Negotiation Hierarchy. In fact, the best process begins with determining what outcomes the parties want to achieve, then the processes and behaviors needed to achieve those outcomes, and then the structures needed to support the processes and behaviors as shown in Figure 1:. Processes include tools such as Building Information Modeling or Lean3 design and construction. Behaviors include communication, collaboration, creativity, alignment and effort. By starting with the desired outcomes, the contract structure is tightly aligned with the project objectives. Unless mindsets are changed, negotiating an IPD contract may be difficult and frustrating because effort will be wasted on the wrong issues. One solution is to have an IPD workshop before any negotiation takes place. The workshop covers what IPD is, why it works, how it differs from traditional project delivery approaches, and discusses holdover thinking, such as the three issues highlighted above. The workshop creates a common level of understanding, allowing the parties (and their counsel) to focus on the issues that will make their IPD agreement successful. Collaborative negotiation is accelerated if the parties have a common understanding of IPD principles and why “improving” an IPD agreement with traditional contract language may actually undermine the IPD agreement and the party’s own interests. A skilled facilitator with actual IPD experience can streamline the negotiation process and improve the outcome. The negotiations, themselves, should begin with an open discussion of each party’s legitimate interests and concerns, which should be documented to guide later negotiations. The goal of the IPD agreement is to create a project where all participants benefit by its success and are equally motivated to avoid its failure. This can’t be accomplished if the parties’ interests are hidden or ignored. 3 For information on Lean, see papers and information published by the Lean Construction Institute, xxx.xxxxxxxxxxxxxxxx.xxx. The next step is to define the principle elements of the commercial terms and record them in a key terms summary. It should be compared to the guidance document developed previously to assure consistency with the parties’ self-defined interests. Because it is short and spare, the key terms summary reveals the fundamental points in the parties’ agreement with a clarity that may be lost in the detail of a completed contract. The final step is to create a contract that fully expresses the agreement documente...
