Alliance Model

Alliance Model

Projects implemented according to the alliance contracting model consist of smooth cooperation between the alliance parties. In an alliance, the parties are responsible for the project’s planning and construction and they share the risks and benefits. An alliance is an open and cooperative project model in
which the parties operate in a shared project organisation. The cooperation keeps the focus on the resolution of problems instead of creating new ones. There are rarely any arguments in alliance projects and it also means clear savings for taxpayers. When the risks and benefits are shared, all win or lose together and work becomes more efficient.

In addition to solidarity, alliances are characterised by innovation,
which helps improve quality and safety and influence the environment
and cooperation, for example.

Continuous management and generation of ideas may also improve the cost-efficiency of construction. It is often possible to achieve substantial schedule benefits and take the investment into use more quickly than when traditional operating models are used.

Applicability of alliance model

An alliance is an implementation model for projects that involve many challenges, stakeholders and uncertainty; for example, hospital and health centre projects, renovations, industrial projects and infrastructure projects. Cooperative elements are also included in many other implementation models these days.

Benefits of alliance model

  • Shared organisation
  • Shared contract: transparency and open books
  • Shared objectives: combining different competencies to achieve shared objectives
  • Key control elements: a jointly agreed target cost, bonuses can be increased by reaching a cost level below the target cost
  • Operating methods that support cooperation: Big Room, Open Book, Target Value Design, Last Planner System
  • Shared distribution of risks andbenefits: profits and losses are distributed equally, each party’srisk premium is equal to the bonus, sanctions are achieved at the same time by the parties

 

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References

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