingham, U.K.
Ballard, G. (2008). “The lean project delivery system: An update.” Lean Constr. J., 1–19.
Bresnen, M., and Marshall, N. (2000). “Partnering in construction: A critical review of issues, problems and dilemmas.” J. Constr. Manage. Econ., 18, 229–237.
Campbell, D. (2004). “Ian Macneil and the relational theory of contract.” Center for Legal Dynamics of Advanced Market Societies, Kobe Univ., Japan.
Chan, A. P. C., Chan, D. W. M., Chiang, Y. H., Tang, B. S., Chan, E. H. W., and Ho, K. S. K. (2004). “Exploring critical success factors for partnering in construction projects.” J. Constr. Eng. Manage., 188–198.
Chan, A. P. C., Chan, D. W. M., Fan, L. C. N., Lam, P. T. I., and Yeung, J. F. Y. (2006). “Partnering for construction excellence—a reality or myth?” Build. Environ., 41, 1924–1933.
Cheung, S. O., Yiu, K. T. W., and Chim, P. S. (2006). “How relational are construction contracts?” J. Prof. Issues Eng. Educ. Pract., 48–56.
Cleves, J. A., and Michel, J. F. (2009). “Lean project delivery: A winning strategy for construction and real estate development.” Grant Thorton, 〈http://grantthornton.com/staticfiles/GTCom/files/Industries/ConstructionRealEstateAndHospitality/BB_stand%20alone%20article_FINAL.pdf〉 (Oct. 12, 2009).
Construction Industry Institute (CII). (1991). “In search of partnering excellence.” Publicación Especial No. 17-1, Reporte de the Partnering Task Force of CII, Austin, TX.
Cowan, C., Gray, C., and Larson, E. (1992). “Project partnering.” Proj. Manage. J., 22(4), 5–11.
Dunstan, K., Lavin, B., and Sanford, R. (2006). “The application of Lean Manufacturing in a mining environment.” Int. Mine Manage. Conf., AUSIMM, The Minerals Institute, Melbourne, VIC, 145–157.
Edkins, A. J., and Smyth, H. J. (2006). “Contractual management in PPP projects: Evaluation of legal versus relational contracting for service delivery.” J. Prof. Issues Eng. Educ. Pract., 82–93.
Höhn, M. (2010). “Relational supply contracts: Optimal concessions in return policies for continuous quality improvements.” Lecture notes in economics and mathematical systems, Springer, Berlin.
Howell, G. (1999). “What is lean construction?” Ponencia Presentada en el 7th Annual Conf. of Int. Group of Lean Construction, Univ. of California, Berkeley.
Koskela, L. (2000). “An exploration towards a production theory and its application to construction.” Ph.D. dissertation, VTT Building Technology, Helsinki Univ. of Technology, Espoo, Finland.
Kumaraswamy, M. M., Rahman, M. M., Ling, F. Y. Y., and Phng, S. T. (2005). “Reconstructing cultures for relational contracting.” J. Constr. Eng. Manage., 1065–1075.
Lichtig, W. (2006). “The integrated agreement for lean project delivery.” Constr. Lawyer, 26(3), 1–8.
Macneil, I. R. (1974). “The many futures of contract.” South. Calif. Law Rev., 47(3), 691–816.
Manley, K. (2002). “Partnering and alliancing on road projects in Australia and internationally.” Road Transp. Res., 11(3), 46–60.
Mignot, A. (2009). “An introduction to alliancing and alliances.” Center for Collaborative Contracting, 〈http://www.alliancingassociation.org〉 (Nov. 10, 2009).
Onwuegbuzie, A., and Leech, N. (2007). “A call for qualitative power analyses.” Quality and Quantity, 41(1), 105–121.
Palacios, J. L. (2010). “Selection criteria and procedures for implementing management models in the relationship with third parties in construction.” M.E. thesis, Pontificia Universidad Católica de Chile, Santiago (in Spanish).
Rahman, M. M., and Kumaraswamy, M. M. (2004). “Contracting relationships trends and transitions.” J. Manage. Eng., 147–161.
Rahman, M. M., and Kumaraswamy, M. M. (2005). “Potential for implementing relational contracting and joint risk management.” J. Manage. Eng., 20(4), 178–189.
Rahman, M. M., Kumaraswamy, M. M., and Ling, F. Y. Y. (2007). “Building a relational contracting culture and integrated teams.” Can. J. Civ. Eng., 34, 75–88.
Ross, J. (1999). Project alliancing in Australia, background, principles and practice. Presentation to industry summit on relationship contracting, Sidney, Australia.
Ross, J. (2009). “Alliance contracting: Lessons from the Australian experience.” Ponencia Presentada en el Seminario de Lean In the Public Sector (LIPS), Karlsruhe Institute of Technology, Germany.
Sillars, D. N., and Kangari, R. (1997). “Japanese construction alliances.” J. Constr. Eng. Manage., 146–152.
State Government of Victoria (SGV). (2006). Project alliancing practicioner’s guide, 〈http://www.dtf.vic.gov.au/CA25713E0002EF43/WebObj/CompleteProjectAllianceGuide/$File/Complete%20Project%20Alliance%20Guide.pdf〉 (May 17, 2010).
Tang, W., Duffield, C. F., and Young, D. M. (2006). “Partnering mechanism in construction: An empirical study on the Chinese construction industry.” J. Constr. Eng. Manage., 217–229.
Tommelein, I., Riley, D., and Howell, G. (1998). “Parade game: Impact of work flow variability on succeeding trade performance.” Proc., 6th Annual Conf. of Int. Group of Lean Construction, Guaruja, Brasil.
Yin, R. (1994). Case study research, design and methods, 3rd Ed., Sage, Thousand Oaks, CA.
Information & Authors
Information
Published In
Copyright
© 2013 American Society of Civil Engineers.
History
Received: Jun 5, 2012
Accepted: Feb 14, 2013
Published online: Dec 18, 2013
Published in print: Apr 1, 2014
Discussion open until: May 18, 2014
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.