Procurement Strategies A Relationship-based

This book addresses the key relationship issues of partnering and alliance contracting, drawing on research from a major Australian project, to examine team working and to show how this can deliver built facilities more effectively.

Derek Walker is Professor of Project Management at the Department of Building and Construction Economics, RMIT University. He worked in various project management roles in the UK, Canada and Australia for 16 years before commencing his academic career in 1986. He obtained a Master of Science from the University of Aston (Birmingham) in 1978, and a PhD in 1995 from RMIT University (Melbourne). He has written over 70 peer reviewed papers and book chapters. His research interests centre on project management and project procurement systems. He is also the Program Director of the Doctor of Project Management (DPM) program.

Keith Hampson led the research team studying the National Museum of Australia project in Canberra. He is currently the CEO of Cooperative Research Centre for Construction Innovation that has a budget of $64 million over seven years to investigate and advance innovation in the Australian construction industry. He is a civil engineer and project and project manager with extensive industry experience. Prior to his CEO appointment to the CRC he was Director of Research in Construction Management and Property at Queensland University of Technology and Team Leader of the national QUT/CSIRO Construction Research Alliance. Keith Hampson completed an MBA, and a PhD in Construction Engineering and Management at Stanford University.

Authors and Contributors

ix

Preface

xiii

Introduction

1

(10)

Derek Walker

Keith Hampson

The structure of this book

1

(4)

Implications of the current global work environment

5

(4)

References

9

(2)

Part 1 PROCUREMENT SYSTEMS AND STRUCTURES

11

(156)

Procurement Choices

13

(17)

Derek Walker

Keith Hampson

Traditional procurement options -- fixed price contracting

13

(2)

Total package options -- BOO, BOT, BOOT

15

(1)

Design and construct, novation and turnkey

16

(3)

Construction management (CM) and project management (PM) and PM/CM

19

(2)

Sequential negotiated work packages - on-call contracting

21

(2)

Guaranteed maximum price (GMP)

23

(1)

Full cost reimbursable procurement

24

(1)

Discussion - procurement choice as design influence

24

(3)

Chapter summary

27

(1)

References

27

(3)

Enterprise Networks, Partnering and Alliancing

30

(44)

Derek Walker

Keith Hampson

The development of enterprise networks

32

(3)

Types of joint enterprise arrangements

35

(2)

Australian partnering research study results

37

(6)

USA partnering research study results

43

(3)

Types of project partnering -- from cooperation to coalescence

46

(2)

Requirements for Level 4 - synergistic strategic partnerships

48

(3)

Reasons for embarking on Level 4 -- synergistic strategic partnerships

51

(2)

Developing a strategic alliance relationship

53

(7)

Sustaining a strategic alliance relationship

60

(1)

Case studies in project alliancing

61

(7)

Wandoo B Offshore Oil Platform -- Western Australia

63

(1)

The Andrew Drilling Platform - North Sea UK

64

(2)

East Spar Development - Western Australia

66

(1)

Fluor Daniel SECV -- Victoria

66

(2)

Other alliance projects undertaken in Australia

68

(1)

Chapter summary

68

(2)

References

70

(4)

Project Alliancing Member Organisation Selection

74

(29)

Derek Walker

Keith Hampson

Introduction - Why form an alliance? - General motivational issues

74

(11)

Manufacturing and distribution industries (primarily product focused)

77

(2)

The airline industry (primarily service focused)

79

(3)

The engineering and construction industry (product and service focused)

82

(1)

The National Museum of Australia project

83

(2)

The selection process for the National Museum of Australia project

85

(13)

The design selection process

86

(1)

The alliance construction team selection process

86

(4)

Selection criteria

90

(8)

Chapter summary

98

(3)

References

101

(2)

Managing Risk and Crises Resolution -- Business-as-Usual Versus Relationship-based Procurement Approaches

103

(20)

Derek Walker

Martin Loosemore

Introduction - risk, uncertainty and crises

103

(3)

The process of preparing for and managing crises

106

(4)

Monitoring

108

(1)

