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Investigating the Adaptability of Relational Contracting(RC) Practices – The Sri Lankan ContextGunatilake, S.University of Central Lancashire(email: SVGunathilake@uclan.ac.uk)Liyanage, C.University of Central Lancashire(email: CLLiyanage@uclan.ac.uk)Jayasena, H. M.University of Moratuwa(email: suranga@becon.mrt.ac.lk)AbstractDespite the plethora of research and industry reports promoting the use of relationship-basedprocurement approaches, the Sri Lankan construction industry still remains dominated by traditionalprocurement and contracting strategies. The industry suffers from the numerous drawbacks inherentto the traditional procurement environments. Research elsewhere suggests that adaptation ofrelationship-based procurement approaches could help uplift the industry performance drastically.This research examines the adaptability of relational contracting (RC) practices (e.g. partnering andalliances) to the Sri Lankan construction industry. The findings of the paper are mainly based on aquestionnaire survey. Data gathered were subjected to quantitative analysis. Overall, the researchsuggests that there is a facilitating environment to RC within the Sri Lankan construction industry.Findings of the research also reveal that the contractors in general were more supportive towardsadaptation of RC approaches than the consultants. Furthermore, the level of existence of facilitatorsto RC (and hence, the adaptability of RC) appears to have a positive co-relation with the level ofintegration in project teams.Keywords: facilitators, integrated procurement environments, quantitative analysis, relationalcontracting (RC), Sri Lankan construction industry.663
1. IntroductionThe construction industry of Sri Lanka, to-date, remains clearly dominated by traditional procurementsystems (Rameezdeen 2007). These traditional procurement environments are generally criticised fortheir characteristic adversarial relationships, unhealthy competition, purely price-based selections,numerous change orders and improper risk transfer tactics (Palaneeswaran et al. 2003). Poor levels oftrust, co-operation and communication are common amongst parties of these projects. As adeveloping country, in Sri Lanka, these challenges are heightened by the presence of a generalsituation of socio-economic stress, resource shortages and institutional weaknesses (Ofori 2000). Allthese contribute to unsatisfactory project performance ultimately resulting in under-performance ofthe construction industry as a whole. Given the increased efficiencies and performance levels that theconstruction demands of the country are likely to require (especially with the large scale post-warreconstruction projects been undertaken) business-as-usual in the traditional procurement frameworksseems no longer an option for the Sri Lankan construction industry. Initiatives around the world foruplifting the construction industry performance have highlighted the need for more effective teamworking (Kumaraswamy et al. 2005) within project teams. This, therefore, has created a growinginterest on “relational contracting (RC)” practices (such as, partnering, alliances and joint ventures).These practices are now proliferating into construction industries around the world following theirsuccessful implementation in various countries, including USA, UK and Australia.The following sections of the paper provide an insight to the concept and benefits of RC. Acomprehensive review of the available literature revealed that the majority of the research in relationto relational contracting has been done for the context of developed countries. There is little to noresearch available exploring the adaptability of these practices in developing countries (especially forthe Sri Lankan context). This research sort to address this void by exploring the adaptability of RCpractices in the Sri Lankan construction industry. It is hoped that fulfilling this aim would provide abasis for future considerations in creating relationship-based procurement approaches in the SriLankan context.2. Relational Contracting (RC)The phrase 'relational contracting' (RC) is used to describe a spectrum of project delivery methodsthat focus upon the relationship between parties to a construction project (Aglionby and Georgiou2004). In contrast to the traditional forms of construction contracts, relational contracts are flexible innature. They sought to establish working relationships between the parties through a mutuallydeveloped, formal strategy of commitment and communication, aimed at win-win outcomes for all(Kumaraswamy et al. 2005). RC principles provide the foundation for a variety of practices such as,partnering, alliances, joint ventures and other forms of collaborative working.Many research studies have established numerous benefits of RC practices to the constructionindustry. For instance, adopting RC has been found to significantly increase project performance interms of cost, time, buildability of design, and fitness-for-use (Bennet and Jayes 1998; Chan et al.664
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ProceedingsTG65 & W065 - Special Tr
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TG65‐SMALLFIRMSINCONSTRUCTION&W06
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CONTENTSTG65PapersStrategyDevelopme
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ComparativeStudyonQualityAssuranceo
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StructuralEquationModellingforSmall
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1. Strategy in the construction ind
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The main part of orders is achieved
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and the public that shapes the mark
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Figure 3: Development in liquidityF
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industry in general. Also a special
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1. IntroductionThe construction ind
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comprises several components: one p
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Pries and Dorée (2005) indicate th
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Table 2: Distribution of innovation
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7. Innovation and collaborationTo i
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understand better the link between
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Reichstein T., Salter A. J. and Gan
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1. IntroductionAccording to the U.S
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50+ Employees11-50 Employees5-10 Em
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in respect to the corresponding cat
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make an educated decision when deci
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1. Accelerate and maximize cash inf
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New High Technology Product Develop
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voltage, causes the gas to emit ene
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3. Research methodologyThis researc
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4.3 Developing luminaire prototypeT
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It is this collective effort which
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Once They Were Heroes: What Happene
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Figure 1: The shells under construc
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client and the general contractor i
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Figure 3: Geographical distribution
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Table 5 (left): World distribution
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subsequent industrial fortune and/o
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Do Projects Matter? Tracing Firms
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study on how to measure whether and
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those produced within or for the co
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Figure 4a (left): State distributio
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3. Reading variations in the indust
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lost fewer companies (25%) than the
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Learning from Collective Action: Le
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subdivisions and suburbs, to confro
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1.2 Demand patterns and cyclesDurin
