Application of Partnering Principles

David GullickStructures Group Director,Parsons Brinckerhoff Ltd,Cardiff, UK

Robert CairnsActing Director of Engineering,Roads Service, NorthernIreland

Donald Pearson-KirkStructures Technical Director,AccordMP (formerly ParsonsBrinckerhoff Ltd)

Proceedings of the Institution ofCivil EngineersMunicipal Engineer 160September 2007 Issue ME3Pages 127–133doi: 10.1680/muen.2007.160.3.127

Paper 100018Received 08/09/2006Accepted 26/01/2007

Keywords:bridges/project management/public–private partnerships

Application of partnering principles to a framework contract

D. Gullick BSc, CEng, MICE, R. Cairns BSc, MBA, CEng, MICE and D. Pearson-Kirk MSc, PhD, CEng, MICE, MASCE, FGS

Sir John Egan’s report on Rethinking Construction

advocated ‘long term relationships based on clear

measurement of performance and sustained

improvements in quality and efficiency’. In 2001, Northern

Ireland Roads Service embarked on a three-year

framework to review the work carried out on their stock of

post-tensioned bridges. The contract adopted a

partnering approach embodying the key principles

recommended by Egan. This paper outlines the significant

lessons learned from a partnering approach between a

consultant and a central government service provider. The

partnership was built on an ethos of knowledge share and

transfer; it developed long-term relationships that

continued after the end of the original programme. It is an

example of how a partnering approach to a single project

acted as a catalyst for the further development of each

organisation. One of the significant factors involved is the

people, their personal and professional relationships and

their willingness to innovate at all times. The partnering

ethos led to innovation in terms of amending the payment

mechanism under the contract as originally procured,

leading to potential incentives and disincentives based on

performance measured using key performance indicators

as advocated by the Egan report.

1. INTRODUCTION

Roads Service, an Executive Agency within the Department forRegional Development for Northern Ireland, is the sole roadauthority in Northern Ireland, responsible for just over24 900 km of public roads together with about 8 300 km offootways, 250 000 street lights, 370 public car parks and 5 800bridges. These bridges range from small-span masonry arches ofaround 2 m span or less to long-span steel structures like theFoyle Bridge (Figs 1 and 2).

Within this bridge stock there were some 47 internally post-tensioned bridges that warranted particular attention.Historically, post-tensioned bridges were considered a safe anddurable construction form, easily providing the required designlife. However, during the 1980s, problems were identified in anumber of post-tensioned bridges in the UK arising fromcorrosion of the tendons. Concern was heightened in 1985 withthe sudden collapse of the Yns-y-Gwas Bridge in Wales. Over thenext five years over 40 bridges were found to require majorrepairs and remedial works associated with concerns over the

Municipal Engineer 160 Issue ME3 Application of partn

post-tensioning. In 1992, the UK Department of Transport placeda moratorium on this form of construction. Subsequent workinvolving the investigation of structures showed that thegrouting operations were often ineffective, resulting in thepresence of voids at locations vulnerable to the ingress ofmoisture and corrosive agents such as chlorides and sulphates.The discovery of this in situ voiding in built structures raisedserious concerns about the possibility of ‘hidden corrosion’ oftendons, adding to concerns over the integrity of the UK’s post-tensioned bridge stock. In 1993, the Highways Agency workingin conjunction with its sister organisations (Scottish Office,Welsh Office and the Department of the Environment forNorthern Ireland) implemented a five-year programme of specialinspections for the 1100 bridges of this type across the UK.

2. SCALE OF THE PROBLEM

To ensure consistent implementation of the inspectionprogramme, all the agencies agreed to use the requirements ofBA50/93.1 This document implements a three-phase approach tothe investigation. Phase I essentially comprises a desk study ofexisting drawings, calculations and inspection reports. Phase IIinvolves a preliminary site investigation aimed at verification ofthe Phase I results and development of a technical plan for anyproposed intrusive inspection and corrosion testing. The Phase IIIreport is intended to be a stand-alone document that contains theresults of the intrusive inspection works with advice on the likelylong-term performance of the structure.

Roads Service implemented their five-year inspectionprogramme using the requirements of BA50/93 during the 1990s.It was implemented using a framework contract with a number ofrecognised consultants. Towards the end of the programme,Roads Service had compiled phase I, II and III reports on all itsexisting post-tensioned bridges. The inspection works revealed arange of defects and deficiencies within the bridge stock. Thesituation was complicated by the fact that the consultants did notadopt a uniform approach when assessing the in situ condition.Many of the descriptors used were vague and the majority of thereports failed to capitalise on the benefits of non-destructivecorrosion testing. Roads Service thus had no clear indication ofthe likely lifespan of the structures and what problems lay‘hidden’ within apparently sound structures.

