RELATIONAL CONTRACTING: An International Coloquium

MEETING DATES: Thurday, June 14 Friday, June 15

A variety of relational contracting strategies are being applied around the world. These contracts offer improved collaboration, innovation and the ability to adjust to circumstances. Further, they shift attention and effort from optimizing locally to optimizing the project. This meeting is open to all. It will feature leading speakers and thinkers from around the world. Join them in a searching discussion about these new contracts. Preparing for the Relational Contracting Conference As teams have begun to negotiate and deliver projects using the Integrated Form of Agreement (IFOA) for Lean Project Delivery, they have been forced to confront a number of issues. The agreement was designed to create the relationships necessary to deliver the project in a way that best serves the interests of all involved. It opens opportunities for reshaping how teams are formed, how its members organize and interact, how they are compensated, and how risk is shared across the project team. Each of these opportunities presents challenges to traditional notions of project delivery and basic ways the design and construction industry has come to define roles and responsibilities. Depending on the particular set of circumstances, teams have responded to these issues in different ways as they come to their agreement. The resulting IFOA is an artifact of their unique conversations.

During the course of the Relational Contracting Conference, we plan to structure the conversation to explore the following topics: Team Formation How were members selected? When? Who participated in the process? What aspects of your process would you use again? What would you change? Team Education How were the initial team members educated concerning the core tenets of lean project delivery? The terms of the contract? Behavioral expectations? How did the team work to build trust? How did the team address breakdowns or the need to rebuild trust? Project Governance How was the Core Group selected? How did it function? What were its strengths? Weaknesses? Did the composition change over time? How were new members integrated into the existing dynamic? How did the Core Group assess team performance/mood? How did it seek to promote continuous improvement? How did the Core Group interrelate to the Senior Management Group? What role did the Senior Management Group play on the project? What worked well? What would you do differently next time to improve? Leadership: Does this agreement call for something different? What characteristics or qualities are important? What are impediments? Concurrently designing process and product The IFOA calls for the team to design or create various processes, rather than having them dictated prescriptively (e.g. target value design, communication plan). What challenges did this present? What new opportunities were explored? What constraints or potential roadblocks were uncovered in this effort? How were those challenges met/resolved? What opportunities do you feel were missed? How would you propose to address this in the future? What traditional systems were abandoned or modified? How was that received? Did the team specify areas to innovate? Set up experiments and document outcomes? How did it promote learning within the team? How did it promote sharing with the broader lean community? How did it integrate learning from other projects? Business Model/Gain Sharing Did the team explore changes to the basic business model of traditional delivery? What influence did the contract have on these topics? Were changes made? Why or why not? How did this impact the project? Did the team develop a method for collectively sharing in the profits/successes of the project? Did the team develop an incentive plan? Who participated? Did it cross the traditional boundaries between designers and constructors? How was it structured? What was rewarded? Did it noticeably influence behaviors? How? Would you pursue an incentive plan in the future? What learning from your experience would you carry forward? Given what you learned, would you be prepared to consider a model where the team’s overall or pooled project profits were distributed to the participating companies in a set ratio? By some other method? Did anything about the financial structure on the project inhibit maximizing the value creation/waste reduction on the project? Did anything encourage these? Risk sharing/mitigation Were risk issues openly discussed? Was the conversation different than on other projects? What did you learn in this process about project risk that you did not know before? How did the team innovate around risk reduction strategies? What new risk elimination or risk mitigation efforts did the team undertake? How was the IPD contingency set? Was the amount negotiated? How was it used? Was it exhausted? Was a plan developed in advance how the team would handle dividing liability if the IPD Contingency was exhausted? Did the project have a GMP? What impact did the GMP decision have on the project’s view of risk? On price? How did it influence behaviors? What learning would you carry forward into future conversations around the GMP? Were there liability caps negotiated in the contract? How were these amounts developed? What impact did this decision have on pricing? Behavior? What issues, if any, were raised by your insurance carriers/advisors concerning the project? How did this influence your negotiation of the contract? How did it affect your planned or actual performance? Other Areas of Learning What else did you learn that would influence how you negotiate the next agreement? WHO SHOULD ATTEND: Any one interested in the construction related contracting relationships, details and execution of contract specs are encouraged to attend. Representatives of owner companies, architectural and engineering firms, contracting firms and suppliers will benefit from the content. Non-members registration fee - $600.00 Non-members receive a one-year membership to LCI. Benefits of LCI membership include discounting to future LCI-sponsored events LCI Corporate members and LCI individual members fee - $450.00 MEETING TIME: Meetings begin Thursday at 8:00 am and conclude at 5:00 pm. Friday meeting begins at 8:00 am and concludes around 1:00 pm. Lunch is included. MEETING LOCATION: Hilton Hotel Northbrook ADDRESS: 2855 North Milwaukee Avenue, Northbrook, IL 60062 Hotel General Telephone Number: Tel: 1-847-480-7500 Complimentary self-parking at Hotel RESERVATIONS: 1-800-HILTONS ROOM RATE: $139 single or double occupancy plus applicable taxes. Room block will be dropped on May 24th. Availability after that date will be on a first come, first serve basis. WEBSITE: www1.hilton.com/en_US/hi/hotel/CHINBHF-Hilton-Northbrook-Illinois/index.do If you have difficulty registering online, send an email to jgclark@leanconstruction.org or call (830) 997-0422 to request an invoice. REFUND POLICY: Refunds requested less than 3 weeks before meeting subject to $75 penalty. INFORMAL DINNER: As folks arrive on Wednesday 6/13, we will work to organize an informal, self pay dinner with the participants of the meeting and the LCI staff. Gather in the lobby around 6:15 pm. The registration fee includes a continental breakfast and lunch for all attendees, forum materials and handouts. On Thursday, June 14, 2007, an evening meal will be provided in the hotel. Dress: Dress is business causal; slacks, sport shirts. It is recommended you bring a light jacket since we cannot always control the temperature in the meeting room. AIRPORT INFORMATION: Chicago O'Hare Airport is the closest airport for booking flights. The hotel is approximately 10 miles from from the airport. DIRECTIONS: From O'HARE AIRPORT CAR RENTAL AREA: From Mannheim Rd. south of O'Hare - Take Irving Park East to 294 North. From Mannehim Rd. North of O'Hare Airport - go south on Mannheim Rd. to back to main road entering O'Hare. Proceed south on Dorothy Coleman Dr. to Interstate 90 east. Continue to 294 North. Exit at Willow Rd. From Willow Rd - West on Willow to Milwaukee, south on Milwaukee 1/2 mile. Hotel is on left. FROM DOWNTOWN CHICAGO: 90/94 West to O'Hare Rockford, 294 North/Milwaukee, WI; Exit at Willow Rd, from Willow Road - West on Willow to Milwaukee, south on Milwaukee 1/2 mile. 1) American Taxi Dispatch pre-arrange through www.americantaxi.com 847-259-1555 ext 282 Or, use the Courtesy Phone Board located on the Lower Level at all terminals.****Please call after luggage has been collected. O’Hare Airport • Press #15 • Press Transportation, Press Cabs, Call American Taxi Midway Airport • Press #13 • 847-255-9614 (Corporate Preferred) • 847-255-9600 (From O’Hare or Midway) • 877-755-2227 (Toll Free) O’Hare to Hilton Northbrook …………$24.00* From Midway or Downtown ……………$52.00* 2) 101 Express Limo Co. Contact Paul Kim at expresslimo101@yahoo.com or call: 847-478-0101 or 847-824-0701