Kāinga Ora trialling new innovative model for build contracts

Build partners and suppliers will co-design the ‘Relational Agreement’ Pilot, which will result in Kāinga Ora taking a more active role in the supply of building materials and how build partners work when undertaking construction projects for the agency.

The co-designed contract model will then be piloted on the construction of more than 100 homes in Rotorua that are scheduled to be delivered  through the new Housing Delivery System recently introduced by Kāinga Ora. 

While exact details of the Relational Agreement Pilot are still to be finalised, the following key principles will apply:

• We are part of a broader ecosystem – Kāinga Ora, build partners and materials suppliers are all working in the same sector and facing similar challenges and opportunities. Our best chance at success comes from working together in partnership.
• Focus on outcomes – Contracts will be more focused on what is intended to be delivered, rather than penalties.
• Transparency - Information on costs, crewing levels and lead times will be shared openly between all parties involved in the build.
• Eliminating risk culture - Through reducing complexity and penalties, we will stem the sector-wide culture of passing on risks in a way that drives up costs and hampers customer-builder-supplier relationships.
• Synergistic partnerships - A commercial agreement that all parties are incentivised and aligned on, to deliver more efficient housing outcomes.

“We are co-designing the Pilot because we want the key players involved in the supply chain of public housing to be aligned and clear on the outcomes, so we can increase productivity and deliver homes more efficiently from the beginning,” says Matt Hulett, General Manager of the Delivery Transformation Group at Kāinga Ora.

“Once embedded, Kāinga Ora will be able to build public housing faster and more cost effectively and the construction industry will have access to a more predictable pipeline of house building work.’’

Mr Hulett says Kāinga Ora will begin in-depth co-design workshops with selected build partners and materials suppliers in October. He says they’ve received positive feedback from the industry during their initial sessions to raise awareness about the pilot.

Construction on the first homes under the pilot will begin in Rotorua before the end of the year.