SECTION ONE
WELCOME TO THE LEAD ALLIANCE PLAYBOOK
SECTION TWO ALLIANCES EXPLAINED
SECTION FIVE OPERATIONAL FRAMEWORK
SECTION SIX COMMERCIAL MODEL
SECTION THREE
LEAD ALLIANCE PARTICIPANTS
SECTION SEVEN
ONBOARDING & ORIENTATION
SECTION FOUR
STRUCTURE & GOVERNANCE
SECTION EIGHT
PLAYING YOUR PART IN LEAD ALLIANCE
LEAD Alliance is laying the groundwork for a better Auckland – more liveable, resilient and inclusive communities – for generations to come.
In partnership with owner participant Kāinga Ora, the alliance participants are delivering solutions to substantial infrastructure challenges to enable more land for housing, tackle flooding and solve infrastructure deficits.
The LEAD Alliance Playbook helps you understand how the alliance works and its key functions. It provides a comprehensive explanation of who, why, what, and how the alliance operates and references other documents and tools that will support you.
This playbook helps you understand how you contribute to LEAD’s success and how to be successful in an alliance environment.
Auckland’s suburbs are being transformed.
LEAD Alliance is proud to be playing a pivotal role in this transformational change.
Auckland, like many growing cities, grapples with an infrastructure deficit and a housing shortage. Kāinga Ora – Homes and Communities has been tasked with delivering new homes and the infrastructure to support them.
LEAD stands for Land Enablement and Delivery. As an alliance, we lead the design and construction of infrastructure to enable land for development. Our name is also a nod to the fact that the alliance is first to break ground in the neighbourhoods being renewed.
LEAD Alliance includes skilled design and construction companies who have partnered with Kāinga Ora to transform Auckland communities. We’ve forged a strong partnership to streamline land development by ensuring that infrastructure is built, and land is enabled for housing efficiently and cost-effectively.
LEAD Alliance is laying the groundwork for a better Auckland – more liveable, sustainable and resilient – for generations to come.
Te Ara Awataha greenway
Northcote Development, 2023
Think of an alliance as like playing for the All-Blacks.
Players selected for the All Blacks are selected from their home provincial rugby teams.
When players play for their provincial team, they wear their provincial jersey, play for their provincial team coach and execute the provincial team game plan.
The best or most skilled players from provincial teams are selected to play for the All Blacks. When players play for the All Blacks, they wear the treasured All Blacks jersey, play for the All Blacks coach and play a specific role to execute the All Blacks game plan.
Like the All Blacks, the home companies or non-owner participants (like provincial teams) who have formed LEAD Alliance, have agreed to provide their best people for selection for their skills in implementing the alliance game plan.
Think of the LEAD Alliance like the All Blacks!
When these people are selected or committed to the alliance, like the All-Blacks, their primary responsibility is now to the alliance, not their home company.
The alliance is a group of participating organisations (like provincial teams) who commit to a commercial venture focused on delivering the programme of work. The alliance has its own organisational structure, board, leaders, identity and commercial agreements. The alliance only exists for the delivery of the programme of work, and once delivered, staff return to their home company.
The model is useful when there is:
° High risk
° Tight timeframes
° Highly complex or large infrastructure projects
° Heavy client involvement required
° Uncertain scope at procurement, with high likelihood of change
° A desire for a non-adversarial commercial model.
It is also useful when the programme of work is too big for a single entity to deliver, and when supply needs to meet the demand of the client at short notice. Alliances improve the ability to deliver the programme by multiple parties coming together to work as one.
The key difference between an alliance compared with traditional contract or joint venture is that the owner (the client, Kāinga Ora) is part of the team, inside the alliance participating and supporting, not just sitting outside waiting for delivery.
It is a form of contracting characterised by collaboration. The programme of work (or project) is delivered by one integrated team, not a contractor under supervision of the owner or owner’s representative. All participants are bound by an alliance agreement to win or lose together, creating a collaborative no blame culture for problem solving and delivering outcomes.
° Successful alliances bring the best people available together to work as one multi-disciplinary team
° Alliance teams are co-located so everyone can collaborate
° Risk and rewards are shared.
Scope is large, challenging to define and the investment is substantial
Impact to the community is significant and requires flexibility in how we work
Due to the brownfields nature of the work (construction on land previously built on, and in our case, in busy residential and commercial areas) there are numerous and unpredictable risks including unforeseen ground conditions and potential utility clashes
High public expectations and a sense of urgency.
