Contracting for Lean Performance: Contracts and the Lean Construction Team

Robert Miles1 & Glenn Ballard2

1Mechanical Technology Coordinator and Corporate Senior Advisor, Industrial Design Corporation (IDC), 2020 SW 4th Ave, 3rd Floor, Portland OR 97201
2Lecturer, Department of Civil and Environmental Engineering, University of California at Berkeley

Abstract

In a previous paper (Howell et al 1996) proposed that construction Partnering is a programmatic Band-Aid on the current construction management system. Claims caused by fundamental weaknesses in this system gave rise to partnering. These weaknesses are particularly apparent on today’s complex, uncertain and quick projects. Partnering exposes and partially fills a gap in current practice but has had little impact on underlying mental models, the management of production, or commercial contracting. Moving beyond partnering means challenging and revising current thinking and practice. Management of the construction process must be re-conceived from the purchase of a product (transactional contracting) to the execution of a production process (behavioral contracting). This dictates that the current standard construction contracting forms which are wholly based on the transactional contracting model, be revisited. A number of progressive projects in the private sector have already been operating in behavioral mode, implementing many Lean Construction practices. But these projects executed and then worked around the industry standard contracts forms. This has functioned reasonably well in strategic alliance client-designer-constructor arrangements. However, this “work-around” approach is clearly problematic in the one-off project relationship. This paper briefly discusses the shortcomings of the current construction contract forms. It then goes on to propose a framework for ongoing discussion and action. Without a revamping of the standard approach to construction contracting, propagation of the concepts of Lean Construction will be limited mainly to the arenas of strategic alliances, and government sponsored or supported experiments.

Keywords

lean construction, performance measurement, benchmarking

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Reference

Miles, R. & Ballard, G. 1997, 'Contracting for Lean Performance: Contracts and the Lean Construction Team' In: & Tucker, S.N., 5th Annual Conference of the International Group for Lean Construction. Gold Coast, Australia, 16-17 Jul 1997. pp 103-113

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