Model for the Evaluation of Owner's Management Approach to Third Party Relations: Lessons From the Mining Industry

Jorge Luis Palacios1, Vicente Gonzalez2 & Luis Fernando Alarcon3

1Head, Civil Engineering School, Universidad Tecnica Particular de Loja, Ecuador; jlpalacios@utpl.edu.ec
2PhD, Lecturer, Department of Civil and Environmental Engineering, The University of Auckland, New Zealand; v.gonzalez@auckland.ac.nz
3Professor and Head, Department of Construction Engineering and Management, Pontificia Universidad Catolica de Chile; lalarcon@ing.puc.cl

Abstract

Construction projects are increasingly executed under complex relationships between the parties involved. The traditional contracting approaches have not proved to be very effective to deliver successful projects, affecting the ability of owners to manage the relationship with their third parties (contractors). Moreover, these approaches promote adversarial relationships between them, causing detrimental effects on project performance. The negative impacts produced by using traditional contracting frames suggest the use of more collaborative approaches to manage their relationship between owners and third parties, which improve the quality of the relationships and performance. In this paper, a model to support the selection of third party relations is proposed, which is based on Partnering, Alliancing, Lean Project Delivery and Relational Contracting principles and it is developed in mining projects. By a detailed literature review and open interviews to experts in managing world class mining projects, the model implemented in an informal matrix was developed regarding three relational levels: (1)Traditional/Transactional, (2)Partnering/Transactional with agreement and (3)Alliancing/Relational. The main implications and lessons learned for construction from the model application in mining projects are illustrated and their potential to improve the relationship between parties and project performance is addressed.

Keywords

Partnering, Alliancing, Relational Contracts, Lean Project Delivery, Integrated Project Delivery

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Reference

Palacios, J.L. , Gonzalez, V. & Alarcon, L.F. 2011, 'Model for the Evaluation of Owner's Management Approach to Third Party Relations: Lessons From the Mining Industry' In:, Rooke, J. & Dave, B., 19th Annual Conference of the International Group for Lean Construction. Lima, Peru, 13-15 Jul 2011.

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