This is all very well, but the basis of the whole client/contractor relationship is the construction contract. To what extent does this increase client satisfaction - and what else can be done to improve it?
The contracts available range from old-style, JCT-type ones through to the newer Engineering and Construction Contract (ECC) and very recent PPC2000. JCT has gone wrong for just about everyone at some time or other. That's not to say that JCT is bad - probably just that its chances of being used on problem jobs are greater because it was used so frequently in the past. By contrast, the newer contracts come with little or no baggage.
Clients looking at their procurement processes afresh tend to want to use the newer contracts just because of this lack of past history. They want to be able to say that they are doing things in a new and different way. And they can take their pick from the alternative approaches. The ECC comes with an injection of engineer's management skills (why do I have to try hard to convince myself that this is a good thing?), while PPC2000 comes built on a foundation of touchy-feely collaborative working.
Both contracts are intended to enable better ways of working, but however well the contracts are written, they can go badly wrong if the people involved do not want to make them work.
Here's an example. Under Clause 61.3 of the ECC, there are practical rules and a defined timescale for the notification of compensation events (claims, to you and me). This says that the contractor must notify within two weeks of becoming aware of a reason for being entitled to more money.
The reason behind the clause is obvious. Claims at the end of a project are the bane of any contract administrator's life. They are usually presented on a global basis when the contractor has lost lots of money. Any number of holes could be picked in the claim if it was split down into detailed cause and effect, so it gets presented in one lump.
The ECC is quite right to set down a mechanism to avoid late claims. Dealing with them when they are fresh in everyone's minds has to be easiest. But the whole thing only works if the parties buy in to the philosophy.
New-style contracts need enthusiasm. When it flags, the old adversarial ways can creep back in again
When they don't, all they have to do is:
- Contractor - notify of a compensation event every time anyone sneezes. Bog down the process with continuous stream of paperwork; freeze up the contractual mechanisms and force everything to adjudication, from which you will hopefully get some return.
- Client/contract administrator - say no to every notification of a compensation event, whether you believe it has any merit or not.
Pass the buck back to the contractor and give it no alternative but to go to adjudication to get what it is rightly entitled to.
While adjudication is a possible saviour, as it should hopefully provide the right answers, it absorbs a lot of energy that could have been used more productively building the job.
To get the best from the new wave of contracts you need the right people operating and working under them. Bob the Builder is not good enough anymore; you need his son with an MSc in construction management and a degree in interpersonal skills.
You also need a long-term client/contractor relationship rather than the one night stands the construction industry normally gets up to.
These contracts need enthusiasm and they need working at. It's when the enthusiasm flags that the old adversarial ways have a tendency to creep back in again.
The role of the partnering adviser under PPC2000 is to push collaboration and partnership working. This may give us a steer for the future. It's this evangelical process of convincing and leading that will keep things going when people begin to waver.
Postscript
Andrew Hemsley is managing director of consulting at Cyril Sweett and can be reached on 020-7242 9777, or at ahemsley@cyrilsweett.co.uk
