UK: Partnering Contracts - A Bridge Too Far?

Last Updated: 9 May 2001

Most of us have a rough idea, at least, of what partnering is. Many of us have tried it and seen it work. When we talk of partnering, we mean two or more organisations working together to improve performance using mission statements or charters to declare their aims. These organisations typically arrange workshops together and embark on joint training and continuous monitoring and performance evaluation. They develop non-confrontational methods of problem resolution and an open book exchange of information, including cost information.

Partnering may be specific to one project or a long term arrangement governing many projects.

Partnering has come a long way in 5 or 6 years. In 1995 partnering was still a novel idea in the construction industry. Now, what the Reading Construction Forum called third generation partnering is widespread. Third generation partnering means bringing together clusters of professionals, contractors, sub-contractors and suppliers within specialist groups, so as to serve the specific needs of a particular client such as the motor industry. This creates a concentration of knowledge and experience relevant to the construction requirements of a particular sector of the economy.

On very big projects such as BAA projects like Heathrow Terminal 5, we have now moved on to the "virtual company" in which all participants in the project are seen as owning their own proportionate share of the project, sharing risk and profits alike.

All these developments in partnering are to be welcomed. However, there is a new development within the past couple of years and that is the writing of "partnering contracts". For example, the Association of Consulting Architects has produced a partnering contract. The JCT is widely reputed to be writing one. This development needs careful reflection and consideration. Is it, "a bridge too far"?

In Trusting the Team, the first major text on partnering by the Reading Construction Forum, it was recognised and explained that partnering was a voluntary process. According to chapter 3, "Where competitive tenders are used, the tendering documents need to include a clause that invites tenderers to enter into a partnering arrangement with the client if they wish. This recognises that partnering must be voluntary". It goes on, "When a client, consultant or contractor decides not to enter into a partnering arrangement, that should be allowed to be the end of the matter as far as that project is concerned".

It seems, however, that from now on many employers will not offer any alternative to a partnering contract.

The initial concept of partnering allowed a partnering "overlay" of trust and co-operation and working towards mutual objectives beneath which there was a formal construction contract which everyone hoped would be left in the bottom drawer.

Certain features of the partnering process can usefully be built into a formal construction contract. For example, a commitment to an open book policy with freedom to inspect each other's documents, or a commitment to keep certain key personnel on a project throughout. This probably takes the contractual aspect of partnering far enough.

What Are The Pitfalls Of A Partnering Contract?

Firstly, if you make partnering an obligatory contractual term, you remove the voluntary aspect which creates goodwill. Secondly, as soon as you define partnering in contractual terms, you create specific contractual obligations which need to be interpreted. People will argue over those contractual obligations and their interpretation if they define the nature of the partnering relationship itself. Even if the partnering contract is crystal clear, something is lost by defining the partnering relationship. Trust gives way to verbal analysis.

What is the point in having a mission statement if the contract requires partnering in any event? If partnering becomes the letter rather than the spirit of the contract, does that not sound the death knell of the voluntary impetus towards trust and goodwill which has characterised partnering to date?

One of the pillars of voluntary partnering described in the Reading Construction Forum's text "The Seven Pillars of Partnering" was "equity" or fairness. People who voluntarily undertook to be fair to each other in partnering may well have undertaken a higher legal duty to each other than any duty they had in contract. If they now partner with each other under a partnering contract, they will know the extent of their contractual duties and they may perceive that they have no obligations beyond this.

The impetus towards partnering contracts may now be unstoppable and the writer may be dismissed as a stick in the mud. However, the construction industry is not noted for the success of its standard forms of contract in avoiding disputes. If we try to create a new breed of partnering contracts and they still produce disputes, where do we go from here?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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