Streamline land development
Harness industry experience to solve complex problems
Early collaboration – construction involved throughout planning and design to ensure the most practicable and cost-effective construction solutions are built into the designs
Flexibility – ability to work together to adapt to changing scope and conditions
Procurement efficiency – supply meets demand for delivery of multiple projects
Continuous improvement – one team sharing lessons learned across projects
Shared risk and opportunities for everyone through cross discipline collaboration (stakeholder, planning, design and construction).
Development, 2024
The LEAD Alliance participants Dempsey Wood, Harrison Grierson, Hick Bros, Tonkin + Taylor and Woods formed an alliance with Kāinga Ora in 2018 to plan, design and deliver the infrastructure required to enable land for Kāinga Ora large-scale projects. Experts in their field, they have complementary skill sets and the best people to successfully deliver the programme.
THERE ARE TWO TYPES OF PARTICIPANTS:
The party that initiates the alliance - Kāinga Ora in our case - funds the financial requirements and owns the outcomes.
Often referred to as NOPs, these are the participant organisations with the specific skills, experience and equipment to deliver the objectives.
The owner plays a key role in stakeholder engagement, relationships with third parties, setting requirements and giving direction.
Along with the owner participant, the non-owner participants come together as one to deliver the project and share in the risk and rewards.
Designers are often referred to as DNOPs (Harrison Grierson, Tonkin + Taylor and Woods) and constructors as CNOPs (Dempsey Wood and Hick Bros).
These organisations are committed to perform the services to deliver the programme of work and are compensated fairly. They share the risk of potential cost overruns and the rewards of cost underruns – this is known as pain and gain share
The Kāinga Ora Urban Development and Delivery Group (UDD) leads the planning and delivery of complex large-scale urban development projects.
UDD partners with stakeholders and communities to develop well-functioning urban environments that support sustainable, inclusive and thriving communities - delivering quality infrastructure to enable land development where it is needed.
UDD is responsible for enabling land and designing and master planning large scale developments including preparing business cases and obtaining all approvals.
Development managers work with build partners to deliver market, affordable and social housing on newly enabled land and provide improved infrastructure and amenity to support the housing and benefit the wider community.
MARKET HOMES
Designed, built and sold at market value
AFFORDABLE HOMES
Designed and constructed to be more affordable than the average market rate
SOCIAL
Public housing offering low-cost rental to residents on low and moderate incomes
• Master planning and business case approval for large-scale neighbourhood developments
• Manages budgets to deliver large-scale projects
• Holds relationships with place-based teams responsible for community engagement and tenant relocations
• Negotiates development agreements with third party developers.
• Ensures land development effectively enables urban development
• Advises on planning, pricing, funding and financing infrastructure
• Works with asset owners including councils, Healthy Waters, Watercare, Vector and others to align joint programmes to maximise public value and reduce disruption
• Supports the state home delivery programme following civil completion.
• Provides oversight, monitoring and reporting across large-scale projects
• Coordinates the land sales programme, scheduling, risk management, governance framework, quality assurance, commercial property, feasibility and finance
• Manages Kāinga Ora strategic risks
• Manages benefits realisation and Statement of Performance Expectation targets.
Freeland Reserve
Roskill Development, 2023
PROGRAMME ALLIANCE BOARD
ALLIANCE GENERAL MANAGER
ALLIANCE MANAGEMENT TEAM
The LEAD Alliance is governed by a Programme Alliance Board. Often referred to by its initials, the PAB includes up to three senior representatives from Kāinga Ora, one from each NOP, plus an independent chair. The duties and authority of the PAB are set out in the alliance agreement.
The Alliance General Manager (known as the AGM) provides leadership to the Alliance Management Team (AMT) and wider programme team. Reporting to the PAB, the AGM is accountable for successful operation of the alliance and achieving the agreed objectives.
Make ‘best for project’ decisions to achieve LEAD’s objectives and key performance indicators
Ensure the alliance functions in alignment with our charter
Ensure sufficient resources are provided to deliver the programme efficiently
Appoint members of the AMT (endorsed by the PAB).
