Hi Rob, Our Contracts Department just informed us that they are not willing to pay for something that I already agreed to with our contractor. This is not the first time it has happened. They think they are the "Project Police". How do I prevent my contracts department from undermining our team's decisions? - Handcuffed
Unfortunately, this issue is fairly common. We have seen internal disputes between construction and the contracts departments escalate into millions of dollars in claims. We have also seen departments come together to overcome these types of structural issues through an Internal Strategic Partnering process.
Internal Strategic Partnering
Internal Strategic Partnering is not project specific, but rather is a partnering effort developed between two (or more) departments within an organization that need to work together in order to accomplish a successful program of projects. It is essential to develop alignment between Construction and the departments who can influence the results of your projects (e.g. design, project management, procurement/contracts, testing, Right-of-Way, etc.). By developing a Strategic Partnership, you will work together to understand each department's needs and to co-create ways to resolve issues that frequently arise. This partnership will address the fundamental problems that often plague projects and will have an impact not only in the short term - but also in the long term for your program.
Benefits of Internal Strategic Partnering
Organizations that have engaged in Strategic Partnering have had outstanding results. Successful Strategic Partnering efforts between Construction and Contracts Departments often:
(a) Help develop mutual sensitivity, so Contracts learns how their actions intended to "protect" the owner's interests can often lead to an adversarial project team relationship, which will end up costing the owner in the long run;
(b) Improve communication between Construction and Contracts, to make the payment process more predictable and fair;
(c) Result in representatives from the Contracting Department attending construction partnering sessions to discuss grey areas in the Specs and to be a part of resolving issues as a team.
Initiating Strategic Partnering
Step One: Sell Your Division Chief
Your first step will be to sell your Division Chief on the Strategic Partnering. You can share the potential benefits listed above and also discuss how continuing down the current path is leading to avoidable claims. You can also contact IPI for more examples.
Step Two: The Invitation
Strategic Partnering starts with an invitation. Your Division Chief will need to invite the head of the Contracts Division to engage in a Strategic Partnering Effort. This promotes executive commitment and buy-in.
Step Three: Assembling the Team
The Department Heads will want to co-create a list of who needs to attend the Strategic Partnering effort. Remember, people do not argue with that which they help to create. Be inclusive and invite the key people your organization who needs to be in the room to create alignment between the two departments.
Step Four: Kick it off and Follow through
To design and facilitate the process, select an IPI Certified Professional Partnering Facilitator to help you through the process. Clearly your departments have struggled with conflict, a Neutral Facilitator will balance the power in the room and will guide the team toward consensus. At follow up sessions they will help to hold both departments accountable for following through on their commitments.
It is essential that once you kick-off the process, you must commit to an ongoing effort. The best practice is to follow-up quarterly. You cannot just make a New Year's Resolution to change the culture of two Departments and hope for the best. By following up and creating performance measures, you give your team the best chance to succeed.
By engaging in a Strategic Partnering effort, your Construction Department and your key stakeholder departments will be driving together towards successful outcomes.
For more information on Strategic Partnering Efforts, make sure to check out the article entitled "No Project is an Island" in the May/June issue of Partnering Magazine. This is the part 1 of our Three-Part series on the various forms of Strategic Partnering!
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