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Building success together: exploring the power of collaborative contracting models for the delivery of health care projects

Infrastructure Ontario (IO) considers a variety of procurement options and contracting methods for its major infrastructure projects, ensuring we select the most suitable model for each project. With a proven track record, IO has successfully delivered numerous projects through our Ontario-based P3 program, as well as more traditional methods, and more recently using forms of progressive and collaborative contracts. Our delivery methods are constantly evolving in response to the market changes, drawing on our project experience and feedback from industry and public sector clients. IO recognizes the unique needs of each project, including their scale and complexity and we work closely with our partners to ensure that we fulfill government commitments to deliver much-needed infrastructure projects as efficiently and quickly as possible.

How do you determine the appropriate delivery model?

Model selection takes into consideration project size, complexity, market fluctuation, competitiveness, risk allocation, a lifecycle approach to model selection, current infrastructure needs, and other qualitative risks and benefits associated with each option.

Increasingly complex projects, market dynamics and industry trends have led to the need for new, creative, and collaborative partnerships to facilitate the successful delivery of projects. One such approach is the introduction of collaborative contracting models for our healthcare and social infrastructure program including a Progressive Design-Build model with target price regime for construction.

This will build on the work we are doing using Progressive Design Build (Target Price), Alliance and Progressive P3 projects for transit, transportation and healthcare sector and will support our core objective of delivering projects that demonstrate value.

What is collaborative contracting?

Collaborative contracting represents an innovative approach that emphasizes alignment of goals and commercial objectives and prioritizes cooperation, transparency and flexibility. At its core, these models emphasize open communication and joint problem-solving during development and construction. By fostering a spirit of partnership, these models create an environment conducive to innovation, collective risk reduction and risk sharing, and continuous improvement. Collaborative contracting models are underpinned by a commercial structure that promotes and incentivizes these behaviours.

key iconWhile the features may vary between different models of collaborative contracting, they generally include:

  1. Collective leadership that includes participation from all stakeholders.
  2. Transition from risk transfer to risk optimization.
  3. Establishment of peer relationships between all stakeholders.
  4. Implementation of transparency through open book structure, including greater pricing transparency and accuracy for the owner and contractor.
  5. Joint and unanimous decision making.
  6. Encouragement of innovative thinking.

How is IO currently using collaborative contracting?

Along with our project partners, IO has brought to market several projects using various collaborative models such as Alliance and Progressive Design-Build Target Price models for some transit and transportation projects and Progressive P3 (DBF/DBFM) models for some complex hospital projects. Hospitals currently being delivered using the Progressive P3 model include;

IO will expand on its existing work on these projects to bring new collaborative contracting delivery models for its healthcare and social infrastructure program including a Progressive Design-Build model with target price regime for construction. In May 2024, IO and William Osler Health System issued a request for qualifications for the Peel Memorial Hospital Phase 2 Redevelopment project using the Progressive Design-Build (Target Price) model. Further, IO will continue to explore the use of other forms of collaborative contracting such as the Alliance contracting model.

Despite having many benefits, implementing collaborative contracting models requires a fundamental shift in mindset and organizational culture. Embracing transparency, accepting uncertainty, and fostering a spirit of cooperation are essential prerequisites for success. Focusing on training and preparation throughout the organization will help us continue to evolve and achieve success alongside our partners on these truly transformative projects for the Province of Ontario.

As IO continues to move forward with delivering major infrastructure projects using a variety of contracting models, you can learn more about our projects in the planning, pre-procurement and active procurement stages by visiting IO’s latest Market Update.