Chapter 4.0 – Midlothian A Case Study
Having looked at the development of partnering philosophies, potential benefits, challenges, and overall aims of partnering in Chapter 2.0, this chapter will focus on the actual implementation of partnering arrangements in the UK public sector. It does this by describing the approach and the process undertaken by Midlothian Council in setting up the current New Housing Construction Partnership (MNHCP). It goes on to explain how Midlothian have addressed Rethinking Construction challenge and implemented partnering through the signing up to the framework agreement.
As is common with most local Authorities within the United Kingdom, Midlothian Council had not constructed its own housing for over 40 years. Housing stock has been running low within Midlothian due to the amount of properties purchased by the tenants under the controversial Right to Buy scheme, brought in by the then Conservative Government in 1979. Many other authorities within Scotland have suspended their right to buy option. The homelessness act 2003 put even greater pressure on Midlothian to supply accommodation for those falling under this category. In 2004 Midlothian spent Â£1.2 million on bed and breakfast accommodation and it was recognised that this would be unsustainable over the coming years and that some other form of action would have to be taken. That action came in the form of a proposal to construct 1000 new houses across 30 sites within the Midlothian area. The framework was agreed in November 2006 with a total planned capital spend of Â£105 million over 5 years from 2006-2011. The project was let under a GC/Works 5 form of contract, based on a negotiated Target cost with a risk/reward element defects and accidents on site. Benefits for Midlothian Council include maximising construction spend, modernising the authority's procurement process and delivering best value from improved predictability. The longer-term aims of the relationship included eliminating duplication, improving communications and integration between the Council and its partners and promoting continuous improvement.
4.2 The Project Specific Aims
The Project aims are to:
- Provide 1,000 new social housing units in 5 years;
- Use best practice/principals;
- Provide a property of good quality built to last;
- Avoid conflict and additional cost's;
- Have flexible housing to cater for Housing for Varying Needs;
- Have sustainable housing to meet Agenda 21 targets;
- Ensure that buildings constructed require only low-level maintenance throughout their lifetime;
- Ensure these aims and goals are to be secured by Design.
4.3 The Partnering Decision
This section focuses on how the decision was made by Midlothian to go down the partnering route and the stages covered to put the partnering team in place. As stated previously Midlothian had not undertaken such a large project for over 40 years and valuable experience in how to handle this size of contract had been lost due to local authority job cuts. Most of the construction section had been decimated and contained very little experience of contracts of such size and complexity. Consultants were brought in to give advice and it was established in these early meetings that a partnering arrangement would fill all the requirements that Midlothian were looking for. At the time of this decision the Facilities and Construction Manager (F&C M) was aware that the traditional approach to construction did not meet the requirements, along with his knowledge of rethinking construction (Construction Task Force, 1998). Feeling that there was strong backing from central government decided that partnering was the way forward. This knowledge that central government was committed to reform in the construction industry was vital as it gave Midlothian Council the confidence to move ahead with partnering. Furthermore partnering offered the chance for the council to show best value in carrying it out. A strategy report was then sent to council cabinet for approval. The report outlined the benefits to the cabinet in the use of a partnering agreement through its auditability and also confirmed that it could meet the requirement of best practice. This report acted as the mechanism for Midlothian to allow partnering to proceed. According to prescriptive texts on partnering, for the client to ensure that all relevant parties in the organisation are informed about partnering (Loraine and Williams, 2000). These requirements were largely fulfilled in the case of the Council.
4.4 The Partnering Process
The partnering agreement would be based on the concept of the 'Seven Pillars of Partnering' see Chapter 2.0 page
- Membership - Choosing the Partners
Following the decision to partner on a particular project or a contract and having completed the process of inculcating its values within the client organisation, the next step is to select the partners (European Construction Institute, Partnering in the Public Sector, 1997). The process was a multi-stage one and very intensive, consisting of preliminary and more detailed questionnaires, presentations, interviews and site visits and the sample pricing of two exemplar sites. In assessing the bids, the council used geared weighting of multiple criteria, which included not only conventional factors (such as commercial stability and technical skills), but also others, such as 'deep' understanding of partnering. At the end of this process it led to the selection of two contractors and five consultants. The consultants that were involved in the initial consultation on partnering were not among the five chosen. The partners were informed of their success in August 2006.
