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Construction projects, especially those involving a collaborative approach
between the client and project participants can, we believe, benefit substantially
from a new approach to the contractual framework. Over a period of more
than three years, we have developed a purchase order and compatible set
of terms and conditions which can be used in the appointment of professionals,
contractors and subcontractors.
Drawing on the experience of the motor industry, where purchase orders
have in many instances replaced long-winded contracts as a means of procuring
works and services, the contract framework can be made up of:-
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A Purchase Order
setting out the key elements of the contract – the names of the
parties, description of work/services, start date, completion date,
insurance and security requirements.
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Collaborative
Construction Terms - written in plain English and aimed at supporting
the underlying processes necessary for successful projects (primarily
team working and proactive risk management) we believe these terms
provide a complete set of contractual provisions.
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A Risk
Allocation Schedule – allowing the flexible allocation of
responsibility for the consequences of risks between the parties.
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Payment
provisions – based on a target
cost arrangement (with provision for pain and gain share and subject
to a guaranteed
maximum cost with an alternative lump sum arrangement where appropriate).
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Specification
of the works and/or services to be provided.
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Warranty
– a one-page warranty identifying the third party/end users who
may have rights against designers and contractors if latent defects
appear.
In addition, assuming that a collaborative approach amongst the key participants
is intended, the drawing up of a partnering charter or project
protocol should be included as an expression, in the party’s
own words, of their personal aspirations for a particular project or longer
term relationship.
We would recommend that any such documents include a statement of their
non-legal binding effect to protect the clients from any potential lack
of clarity (in strict legal terms) in their own wording, particularly
in relation to the aspirational statements that may extend to achieving
defined targets within specified periods of time.
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