OWNER INTERFACE MANAGER
SARAH ANDERSON
DESIGN MANAGER CLINT EVERY
EXECUTIVE ASSISTANT LISA WRIGHT
ALLIANCE MANAGER MARK CROWLE
CONSTRUCTION MANAGER KUSAY BEARAKAT
GENERAL MANAGER CROWLE
HEALTH, SAFETY & ENVIRONMENT MANAGER
MARK HAYS
PROGRAMME DELIVERY MANAGER
OWEN CLEMENTS
COMMERCIAL MANAGER
CHRIS COLE
PEOPLE & COMMUNICATIONS MANAGER
CAROL MOFFATT
The Alliance Management Team provides day-to-day leadership to the wider team to meet or exceed our objectives:
Day-to-day leadership and role model constructive leadership behaviour to create a high-performance culture
Day-to-day management of the wider team to ensure work is delivered in accordance with the alliance agreement, addressing issues as they arise
Select and support senior leaders
Support the Alliance General Manager to make best for programme recommendations to the Programme Alliance Board
Ensure delivery of outstanding performance in the key result areas
The Owner Interface Manager (OIM) manages the interactions and interface between LEAD and Kāinga Ora. The OIM is the key contact for the alliance with the owner participant and is a member of the AMT. Active owner participation is critical in maximising the benefits of the alliance model.
The OIM is supported by a team of client side project managers who provide the connection to technical and subject matter experts across infrastructure planning, development, commercial management and property in Kāinga Ora. The owner particpant has a responsibility to enable the achievement of the LEAD Alliance objectives and key performance indicators.
Engaged by the Owner Participant, the Independent Estimator undertakes an independent estimate of the alliance proposals Target Outturn Cost - TOCs and the Programme Target Outturn CostPTOC which is assessed annually.
The purpose is to provide confidence to the Owner Participant that the alliance TOCs are fair and reasonable value compared to the market. The IE reviews the design and construction methodologies, the programme to complete a work package, the labour and non-labour rates, risk and escalation.
The relationship with the IE is managed by the Owner Interface Manager.
The External Auditor , also engaged by the Owner Participant, is responsible for ensuring that all alliance participants receive their entitlement in accordance with the alliance agreement (LAND ENABLEMENT AND DELIVERY ALLIANCE AGREEMENT).
Having an external auditor provides confidence to the alliance participants that all commercial aspects of the alliance agreement are administered correctly and transparently.
Tāmaki Development, 2024
The Auckland Civil Alliance Programme Agreement was entered into by the alliance participants in 2018. The agreement was extended in 2023 for five additional years and is now known as the Land Enablement and Delivery Alliance Agreement or LEADAA.
During its first five years of operation, the alliance delivered more than $700m of works enabling more than 4,500 homes. More than than 116ha of Auckland’s oldest neighbourhoods have been transformed above and below ground including Ōwairaka, Roskill South, Northcote and Oranga to future proof these neighbourhoods for hundreds of thousands of people for generations to come.
Kāinga Ora estimates that over the subsequent five years, the alliance will deliver land for a further 6,000 homes and up to $1bn of works for Auckland’s five large-scale projects
The LEADAA provides the foundation for the commitment of the alliance participants.
The agreement formalises the operating principles, commercial and legal terms of the relationship between Kāinga Ora and the non-owner participants
It is a guide to the way the relationship should work and drives a one team culture of working together for the best outcomes.
While the agreement sets out the formal structure of the relationship, it should only be used as a reference point when there is confusion or a dispute.
Successful alliances spend time understanding the intent of the alliance relationship and live these relationship principles every day.
Our charter provides us with simple, shared language to understand and talk about our why, what we do and how we do it.
Developed collectively between representatives of the participants and building on best practice in alliancing globally and in NZ, it outlines our vision, values and the behaviours that unite us.
LAYING THE GROUNDWORK THE NEW HOMES AND COMMUNITIES NEED
GROUNDWORK FOR AND SPACES
NEED
ENHANCE AUCKLAND
Better urban development for future generations
EMPOWER PEOPLE
Harnessing the power of our stakeholders, our people and iwi to achieve outstanding outcomes
CREATE NEIGHBOURHOODS
Developing the landscape to support community growth
WHAT THE ALLIANCE TEAM NEEDS TO ACHIEVE TOGETHER TO SUCCESSFULLY DELIVER PROGRAMME
Attract, retain & grow a champion team
Deliver outstanding public value
Prioritise & strengthen the health, safety & wellbeing of our teams & communities
delivery,
Breakthrough design & construction efficiency
Seamless delivery, flawless completion
Successful collaboration with our delivery partners
Minimise disruption to our communities
Respect & enhance the environments in which we work
01 Be open and honest with each other, treat each other with respect
02 Acknowledge that all alliance partners have an equal say
03 Agree accountabilities and responsibilities together
04 Accept responsibility as an alliance but deliver on individual accountabilities
05 Deliver business results where we all win and lose together
06
Accept collective responsibility with a fair share of risk and reward
Principles build trust, understanding and connection among alliance team members. They spell out what team members can expect from each other and ourselves. They are a useful framework for decision making and conflict resolution.
