Civil Engineering Reference
In-Depth Information
28
Alliance Contracting
Bruce Allender, B App Sci, Black & Veatch Corporation
INTRODUCTION
Alliance contracting has been defined as having an agreement between parties to work
cooperatively to achieve agreed outcomes on the basis of sharing risks and rewards
(Abrahams and Cullen 1998). This cooperation among parties suggests that alliance
contracts have the potential to deliver substantial cost and quality benefits without the
adversarial relationships that are common in more traditional contracts (Gallagher 2002).
These potential benefits have caused owners worldwide, especially in Australia, to con-
sider this delivery method for their water and wastewater infrastructure needs.
Alliance contracting originated in the oil and gas industry in the 1990s and dem-
onstrated earlier project delivery and more cost savings than traditional project delivery
methods, which dominated the industry at that time. Since then, alliance contracting as
a project delivery method has been implemented for water and wastewater projects with
impressive results. Members of alliance teams not only experience cost savings and meet
compressed schedules, but they also report a significant beneficial bond within the team
members, consisting of the owner, designer, and constructor.
Alliance Contracting Structure
There are many forms of alliance contracts used to deliver projects by the private and pub-
lic sectors. The commercial structure of an alliance as shown in Figure 28-1 is somewhat
similar to that of a DB, which is used in the United States. There are, however, contractual
differences in how the risk is allocated and transferred. For example, in alliance contract-
ing, the owner shares in the risk of delivering the project.
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