4.1     Given the large number of stakeholders involved in the housing construction process, and the way their roles are inter-related, quality housing can only be achieved if they all work together in a cooperative spirit. Partnering is the key to enable all stakeholders to work together and to achieve common objectives by maximizing the effectiveness of each contribution.

4.2     For such a partnering to flourish, six key elements must exist. They are : commitment; clear roles and responsibilities; equitable risk-sharing; communication and feedback; objective performance appraisal and balanced reward and punishment. In the ensuing paragraphs, we will demonstrate how the HA aims to take the lead in building up this partnering framework.

  
Commitment

4.3     To start with, all stakeholders must share the common goal of delivering quality buildings. In the past, some stakeholders believed that the quality of public housing should by definition be inferior to private. This "it's only public housing" attitude must be completely refuted. Public housing should be a quality product which meets the needs and expectations of customers for comfortable and durable accommodation. It should also be delivered on time and within budget. All stakeholders should contribute to this quality objective, for ultimately it is in the interests of all that it will be achieved.

4.4     Part of realizing this quality objective relies on stakeholders taking pride in their work and having a sense of ownership of the final product. The HA will reinforce the commitment of stakeholders to delivering quality housing at two levels -

  
Clear Roles and Responsibilities

4.5     The existence of a large number of stakeholders has sometimes meant that some confusion in roles and responsibilities is unavoidable. However, this confusion, if not properly addressed, can compromise the partnering spirit and even building quality. For example, some stakeholders still believe that responsibility for delivering quality housing falls squarely and solely on property developers. However, as illustrated in the previous supply chain, housing production requires input from all stakeholders at different stages. Quality housing is the business of every stakeholder. It is important to define clearly the roles and responsibilities of key stakeholders and thereby maximize the benefits of their contributions and interaction.

4.6     In the case of public housing, we believe that the key roles and responsibilities of main stakeholders should be reflected as follows -

4.7     The above broad classifications of roles and responsibilities is by no means exclusive and does not aim to segregate the contributions of different stakeholders. Rather, it aims to assist in focusing on their main roles and the interaction between them.

  
Equitable Risk-sharing

4.8     Equity is fundamental to building up an effective partnering framework. Construction is an inherently risky business and an equitable sharing of risk is a pre-requisite for cultivating a win-win philosophy for all parties. While risks may not be removed completely, we should reduce them pro-actively. As a responsible developer and partner, the HA will review current risk-sharing arrangements with contractors and consultants. In particular it will -

  
Feedback and Communication

4.9     Candid and continuous communication amongst stakeholders is indispensable to fostering a cordial partnering framework. The HA will initiate a series of measures to ensure that stakeholders' views and feedback are properly reflected throughout the production process.

4.10    To start with, we will strengthen our communication channels with key stakeholders at all levels and stages -

4.11    Some disputes are unavoidable and existing contracts include arbitration and mediation clauses to facilitate their resolution. However, experience shows that most stakeholders rely on more costly and time-consuming routes such as litigation and extended arbitration to resolve problems. We believe that it is not healthy and therefore we will explore the use of adjudication and/or Dispute Resolution Advisers (DRA) in complex building contracts. We are aware that DRA have been used in Government's large-scale projects and the feedback has been very positive. Our guiding principle will be a swift resolution of problems. At the operational level, issues must be settled within a pre-determined time period, failing which, parties should be able to raise any unresolved problems immediately to higher levels with the expectation of a speedy decision. Similarly, all parties should be able to expect a quick, clean and economical process for resolving contractual disputes.

4.12    In addition, we must address the needs of customers as end-users of our product proactively, bearing in mind that their expectations are rising progressively. Thus, we will -

  
Objective Performance Appraisal

4.13    The HA is committed to maintaining an objective, open and fair performance appraisal system for contractors and consultants. For building contractors, the Performance Assessment Scoring System (PASS) has been the key device to assess their performance since 1990. However, having regard to their feedback on the objectivity and sampling coverage of the current PASS, we will introduce PASS 2000 from April 2000 onwards to enhance its representativeness and coverage. Under PASS 2000, the outcome will be derived objectively through a three-tier system : including daily site inspection records from site staff, monthly reports from project professionals and quarterly reports from an independent team.

4.14     The performance of consultants is currently assessed through the HD's consultant performance reports. However, there have been complaints that the system is too subjective and does not provide clear guidelines for appraisal. At the same time, gradings tend to be too narrow for effective demarcation of different levels of performance. Hence, we will further review the appraisal system for consultants to enhance its objectivity and consistency. We will draw up clear guidelines to provide benchmarks for performance evaluation.

  
Balanced Reward and Punishment

Disciplinary Mechanism

4.15    At present, the HA's Building Committee (BC) is responsible for reviewing the listing status of contractors and consultants and taking disciplinary actions in the form of tendering suspension, demotion, or removal from listings. The List Management Committee (LMC) and the Consultants Review Board (CRB) are the HD's fora to monitor contractors and consultants' performance respectively and provide recommendations to the BC for decision. The HA will take a hard-line against all non-performing contractors and consultants.

4.16    Whilst recognizing that the HA's decisions on hiring contractors are essentially commercial, some contractors and consultants have expressed the view that the existing disciplinary mechanism is not sufficiently objective, as the BC is both a decision-making and review body. In order to enhance the independence and objectivity of our disciplinary mechanism, we propose -

  
Tendering

4.17     As an accountable public body responsible for a very large budget, the HA is duty bound to ensure that its procurement policies secure value-for-money. The HA has thus for many years operated an open and competitive tendering to identify competent business partners for both works and consultancy contracts. The HA always supports healthy competition within the industry for making improvements.

4.18     There is a common perception, however, that the HA always awards contracts to the lowest bidders and hence quality is sacrificed. This is not the case. Our tender evaluation covers assessments on technical, financial, performance, workload and contractual aspects. The general principle is to award the contract to the lowest bidder provided that he satisfies all other technical requirements. The system thus strikes a balance between tenderers' potential performance and also their fee submissions.

4.19     Recently, we have improved our tendering system to encourage good performance from building contractors through the introduction of the Preferential Tender Award System (PTAS) and the Bonus Scheme. The PTAS has been in place since September 1999 and uses a 80:20 score weighting between tender price and performance to assess the performance and capability of contractors systematically. Under the Bonus Scheme introduced for projects tendered out from September 1999 onwards, good performers will be rewarded with a bonus up to $7.5 million or 1% of net contract sum, whichever is the lower. The bonus is awarded with regard to contractors' performance at both the completion and maintenance stages.

4.20     As a further step towards enhancing our tendering system, we will address five issues -

The strategic partnering concept, if adopted, would supplement our competitive tendering system but would not replace it.

4.21    For consultancy projects, the split between technical and fee scores is 50:50 for normal design projects and 70:30 for complex projects. Feedback from both consultants and the community favours putting greater emphasis on performance and technical capability. We will improve the tendering arrangements for consultancy projects, including -

4.22    With a common quality-driven agenda, all stakeholders should contribute in enhancing building quality progressively. We believe that the proposals in this chapter will foster a partnership for continuous cooperation and a culture of quality.

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