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Brain Noble
Director Operational Asset Management
Main Roads Western Australia
4th November 2010
Alliance Contracts in Australia
Australias first Alliance was in the oil industry in mid
1990s.
First used in the water industry during late 1990s.
First road construction alliance is 2000.
Main Roads Western Australia first Alliance in 2003.
Main Roads has awarded 8 Construction Alliances
and varied two maintenance contracts into Alliances.
Our future road maintenance/management strategy
is based upon this type of contracting.
Alliances were developed from a strained
Contracting Environment
Project Alliance Definition
A Project Alliance is where an owner and one or
more service providers (designer, constructor,
supplier) work as an integrated team to deliver a
specific project under a contractual framework
where their commercial interests are aligned to the
actual project outcomes.
Alliance
Leadership Team
Alliance
Management Team
Headed by
Alliance Manager
Project Team
Alliance Leadership Team Responsibilities
3 phase process
1. Selection of Partners.
2. Interim Alliance.
3. Full Alliance.
Selection Interim Full Alliance
Selection
of Preferred Commercial
Proponent Discussions
Are Key
No
Issues
Agreed?
Yes
Interim Alliance Period
Is
No The Target Outturn
Cost
Agreed?
Walk Away
Yes
Alliance Agreement
All parties have the right to Only owner has the right to terminate
walk away up to this point For convenience from this point
1ST Phase
Selection of partner(s)
Selection Criteria
Non Cost
Technical, financial, and management capacity.
Understanding of and commitment to the Alliance
way of doing business.
Preliminary ideas on innovations and execution
strategies plus the potential to deliver outstanding
design and construction outcomes.
Willingness to commit to the project objectives and
pursue breakthrough outcomes.
Ability to work with the owners personnel in a high-
performance team.
Selection
Delivery of Services
Payment Structure
Full Alliance
Profit
Part 2
Part 2 is at risk (Margin)
oheads
Corp. Project-specific
under the Part 3
risk/reward
overheads
arrangements
Part 1
Part 1 costs are guaranteed (Costs)
irrespective of the
Direct Project Costs
outcome of the Part 3
risk/reward arrangements
Full Alliance
Overrun
Underrun
50% 50%
Owner NOPs
50% 50%
Managing Change
As a general principle, the parties collectively
assume all risks associated with the delivery of
the project, regardless of:
Whether or not those risks are within the
control of the parties.
Full Alliance
building 4
The number of Alliances in Australia
Time Number
1996 / 1997 5
1998 / 1999 11
2000/ 2001 14
2002 / 2003 28
2004 / 2005 35
2006 / 2007 87
20008/2009 37
Value and Number of Australian Alliances
(1996 2008)
Value $A millions Number
0 to 50 58
51 to 100 40
101 to 250 58
251 to 500 30
501 to 750 12
751 to 1000 7
1001 to 1500 2
1501 to 2000 7
2001 to 3000 + 3
30 Government Alliance Contracts