Diagnosis

109

(1)

Decision making and implementation

109

(1)

Recovery and learning

109

(1)

Countering dysfunction in managing crises

110

(10)

Building solutions to problems

111

(1)

The National Museum of Australia project

112

(8)

Chapter summary

120

(1)

References

121

(2)

Enabling Improved Business Relationships -- How Information Technology Makes a Difference

123

(44)

Bruce Duyshart

Sherif Mohamed

Keith Hampson

Derek Walker

Introduction

123

(2)

IT in the construction industry

125

(7)

Impact of IT on the construction industry

126

(5)

Project collaboration websites

131

(1)

Case study -- implementation of an IT solution for the delivery of the National Museum project

132

(11)

Developing an IT return on investment (ROI) model

133

(10)

An assessment of the application of IT on the National Museum of Australia project

143

(13)

Defining an evaluation framework

143

(2)

Survey methodology

145

(1)

Survey results

145

(2)

Analysis of project collaboration data

147

(9)

IT study conclusion

156

(1)

IT and project alliancing

156

(4)

Mutual cooperation

157

(1)

Conflict

158

(1)

Benefits

159

(1)

Satisfaction

159

(1)

Chapter conclusions and future directions

160

(3)

References

163

(4)

Part 2 RELATIONSHIP-BASED PROCUREMENT ATTITUDES AND BEHAVIOURS

167

(130)

Developing Cross-team Relationships

169

(35)

Derek Walker

Keith Hampson

Introduction

169

(1)

The role of power and influence -- building mutual objectives

170

(7)

Performance improvement through innovation, continuous improvement and knowledge management

177

(7)

Problem resolution -- acting like one big team

184

(3)

Trust, commitment and relationship building

187

(3)

Trust and relationship maintenance

190

(2)

Teams and leaders -- building a foundation for partnerships

192

(6)

Chapter summary

198

(2)

References

200

(4)

Developing a Quality Culture - Project Alliancing Versus Business-as-Usual

204

(32)

Michael Keniger

Derek Walker

Project briefing and development of a quality culture

204

(5)

The National Museum of Australia - a case study in developing a quality culture to match stakeholder needs

209

(22)

History of the selection of the project team

209

(5)

Alliance leadership team and internal quality working group developing of a quality culture

214

(1)

The role of the independent quality panel in developing a quality culture

215

(3)

The quality measurement (QM) process adopted on the National Museum of Australia project

218

(8)

Lessons learned for future adoption of quality measurement process on similar projects

226

(1)

Detailed descriptions of quality measures used on the National Museum of Australia project

227

(4)

Chapter summary

231

(3)

References

234

(2)

Developing an Innovative Culture Through Relationship-based Procurement Systems

236

(22)

Derek Walker

Keith Hampson

Stephen Ashton

Introduction

236

(2)

The nature of innovation and how it can be fostered

238

(7)

The decision to innovate

238

(1)

The process of undertaking innovation

239

(3)

Achieving improvement through innovation

242

(3)

Innovation as a strategy

245

(4)

Pushing the (3D) envelope in documentation - shop drawing and manufacturing procedures in the Australian construction industry on the Action Peninsula project

249

(5)

The traditional paradigm

249

(1)

Paradigm shifts

250

(1)

3D CAD innovation on the National Museum of Australia project

251

(1)

Design issues

252

(1)

Engineering and manufacturing issues

253

(1)

The National Museum of Australia project experience of this innovation

254

(1)

Summary and implications for the future

254

(1)

References

255

(3)

Implications of Human Capital Issues

258

(39)

Derek Walker

Introduction

258

(1)

Ethical positions and beliefs in negotiating the resolution of disputes and day-to-day interaction

259

(12)

Organisational environment factors affecting trust and commitment

271

(16)

Human capital skills required to facilitate trust and commitment

287

(5)

Chapter conclusions

292

(1)

References

293

(4)

Index

297

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Procurement Strategies A Relationship-based Approach

Summary

Author Biography

Table of Contents

Supplemental Materials