For some high-risk projects, the optimum VfM outcome may be achieved by the project solution being progressively refined and developed to reflect emerging risks. For example, these risks may arise in relation to stakeholders, network and legacy issues or developing a project in a live operating environment. The Owner is likely to obtain a better VfM outcome if the Participants work collaboratively to manage these risks and solve any related problems as they arise. As an emerging risk materialises, it will impact the design and scope of the works. A collective approach means the Owner is likely to achieve the desired project outcome without having to pay a substantial risk premium upfront, which would be the case if the risks were transferred to the designer/contractor under a traditional contract.
| Additional reasons for using an alliance |
| Sometimes alliancing may be selected as a delivery method for other reasons. These reasons may contribute to the Owner's decision to use alliancing, but should not be relied upon as the primary reason to justify the selection of alliancing to deliver a specific project. Innovation or outstanding outcomes are needed: Innovation or outstanding outcomes can occur and be achieved under any delivery method. This should therefore not be used as a sole rationale for using an alliance, but is an added consideration when innovation is encouraged and supported by Owner involvement. To deliver new or emerging technology: Owners should give careful consideration to using an alliance to deliver new or emerging technologies. The risk-sharing model in alliancing means that Owners will share the risk of implementing any new technology on a project. Owners may be exposed to higher costs, or handover and operating difficulties. This higher risk exposure should be reflected in the commercial arrangements. Owners may select alliancing if they wish to share in the development of new technology. No litigation over contractual disputes: Alliances are characterised by the key principle that, subject to certain exceptions, there is to be no litigation between the Participants. The removed threat of litigation over contractual disputes is attractive to both NOPs and Owners. Although the application of the principle means that alliances have not been the subject of many litigious disputes, it is impossible to completely remove the threat of litigation (see Guidance Note No 1). It is also important to remember that the 'no fault - no blame' culture (which supports the no litigation principle) should not mean there will be no disagreements between the Participants (refer to section 2.1.2). |
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