New Partnering

In more traditionally organized collaborations on building projects, the interdependencies and ownership of decisions shift across the phases of conception:

• The builder manages the selection of advisers and contractors, enforces the contracts and decides on necessary adjustments and changes.
• The consultant has the full influence on the projecting.
• The contractor determines and controls the flow of the construction.

Through conventional and more traditionally organized construction processes, the building industry has developed diverse and deep competencies in the three silos; builder, consultant and contractor. The idea of New Partnering is to bring these competences together – to utilize them so the projects develops from being a project where the partnership is only organized as a division of work between the three parties to build a knowledge-sharing collaboration culture where the asymmetric knowledge is brought into play on time and is used in the interest of the project.

Trust is a prerequisite for openness and transparency. Openness is a prerequisite for knowledge sharing. Knowledge sharing is a prerequisite for an optimization of building process and project.

The expected effect is that the framework for time and economy is respected, and that the quality of the finished project is better than if the parties had worked according to the traditional division of work, as disagreements and risks in proportion to time, economy and quality of the project are timely resolved and money is prioritized where it provides the most value through a shared knowledge sharing.

The model consists of three main elements:

1. Tender with a more thorough recruitment of the team to solve the task. Including behavioral analyzes of the offered key persons and the companies' culture in order to assign the project to the right partner.
2. Agreement that contains clear structure and incentives. Including an economic model that separates contract expenses from the supplier's profits, and where bonus targets defined as shared objectives constitute close to half of the supplier's total earning potential. This means that the better the supplier and the client succeed in achieving their mutually agreed objectives, the higher is the earning that the supplier receives.
3. Cultural change through a systematic and well-maintained effort with inspiration from negotiation psychology and motivation theory, which contribute to build a robust and well-run organization. Including methods for open protection of interests and timely handling of disagreements as well as ongoing evaluations of the collaboration.

New Partnering has been developed with inspiration from the Finnish Alliance model and several well-proven models under private and public management in Denmark after a longer market dialogue.

Phase model

New Partnering consists of three phases, follows AB/ABT18 including appendix on project development and can be used in both general and turnkey contracts.

Phase 0 - The implementation phase that sets the frame for the partnership and project development. The phase consists of, among other things, a collaborative workshop, a study trip to achieve a common frame of reference, and the preparation of a process and decision plan for the subsequent phase. In addition, time and economy are verified.

Phase 1 - The project development phase including proposal phases and regulatory project. The purpose of this phase is to develop, optimize and concretize the project within the framework of time and economy in order to reduce the project's risks and prioritize how the money is best spent to create the greatest possible value for the customer. The phase allows for early application of mock-ups and early supplier involvement. The phase ends with the submission of a quality catalog, so that the project is fully in line with expectations.

Phase 2 - The completion design and execution phase, which is an execution of the agreed project, including completion of the design, quality assurance, execution, function testing (performance test) and handover.

The collaborative model requires the contracting parties to introduce a transparent cost control, ie. "open books" and work within a target price. The contract costs are separated from the supplier's profit and are divided into a fixed contribution margin as well as a variable contribution margin, which depends on whether the project's objectives are met.

The objectives are:

Goal 1: Keep budget
Goal 2: Meet the deadline divided into milestones
Goal 3: Safe and healthy construction
Goal 4: Conclusive quality assurance
Goal 5: Flawless handover
Goal 6: Good cooperation

Main points from the tender model

• Introduction of a design manual as a tender or basis of tender, which will form the framework for project development.
• Assignment criteria with a focus on organization and staffing as well as the ability to contribute constructively to project development and a robust project implementation. Including corporate culture.
• More thorough analyzes of key employees offered during the tender. This applies to both professional qualifications and personal competencies and involves a so-called behavioral indication analysis.
• Focus on achieving a realistic pricing and time schedule that reflects what the tenderer believe the project and a robust implementation entails, instead of the lowest price and fastest execution time.

Main points from the agreement

• Budget model that separates contract costs and the supplier's profits and involves open books.
• Incentive structure where bonus targets defined as common objectives make up close to half of the supplier's total earning potential.
• Mutual exit option, where the parties can step out of the project after the project development phase.
• Milestone plan that is compared with level registration and payment plan and is included in the incentive structure.
• Quality catalog where the parties agree on quality levels as the end of the project development phase.

Main points from the cultural change

• Implementation of a corporation agreement, which includes a mapping of interests.
• Systematic follow-up on the partnership through a fixed evaluation model.
• Anchoring the corporation agreement in the management at both the builder and the supplier
• Method for handling disputes. Including a solution ladder and a disagreement protocol.

Projects with NEW PARTNERING

New Partnering was first put into use in 2017 on the project NEW AARCH - new school for the School of Architecture in Aarhus in a turnkey contract. You can read more about the project here.

In 2019, the Danish Building and Property Agency tendered a project to Aalborg University (AAU), the Science and Innovation Hub, with New Partnering as a collaborative model, here in a general contract.

The Danish Building and Property Agency plans to offer a new domicile to the Danish Maritime Authority in Korsør in New Partering in 2021.