Selecting the Contract Strategy

There are a considerable number of construction contracts available to housing clients. Many of these have been in use over a long period of time and others have developed more recently. These can be divided into two broad categories as follows:

• Project Partnering Contract (PPC2000), its derivatives, and the NEC Engineering and Construction Contract with Partnering Supplement. - More recently published Standard Forms of Contract which are often referred to as modern contracts and are considered to be more appropriate for partnering arrangements. 43% of those demonstrations surveyed, used one or these specific partnering contracts - approximately two thirds using PPC 2000 and one third using the NEC Partnering Supplement
• Joint Contracts Tribunal (JCT) Standard Forms of Contract. There is a wide suite of JCT contracts in use and these are often referred to as traditional contracts. Housing construction clients will be very familiar with these. These contracts are often used with a Partnering Charter attached. 42% of demonstrations surveyed had chosen this form of contract arrangement.

Bespoke Contracts were used by 8% of demonstrations. These are not standard forms and are developed as one off contracts for specific projects or programmes. They were more commonly used prior to the development of PPC2000 and the NEC Partnering Supplement in conjunction with the client's legal advisors.

It is important to give careful thought to the selection of the right contract to ensure that the chosen form matches your overall procurement requirements. For example, if your intention is to embrace the full ethos and practice of partnering then the contract should embrace the following key issues:

• Early appointment of the contractor
• Inputs from other key suppliers,
• Core team working arrangements
• Performance management
• Customer satisfaction
• Joint Risk and value management
• Problem resolution mechanisms.
• Open Book and Joint Cost Management

Clearly the more compatible the procurement and contract strategies are the better the process will be for all parties involved. All will be singing from the same hymn sheet. However there is no single answer for every project or for every housing organisation.

Some clients may still have to work for some time with traditional contracts because they are the only ones accepted in their organisations or where the new forms of contract and quality / price selection processes are still not fully embraced. With intelligent project leadership and realistic expectations some success may be achieved by overlaying these with partnering agreements. However such a strategy does not facilitate the complete implementation of partnering and Best Value procurement.

Remember! If you choose a form of contract that contractually inhibits or neutralises your partnering objectives don't be surprised if partners resort to adversarial behaviour when the going gets tough.

Barriers to change can be overcome by:

• Doing things as they were done in the past is habitual and therefore changes in processes need to be planned and managed.
• Consult on changes to existing procurement and contracting processes.
• Seek help and guidance from those who have done it before.

Examples:

• The London Borough of Hackney (Link to Nightingale Estate- Rogate House, Hackney- Project 1053) developed a contract with Trowers and Hamlin which became PPC2000.
• Citywest Homes (Link to Implementation of Strategic Partnering, Major Works, Repairs and Planned Preventative Maintenance- Project 1188 ) selected the PPC2000 as the base document because it is most closely suited to the way the organisation operates.
• Whitefriars Services Ltd (Link to Whitefriars Maintenance, Coventry- Project 1110) signed a five-year strategic agreement under PPC2000.