Contracting Relationship Trends and Transitions

Abstract

Construction industry reports worldwide have called for radical cultural changes to reduce adversarial conflicts and increase productivity levels. These reports have recommended reintegration of fragmented function and teams through different teamworking approaches such as partnering and alliancing. The theoretical basis for such approaches can be tracked back to relational contracting (RC) principles. Recent teamworking initiatives have met with some success, based on structured cooperation between owners and contractors. However, the full benefits of these cooperative approaches may only materialize if (1) all potential team members/project partners are selected on the basis of relevant rationalized evaluation criteria; (2) all stakeholders work closely together as a coalesced team with common objectives, and (3) these arrangements are underpinned by government-sponsored, proper change initiatives. These approaches and arguments are analyzed in this paper, aiming at developing the required project culture through the application of RC principles for the joint management of risks during the entire project life cycle. Relevant observations from two recent Hong Kong-based industry surveys indicate a high motivation toward such approaches. Finally, examples of some potentially beneficial change initiatives are used to illustrate the potential synergies that are achievable.