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eaching 47 stories in 1978, confron
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1.7 Human resources and productivit
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Bateman A (1969) Desarrollo de las
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Small and Medium Size Contractors i
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compulsory site inspections/briefin
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5. Skills related barriers to const
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22%MaleFemale78%Figure 1: Gender in
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ReferencesCheetam, T. and Mabuntana
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Between Fit and Misfit -Small Contr
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Another way to approach the dilemma
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and intrinsic / absent information;
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ERP. It supports a large range of t
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icklayers found the system intuitiv
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a mobile element encompasses a comm
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Wang L. (2008) Enhancing constructi
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1. IntroductionSustainable developm
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69.3% of the workforce in the indus
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Summarizing, the application of PS
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Subcontractor and Specialtycontract
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ReferencesAbiko A K, Marques F S, C
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Oviedo Haito R J J, Cardoso F F e S
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1. IntroductionNumerous attempts by
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3. Structuring of an integrated eme
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the management team with a wealth o
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7. Quantitative measured data: CSIR
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emerging contractors felt they gain
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their ability to manage their busin
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ReferencesBuilding Industries Feder
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1. IntroductionSmall and medium-siz
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Unlike in Hong Kong, NetRegs (2003a
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esources needed for the implementat
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3. Conclusions and recommendationsT
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ReferencesAnglada, L M. 2000. Small
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Revel, A., David, S. and Chen, H. 2
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1. IntroductionSmall and Medium Ent
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3. Sharma et al. (1995) Waste Manag
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1. Government Role (Regulation & Le
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3. If (i, j) entry in the SSIM is X
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Figure 2: MICMAC MatrixThe MICMAC M
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Mandal and Deshmukh (1994) claim th
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policies. Thus, ISM and SMEs Models
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Competitive Stakes in the “Credit
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3. MethodsThe period between 1993 a
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ut the Swedes retain a sizeable pre
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Table 4: Profit margin by national
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in this initiative has been stepped
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In times of national crisis and sta
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Siehler B A (1998) “Different app
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The Move to Nighttime Construction
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working at night will affect the wo
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under construction will be less con
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of the dangers in the work zone, bu
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Connecticut Yes Yes Yes (Crash Truc
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Nevada Yes No No No All the traffic
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to night work are projectspecific.W
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Cottrell Jr., B. H. "Final Report:
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1. IntroductionThe integrated desig
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systems. The viability of the 1 st
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2.4 Recursive, 1st-order BE system
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INTERACTION WITH 1 ST -ORDER PRACTI
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(8) A subsystem of foresight-specif
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4. ConclusionsIt is herein repeated
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1. IntroductionWork-life balance is
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elevance for the employees in the c
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2.3 Meeting the needs of the employ
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One engineer mentioned a “look bu
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employment strategies were used ext
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Felstead, A., Jewson, N., Phizackle
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1. IntroductionProduction quantitie
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ConstructionmethodType ofconstructi
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3.2.1 Calculation of the maximum nu
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4.3 Calculation Mode 3 - Applicatio
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Figure 5: Floor plan - standard flo
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A realistic construction time can b
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1. IntroductionComplexity silently
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That lack of actual relating in sys
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deliveries, such as those stemming
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5. Coping with complexity and learn
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alone. Management attention has to
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Luhmann N (1995) Social Systems, St
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Keywords: building product supplier
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In the same vein, the roots of the
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other hand, the conduct of a set of
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Figure 2. Timeline schedule of the
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(2000) for managing crises in const
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potential consequences. Complexity
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Palojärvi L, Huovinen P and Kiiras
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1. Introduction“The absence of se
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the context of the specific organiz
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Management functions (Management)Or
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Figure 3: Shared sense - identity -
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teamwork and I think the keyword on
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Luhmann N (1971) Sinn als Grundbegr
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1. IntroductionThe development of a
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sensitivity. (e.g. OGC 2004) Someti
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Office face rents grew through the
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At the time of signing the Developm
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contractor mitigated some of this d
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Byrne, P., & Cadman, D. (1984). Ris
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1. IntroductionStudent drop rate of
