The British Property Federation’s consultancy agreement is a good start, but what we really need is an all-inclusive contract for all parties and single project insurance
It was never going to be easy to turn design-led, fragmented and wasteful construction into an efficient and reliable industry. The present generation of reformers have been at it for more than 15 years and only now are improvements to standard practice slowly emerging.
Full marks to the British Property Federation and the Construction Confederation for making the first significant contractual breakthrough. Ann Minogue summarised their “short, simple and fair” consultancy agreement (27 May, page 47), which applies the same terms to each member of the design team and clarifies their interdependent roles and responsibilities.
Yes, we have had all the JCT upgrades and a stash of partnering agreements, but they all assume that the parties to the contract are separate independent enterprises. As such, they need regulating to ensure they don’t act too independently and that at least most of them will concentrate on the interests of the project and its clients – missing a few, of course, to keep the lawyers happy.
As more and more clients move towards design and construct as a procurement and construction management mode, the need by principal constructors for a single consultant’s agreement covering all designers employed on the project has become urgent. The plethora of bespoke funder agreements and warranties are inevitably designed to cover their risks and losses, not for the co-ordination of the design team’s work so vital to the long-term success of the project and our zero-defects goal.
It is disappointing that the BPF form implies that novation of design is an acceptable principle in the design-and-construct approach. Novation means the basic form, structure and specification of a project will have been set before any of the potential constructors have been involved. It forms the basis of the competition between them to win the project and so collect the retrospective responsibility for the design’s performance.
That is little better than traditional adversarial procurement. The root cause of most disputes in traditional and novated design-and-construct contracting is that the contractor is deemed to take full responsibility for the performance of the design, while contractually excluded from any involvement in its conception or development.
The predictable squeals of outrage from consultants centre around responsibility, both for their own work and that of others on the project. It should be a simple management issue to resolve, but nigh impossible while consultants cling to their individual independence. It is that fragmentation of the design and construction management process that causes the liability, warranty and indemnity problems.
It is about time consultants accept the inevitable and gracefully give up their independence
The answer – single project insurance – will only become available when everyone involved in a construction project willingly and purposefully agrees to work as a single, integrated and insurable entity.
So, instead of arguing for a more consultant-friendly agreement, it is about time that consultants accept the inevitable and gracefully give up their independence. Let’s put all the effort into taking the BPF principle of linking all the design consultants and supervisors through a single consultant’s engagement agreement that defines their individual and collective responsibilities and expand it using similar terms to include constructors, specialists and subcontractors. Then at last we have the fully integrated, single-responsibility, all-inclusive design-and-construct agreement the industry and its clients really need.
With that type of integrated, collaborative structure, the negotiation of single project insurance will fall into place. The reasons to inflict collateral warranties or retain retentions and all the other unnecessary regulations dreamed up by the lawyers disappear. Welcome to the 21st century.
This is an offer that designers and supervisors cannot refuse. It is their best chance to join the team and be employed on the same terms as everyone else, sharing, in appropriate proportions, responsibility, authority and remuneration with constructors. It is in everyone’s interest, from the client downwards.
Colin Harding is chairman of Bournemouth-based contractor George & Harding