3. THE WAY FORWARD

In light of the volume of material collated on the 47 structures,the nature and range of the problems observed, and the specialist

ering principles to a framework contract Gullick et al. 127

Fig. 1. A view of Foyle Bridge

128

nature of the construction form, Roads Service decided toemploy a specialist consulting firm to assist with the review of itspost-tensioned bridge stock. In September 2001, open tenderswere invited for a contract entitled ‘Inspection of Post-TensionedBridges and Design & Supervision of Repair & StrengtheningWorks to Post-Tensioned Bridges, Northern Ireland’. Thecontract was drawn up under the NEC Professional ServicesContract2 with the intention of using main option G termcontract for selection and payment of the successful candidateand the project being managed by the Roads Service HighwayStructures Unit (HSU) in Ballymena, Co. Antrim. As stated in thescope of the contract documentation, the objective of thecontract was to review the findings of the special inspectionsalready carried out, and to combine these with further work toarrive at a best-value repair and maintenance plan for eachstructure. Given the nature and scope of the project it wasconsidered impractical to determine the full extent of the serviceto be provided during the contract. The intention was that theHSU project management team would identify all works requiredon any specific structure with the consultant employed on a‘call-off’ basis. Nine specific independent task areas wereidentified in the contract to allow tenderers to allocate resourcesand staff to the project

(a) feasibility and scoping(b) additional investigation

Fig. 2. Bellevue Bridge

Municipal Engineer 160 Issue ME3 Application of partner

(c) design contract preparation and supervision(d) supervision(e) structural assessment(f ) principal inspection(g) special inspection(h) design checks(i) planning supervision.

All design, inspection and assessment works to be undertakenwere required to be in accordance with the Design Manual forRoads and Bridges.3 The contract was evaluated on a quality/price basis and, given the nature and complexity of the work, an80%/20% quality/price split was adopted. The contract wasintended to run for one year with the possibility of an annualextension for a further two years. A number of internationallyrecognised consulting houses tendered for the contract; thetender was won by consulting firm Parsons Brinckerhoff Ltd(hereafter referred to as the contractor).

4. WIDER ISSUES

Roads Service, as a purchaser of multi-million pound publicworks programmes, has a duty to ensure best value for money forthe taxpayer. To help achieve this, the Roads Service Board hasstated that it wishes to ensure the retention of ‘engineeringintelligence’ within the client organisation. An ‘intelligent’ clientorganisation requires staff and managers to have a soundtechnical background so that they are able to interpret the adviceof other professionals, to make better value judgements anddecisions, and to be well informed to advise ministers anddepartmental officials on relevant technical and professionalissues. A best-value review of Roads Service’s in-houseconsultant highlighted its role as the primary source of thisengineering intelligence. Roads Service therefore had anobjective to extend the breadth and depth of their technicalknowledge. Consequently, both parties aspired to gain maximumbenefit from any long-term future working relationships thatcould develop. Discussions were held to try to understand theaspirations of both organisations, irrespective of the specificdetails of this commission.

The first part of this commission involved the application ofspecialist knowledge and techniques. In accordance with RoadsService’s objective to remain an ‘intelligent’ client, a mechanismwas required for the transfer of specialist knowledge that thecontractor would bring to the work. Discussions were widened toinclude ways in which the recommendations of the Egan report4

could be implemented. As the project developed, the scope ofwork carried out involved more conventional elements such asinvestigation (Fig. 3), assessment and strengthening—both partiestried to ensure that opportunities for providing added value andinnovation were maximised as far as possible at each stage ofthe project.

Discussions were also held regarding how knowledge transfercould act both ways, and how the contractor and Roads Servicecould develop together as organisations and as people workingfor each organisation. It quickly became clear that there were anumber of exciting opportunities for both the contractor andRoads Service and the teams were keen to apply the principles ofpartnering throughout the length of the commission.

ing principles to a framework contract Gullick et al.

