Choice of contracts offer best practice
A
Joint Contracts Tribunal (JCT) product story
Edited by the Buildingtalk editorial team
Jan 5, 2009
Review of construction contracts commissioned by the OGC has found that three contract forms satisfy the principles of its Achieving Excellence in Construction initiative.
Completed by Arup in September, the review found that the Joint Contracts Tribunal (JCT) Constructing Excellence contract (JCT-CE) and the Association of Consulting Architects (ACA) Project Partnering Contract (PPC2000) both met the criteria, as well as the New Engineering Contract (NEC) Engineering and Construction contract (NEC3).
The Arup review said: "Each contract reviewed satisfies the Office of Government Commerce (OGC)'s Evaluation Criteria".
"Each contract reviewed would enable parties, using them correctly, to achieve OGC's Achieving Excellence in Construction standards from which the Evaluation Criteria are derived".
It continued: "No single contract is superior to the other two in all respects - each has its own strengths and weaknesses and each is highly adaptable".
"The difference in the way that each contract is applied by users will be at least as significant as the differences in the processes or terms and conditions provided within the contract".
The review followed an initial assessment of contract forms in 2005 by OGC itself, when only NEC3 was found to satisfy the requirements.
This was before JCT-CE had been published.
Professor Peter Hibberd, secretary general of the JCT, said: "This is excellent news".
"We always knew our Constructing Excellence contract met the criteria - had it been published at the time of the first review, I am sure it would have been included".
"This latest review, conducted independently by Arup, has re-created a level playing field in terms of standard contract forms for use in the public sector".
Arup used several evaluation criteria to assess all the contracts.
They included:.
- Encouragement of collaborative working.
- Encouragement of project processes necessary for successful projects.
- Encouragement of the achievement of value.
- Encouragement of supply chain management.
- Encouragement of dispute prevention.
- Encouragement of early dispute resolution.
- Provision of processes for dealing with variation control and pricing.
- Incentivisation of supply chain performance.
- Encouragement of risk management.
- Encouragement of client and supply chain involvement in design development.
- Provisions for performance management.
- Provisions for risk allocation.
- Clear provisions regarding variation pricing and impact of variations on programme.
- User friendliness of the documentation.
The JCT Constructing Excellence documentation was developed by JCT in collaboration with Constructing Excellence.
It aims to promote collaborative and integrated working, providing a single contract form to regulate all the relationships involved in a project.
It makes the delivery of a project the joint mission of the entire project team.
Sir Michael Latham gave the keynote speech at the launch of the new contract in 2007.
He said: "It (the contract) is brief, it is in plain English, it is user friendly, and it is perfectly understandable and practical".
"I commend the new documentation to you, and hope it will be widely used".
"This is a great industry".
"It needs to work together, not separately".
"Day by day, it is increasingly doing so".
"But, believe you me, there is still a very long way to go".
"We have started on the best practice road".
"But we are certainly not there yet".
"Congratulations to the JCT and Constructing Excellence for helping us along that road.".
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