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Purchase
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Collaborative
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Guide
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Guide to risk
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1 |
Aim and
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2 |
Underpinning
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3 |
Flexibility |
4 |
Clarity |
5 |
Other features |
6 |
Informal
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A |
Appendix: Draft risk allocation schedule |
6 |
Guide to useInformal definitions |
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Please note that these are informal definitions designed to give a general sense of key terms and aid understanding of the contract. They are not legal definitions. For the robust legal definitions that underpin legal interpretation of the contract, please refer to section 8 of the Terms and Conditions. |
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Client's Brief |
See Purchaser's Brief. |
Collateral Warranty |
A warranty (guarantee) made in parallel to the main contract, rather than as an integral part of it, for example an undertaking that subcontractors will be paid by the Purchaser for work they have done if the Lead Supplier cannot do so. The term 'collateral contract' is used with the same sense. |
Contract Sum |
An agreed lump sum to be paid for the whole of the Services, usually in instalments according to a Payment Schedule. |
Defects liability period |
The period following completion of the project during which the Supplier will be liable for defects in their work and obliged to compensate the Client for them. |
Dispute Resolution Procedure |
A formal route, explicitly agreed between both parties, through which any disputes that arise during the project will be resolved. The procedure used in CC projects is set out in section 7 of the Terms and Conditions. |
Guaranteed Maximum Cost |
An agreed cost for the provision of the whole of the Services, excluding the Supplier's Margin, that cannot be exceeded (except by payments in respect of Relief Events). |
Key Performance Indicators (KPIs) |
In this context, performance measures that reflect critical or central aspects of the project: the achievement of defined milestones or success overall. |
Lead Designer |
Designer responsible for all design carried out by others. |
Lead Supplier |
Supplier responsible for all construction carried out by others. |
Liquidated damages |
An amount of money, agreed upon by both parties, that one will pay to the other in specified circumstances, such as (for example) a delay in the completion of the project. |
Milestone |
A key event or specific achievement during the life of the project. |
Open book accounting |
An arrangement where both sides agree to let the other inspect their accounts, perhaps including information on budgets available and profit that has been made. Often a key aspect of collaborative or partnering arrangements. |
Overriding Principle |
The overriding principle of CC projects is collaboration: working together in a co-operative and collaborative manner in good faith and in the spirit of mutual trust and respect. |
Payment Schedule |
A document setting out when part-payments of a Contract Sum will be made, perhaps linked to when activities are completed or milestones reached. |
Performance measures |
Ways of assessing whether (or how well) the contract has been fulfilled and the project delivered. The terms 'performance metrics' and 'performance indicators' are also used in this sense. |
Products |
Physical commodities to be delivered under a contract, as opposed to services to be performed. |
Project Programme |
A document setting out the sequence of events (components, milestones, schedules) and responsibilities of the project. |
Project Protocol |
A document setting out the joint aspirations of the Project Team with regard to the project, as well as how they will work together to achieve them. The Project Protocol expresses intentions over and above contractual obligations with regard to working together. It is signed by all members of the Project Team. The term 'partnering charter' is also used with this sense. |
Project Team |
A team set up for each Project, comprising the Client and other participants considered by the Client to be of key importance to successful project delivery. |
Purchaser's Brief |
A document produced by the Purchaser and attached to the Purchase Order (at Appendix 1) that sets out what is required from the Supplier. Also known as the Client's Brief. |
Purchaser's representative |
An individual appointed by the Purchaser who acts on their behalf and is the first point of contact for the Supplier. |
Relationship |
The less formal dimension of an agreement or working arrangement, including:
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Relief Event |
Any event that has an effect on the cost of performing the Services, or the date of their completion, including the occurrence of risks both foreseen and unforeseen. |
Risk |
A possible outcome that could endanger part or all of the project if it occurred. |
Risk Allocation Schedule |
A document setting out the contractual allocation of risks between the Purchaser and the Supplier. |
Risk allowance |
The total estimated financial effect of a risk occurring. |
Risk Register |
A document listing all the risks identified on a project, the likelihood that they will arise, who 'owns' them, and the actions that are being taken to minimise them or that will be taken if they arise. |
Services |
In this document, this term is intended to cover works and/or services in the traditional sense. |
Supplier's margin |
An agreed amount or percentage paid to the Supplier to cover profit, central office and site overheads and so on (as opposed to their actual costs on the project). |
Supply chain |
Collective term to describe a group of companies whose various individual goods and/or services combine in the delivery of a project, service or product. This can be through subcontracting arrangements, teamworking, or straightforward purchasing. |
Target Cost |
An amount agreed in respect of the Supplier's profit and overheads that is paid to them in instalments during the contract period. |
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