Increased cooperation through immediate post contractual negotiation

Traditional contracting often leads to claims during construction by contractors, increasing transaction costs for both parties in the form of policing and enforcement costs. Partnering is widely advocated as a governance form to more cooperative relationships between client and contractor. However, partnering requires a significant investment in elaborating a specific procurement approach, and is regarded as inappropriate for small, one-off, less complex projects. Dutch municipal governments are searching for alternative solutions to increase cooperation with contractors and reduce transaction costs by applying immediate post contractual negotiations in traditionally procured projects. We studied four such municipal projects which have shown that immediate post contractual negotiations achieve the effects of partnering despite the initial traditional procurement procedures. These negotiations seem to reduce the transaction costs of traditional procurement making them particularly applicable in smaller projects where high set up costs would not be justifiable due to their limited size, complexity, or cost.