Optimising Contracting for Alliances in Infrastructure Projects

International Construction Law Review, Vol. 23, No. 1, January 2006

15 Pages Posted: 12 Dec 2006  

Matton van den Berg

Peter Kamminga

VU University Amsterdam - Faculty of Law; Harvard Law School (Program on Negotiation); University of California Hastings College of the Law

Abstract

Conflicts between purchaser and contractor are a major problem in infrastructure development. Consequences of conflicts are massive cost overruns and delay. For this reason, the construction sector makes increasing use of project alliancing, one of the modern frameworks of delivery of complex projects. Alliancing is applied to encourage the parties to a contract to adopt a more cooperative attitude with a view to improving efficiency in terms of cost, time and quality. In this paper a problem is identified considering the effectiveness of alliancing: the 'legal framework' used for an alliance - particularly contracts - tends to be of a competitive nature. As a result, if a serious conflict arises, and the contract starts playing a central role, damage may be done to the parties' relationship. This again may threaten the success of an alliance. It is argued that, to effectively support cooperation models such as the alliance, an alternative legal framework needs to be designed that actually prevents parties from reverting to uncooperative and adverse behavior in the event of conflict. In the second part of the paper, the essence and possible design of such a framework is explored. Negotiation and conflict theory is used to give insight into the ways in which a legal framework may facilitate cooperation. Finally, the paper gives a broad outline and some examples of a contracting process in which these insights are incorporated.

Keywords: contracting, cooperation, alliances, infrastructure projects, negotiation and conflict theory

JEL Classification: D70, D74, K10, K12, K20, K40

Suggested Citation

van den Berg, Matton and Kamminga, Peter, Optimising Contracting for Alliances in Infrastructure Projects. International Construction Law Review, Vol. 23, No. 1, January 2006. Available at SSRN: https://ssrn.com/abstract=934569

Matton Van den Berg

( email )

Tilburg, 5000 LE
Netherlands

Peter Kamminga (Contact Author)

VU University Amsterdam - Faculty of Law ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

Harvard Law School (Program on Negotiation) ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

University of California Hastings College of the Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States

HOME PAGE: http://www.uchastings.edu/faculty-administration/faculty/kamminga/index.html

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