Fig. 3. Investigation of Bellevue Bridge

5. THE PARTNERSHIP

5.1. Getting to know each other

In order to facilitate the knowledge-share approach, eachorganisation committed to ensuring co-location as far aspossible. Fortunately, some space was available in Roads Serviceoffices in Ballymena and this was made available to thecontractor’s staff. As the contractor did not have a base inNorthern Ireland, this was an example of Roads Service’scommitment to the partnering process. Successful co-location oftwo separate organisations (Fig. 4) with different businesscultures was dependent upon a number of key factors

(a) the personalities of the staff involved(b) their commitment to the approach chosen and ensuring its

success(c) the need for each individual to gain the mutual respect of

team members—a function of the personalities involved andtheir technical abilities

(d ) tolerance of each other’s culture and work practices.

Some staff from both Roads Service and the contractor wereinitially reticent about whether this was a good approach andwhether it would work; their concerns centred on issues such as

(a) different working practices(b) lack of knowledge of cultural issues in Northern Ireland(c) interference with other work taking place in the open-plan

office environment

Fig. 4. Co-location facilitates effective workingFig. 5. A signed partnering charteof team members

Municipal Engineer 160 Issue ME3 Application of partnering principles to a framework con

(d ) disruption to family life,particularly for thecontractor’s staff withyoung families.

The key to the success of theco-location was good clearcommunication with staff fromboth organisations and plannedresource allocation andmanagement, ensuring that thepersonal circumstances of thestaff involved were regularlyreviewed.

5.2. Partnering workshops

This was Roads Service’s first foray into partnering withconsultants and, although the contractor had a number ofsuccessful partnerships in place with other publicorganisations, many of the contractor’s staff involved in thiswork had little or no partnering experience. In April 2002, apartnering workshop was held to develop strategies andinitiatives to ensure the success of the partnering approach.Both organisations committed to adopting key underlyingprinciples to the management and operation of the framework.These principles were embodied in the signing of a partneringcharter (Fig. 5). The key issues addressed were

r exemplified the commitment

tract Gullick et al. 129

Fig. 6. Joint training was beneficial to both organisations

130

(a) knowledge sharing(b) staff development(c) gaining respect and trust(d ) building enthusiasm(e) problem resolution( f ) key performance indicators (KPIs).

A number of key initiatives were identified under each of theheadings listed above and a programme was developed along withan allocation of responsibilities. The use of KPIs to drive the processof continuous improvement was, however, left for future review asthe contract had only been recently commissioned and RoadsService wished to assess the performance of the scheme using theProfessional Services Contract framework that was in place.

5.3. Partnering initiatives

Many partnering initiatives were undertaken throughout thecommission, including

(a) a rolling programme of secondment of Roads Service staff tothe contractor to work on specialist areas of the commission

(b) joint training seminars on a wide range of technical topics,only some of which were related to the PT bridgescommission (Fig. 6)

(c) entering combined teams in industry-wide competitions (forall three years of the commission, the team won the NorthernIreland round of the New Civil Engineer Powers of Persuasioncompetition, reaching the national final in 2004 and 2005)

(d ) submission and presentation of joint technical papers atconferences

(e) mutual study tours to share knowledge with otherprofessionals worldwide

( f ) co-operative problem solving on a range of engineeringprojects

( g) recruitment of the contractor’s staff based with Roads Servicein Northern Ireland to facilitate good communication

(h) publicity of the success of the partnership in magazines andnewsletters of both organisations

(i) social events.

5.4. Immeasurable benefits

Both organisations and the people involved benefited from thepartnering initiatives that were adopted. Benefits included


(a) technical development of staff in areas related to thespecialist project

(b) a more technically aware client, providing benefit toindustry as a whole

(c) development of staff in many different technical areas(d ) exposure to and appreciation of the different cultures of a

private consultant and a central government serviceprovider, with a resulting broadening of viewpoints

(e) long-term friendships that have remained beyond the end ofthe project.

5.5. Value for money

Much of the value from the partnership is contained in theimmeasurable benefits referred to in Section 5.4. However, inmonetary terms the value obtained could be expressed as the costof doing the work and the results obtained measured against thevalue of the asset to Roads Service. As an indicator, the assetvalue of the 47 post-tensioned bridges was £130 million (2002estimate); the total cost of doing the work and the resultingmaintenance liability associated with each bridge was estimatedto be £3$5 million (2004 estimate). Before this work was carriedout the maintenance liability and safety risk associated with thesestructures were unknown.

6. PROBLEMS WITH THE PROFESSIONAL SERVICES

CONTRACT FRAMEWORK

After one year of the commission it was evident that itsoperation could be improved and the partnership strengthenedby looking at the contractual form that was in place. The reviewhighlighted that there were no issues with the core contractclauses. However, it was judged that the payment mechanismcould be improved to the benefit of both parties. The tenderedpayment mechanism involved the use of daily rates inclusive ofcertain expenses. The contractor’s staff were paid on this basisirrespective of the actual cost incurred.

