Framework for Multiparty Relational Contracting

A framework for multi-party relational contracting is proposed whereby the owner, contractor, suppliers, and manufacturers collaboratively work together under similar terms and conditions. The proposed framework improves and fills the voids in the already available Integrated Project Delivery (IPD) agreements. To this end, a four-step research methodology was utilized. First, a comparative analysis between available traditional and relational contract agreements was provided. Second, the available standard integrated project delivery contracts in the United States and the standard partnering contracts in the United Kingdom were reviewed. Third, practical case studies in the US market were reviewed and analyzed for lessons learned. Fourth, the proposed framework was developed to address ten critical interrelated aspects including: project environment, project management, partnering advisor, design process, partnering and project schedules, suppliers and manufacturers, prices and profits, incentives, changes, and conflicts and disputes. This study paves the ground for a more efficient and effective contracting environment that can hopefully recover communication, encourage cooperation, share risk, improve quality, decrease cost, minimize waste, maximize efficiency, and mitigate conflicts. The proposed framework should be formally drafted by legal professionals to allow piloting and testing on actual case study projects. While this research is applied within the framework of the U.S. market, its results and associated discussions and analyses are transferrable and implementable in other contracting environments.