Feasibility of collaborative working at the second tier subcontractor level in a prime contract

The Building Down Barriers (BDB) initiative involves adopting a procurement strategy to promote collaborative working through use of incentives to innovate best value for the client. The framework set out by BDB provides a strategy for procuring the supply chain at the first tier subcontractor level. However a strategy for implementation further down the supply chain for smaller subcontractor work packages, at the second tier, is not well developed. This paper describes the work undertaken to gauge the feasibility of implementing a collaborative working incentivisation agreement at the second tier subcontractor level. The research employed a case study research strategy. The case was a large regional construction contractor (annual turnover in excess of £100m) engaged as a first tier subcontractor on a prime contract project from a major national client organisation (annual construction expenditure well in excess of £1 billion). Through careful analysis of literature, a collaborative working incentivisation model was developed and validated with upstream parties. The model was then presented to three groups of second tier subcontractors and data relating to their opinions about the model and factors important to contractor-subcontractor relationships were collected. The results show that while the model was generally feasible, the agreements appropriate for different subcontractor groups vary due to different experience with open book relationships. It is argued that the success factors identified in this work provide a basis upon which contractors can develop strategies to overcome barriers to, and produce an environment that will facilitate, collaborative working.