During the tender period, the contractor took a commercial viewregarding certain daily rates involving an assessment of thelikely input from certain grades to achieve an overall profitmargin whilst ensuring that the rates were competitive incomparison with other tenderers. Therefore, at tender stage, thecost of the scheme and the final profit margin were uncertain.

Under the original arrangement there was no formal incentivefor the contractor to use its best staff, and the cheapest resourceswould have maximised the profit in any one grading band.However, this was never the modus operandi as the contractorprovided the top-quality staff outlined in their tender. This led touncertainty regarding their final profit margin. There was alsono incentive under the original contract for the contractor tomaximise efficiency as the contract ensured that every hourspent on the scheme, irrespective of productivity or programme,would be paid. Roads Service had the veto that the funding couldbe stopped and the appointment terminated. The situation couldthus be improved for both parties.

In light of the above issues, both the contractor and RoadsService agreed that revisions to the existing payment mechanismwould be in their best interests. In revising the existingarrangements, the principal objective was to ensure that the


KPI no. KPI Weighting Points Maximum points

1 Variation of budget against forecast 6 5 302 Client satisfaction 3 5 153 Health and safety 2 5 104 Adherence to programme 6 5 305 Defects 2 5 106 Contribution to partnership 2 5 10Total maximum points 105

Table 1. KPIs adopted for the contract

Roads Service achieved best value. There were also a number ofcomplementary objectives

(a) the approach had to be transparent and readily auditable(b) PB would be incentivised towards maximum efficiency and

delivery, including budget and programme(c) both parties should have improved certainty of outcome.

It is worth mentioning at this point that the partnering ethos hadalready proved to be successful and it was readily accepted by allparties that the commission was running very smoothly with astrong joint team ethos evident across the project.

6.1. Key performance indicators

To meet the stated objectives, it was agreed that fees paid shouldbe based upon actual costs incurred, with profit being linked toperformance through KPIs. This approach ensured

(a) Roads Service would pay for ‘rolled-up’ costs only whennecessary

(b) the arrangement would be transparent(c) the contractor was incentivised to perform better(d ) removal of the reverse incentive against the use of the

contractor’s more highly qualified and hence highly paidstaff, giving a greater certainty of profit level if performancewas maintained.

Profit variance was established between a minimum profitmargin of 2$5% and a maximummargin of 10% above breakevencosts. The actual profit was based on a sliding scale depending onachievement of the KPIs. As the contract had been operating for ayear, the profit levels achieved by the contractor were known.The minimum and maximum profit levels were therefore setabove and below the previously earned profit. Table 1 lists theKPIs adopted for the contract, showing the calculation of pointsbased on a weighting system to be used as part of the profitcalculation. Table 2 shows an example of how the profitpercentage was calculated (PB was paid auditable cost C2$5%C

(69/105)!7$5%Z7$43% profit).

KPI no. Weighting Mark (out of 5) Score

1 6 2 122 3 3 93 2 5 104 6 3 185 2 5 106 2 5 10Total 23 69

Table 2. An example of calculation of KPIs


Some of the KPIs were directly measurable and those forprogramme and budget were given a much higher weighting thanothers. Other KPIs were more subjective and the KPIs for clientsatisfaction and contribution to the partnership were thereforeassessed quarterly. In each case where a KPI was not directlymeasurable, KPIs were jointly agreed upon completion of discretetasks (e.g. completion of all work on any one structure). Table 3and Fig. 7 give a summary of the overall KPI performanceachieved at completion of the commission.

7. OUTCOMES

The partnering approach and change to the payment mechanismwas beneficial to both parties and the project in the followingways.

(a) The issue of financial matters was important to all but thefinancial risk to both organisations was limited by the changeof payment mechanism, allowing them to focus more closelyon getting the job done.

(b) Continuous improvement was facilitated by the use of KPIs.(c) A realisation that delivery of the project was a primary

objective for both organisations.(d ) The partnering approach ensured that seamless teams of

individuals from PB and Roads Service worked towardscommon goals for the benefit of the project and each other.

(e) Roads Service is now equipped with knowledge regardingtechnicalmatters that it didnot possess before the commission.Some of this knowledge is not possessed by other consultantsin Northern Ireland and therefore allows Roads Service todevelop best practice in Northern Ireland through itsprocurement process.

( f ) Roads Service achieved its objective of remaining an‘intelligent’ client.