07 Obtain the unconditional support from the top level of our organisations
08 Resource the alliance to deliver high performance
09
Operate with no-blame between organisations and teams
10 Determine what is ‘best for project’ when making decisions
11 Do business on an open book basis
12 Promote innovative thinking to achieve outstanding results
Development, 2024
The underlying approach to alliancing is shared risk. How does this work in practice?
The non-owner participants are compensated for the work that they carry out for Kāinga Ora in accordance with the commercial framework detailed in the LEADAA:
Limb 1: Net actual costs
Limb 2: Corporate overhead and profit (capped and at risk)
Limb 3: Cost and non-cost performance based payments.
The framework applies to each package of work agreed.
Instead of having a contract sum, the alliance participants develop an initial target cost, better known as a Target Outturn Cost TOC, for each package of work and Programme Target Outturn Cost PTOC for each operating period.
The intention is to calculate an estimate of all costs required to deliver the scope of works, or in the case of the PTOC, operate the alliance.
It is not a tender figure, nor a contract sum. It is an estimate of what it will cost to deliver the package of works, including the inherent project risks (identified and unidentified) that inevitably occur.
To agree the initial target cost, the alliance prepares a proposal based on the agreed scope and risk allocation. Each proposal is subject to a formal exchange and reconciliation process with an Independent Estimator (IE) engaged by the owner participant. The IE’s role is to undertake a parallel estimate or peer review of the estimated cost to provide confidence that it is reasonable and will achieve best for project results.
Final Target Cost for an operating period or package calculated as the sum of the Initial Target Cost, the total of variation adjustments, and any other positive or negative adjustments that the PAB decides should be accounted for.
TARGET OUTTURN COST (TOC)
Detailed civil design and construction.
DESIGN TARGET OUTTURN COST (DTOC)
Neighbourhood planning packages that look at issues, concept design and staging to deliver neighbourhood infrastructure.
PROGRAMME
TARGET OUTTURN COST (PTOC)
Labour and non-labour to operate the alliance.
Direct reimbursable costs incurred by NOPs during delivery of the package typically include:
• Costs to prepare and complete pricing for the proposal
• Design costs including consultants who are not part of the alliance day-to-day
• All construction trade, subcontractor and supplier costs to provide all plant, labour, materials and equipment to complete the works
• Actual costs only, no offsite overhead or profit
• All actual costs of any rework, including mistakes or defects
• Consequences and impacts of any risks and opportunities.
NOP limb 2 is typically made up of:
• Operating costs (for example home company operating costs, PAB members’ time spent on the alliance etc.)
• Normal agreed margin for completing the works.
A limb 2 pool is created at the time the TOC is agreed, based on the estimated initial limb 1 budget. Limb 2 is not guaranteed, and is impacted by the cost performance limb 3. The limb 2 pool does not increase or decrease as direct costs (limb 1) increase or decrease, unless a variation is issued.
Limb 3 is a mechanism for incentivising alliance performance that improves non-cost metrics and reduces cost for the owner participant:
• Cost Performance Indicator - sharing any under or overruns of the final actual costs measured against the final target cost
• Non-Cost Performance Indicator - Non-owner participants performance against the agreed KRAs and KPIs
The alliance model is based on the premise that the owner participant sells risk to the other participants, so that risk is shared. However, when developing the scope for a package of work, it must be considered who is best placed to manage the risk. Where the risk is best managed by the owner, the owner picks up 100% of the risk allocated to them, but still shares in risks allocated to the LEAD Alliance. For tenant relocation for example, the non-owner participants have no control or ability to influence the process to relocate Kāinga Ora tenants, therefore the risk of delay to programme or cost increase as a result of tenant relocation delays is 100% owned by Kāinga Ora.
Limb 2 fee is 100% at risk under limb 3 pain/gain
CORPORATE OVERHEAD AND PROFIT PROJECT SPECIFIC COSTS
Limb 3 performance based payments can be negative (pain) or positive (gain)
LIMB 2
LIMB 1
DIRECT COSTS
Not to scale
Sharing over and under runs occurs on every PTOC and TOC. An underrun (gain) is when the final actual cost is below the final target cost. An overrun (pain) is when the final actual cost is over the final target cost.
