Collaboration in a High

Performance Environment

The Future of Major Airports?

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The next 25 minutes

What you’ll hear about today:

─ High Performing teams deliver better outcomes

─ Collaboration is a key element of high performance

─ Contract Forms that promote collaboration

─ Other ways to achieve collaboration in a traditional framework

─ Challenges for the Client and the Suppliers

─ Is this a potential new way?

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Research for this topic

Alliance Project Delivery Traditional Project Delivery

Six current or previous alliance projects in New Zealand

Grafton Gully (2004)

Manukau Harbour Crossing (2010)

Kirkbride Interchange (Current)

Hamilton Section of Waikato Expressway (Current)

East West Link (Current)

Safe Roads Alliance (Current)

Melbourne Airport airside improvements incl PUGS

Auckland Airport

Queenstown Airport

Upper Harbour to Greville

Early Contractor Involvement Project Delivery

Ngauranga to Aotea Quay

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High Performing teams

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When do you Require High Performance

High risk levels

Inputs still incomplete e.g. property purchase

Stakeholders

Critical deadlines

Lack of resources- especially time.

Other important, non-cost areas require it.

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High Performing teams deliver better outcomes

Deliver non-cost outcomes as

well

─ Health and Safety

─ Airside operation continuity

─Quality

─ Programme

─ Stakeholder satisfaction

─ Environmental improvements

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High Performance requires effort to develop culture

Organisational Culture is a defining factor

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High Performance Culture at Project Level

Project high performance development requires similar effort- collateral helps this

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Visible guides help High Performance culture

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MHXK Dome

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Collaboration is a key to High Performance

Alignment of project goals and expectations for all

Better risk management

Encouraging innovation (not just risk free novelty)

Re-allocating time previously spent establishing and maintaining positions (up to

20% of management time)

Quicker resolution with more senior inputs

Targeted relationship building and maintenance

How will you know when you have collaboration?

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Selecting Contract Form for C and HP

Source: NZTA State Highway Procurement Strategy 2014

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Selecting Contract Form for C and HP

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Contract Forms that Promote Collaboration- ECI

Early Contractor Involvement

Contractor engaged by client at project development stage

Provides innovation, design challenge, constructability and risk

management

Client retains cost risk during development, converts to D&C in delivery

Commonly used when there are issues of

Need for faster delivery Constructability Programme complexity

Multiple stakeholders Potential for innovation

Collaboration during project shaping and planning stages leading to better D&C outcomes later

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Observations

Good inputs from the constructability teams

Clever timing of contractor inputs is essential- “not too early, not too late”

Commercial model difficult for contractor in early stages

Contractual arrangements with designer need thought

Prelim Design

Time plus pain/gain

Detailed Design

Time plus pain/gain

Delivery

Negotiated GMC or

similar

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Contract Forms that promote collaboration- Alliance

Alliance

Based on key principles established in written agreement

Collective responsibility for risk and reward on equitable, open-book basis

Strong focus on non-cost performance

Requires diverse skill set and significant senior input from Client and suppliers

at several levels

Commonly used when there are issues of

Critical risks Key inputs still required Complex programme

Consents or land still to

be delivered

Critical elements may

change

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Key Features of an Alliance

Core principles

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Alliance Commercial Model

1 2 3

Cost plus site

overhead

Offsite

overhead and

profit

pain : gain

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Learnings from Alliance projects

High performance culture is only achieved through hard work- adversity helps

You must select really good people and the Client must be seriously involved

Incentivising non-cost performance leads to better outcomes but must be done

simply

Make sure you understand what is “business as usual” performance

Sharing all risks promotes better aligned thinking

By falling back to the alliance principles, decisions are easier to make

Off-boarding can be a problem

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Can Traditional models be collaborative?

Incentivised traditional contract- used in

Melbourne PUGS (Papa Uniform Gulf Taxilane Slab

Replacement)

• Fully developed design tendered

• Constructors shortlisted on ability to perform in a

collaborative environment

• Tender price includes an at-risk amount

nominated by tenderer for performance

• Team charter, team building day

• Active senior leadership team

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PUGS Melbourne- incentivised traditional

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What was achieved on PUGS?

Key Outcome How Achieved

Aligned Objectives Embedded in selection criteria and procurement planned

around these

Good people Propensity to collaborate and record of doing so, planned

succession

Relationship management RMT team with senior reps from all

Performance incentive Separate payment based on tendered amount- client

assessed

Risk Management Through site team based on the above principles and rules

Collaboration and High Performance Largely by the above

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Challenges for Clients and Suppliers

Finding and retaining the right people for the job including senior leadership time

Financial model of alliance delivery- establishing business as usual costs

Really living the collaborative model- coaching helps but people succeed

Sticking with the rules when things go wrong

Cost of procurement

External criticism- soft money contracting, liability sharing not transfer- is this really

value for money?

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Opportunities for CHP contracts on airports

Time critical activities and/or those with greater interface challenges

─ Airside landside interface

─ Rapid upgrade of critical terminal elements

What else?

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Some Closing Remarks

So far, collaboration is leading to higher performance and thus better outcomes for

Owners with appropriate project opportunities

Traditional models will deliver good results with focussed collaboration

Alliances or ECI are options for future, bigger projects

A Challenge:

Do we want to have our cake and eat it too?