The overall goal of partnering is to replace the historically adversarial environment inherent in most complex purchasing projects with a co-operation-based approach in which contractors, subcontractors, customers and others involved in the execution of the project treat it as a common problem to solve.
The project is effectively seen as a joint venture exercise in which all share an interest in a mutually successful outcome.
Partnering is largely dependent on the existence of a trust-based relationship.
It is said to improve productivity, lower costs and to enhance the prospect of delivery to a satisfactory standard and on time.
At its most formal, partnering can include weekend retreats, workshops and a mission statement of common goals drawn up by representatives from the customer and supplier.
Both sides also pledge to “escalate” any conflict to higher management levels until it is resolved.
Generally, there are a series of steps that must be taken to resolve any dispute on an amicable basis, through a formal process of negotiation, carried on at successive levels between the two corporations.
The process begins at the low managerial level and proceeds on a reciprocal basis to progressively higher levels within the two organizations, usually ending at a CEO-to-CEO dialogue.
Only if that final step fails to result in an agreed solution can the parties proceed to litigation or arbitration.
The total ideal environment for partnering is where the parties to a contract already have a deep and long-term business relationship.
Another key prerequisite for a successful partnering is mutual trust.
Partnering requires the customer to abandon the micro-management of specific matters and measurable commitment by both parties to achieve their respective business goals on a supportive and reciprocal basis.
The best partnering arrangements are healthy when they are focused on results and services, rather than adjudicating fault.
Finally, a good partnering relationship requires a mutually satisfactory balance of the output qualitative and financial imperatives of the relationship.
It requires co-ordination, creativity, effective communication, a conflict resolution process, the devotion of adequate resources, management support, underlying mutual trust and a long-term commitment.
However, where properly implemented and backed with the required level of support, the degree of success of partnering can be determined by subjective measures (e.g., perceived satisfaction of partners’ expectations) and objective measures (e.g., cost variation and rejection of work).
Partnering can still be enjoyed where the forgoing idea conditions are not satisfied, although with a lesser expectation of significant results.
Partnering commitments within a project contractual structure usually envision some form of ongoing process of exchange, coupled with an internalized tiered-negotiation infrastructure.
Each party designates a mid-to-senior level executive who is primarily responsible for the partnering aspect of the transaction.
Each representative will exercise specified functions and powers identified in the overall contract documentation.
Each party commits to maintain a designated representative in place for the duration of the contract and to provide cover during illness, incapacity or any other inability to perform.
Generally, it is accepted that the scope of authority is limited. For example, it is recognized that neither representative has the authority to modify or waive any provision of the overall agreement or to authorize a variation in the specifications or terms of supply.
However, within these constraints, the representative is the primary point of contact and authorized spokesman.
He or she possesses the full authority to act on behalf of the party representative for all other purposes.
In addition to the designated project representatives, the parties also identify the key individuals within their respective organizations who are critical to the performance of the project.
They each commit to use commercially reasonable efforts to ensure that individuals remain involved in the project for its duration.
Where a party considers it necessary to replace such an individual, there will be a process of consultation and replacement.
Stephen Bauld is a government procurement expert and can be reached at [email protected]. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
