Towards Agreed Expectations - Department of Treasury and Finance

5. Opportunities for improvement – CollaborationThis chapter discusses the concept of collaboration in traditional contracting and its use for thebenefit of both the client and the tenderer.5.1 Collaboration and InteractionFrom a strictly legal standpoint, there is not a material difference between the terms "collaboration"and "interaction". However, there is a practical difference in the way that these terms have beencommonly understood, used and applied in the context of procurement processes. Generally, itcould be said that ‘collaborate’ has a broader meaning than ‘interact’ (i.e. two parties can interactwithout collaborating but cannot collaborate without interacting).The term collaboration is used in this report as meaning the client and the bidder having an open,honest, frank dialogue to understand the client’s tender needs/wants on the one hand; and on theother to understand the bidders’ potential supply offer. It is about the sharing ofinformation/knowledge which historically resides or is kept by one of the parties. The sharing withthe other is to “collaborate” to achieve a common goal; the goal being a “successful project”, whichnormally has a different meaning to each party, but is one they are all pleased/proud to havedelivered.Collaboration in this context can mean that the client will provide guidance to the bidder on itsemerging tender response. Moreover, the client may be put in a position of explaining, answeringquestions; thinking and responding about things it hadn't put its mind to but which the bidder feels isimportant for fully understanding what the client wants to procure. However, all this does not meanthe client has ownership or takes a share of the risk of the tender offer informed by the collaborativeprocess. The tenderer at all times owns the tender proposal, including post-contract award. Thisprocess should be mutually beneficial to both parties where everyone understands what is required.Collaboration is not PartneringPartnering in construction contracts was developed / employed in the 1990s as a means forestablishing a more cooperative relationship between parties in “hard dollar” contracts . Typically itinvolved the development of a “Partnering Charter” which ran in parallel with the constructioncontract and provided guidelines on how the parties should conduct their relationship. Thechallenge with partnering was that it could lead to an expectation that when significant contractualissues arose, the parties would work cooperatively to resolve the matter (rather than reverting tothe contract terms), even if it required commercial compromise by one of the parties.Collaboration in the tender stage is not the same as partnering. For collaboration to be effective,the client and tenderer must at all times act in accordance with the rules of the tender process asdefined in the RFT. Furthermore, each party must recognise and respect that once a contract isawarded the other party will want to, and is entitled to, satisfy their contract obligations in themanner which best suits them, whilst acting in a professional, diligent and reasonable manner at alltimes.The contract is awarded on the basis that one offer was superior to all others. Changingcontractual terms, conditions and price post award is problematic as it can invalidate the tenderselection decision.The process for procuring D&C contracts has traditionally been viewed as "interactive", but notnecessarily "collaborative". For example, the project owner interacts with prospective contractors toprovide technical information, discuss clarifications, and negotiate the terms and conditions. Bycontrast, the process for selecting and establishing Alliance Contracts has traditionally been viewedas "collaborative". For example, the owner and non-owner participants would actively co-operate30