Analysis of Transportation Agencies’ Claim History: Partnered versus Nonpartnered

Abstract

The literature on dispute avoidance credits claims avoidance as one of the primary benefits of a formal partnering program. A recent survey from AASHTO found that a number of agencies have dropped formal partnering because they found that the costs were no longer offset by the value of minimizing legal conflicts. This paper compares the mean project claims costs of two agencies that formally partner most major projects to the claims record of two agencies that no longer employ formal partnering in order to evaluate formal partnering programs’ ability to reduce claims costs, and it finds no statistically significant difference between the two groups. However, it does not conclude that formal partnering is ineffective. Using classic organizational management theory as its backdrop, the paper hypothesizes that the two agencies that stopped investing in formal partnering workshops have in fact fully institutionalized the salient principles of partnering, such as increased collaboration, communication, trust-building, and dispute escalation to the point where they are routine business practices. Thus, many of the underlying conditions that formal partnering is designed to address are no longer present in those agencies’ procurement culture. The study also identified levels of partnering activities that are less structured and demanded fewer resources as well as less time than formal partnering. As such, the paper proposes definitions for semiformal and informal partnering, characterizing current practice as a spectrum of partnering intensity.