The traditional method of contracting is based on the transaction. Money is exchanged for goods and services. It places the focus on individual performance, and not the interdependent nature of performances within the project.
Attorney Will Lichtig has identified common responses to shortcomings of this system. These include past design constructability reviews and value engineering. Yet he sees these attempts to mitigate the negative impact of current problems as a band-aid approach.
Lean Project Delivery is based on relational, as opposed to transactional, contracting. It seeks to give explicit recognition to the commercial relationship between the parties. The terms of the contract assume less prominence than the relationship itself. Relational contracts establish mechanisms for delivery that focus on trust and partnership.
Currently prevalent contract systems are not relational, and thus not readily adaptable to Lean Project Delivery. Fortunately, the path to a viable relational contract has been blazed by Mr. Lichtig. He has developed a new and original contract, which has been successfully used on projects in California and Missouri. It is the basis for the 52 page Tri-Party Agreement for Collaborative Project Delivery published by the consensus documents group and now available on the web.
For more on Lean Project Delivery, see “’Lean’ production standards take root at construction sites,” Joe’s article published in the October 27, 2006 issue of the Cincinnati Business Courier.
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