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48 C H A P T E R 4 Conclusions and Suggested Research Enhancing Partnerships railroadhighway agreement process than either could achieve on its own. Partnership is a term commonly used in business. It is impor- Because two institutions are involved, the model process is tant to understand that partnerships that are not understood, formal. It is tiered and stratified to outline the broad under- agreed to, and appreciated by all parties involved will fail. standings that the parties agree to overall. It then progresses There are many ways to develop and maintain partnerships, through more detailed agreements down to streamlined and but they start with strategies, agreements, processes, and prac- standardized project-specific agreements. The intent of the tices that support success for both parties. model process is to outline an overall framework for ongoing Douglas M. Lambert and A. Michael Knemeyer (1) say the partnership, agreement-streamlining and continuous process following about partnerships: improvement. Although formal, the model process is flexible to allow it to be modified to meet the circumstances of the Partnerships are costly to implement--they require extra communication, coordination, and risk sharing. They are jus- various railroads and highway agencies. tified only if they stand to yield substantially better results than Two successful precedents form the basis for the proposed the firms could achieve without partnering. railroadhighway partnering processes proposed here. First is the construction partnering process that has been widely Rosabeth Moss Kanter (2) notes that "successful partner- adopted by many state transportation agencies and that was ships manage the relationship, not just the deal": pioneered by the U.S. Army Corps of Engineers. Construc- tion partnering is so successful and so mature that several [Business alliances] must yield benefits for the partners, but generations of training manuals, facilitator courses, and text- they are more than just the deal. They are living systems that books have been developed over the past two decades. The sec- evolve progressively in their possibilities. Beyond the immedi- ond successful precedent forming the basis for the partnering ate reasons they have for entering into a relationship, the con- and model processes is the field of environmental streamlin- nection offers the parties an option on the future, opening new ing. Likewise, this field has become so mature that it has its doors and unforeseen opportunities. own websites, national resource centers, model agreements, Alliances that both partners ultimately deem successful involve collaboration (creating new value together) rather than and templates for success. An environmental streamlining mere exchange (getting something back for what you put in). resource center is jointly funded by FHWA and AASHTO to Partners value the skills each brings to the alliance. (italics in facilitate streamlining and environmental excellence. Both the original) the construction partnering process and the environmental streamlining process hold many lessons and analogies for To "manage the relationships" between railroads and high- improving the partnerships and relationships of railroads and way agencies so that their partnership "yields substantially highway agencies. better results than the firms could achieve without part- nering" is the objective of the model processes described Principles of Construction Partnering earlier. The model process outlined below is intended to allow the large institutions involved to identify common In construction partnering, neither the owner nor the con- understandings, common processes and ongoing coopera- tractor abdicates any of their legal rights or obligations. How- tion so that each achieves substantially better results in the ever, they use specific tools and processes to reach common

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49 goals. At a minimum, the steps of partnering include the costs and protect their assets and interests to the extent possi- following: ble. Partnering seeks to create a win-win mindset between two parties as opposed to an "I win, you lose" approach. Partner- 1. Defining what success is for both parties; ing is both an agreement and an active, ongoing relationship. 2. Formally agreeing that each wants to assist the other in The partnering agreement clarifies what both parties expect achieving this common success; and what they both want to mutually achieve. The relation- 3. Developing a level of service agreement that spells out ship is the ongoing series of steps that each side takes to fulfill what each expects from the other in terms of service and its obligations to the other from the partnering agreement. timeliness; The California Department of Transportation (Caltrans) 4. Identifying escalation paths for each to follow when prob- and its construction industry view partnering as a means for lems cannot be resolved at the lowest level; the private sector to remain profitable while the public-sector 5. Identifying a dispute resolution path for when escalation transportation agency receives a quality product. In 2006, fails; Caltrans, the Associated General Contractors of California, 6. Agreeing to remain in constant communication to ensure the Southern California Contractors Association, and the Engi- that problems are identified early and to monitor whether neering and Utility Contractors Association signed a partner- milestones have been achieved; ing agreement. In it, they stated the following: 7. Periodically analyzing what went right, what went wrong, and what can be learned for the future; and We, the undersigned partners in California transportation 8. Identifying critical reports and information throughout construction, agree to work together as a cohesive, cooperative the process so that they do not become detrimental to team to safely deliver quality projects to the public on time and timely project completion. within budget, providing an opportunity for well-managed, competent contractors to make a reasonable profit. Based on our collective experience in implementing part- Begin with Common Understanding nering in Caltrans construction projects, we have identified the following partnering success factors and commit ourselves The model process described here begins with the under- to their continuous improvement. standing of both the railroads' and the highway agencies' per- Follow-up and Measurement spectives. From the railroads' perspective, there is little benefit Training and Empowerment of Field Staff or new value added to their business from most highway proj- Project Stakeholder Partnering ects. On the contrary there is the possibility of encroachment Strategic Level Partnering and loss of valuable and irreplaceable right-of-way from these Decision Making and Risk Management projects. In addition, the construction process can endanger Recognition and Awards. rail safety and hamper rail operations. This perception needs to be addressed when discussing, developing, and enhancing Analogous to this project, Caltrans executed an overall part- partnerships between the two parties. After years of minimal nering agreement with its construction industry addressing growth, the railroads are now in an expansion era. Major rail- how they want to work together. In addition to this, Caltrans roads are looking to expand corridors in the future and are executes specific, project-level partnering agreements for each protective of their limited and finite rights-of-way. Addition- construction project. Likewise, Caltrans has proposed that ally, project reviews are expensive to railroads. As private highway agencies and railroads develop an overall partnering businesses, they need to recover the costs of these reviews. agreement for their ongoing relationships, as well as use spe- From the highway agencies' perspective, there is a signifi- cific partnering techniques for each project. cant need to improve aging highway infrastructure, but pub- To have a successful partnership, both highway agencies lic agencies face severe budget limitations. They are reluctant and railroads will have to work on building, growing, and to increase project costs to accommodate the railroads unless maintaining their relationship. The railroadhighway agency they see an overriding safety or operational need to do so. For relationship can be preserved if both perceive the partnering the highway agencies, moreover, the length of the agreement process to lead to the efficient use of resources, appropriate process also is important. Most highway agencies are trying compensation without wasteful administrative activities, good to meet project schedules, which can be delayed by lengthy communication and streamlined processes for both. railroad agreement processes. Both parties, therefore, face pressures to reduce their own Partnering as a Framework costs and to protect their own assets. A successful partnership or partnering process between railroads and highway agencies A high-level process to improve the partnering between the rail- will need to create ongoing processes that reduce both parties' roadsandthepublicagenciesis discussed below. The partnering