How can project teams develop and follow through on alliancing contracts?

The concert hall falls silent. The first notes float through the air and then the orchestra comes together creating a magnificent soundscape. Each musician plays their part, collaborating to create something spectacular

A strong alliance is like the orchestra, a group of talented people with a shared purpose working in harmony to achieve a defined common goal. For an alliance to be successful everyone must play their part.

It’s this harmonious scene that many construction projects would like to replicate, but the reality is that it’s much harder to hit the right notes.

To help, Eversheds Sutherland and Aecom have developed a guide for project teams of all shapes and sizes to support them in developing the right type of alliance for them.

First movement – procurement strategy

Critical to success is the behaviours and attitudes of the people that form the alliance. This starts from the top down. Like the conductor of an orchestra, the client must have a clear direction, understand how an alliance operates and, as an organisation, buy into the approach. Delivery must be through practitioners who are committed to the alliance.

• The client must understand what its goals are from the start. Set clear and measurable outputs. What does short- and long-term success look like?
• It must also be willing to empower the alliance to achieve its aims. This involves giving up some control, which can be challenging if you are not used to alliancing.
• The procurement strategy for the selection of alliance members needs to be carefully crafted and align with the client’s goals. It must assess experience and cultural alignment. This may involve behavioural assessments, taking care to ensure an objective approach.

Second movement – contracting the alliance

This is the equivalent sheet music for the project team, steering roles and responsibilities.

• The initial contracting model is set by the client and must be aligned with the goals it wishes the alliance to achieve. Potential alliance members may help develop this through the procurement process.
• The performance and incentive arrangements are the bedrock of the model and take time to develop. Allow time to rigorously test it; try to break it.
• Clearly define how risks will be shared and managed. How will issues like delay and defects be managed through the performance and incentive arrangements?
• How will governance work, within the alliance and between the alliance and its component organisations? Will there be time prior to contract for the alliance to create its own management and governance structures? Will certain decisions be reserved for the client alone, for regulatory, security or other reasons?
• Standard forms, including the NEC4 Alliance Contract and ACA FAC-1/TAC-1, can be used as a starting point, but the detail is for the individual client and alliance to develop to suit their circumstances. The drafting needs to be done by someone who has a deep understanding of the way the alliance is intended to operate.

Third movement – operating the alliance

When the alliance is in full swing, it is important to keep up the tempo and ensure the harmony throughout. This is where the alliance will ultimately succeed or fail.

• The members must live the alliance. A common alliance culture should pervade delivery, typically with an integrated delivery team leaving their organisation badges at the door.
• Individuals are key. All participants must fully understand the ethos and goals of the alliance, with comprehensive briefing and training if required. All decisions should be made with the overall goals of the alliance in mind.
• Honesty and openness is vital. Being in an alliance does not mean avoiding difficult conversations. The members of the alliance must work together to achieve their joint goal, supporting each other to resolve issues or address poor behaviour together.
• You should also ensure that the performance and incentive mechanism continues to be operated as intended. If things aren’t working, address them upfront, don’t wait for them to become an issue later.

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The final movement – learning lessons and evolution

Practice makes perfect. In our experience the best alliances are those that have clear goals from the outset and give the members of the alliance freedom develop and evolve.

• To thrive an alliance must reflect on what works, what doesn’t and adapt accordingly.
• Capturing and measuring data is key. Digitisation, including BIM, data analysis and increasing use of AI tools, should continue to make this process more efficient.
• It may take time to see the full benefit and it is important not to be deterred if results are not immediate.

Project promoters will of course be looking to develop a contracting model which works for their scheme. To achieve a successful and harmonious alliance, everyone has to play their part.

You can download the guide here.

Tom Douglas is partner at Eversheds Sutherland specialising in construction and Edd Burton is Aecom’s head of advisory services for Infrastructure