Imaginative owners embrace alliancing because they believe they can achieve savings by giving great latitude in the design and construction to the alliance team. The process focuses on collective objectives and incentivising the team members through risk and reward mechanisms. It is a flexible process and differs significantly in its applications to individual projects. It combines leading edge risk sharing incentives with the popular “partnering” techniques, through co-operative attitude building among project participants.

While alliancing certainly is a new contracting technique that has been successfully used, it should be recognised that it has evolved from a number of existing contracting techniques that have been developed over the past decade. Owners, disturbed at the escalating prices of large construction projects, have sought new techniques to permit all the major contractors and designers to become stakeholders in projects and share in the gain or loss measured by identified goals. The contracting team is rewarded for better than average performance and penalised for less than average performance.

Conceptually, the owner, contractor and service contractors form a virtual corporation in which everyone involved shares equal representation, authority and risk. A single goal of successful completion of the project at an acceptable standard forms a criterion and benchmark for measurement of project performance. This goal is established by all members of the alliance. Success or failure is usually measured by an independent third party.

When the alliance process works as planned, its intent is to generate an environment of innovation and continuous improvement, rather than adversarial confrontation. It promotes extraordinary performance and enhances the business outcome for all companies involved in the project.

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