Alliancing in Australia: competing for thought leadership

Clients need to be ever vigilant to maintain a central role in thought leadership for the procurement of infrastructure projects. This paper uses the case study of alliancing in Australia as a cautionary tale to illustrate how value for money can be eroded when clients concede thought leadership to suppliers. In the mid-1990s the alliance model of contracting was introduced to Australia. By approximately 2005 this alliancing model was a dominant method of infrastructure procurement. Thought leadership by suppliers (including advisors) quickly evolved a model based on the promise that, ‘Clients would receive enhanced value-for-money outcomes and no disputes with a culture-centric procurement model that avoided price competition’. It sounds naive and it was, as evidenced by substantial research sponsored by the various Australian state treasuries. In July 2011 the public sector took a thought leadership role and adopted a new National Alliance Contracting policy and guidelines. This second generation of the alliance model was founded on competition of intellectual effort and price. The story of alliancing in Australia demonstrates that thought leadership in the procurement of infrastructure projects cannot be ignored by clients.