Relational Contracting: the Way Forward or Just a Brand Name?

Abstract

Accounts of the development of a successful construction project often stress the importance of team relationship, project environment and senior management commitment. Numbers of studies carried out in the past decades indicate there needs to be a change of culture and attitude in the construction industry. In order for a turn around in the industry, relational contracting approaches have become more popular in recent years. However, not all relational contracting projects were successful. This paper details the fundamental principles of relational contracting. It further reports findings of a research currently taking place in Australia, how effective is relational contracting in practice.

The problem addressed in this research is the implementation of relational contracting: • Throughout a range of projects • With a focus on client body staff

The context within which the research was undertaken is: • Empowerment, regional development and promotion of a sustainable industry • The participating organisations have experience of partnering and alliancing • Success has been proven on large projects but performance is variable • Need has been identified to examine skill sets needed for successful partnering/alliancing

The practical rationale behind this research is that: • Partnering and alliancing require a change of mind set – a culture change • The Client side must change along with contracting side • A fit is required between organisation structure and organisation culture

Research Rationale: The rationale behind this project has been to conduct research within participating organisations, analyse, rationalise and generalise results and then move on to produce generic deliverables and “participating organisation specific” deliverables. This paper sets out the work so far, the links between the various elements and a plan for turning the research output into industry deliverables.