Let's deal in turn with Ann's points:
- "It was right to base the GC/Works Subcontract on DOM/1."
"Contracts should address the risk issue in the construction industry from a fresh perspective. Contracts writers must realise that it is impossible to manage today's construction using yesterday's contracts." (Determining the Impact of Various Construction Contract Types and Clauses on Project Performance, University of Illinois Research Project 1986.)
- "The GC/Works Subcontract was issued to comply with Latham's aspirations for integrated suites of documentation and to avoid bespoke arrangements."
Ann refers to Latham's aspirations. He recommended the outlawing of cross-contract set-off; the owners of this document have seen fit to ignore Latham and include cross-contract set-off.
But there remains a fundamental objection which is that this new document was drafted on the principle of being "back to back" with the main contract. So, is each subcontractor expected to carry the same risks as the main contractor? I thought the government's (and Latham's) aim was to allocate risks to the party best able to manage them.
So, here we have a government as a best practice client – legitimising bad practice (pay if paid). Permit me to be emotional here, Ann. This is outrageous
- "The documentation does not provide for 'pay if paid' arrangements."
- "The condition in the subcontract which makes the provision of warranties/ guaranties a condition precedent to payment fully accords with the law."
- "The suggestion that the subcontract flouts the Construction Act is 'outrageous'."
- "What else is there to use if DOM/1 and the GC/Works Subcontract is not acceptable?"
As I have already said, main contractors can adopt their own bespoke conditions which compounds the problems. The culprits in this saga are the owners of this document – Property Advisers to the Civil Estate and the Construction Confederation. I don't blame the confederation as much as I blame PACE – it should know better.
Rudi Klein is a barrister and chief executive of the Specialist Engineering Contractors Group.