Gain share for the non-owner participants is not capped, however it is adjusted based on the percentage of underrun versus the TOC. The share of pain for the NOPs is capped at the sum of the NOPs margin and profit (limb 2). What this means is that the NOPs could potentially lose their limb 2; however they will still be paid for the actual costs incurred (limb 1).
It is important to note that in the cost performance limb 3 share, the first 10% of an underrun is shared 50:50 between the NOPs and owner participant. If an underrun is over 10%, the portion of underrun over 10% is shared 80:20 with the owner participant and the NOPs.
Ultimately, an underrun is positive for the owner participant as it means there has been a cost saving on the project.
80% underrun paid to Kāinga Ora
20% underrun paid to NOPS
50% underrun paid to Kāinga Ora
50% underrun paid to NOPS
TOC
UNDERRUN OVERRRUN
10% underrun
50% overrun paid by NOPS
50% overrun paid by Kāinga Ora
Cap at sum of overhead & profit
Key Results Areas provide clarity on desired focus areas. They drive behaviour, align effort and provide a framework for measuring alliance performance.
Each year our owner participant Kāinga Ora confirms the Key Result Areas (KRAs) based on outcomes that are important for the owner participant – for example health and safety and cost and programme.
Once KRAs are set, the AMT develops Key Performance Indicators (KPIs) for approval by the PAB. Measurement against KPIs assess the alliance’s performance.
The overall performance score for the alliance is calculated as the weighted sum of the scores of the KRAs for each financial year ending 30 June.
The alliance’s important operational areas
Aorere Development, 2024
All LEAD team members are inducted into the alliance.
KEY SESSIONS INCLUDE:
o Alliance induction
o Alliance principles training
o Health and safety induction
o Kāinga Ora Urban Development Delivery induction.
Functional areas also provide specific training suited to their team.
Management plans are a ‘how to’ guide for how each key functional area operates.
They document the processes and procedures that contribute to delivering work packages and achieving key performance indicators.
The AMT member responsible for each function owns the relevant management plan and is responsible for reviewing and updating it for approval by the AGM, once approved by the PAB.
° Programme governance
° People & culture
° High performance
° Health & safety
° Environmental
° Design
° Construction
° Commercial
° Finance
° Owner interface
° Stakeholder and engagement
° Programme & project controls
° Procurement
° Programme system
° Risk
° Quality
° Schedule
° Handover
Management plans are live documents that are reviewed and updated annually, or as required.
All alliance documents are managed through a disciplined process and are version controlled in document management system 12D Synergy. Kāinga Ora holds a current version copy of relevant documents in Objective. All alliance work is carried out and stored on alliance systems, not home company systems.
Quay street office, 2024
Image: LEAD Alliance
When an alliance is delivered the right way, it creates a culture of trust that drives collaboration and high-performance.
People who have worked on successful alliances describe it: ‘like creating a sense of MAGIC, where every individual, team and organisation has the opportunity to operate at their best.’
In an alliance one-team culture, individuals feel safe to challenge themselves and others to grow – pushing the boundaries of their capability. They feel safe to challenge the way things are done to seek creative and innovative ways to improve and deliver outstanding outcomes.
A common misconception is that collaboration means people being nice to each other and happy. While we are not saying collaboration does not mean a positive relationship, it is more focussed on creating an environment of alignment to outcome, which leads to robust and purposeful action.
Collaboration does mean respect and a willingness to challenge and change in a best for programme or project mindset. People enjoy coming to work, the team is focussed on the good things achieved and not on mistakes or shortfalls, people feel safe to speak up without recourse and high-performance behaviours feel instinctive.
The team has the maturity to have honest but respectful and constructive conversations that are authentic and focused on helping individuals and teams grow towards achieving the desired outcome.
People are prepared to initiate these conversations and receivers are prepared to listen and take feedback on board.
This is why we have a carefully laid out LEAD Alliance charter and principles, and why objectives, key results areas and key performance indicators are clearly stated to drive us all in the right direction.
WHEN THE ALLIANCE TEAM IS ALIGNED TO THE WHY, WHAT AND HOW AND EVERYONE LIVES THIS EVERY DAY, OUR WORK BECOMES MORE THAN A JOB, IT BECOMES AN EXCITING OPPORTUNITY FOR US TO GROW AND PLAY OUR UNIQUE PART IN… TRANSFORMING AUCKLAND.
YOU ARE NOW PART OF THE LARGEST URBAN REGENERATION IN AUCKLAND’S HISTORY.