Contracts, collaboration and conflict resolution: Forging relationships in the face of adversity

Contracts have traditionally been used to coordinate expectations and structure relations, with clients using them to define and manage commercial relationships with suppliers. Whilst extant literature is concerned with large capital projects of a ‘one-off’ nature, this research is concerned with individual contracts within ‘on-going’ strategic infrastructure maintenance programmes. Whereas relational contracting strategies are associated with better client-supplier relations, ‘on-going’ strategic infrastructure maintenance programmes tend not to use such contracts. This presents a problematic contextual backdrop for the successful delivery of such programmes. This research seeks to understand the conditions under which collaborative working arrangements can be achieved within non-collaborative commercial frameworks. An in-depth case study is used to explore collaboration within transactional lump-sum arrangements. The research reveals how the interpretation of a lump-sum contract led to the prioritisation of cost savings over quality and initially stimulated behaviours that inhibited collaboration. However, over time informal working practices and a collaborative working philosophy emerged reminiscent of that expected under relational contracts. Collaboration was established in an informal project culture that ran counter to a persistent adversarial commercial framework. Formal performance measures were resolved and performance appeared satisfactory to the client, even though it was enabled by informal working practices running counter to the client’s chosen contract. Contra much previous work that deterministically positions relationships as a product of the contract, this study reveals that collaborative behaviours can thrive even in unfavourable contractual conditions. This, in turn, calls for a re-theorisation of the relationship between contracts and behaviours within long-term programme arrangements.