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Originally from Alternatives to the High Cost of Litigation

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As business environments have grown more complex with greater interdependencies— e.g., outsourcing deals, strategic alliances, and complex public works initiatives—contracting professionals are seeking ways to devise alternative contracting models to better align the parties’ interests around the objectives of the contract.

Performance-based agreements, Integrated Project Delivery (IPD), alliance contracting, a Vested sourcing- business model, and public-private partnerships (PPPs) have all emerged as credible alternative contracting models. [The author is Vested’s designer; the website explaining the initiative and the model can be found at www.vestedway.com/what-is-vested.]

While each model differs in its approach and effectiveness, all of the models seek to promote collaboration and align interests among trading partners with the goal to shift behaviors to those promoting collaboration and away from actions targeted to maximizing each parties’ own short-term benefit. This month’s Back to School on Dispute Management column focuses on alliance contracting.