Traditional procurement is based on adversarial contracting methods. Following negotiation of the building contract, the state agency, contractor and sub-contractors commence a process whereby omissions or incompleteness in the specification, variations to the contract and the settlement of claims is a source of ongoing friction against the backdrop of potential litigation if the intermediate steps of negotiation and alternative dispute resolution are unsuccessful. Adversarial contracting and staff time devoted to resolution of disputes is a major impediment to improved industry productivity with flow-on consequences for industry profitability and investment (Egan 1998, p. 7). The adversarial foundations of traditional procurement are estimated to cost around 10% of annual construction capital spending and 5% of building operating costs (NAO 2005b, p. 6).
Alternative procurement methods including PPPs and relationship contracts are circumventing the numerous problems associated with adversarial contracts including its cost and adverse impact on productivity performance. Project collaboration enables real-time sharing of information, drawings, specifications, time-scales and budgets. From the state agency's perspective, the benefits of collaborative project management software are better communication, a reduction in mistakes and increased speed. A PPP assigns design, construction and operation risk to the consortium to be managed on an integrated basis with significant value improvement and cost reduction (Egan 1998, p. 8).