Government curbing contract choice

The Joint Contracts Tribunal (JCT) question why the Office of Government Commerce (OGC) has decided to continue endorsing only one form of construction contract for use by government departments.

This decision comes in spite of the results from its own review, which found that not one but three contract forms fulfilled its review criteria.The Joint Contracts Tribunal (JCT) questioned why the Office of Government Commerce (OGC) has decided to continue endorsing only one form of construction contract for use by government departments in spite of the results from its own review, which found that not one but three contract forms fulfilled its review criteria.

Professor Peter Hibberd, JCT chairman questions whether be the role of any government department to endorse one particular product or service over others in the market.

The OGC originally reviewed all construction contract forms in 2005.

It found that one form met its Achieving Excellence in Construction (AEC) criteria, and a decision was made not only to endorse but actively to encourage its use in government projects.

John Bradley, director of legal affairs at the Construction Confederation, said: "By favouring one type of contract, the OGC is creating a monopoly in construction procurement for Government departments".

"This step is obviously uncompetitive and wholly inappropriate in today's industry".

"The choice should be left to individual departments to choose the contract form most appropriate to the particular project"".

"For the second review, the OGC commissioned Ove Arup and Partners".

"This time the results were published, in January this year, and found that three contract forms met the OGC's AEC criteria".

"However, OGC has made clear that it intends to continue along its current path of only endorsing one contract form, the one it previously selected".

RIBA president, Sunand Prasad, said: "The RIBA have noted that the OGC have still refused to remove the restrictions on government departments using any form of building contract except the NEC, despite having agreed that other forms also meet their criteria".

"The OGC's objective to promote collaborative working is laudable, but to promote just one contract form, when others also meet its collaborative working criteria is wrong and an inappropriate restriction on the market".

"Having taken appropriate advice, it should be left to individual government departments to decide which contract form best suits the specific circumstances and nature of each of their projects".

JCT contracts are unique in being created by collaborative working across the construction industry, and in offering a full suite of complimentary contracts.

We therefore think that it is important that government departments have the opportunity to take advantage of tried and tested construction contracts"".

"Sir Michal Latham, author of the Latham Report and deputy chairman of Wilmott Dixon, said: "As I said two months ago, I am pleased that there are now three partnering contracts available to clients and to the supply side, all of which I helped to launch, and one of which - the JCT/CE Contract - I launched just over two years ago at the House of Commons.

I believe that all three contracts are very suitable, and I think that Government departments should be able to choose which of the three they prefer.

My own company uses two of these contracts, and find them both very helpful"".

"Professor Hibberd continued: "It appears strange that a government department would commission a detailed and costly review, and then decide to ignore its findings".

"The review was independent, and its findings were clear".

"At the very least, the OGC should cease its endorsement of the one contract form, and allow government procurers to choose for themselves the contract form most suitable to their requirements and circumstances.

"After all, the OGC's objective here is to promote collaborative working, and to reduce costs.

Surely restricting choice would clearly distort the operation of the market for public sector construction contracts.

A one-size-fits-all contract form is not going to help meet those objectives"".

"Suzannah Nichol MBE, the chief executive of the National Specialist Contractors Council, said: "Why is the OGC favouring one particular contract when a number of forms meet its Achieving Excellence requirements? The construction industry has been making excellent progress towards more collaborative working, and JCT offers a series of contracts which work and operate successfully in a variety of applications and projects.

We firmly believe that the OGC should not be endorsing one contract over another when it may not be the best choice for particular projects".

Norman Fiddes, chairman of the Scottish Building Contracts Committee, said: "Although the OGC has made good progress in guiding public procurement along the right path to collaborative working, it should avoid being too prescriptive".

"The market has responded to the OGC's Achieving Excellence requirements and has brought forward new collaborative working agreements which are bound to have a significant impact on the industry as a whole - however, having commissioned a review that was favourable it only seems reasonable for OGC to endorse the use of all of these contracts on government projects.

Professor Hibberd concluded: "We simply want to see a level playing field.

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