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CCPPP conference keynote Ashcraft peels off the layers of project delivery

Angela Gismondi
CCPPP conference keynote Ashcraft peels off the layers of project delivery
SCREENSHOT — Howard Ashcraft, partner at Hanson Bridgett LLP, who provided the opening keynote address at the Canadian Council for Public-Private Partnerships conference Nov. 16, shared a flow chart for developing a project delivery model for major projects.

When it comes to project delivery, understanding the power of relationships and structure is crucial because both have an immense impact on outcomes.

That was the message from Howard Ashcraft, a partner at Hanson Bridgett LLP, who was the opening keynote at the Canadian Council for Public-Private Partnerships 29th annual conference held virtually Nov. 16. In his address, A Global Look at Major Projects: What Does History and Experience Tell us About Best Approaches for the Future, he spoke about the importance of collaborative project delivery models such as Integrated Project Delivery on major infrastructure projects.

“Although this is a P3 conference, if you peel the financing off a P3 you end up with project delivery and if you want to talk about reliably and efficiently executing major projects you have to focus on project delivery,” said Ashcraft. “If you remember one thing from the discussion today it’s the structure of a project affects behaviour and the behaviour affects outcomes.”

What can be done to make project delivery better? When designing a project delivery system, Ashcraft starts with a flow chart.

“We first try to figure out why are we even doing this project…because we’re going to measure success by how well we solve that problem,” Ashcraft said. “Once we have that, we start looking at the opportunities, the challenges and the risk and use that to form what we are really trying to accomplish.”

You then need to filter it through the capabilities of your sponsor, suppliers and lenders.

“You have to look at financing as well and that’s especially important in P3 because P3 is heavily driven by finance,” said Ashcraft. “You filter through that and then you start working on your basic structural elements.

“You start building that organizational structure.”

Then you step back and look at whether the systems make sense.

“We then, from that system, look back and say ‘have we created a system which removes disfunctions? Have we created a system which incentivizes performance?’

“If we haven’t we then iterate through and actually try to get there,” said Ashcraft. “Generally, when I do this for a complex project, I end up with some form of collaborative project delivery. It’s often Integrated Project Delivery, but not always.”

In the ‘70s a lot of work was done on what is known as relational contracting, Ashcraft explained.

“It was based on the relationship of the parties and if those relationships were very strong…the power of that relationship will keep the project moving even in adversity,” he noted. “It creates what I call the ‘zone of resilience,’ where in fact the relationship is so important to the parties that they will work on a project perhaps even against their interests to bring it successfully to completion.”

In a relational model, the parties must work things out.

“If a large portion of your business is working for a large major client that has multiple projects, when something goes wrong on a project do you immediately go into a legal battle or do you think, ‘I actually want to work on those other projects, let’s work this out,’” he said.

If you procure all your projects on the lowest responsible bid you essentially destroy the possibility of developing relationships, he added.

“Your vendors then know that on the next project as long as they are the low bidder they’ll get that project, so why should they cut you any slack on this project?” Ashcraft pointed out. “You have destroyed the relationship by a structure you created. Tying profits together on project outcomes strengthens relationships. Using co-location strengthens relationships. There is a series of things that you can do that will strengthen the relationships.”

Then you make it contractual.

“A lot of people say, ‘let’s just collaborate on top of traditional contracts,’” said Ashcraft. “It works if everything goes well but if things aren’t going well the tendency is going to be to resort to the contract, to resort to traditional systems. So make collaboration contractual so you can’t get off the island.”

When you do all these things there is a major transition.

“If you go from, for instance, focusing on enforcement or promises, if you are traditional you are looking at external adjudication,” said Ashcraft. “If you are in a relationship you are internally adjusting in order to maintain that relationship which means the definition of success goes from compliance, ‘I did exactly what you told me to do, I’m sorry your project failed,’ to have ‘I actually satisfied you, are we both satisfied, such as we want to do it again.’”

He shared tips for highly successful projects: procure for performance, structure for outcome, engage everyone, reinforce relationships, create transparency, support dialogue, measure and report (dashboards) and validate.

 

Follow the author on Twitter @DCN_Angela.

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