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profit of staying and cost of leavi
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etween value commitment and stress
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construction professionals may indi
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AcknowledgementThis paper is partly
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Meyer, J. P., Allen, N., J. & Smith
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1. IntroductionDigital information
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SharedDocumentationWork inprogressA
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CAD manager and other key members o
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of others to deliver the project, b
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There are also some limitations of
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ReferencesAbbott, A. (1988) The Sys
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Risks Shared and Allocated by Const
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2. Methodology & aimThe aim of this
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efficient relational contracting”
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Davies J (2007) “Preliminary resu
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1. BackgroundConstruction project i
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Figure 3: Framework of Public Const
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Pre-constructionContractor`sconstru
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also makes the fails of product’s
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(3) Site Inspection System of Priva
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Implementing a System for Achieving
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aimed to generate innovation projec
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2.3. SWOT analysisThe firm under st
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Figure 1: Process of technological
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the project manager must prepare a
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the evaluation of R&D projects; ide
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Heuristic Repetitive Activity Sched
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the inability to satisfy work conti
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esearchers and practitioners to be
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Idle time of crew, due to work inte
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PFij-k’ = EFij-k’ + Sij-k’the
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The proposed method has also been t
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The Innovation Value Chain Analysis
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2. Innovation value chainInnovation
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comprehensive programme of over 50
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) Conversion of ideas into practice
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Taken together, the project team ha
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understanding of these stages of in
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Supply Chain Management:A Critique
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terms of volume is carried out by a
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Open : Selective : Restrictive : Cl
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competitive client / contractor / s
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learning agenda, otherwise future i
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GREEN, S. D. & MAY, S. C. (2005) Le
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WOLSTENHOLME, A. (2009) Never waste
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1. IntroductionThe external backgro
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opportunities in private sectors an
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A delivery system of a VCMSC is bas
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In addition, the IIS provides a lea
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and positions (versus other SSCs) i
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Bauer R and Köszegi S (2003) “Me
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1. IntroductionWe live at a time wh
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3. Reengineering of the constructio
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Table 1: Five elements that enable
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Ballard G, Howell G (2003) "Lean pr
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1. Introduction“New industrializa
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and control mechanisms encompassing
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…Strategic component and systems
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case of nice to have.” A result o
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optimized to result in minimal wast
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Lindgreen A., Balazs Revezs and M.
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Qualifications in Croatian Construc
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2. History and Current State of Voc
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By craft school standards, semi-ski
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4. The New Croatian Qualification F
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5. Challenges of the New FrameworkC
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European Communities (EC) (2008) Th
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5.2..After finishingprofessionalstu
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1. IntroductionIn Australia, around
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groups (95.6 per cent). Nevertheles
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While the majority of supervisors i
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create business case incentives for
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Success Factors in Large Constructi
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Cooke-Davies (2002) defines 12 diff
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2.2 Prerequisites / delimitationsTh
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An overview of the most important c
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Table 2. Comprehensive comparison o
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ReferencesChan, A.P.C and Scott, Da
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1. IntroductionInnovation has becom
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co-workers, leaders among others is
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management in the construction indu
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project outcomes to be measured wil
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what is the relationship between tr
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Lim, J.N. & Ofori, G. (2007), "Clas
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Multidisciplinary Integrated Tools
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Figure 1: Qualitative expression of
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subjects and scope (local, regional
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Figure 3: The hierarchical structur
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Table 1: A comparison matrix for co
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Cardona, O.D. et al (2008) "Earthqu
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Appropriate Time and Costs Estimate
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• Wrong time estimates cost money
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FocusPeople involvedMethods ofimple
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Organizational culture also influen
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Moylan W A (2002) Planning and Sche
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1. IntroductionThe general theme fo
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2.3 Methods of trade-off decisions
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4.2 The aspect of trade-off ‘elem
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limiting the trade-offs to time, co
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Nokes, S., Major, I., Greenwood, A.
