Partnering: Contracting for the Future

TLDR

The construction industry must adopt new strategies to reduce costs and enhance competitiveness, and partnering is presented as a means to form strategic alliances and strengthen firms’ positions in a changing business environment. The paper examines partnering as a contracting strategy for construction and engineering firms. Partnering is defined by commitment, trust, and mutual advantage, with guidelines covering strategy development, partner selection, contract negotiation, and implementation, while acknowledging barriers to its growth. The study identifies current partnering relationships and concludes with practical guidelines for developing, selecting partners, negotiating contracts, and implementing partnering agreements.

Abstract

The construction industry must seek new strategies to lower costs and to gain a competitive advantage in a changing business environment. Partnering is one approach to conducting business in this new environment. This paper discusses the concept of partnering as a contracting strategy for construction companies and engineering firms. First, partnering is defined and key elements of partnering are addressed. These key elements include commitment, trust, and mutual advantage and opportunity. A discussion of partnering as a contracting strategy examines the use of partnering as a means to form strategic alliances for growth and as a means to strengthen a firm's competitive position. Barriers to the growth of partnering exist, and these barriers are presented. Some current partnering relationships are identified, and the paper concludes by presenting some guidelines on partnering. The guidelines pertain to partnering strategy development, partner selection, contract negotiation, and implementing a partnering agreement.