Effective Project Management

Section J Joint Associations

A joint association is an enterprise formed by two or more undertakings for the purpose of executing a particular, clearly defined objective. The joint association will have a single contract with the owner and will be jointly and severally liable for the risks involved. Typical arrangements are:

• Ad hoc partnering
• Prime and subcontractor
• Single project contractual joint venture
• Multi‐project contractual joint venture
• Partnerships
• Joint venture company (joint stock company)
• Broadly based strategic alliance

In a consortium, each company has a separate contract with the owner. It is, therefore, important to build the safety case into each of the consortium agreements. Consequently, it is not strictly a joint association.

An alliance, however, is a short‐term strategy applied to a particular project for the purposes of sharing risk and reward, whereas partnering is a long‐term, mutually beneficial contractual arrangement between two or more parties, with compensation linked to performance objectives. The whole essence of partnering arrangements is a realignment of interests. These collaborative relationships involve an approach, which is focused on teamwork and incentives.

International associations are more complex, more costly, and time consuming. They have different cultures and systems and require sophisticated risk management.

International associations are often used on the basis that the local partner will help to bring in work. Therefore, ...