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Exploring the Potential Contributio
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2007). Little discussion is focused
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following session, a brief discussi
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According to Reiss et al. (2006) be
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ealisation is an approach has also
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Community Development Resource Asso
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Turner, J.R. and Cochrane, R.A., 19
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1. IntroductionThis paper is part o
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3. Insights in modern, enlarged RM
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and management and assesses it with
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According to Ralls et al. (1999), t
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iskmanagementroughly half of 1980's
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Lehtiranta L and Huovinen P (2010)
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1. IntroductionIn general, literatu
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7 Overall validity protection3 Defi
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3.3 Conduct of the review of enlarg
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(7) The high validity of the review
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(3) The focal contexts could be gro
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ReferencesAhonen L (2007) Managing
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Critical Success Factors of Sustain
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2004), (Fortune and White, 2006) an
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For practical reasons, the numbers
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Table 4: the rotated Component Matr
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the project manager needs LCA tools
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Nguyen, L.D., Ogunlana, S.O., & Lan
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Sustainable Development in Construc
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Strategic management thus refers to
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construction anddevelopment (Charte
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The third part of the study include
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Figure 1 Diagram of the TMO of the
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The principles of SD include social
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Glasson, J., Therivel, R., & Chadwi
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Stead, J., & Stead, W. (2008). Sust
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1. Introduction1.1 BackgroundDue to
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In this frontier study, the overlap
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3. Comparative of Shanghai project
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IVRGCMMIVR: InvestorM: M companyGC:
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Chinese GC is not relied on a long-
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1. IntroductionToday, there are met
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improve performance in the on-site
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form-altering material parameters f
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Cost4.1 ConsequencesAll nine respon
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(Roy et al. 2005). Designers in the
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Höök M. and Stehn L. (2008), “A
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Performance Indicators of the Compa
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products.A system of indicators can
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In general it was possible to ident
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e-mailing the results;weekly issue
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Chart 1: Objectives, goals and indi
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elating to the performance indicato
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Management Processes Standardizatio
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following stages, as most frequentl
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3.3 Best practicesProject life cycl
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Integrated process map is a matrix
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ReferencesPMI (2008) A Guide to the
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Improving Construction Design and P
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Problems in project delivery often
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By analogy with manufacturing conce
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2.3. Design of the production syste
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vious experience of joint work. It
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Ronen, B. 1992, "The complete kit c
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1. IntroductionIn the second part o
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In the realization of the total inc
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Furthermore, this paper will presen
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89Our company is investingenough in
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Design-Bid-Build versus Design-Buil
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Kumaraswamy and Dissanayaka (Kumara
Page 622 and 623: 2.5 Selection methodologiesIf a cli
Page 624 and 625: 2. Procurement system4. The project
Page 626 and 627: questions in which experts were ask
Page 628 and 629: 5.1.13 Product complexity10 experts
Page 630 and 631: ReferencesChan, A.P.C. et al. (2002
Page 632 and 633: 1. InstructionUnlike the majority o
Page 634 and 635: 2.2.1 The dimension of timeThe time
Page 636 and 637: slightly higher. The most common ex
Page 638 and 639: HRMFinanceRiskSafetySchedulingQuali
Page 640 and 641: Success of0.99ConstructionCOmpanyeT
Page 642 and 643: The dimension of time is comparativ
Page 644 and 645: Cooperation in Project Alliancing:
Page 646 and 647: 2003).Project alliancing is used to
Page 648 and 649: main contractor relationship in the
Page 650 and 651: In the context of construction, pro
Page 652 and 653: In construction management, the per
Page 654 and 655: The Delphi method may also be used
Page 656 and 657: Ross J, (1999) “Project Alliancin
Page 658 and 659: 1. IntroductionIt is becoming incre
Page 660 and 661: 4. Seven wastesAccording to Ohno se
Page 662 and 663: 4.5 Waste of unnecessary inventoryT
Page 664 and 665: In the Lean concept these inspectio
Page 666 and 667: health and safety of the work. Thes
Page 668 and 669: 8.2.4 StandardiseThe establishment
Page 670 and 671: its design supports workflows and v
Page 674 and 675: 2004). Many government organisation
Page 676 and 677: 3.3.3 Mutually agreed risk-reward p
Page 678 and 679: Table 1 gives the years of experien
Page 680 and 681: degrees of agreement to the stateme
Page 682 and 683: All project parties are held jointl
Page 684 and 685: International Council for Research
Page 686 and 687: DISCLAIMERAll rights reserved. No p
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