- Integration- Team Formation
The remainder of the "seven pillars of partnering" were put into action once the strategy and financing of the project had been passed by the council cabinet. Partnering depends on co-operation which in turn depends on trust. The integration pillar deals with the need to develop co-operative behaviour at all levels. This was done through a serious of workshops. The purpose of the workshops was for the project team to:
- Create a Partnering Charter for the project
- Develop an Issue Resolution Process
- Develop a Joint Evaluation Process
The first workshop took place over 14/15 November 2006 and was attended by 22 participants of the partnering organisations. This workshop was designed to develop the partnering agreement. This was achieved by a discussion to identify the issues that would affect the way the partners work together. During each workshop the proceedings were fully documented and these provide a basis for further development of an action plan agreed by the parties. In addition to the conduct of the workshop appropriate pre and post workshop advice is provided on the development and maintenance of the partnering agreement.
4.4.3 Benchmarks : Setting Standards
Once the partners had been selected it was, of course, necessary to operationalise partnering by agreeing objectives, structures, performance monitoring, conflict resolution and how information would be communicated (Lorraine and Williams, 2000). Essentially the partners had to agree mechanisms to facilitate partnering; changing it from an idea to a reality. From its inception, the MNHCP has been committed to rigorous performance measurement. It was crucial that MNHCP could see how it was performing and compare results against national construction industry standards, particularly with regard to cost, time, health & safety, defects and sustainability. A second workshop was held on the 5/6th
of December 2006. This workshop was designed to engender a sense of ownership of the agreement by getting those present to decide what factors to focus on and measure in the Partnership and establish agreed expectations and to generate performance indicators. The Project Performance Indicators (summarised below) designed for the project to provide feedback on how the partnership is performing as well as an assessment of how each contractor and consultant are meeting the required standards across a range of criteria.
- Programme (Management of Time)
- Public Relations (No of complaints)
- Health & Safety (Accidents & Safety Notices)
- Finance (Cost Saving & Cash Flow)
- Payments (from client-constructors-sub-contractors/sub-consultants)
- Errors (Design & Construction Errors)
- Defects (Internal & External)
- Staff (Continuity & Training)
- Environmental (Material & Waste)
- Project Processes : The Issue Resolution Protocol (IRP)
The partnering workshop is the vehicle used to create the partnering charter for the project which comprises the mission statement and performance objectives; issue resolution and evaluation process as well as problem management techniques are subsequently developed (European Construction Institute, 1997). In line with the overall procurement philosophy, the Council have developed a protocol based on best practice. The protocol does not seek to give advantage to the Council or any other party. Under the IRP issues would be resolved at the "lowest level" possible. Conflict resolution was an area where the workshops were apparently weaker in comparison to suggested best practice. Such practice guides contain information about the timescale which each level has to solve a dispute before it moves to a higher level for consideration. (Loraine and Williams, 2000). The dispute resolution procedure of the MNHCP shown in Figure 6 below is less explicit than those described in best practice guides. For example there exist no timescales to determine how long each organisational level has to resolve a dispute before it must move up the next level. This contrasts sharply with suggested practice. Of course so far there have been no disputes that have not been settled and so the procedures shown above seems to be perfectly adequate. However, a more detailed procedure would allow parties to know where they stand and timescales involved so that expectations are not unrealistic. This flow chart is an indicative representation of the process. The shaded elements represent the desired process. Figure 4.2 : Midlothian Partneship Issue Resolution Protocol (IRP) (Source : Midlothian Construction Services, March 2006)
- Feedback and Communication
Communication and feedback are the great drivers of the MNHCP. A monthly project progress team meeting is one of the partnering tools used for feedback. The progress meeting provides the team an opportunity to bring up issues, concerns, and ideas on a regular basis. Project meetings can help everyone working on the job understand the schedule, co-ordinate work, and to identify and resolve issues by bringing everyone together involved in one place, at the same time, to discuss the status of the project and to plan ahead. Good communications and planning are critical to a successful project. Good communication also means that there are no surprises on the project. It means that one day you won't open a letter to find that someone is upset about something that you have never heard of before. The project team committed to not writing letters without talking to each other first. Talking first gives everyone an opportunity to make sure they understand the issues(s) and to try to work things out before positions are put in writing. The council also committed to review achievements regularly, to ensure efficient and effective working. One innovation has been the appointment of a Project Co-ordinator. His role includes a number of functions designed to ensure the effective functioning of the Partnership. This post reflects suggested partnering practice. (Other key individuals within a partnering arrangement are "The Partnering Champions".