(g) Staff frombothorganisations learnednew skills anddevelopedprofessionally and technically.

(h) Although the commission is now complete, Roads Service andthe contractor have continued to work together in jointlyfunded research looking at the effects of above-ground saltand alkali contamination in highway structures.

7.1. Best practice

Many of the initiatives outlined in this paper are examples of bestpractice as advocated by Egan.4 However, a key issue that shouldbe highlighted is the way in which personnel worked as anintegrated team, learning and developing together. The use of thecontractor’s global knowledge base and the adoption of onlinecollaborative working processes are additional examples of bestpractice. In addition, the joint capabilities of team members drawnfrom both organisations meant that those staff with the bestexperience and skills and organisational and operational


KPI no. Principal inspections Special inspections Assessment and design Average Target

1 4$6 5$0 5$0 4$9 5$02 3$0 3$0 5$0 3$7 4$03 5$0 3$0 5$0 4$3 5$04 5$0 5$0 5$0 5$0 5$05 4$0 4$0 5$0 4$3 5$06 4$0 4$0 4$0 4$0 5$0

Table 3. Summary of overall KPI performance

Northern Ireland Roads Service - Partnering AgreementKPI EvaluationOctober 2004

Budget

Client satisfactionPrincipalInspectionsSpecialInspections

Average

Assessments

Target

Contribution to partnership

Defects Health and safety

Adherance to programme

5

4

3

2

1

0

Fig. 7. Joint development of KPIs for encouraged continuous improvement

132

knowledge were chosen to carry out specific tasks. The team thusworked effectively and efficiently.

7.2. What would we do differently?

This commission ran for over three years with many benefits toboth parties. With the benefit of hindsight, however, it would havebeen advantageous to have tried to integrate the teams earlier inthe process, moved to the incentive/KPI-based paymentmechanism earlier and reviewed KPIs to show that they wereappropriate and achieving the objectives.

8. HOW DOES THIS COMMISSION ALIGN ITSELF

WITH THE EGAN REPORT?

The Egan report4 recommends five key drivers for change in theUK construction industry

(a) committed leadership(b) a focus on the customer(c) integrated processes and teams(d ) a quality-driven agenda(e) commitment to people.

Egan recommends ‘long term relationships based on clearmeasurement of performance and sustained improvementsin quality and efficiency’. The report also advocates anon-adversarial approach, leading to closer working relationshipsfor the benefit of the project.


Roads Service and the contractor were not content to beconstrained by the traditional client/consultant relationship andearly discussions highlighted the opportunities that were available.The underlying ethos and approach to the partnership was one of‘taking opportunities together’— a phrase adopted as the title to thepartnering workshops held.

Each of the key drivers in the Egan report was successfullyimplemented and addressed throughout this project. The projectwas delivered on time, on budget and at the best quality. Therewere additional benefits to everyone involved at all levels ofboth organisations and both organisations achieved theircorporate goals.

9. CONCLUSIONS

The partnership approach adopted by Roads Service and thecontractor ensured that the requirements of this project weredelivered in a timely manner, were of good quality anddemonstrated value for money. Additionally, this approach gavestaff at all levels within both organisations developmentopportunities that they otherwise would not have had. Bothorganisations developed corporately by adopting this approach.

This partnering commission is an example of what the UKconstruction industry can achieve when the people involved arewilling and able to influence the ways the industry haspreviously procured and managed projects. However, successwill not be achieved unless the people involved at all levels are


committed to the process and willing to seek innovation andadded value at all times.

REFERENCES

1. DEPARTMENT FOR TRANSPORT/SCOTTISH OFFICE DEVELOPMENT

DEPARTMENT/WELSH OFFICE/DEPARTMENT OF THE ENVIRONMENT FOR

NORTHERN IRELAND. Post-tensioned Concrete Bridges; Planning,Organisation, and Methods of Carrying Out Special Inspections.DfT/SODD/Welsh Office/DENI, 1993. BA50/93.


2. NEC. Professional Services Contract, 2nd edn. Thomas Telford,London, 1998.

3. DEPARTMENT FOR REGIONAL DEVELOPMENT, NORTHERN IRELAND. DesignManual for Roads and Bridges, Vol. 3, Highway StructuresInspection and Maintenance. DRD, Belfast.

4. DEPARTMENT FOR TRADE AND INDUSTRY. The Report of theConstruction Task Force to the Deputy Prime Minister, JohnPrescott, on the Scope for Improving the Quality and Efficiencyof UK Construction. DTI, London, 1998.

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Application of Partnering Principles