Know who your friends are

My informant looked at me and said:

“I can’t believe it! Obviously, I’m not at liberty to disclose names, but I know of a framework contract where the public sector client isn’t deducting retentions, but the contractor is deducting retentions from its subcontractors, which are also part of the framework.

“How can you collaborate when somebody is telling you that you are not to be trusted and money will be held back to ensure you do a good job?”

It is not the first time I have heard this type of story. It reminds me of the Great Partnering Debate, organised by the Society of Construction Law in June. The editor of this magazine chaired the event and my co-debaters were Julian Critchlow, David Mosey and Geoff Nobbs. The motion was: “partnering is just a euphemism for shafting”.

Some interesting issues arose out of that debate. I thought a key point was that we could never really say for definite whether genuine partnering was taking place.

In a 2001 National Audit Office report, professors Fisher and Green of Reading university described partnering as an “imprecise and illusive” concept. So, it can be what you want it to be because nobody is going to say you are doing it wrongly.

Traditional definitions of partnering are generally couched in aspirational terms with buzzwords such as trust, teamworking and shared values. When the going gets tough, though, partnering is often shown to be skin deep. In 2000, Baird Textile Holdings sued Marks & Spencer after the latter ended a relationship that went back more than

30 years. Over that time, Baird had supplied M&S with clothing under a partnering arrangement. When M&S’ profit began to slide, it in effect told Baird to get lost.

The baggage of traditional contracting is a huge barrier to real partnering. Success has generally been built on the ability to offload risk, not share it

The Court of Appeal held that Baird had no comeback because there was no contract. The parties had a strong and long-term relationship and never felt the need to express it in a formal way.

Professor Stuart Green has argued that the promotion of partnering in construction is about increased control of the supply chain. It is all about getting lower prices in the supply chain and is not too dissimilar to the attitude shown by large supermarkets to their suppliers.

This appears to be backed up by a recent study carried out by Jim Mason at the university of West of England. He concluded: “Little has changed in the 10 years since partnering was introduced to improve the lot of the specialist contractor in terms of levels of disputes and the incidence of long-term collaboration.”

On the other hand, I am aware of many examples of genuine teamworking in which there is an equality of treatment of those involved. Recent research carried out at the university of Northumbria suggests that there is a lot more communication and transparency in partnering relationships than in traditional contracting.

Unfortunately, the baggage of traditional procurement and contracting acts as a huge barrier to genuine partnering throughout the delivery team. Success has generally been built on the ability to offload risk, not share it. Worse still, most partnering relationships are between client and main contractor – the rest of the delivery team is simply ignored.

So, here’s my quiz to establish whether the partnering is genuine:

• Have the partners been involved in the key decisions on risk, management, design and costs?
• Have the partners agreed their respective overheads and profits?
• Is there a partnering bank account?
• If so, is each partner paid from this account?
• Is there an insurance policy that underwrites the team (not the individual)?
• If there is such a policy, does it cover the risk of any financial loss in excess of the cost plan that was agreed by the team?

If you have answered “yes” to at least four of the above questions, I believe you are genuinely partnering.