These are senior individuals in the organisations concerned and they play a "central role" in ensuring the viability of partnering, (Bennett and Jayes, 1995). For this role indicates a commitment to partnering and, as noted, commitment of individuals is vital for successful partnering. The functions of this role are vital in allowing the agreement to function. The Council Champion roles include:
- Agreeing the allocation of works under the agreement
- Establish and maintain monitoring systems to evaluate partnership performance
- Monitor targets regularly
- Liaise with all parties involved to ensure adherence to the Partnership
- Promote innovation within the partnership
- Discussion : Midlothian Approach Vs Best Practice
The selection process and the development of the Midlothian Housing Construction Partnership in the workshops discussed above, was essentially very successful. The selection process, involving two questionnaires and an interview/presentation. It was a rigorous selection process that achieved its aim of selecting effective partners. This validates the approaches followed as effective tools to help implement partnering. Thus this validates the texts on the best practice which promotes such approaches. The selection process also required commitment from constructors. For example all the successful (CT) set up a special panel to deal with the questionnaire and interview. Such commitment here indicates a commitment to partnering generally. Having noted this however it should be mentioned that past experience was a factor in these Construction team (CT) knowledge of what would be required of them. This knowledge gave them an understanding of what the client would require of them. This experience was important, not because it directly resulted in these companies being selected as partners, but because they could draw on the past experiences to convince Midlothian of their competence in the selection process, which fits well with ideology of partnering. The Central function of the interview/presentations allowed the council to establish the (CT) who felt they could work with effectively on a personal level. The fact that these contractors/consultants had been short listed proved that, generally, they were capable (CT). Indeed all of those who made presentations were very competent and the race was a close one. It can also be argued that the diversity of the selection panel was actually positive. Had the panel comprised compromised technically qualified individuals they would have been more likely to have focused on technical issues that, at this point, were no longer relevant. The primary qualification questionnaire had already ensured those short list were competent. At this stage attitudes were important and the selection panel were more than competent to judge on these. The workshops ought to be deemed successful as they achieved all the aims they are supposed to according to writers on the subject. In particular it felt the workshops were well organised, "spread the team working message very well". Furthermore the initial workshops were successful in that they promoted the aims of Midlothian Council. To allow the partnering agreement to operate, a series of project workshops followed. They generated a sense of ownership, a range of issues to focus on and performance indicators to measure and illustrate Best value. These project workshops should be regarded as a positive aspect of the partnering process to the extent that they allowed those involved to have a direct input into performance measurement. The dispute resolution procedure of the MNHCP is less explicit than those described in best practice guides. For example there exist no timescales to determine how long each organisational level has to resolve a dispute before it must move up to the next level. A more detailed guide, perhaps including timescales and who to contact would make the situation clearer. To date he MNHCP approach has worked well. During the course of carrying out this research, for this project, no major unresolved disputes came to light. Time will tell whether the MNHCP approach to conflict resolution will prove as, if not more, effective than suggested best practice.
This study describes the establishment of the MNHCP which, generally, was through and followed current perceptions of how to set up partnering, with only a limited number of specific deviations. These appear to have had a significant negative impact on the overall process. The problems and issues noted, whilst important, should not deflect from the overall view that the establishment of the MNHCP was professionally and successfully carried out.