At CCA’s Best Practices in Construction Symposium held in Toronto in October, members of the Union Station Enhancement Project team explained how a collaborative delivery model is changing the way owners, designers and contractors manage risk, schedules and major project decisions.
(left to right): Rod Gilbert, Tim Shepherd, Marcia Medrano and Eric Flaubert. Image by Sean Tarry.
As infrastructure projects become larger and more complex, simply transferring risk down the contracting chain is becoming increasingly difficult. And, in some cases, it’s also becoming increasingly unattractive to contractors.
That was one of the central messages from a discussion on alliance contracting at the Canadian Construction Association’s Best Practices in Construction Symposium. Using Metrolinx’s Union Station Enhancement Project (USEP) as a case study, panelists explored how an alliance model can create a different approach to risk, decision-making and project execution.
Metrolinx initially intended to procure USEP as a traditional P3, but the procurement was unsuccessful. The experience was part of a broader shift toward progressive delivery models as contractors became less willing to accept the risk associated with large fixed-price projects.
“The market was telling us loud and clear they weren’t interested in big fixed-price jobs anymore,” said Marcia Medrano, Executive Vice President, GO Expansion, Union+ at Metrolinx, adding that the agency also needed to rethink how it approached project risk. “It wasn’t just a question about risk transfer anymore. It was a question about risk management.”
Everybody owns the problem
Under the alliance approach, the owner, designer and construction partners share financial risk and operate under a common commercial framework. That changes the incentive when problems emerge.
“Every problem that you have is everybody’s problem,” said Tim Shepherd, Vice President and Area Manager, Kiewit. Rather than determining which party is contractually responsible for a construction, design, land or stakeholder issue, he explains that the team focuses on finding the best solution for the project.
That continues through construction. Unlike some progressive models, where collaboration is concentrated during development before parties agree on a target price, the alliance maintains unanimous decision-making and shared accountability during execution.
For contractors, that can fundamentally change where project resources are directed.
“You get to solving the problem, and everyone’s calories are burned at solving the problem, not at calculating each other’s risk,” said Medrano.
Collaboration takes work
The panelists cautioned that an alliance contract alone will not create collaborative behaviour.
Behavioural assessments formed a significant part of partner selection for USEP, while collaborative behavioural coaches with international alliance experience were brought in to help establish the project team. Approximately 220 to 230 hours of training took place during procurement, and behavioural coaches remain involved years later.
“Human behaviour is the toughest part of any contract,” Medrano said. “A fundamental tenet of working in an alliance is that you have to work at it.”
The team also conducts surveys to assess how well each partner demonstrates alliance values. Those assessments have sometimes exposed uncomfortable organizational habits and blind spots, but panelists said identifying them allows the team to improve.
Let the schedule drive design
The model has also allowed USEP to respond to changing requirements without bringing progress to a halt.
While the project’s fundamental objectives – new concourse space, platforms and tracks – remained consistent, details including platform dimensions, track configurations and interfaces with other projects evolved significantly.
The team learned that when new scope appears, the first question should not necessarily be how quickly design can advance. Instead, contractors and designers should determine where that scope sits in the overall project schedule.
A requirement for additional vertical circulation at the station provided an example. Once the team determined that the new work would become critical path, resources and design priorities were redirected and early works advanced.
Medrano described the approach as “design to build on steroids,” requiring trust between designer and contractor and, crucially, an owner capable of making timely decisions.
KPIs that evolve with the job
USEP’s performance measures also extend beyond conventional cost and schedule targets.
Eric Flaubert, Senior Vice President, Major Projects, WSP Canada Inc., explained that KPIs cover areas including safety, people, operations, stakeholder satisfaction and important interface milestones, highlighting the fact that the team regularly examines whether those measurements are producing the behaviour originally intended.
“They are not static,” he said. “The objective is to reward performance that matters rather than encourage teams simply to chase metrics. We don’t want to simply tick the boxes.”
Not a model for every project
For general contractors, perhaps the most important takeaway was that alliancing should not be viewed as a universal replacement for traditional procurement.
Projects with straightforward scope and manageable risks may be better suited to conventional approaches. Complex projects characterized by significant uncertainty, interfaces and changing requirements can provide a stronger case for an alliance. And owners also need to understand what they are signing up for.
“Go educate yourself,” Shepherd advised. “Go actually see how it’s working.”
And collaboration should not be confused with an absence of commercial discipline.
“Alliancing is not just fluff,” Medrano added. “It’s not just kumbaya.”
The distinguishing feature is a commercial framework designed to align interests – backed by transparent project controls, shared cost and schedule information and people empowered to make decisions.
As the panel made clear, the model ultimately depends as much on organizations and people as it does on contract language – the right project, the right partners, genuine risk sharing and an owner prepared to participate as part of the team.