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Balancing of interests between the clients and contractors within infrastructure innovation partnership projects

Heming, S. (2021) Balancing of interests between the clients and contractors within infrastructure innovation partnership projects.

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Abstract:The aim of this paper is to identify and understand the tensions that can occur between the client and the contractors within innovation partnerships (IPS) procedures to present recommendations to ensure a balance of interests between the client and market parties. The IPS is a relatively new procurement procedure were the client and market parties agree to a long-term partnership in which they develop innovations together. Due to the novelty of the procedure, conflicting interests, the long contract duration and the dynamic environment, tensions and paradoxes are inevitable in IPS leading to delays and cost overruns. In addition to this, there is no scientific research done on how to deal with these tensions to ensure a balance between the client and market parties. This study uses two large-scale and real-life IPS infrastructure projects to research the tensions within IPS projects. The first case is IPS Amsterdam in which the municipality demands a new innovative product for the renewal of their quay walls. The second case is IPS Sterke Lekdijk were the water board uses the IPS to tilt the current innovations in the dike sector to a commercial applied level to use these innovations for future dike renewal projects. By comparing these cases, three dynamics are found that influence the balance in an IPS procedure, namely: the organisational structure, intellectual property, and the financial component. Within these dynamics, tensions were discovered. Examples of these tensions are the question of who should pay for the IP, setting up a cost-effective profit mechanism (IPS Amsterdam) and process control (Sterke Lekdijk). This research highlights several mechanisms that alleviate the tensions within the IPS procedures. These mechanisms are divided into six categories: contract provisions, relationships, digitalised tools, relational governance, knowledge, and competences. By comparing the results of the two cases it is found that the dynamics of an IPS and the dealing mechanisms are interrelated, and both play an essential role in developing a balanced environment and resolving tensions. A general conclusion is that the better the relationship, the quicker the tensions were resolved. Hence, the dynamics and mechanisms should be flexible and interchangeable so that a balanced environment is reached, and the building of relationships is promoted.
Item Type:Essay (Master)
Faculty:ET: Engineering Technology
Programme:Construction Management and Engineering MSc (60337)
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