It’s radical. It’s brave. And, amazingly, it’s the brainchild of the JCT. Prepare to be shocked by Constructing Excellence, a partnering contract with a difference …
According to the JCT website, the new Constructing Excellence contract is complete and will be published in December this year. If the snippets of information I am hearing are correct it change the perception of the JCT from a staid producer of mainstream contracts to the most innovative contract-writing body in the industry. This will be like your granny turning up to your next party sporting an eyebrow piercing, dreadlocks and a spliff.
Rumour has it that the contract has been developed jointly by the JCT and Be (Building Excellence – now part of Constructing Excellence) and it will be based on the original Be contract.
There will be two parts. The first will be the Constructing Excellence contract itself, which will break new ground as a single contract to be used for all relationships on a project. It will apply to clients, main contractors, subcontractors and consultants. At a time when the industry is still wondering whether it can cope with a single appointment document for consultants, this is a brave move.
Almost as brave is the fact that it dumps the old client, contractor, consultant terminology. Instead, there are just purchasers and suppliers.
The Constructing Excellence contract is apparently intended for the public sector market. As the government has told those clients to adopt partnering it is no surprise that the it will have collaborative working at its heart. Although collaborative working is good in the right circumstances, the contract will be out on its own in the extent to which it makes the delivery of the project the joint mission of the whole project team. If, as is suggested, the contract talks about the project team “guiding the successful delivery of the project”, it could find itself open to criticism from those who say this means nobody will be in charge.
Also fundamental to the contract is the treatment of risk. It will allow purchasers and suppliers to pre-agree the costs and times allowed within the contract price for named risk events. More interestingly, it will also allow them to pre-allocate the effect of cost and time overruns for those events. This is a change from the way other contracts work and will take some getting used to.
The second part of the contract will be the project team agreement. This is an optional multiparty contract for the core project team that sits above the Constructing Excellence contracts. Its main purpose appears to be to allow all of the parties to share in a pain–gain mechanism across the whole contract. Although this is great in theory, these mechanisms are seldom used.
Constructing Excellence’s main competition will be NEC, with its X12 partnering option, and PPC2000. So how does it stack up against them?
- Although the contract comes to the industry later than the others, the JCT brand means it will definitely be in the running.
- It avoids the complexity of the other contracts. Adopting the purchaser–supplier approach could appeal to public sector purchasing departments, which can have a huge say in contract selection.
- PPC2000 has been criticised for its multiparty approach and the potential legal problems this could cause. Constructing Excellence adopts a conventional two party contract arrangement and reserves its multiparty approach for cross-project incentives. This more traditional approach is likely to win it friends.
- The NEC can be too process-heavy for some clients and teams. The Constructing Excellence contract avoids this and so could suit smaller design and build contracts.
So how will the contract fare? And in particular will it do better than the original Be contract, which seems to have disappeared without trace?
It will certainly be worth considering against its competitors but as it represents such a huge shift away from the traditional JCT approach it remains to be seen whether the JCT name will be sufficient to give it market share. If I had to put a fiver on it, I would say it will remain a niche contract.
Andrew Hemsley is a regional operations director at Cyril Sweett. He can be contacted at:firstname.lastname@example.org