Public sector choice of construction contracts

A review of construction contracts commissioned by the Office of Government Commerce has found that the Joint Contracts Tribunal Constructing Excellence agreement, satisfies all the principles of the OGC’s Achieving Excellence in Construction initiative. The recognition that the contract fulfils the OGC’s criteria provides government departments with a real choice of contract forms when commissioning building projects.

The report was completed by Arup in September and published by OGC last month.

Professor Peter Hibberd, secretary general of the JCT, said: “This is excellent news.
Public sector clients now have a choice – they can decide which contract form is most appropriate for their project.”

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, who launched the JCT/CE contract at the House of Commons in 2007, said: "The construction industry has taken huge strides forward in recent years, but it is still not enough. The OGC has attempted to direct public procurement along the right path to collaborative working, and I am pleased that three contract forms now meet its principles for achieving construction excellence.

“The widespread adoption of these contracts in the public sector, and hopefully the private sector, will enable the industry to take further steps along the path to best contractual practice."

Arup used several evaluation criteria in its review to assess all the contracts. These 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.

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