Perform 21 comes of age

The Government has issued directions that local authorities letting construction contracts must seek ‘best value’. In practice this means that contracts placed solely on lowest price are out and partnering with collaborative working arrangements is the preferred procurement route.

In the past local authorities have been very conservative in their procurement of construction contracts, generally employing the tried and tested JCT and ICE contracts with considerable success. A different approach is needed to meet the new challenge. Perform 21 has been designed with the requirements of best value and best practice procurement processes in mind.

Is Perform 21 different?

Perform 21 promises a less complicated future. Over many years a tendency has developed to include procedures in the conditions of contract. There are a number of reasons for this, the main one being that employers and their advisers had little trust in the ability of contractors to manage the construction process efficiently.

It was considered that contractors’ efficiency would improve if clauses were introduced that made procedures to aid efficiency mandatory requirements. A good example is the clauses that set out detailed requirements of the contractor’s obligations to produce a contract programme and keep it updated. It is highly debatable however whether this process has affected the efficiency of contractors.

Perform 21 has broken with tradition in producing the Public Sector Partnering Contract (PSPC). This sets out the basic rights and obligations of the parties, making it clear who carries the essential matters of risk. The procedures that mirror those normally employed by local authorities are included in a Best Practice Toolkit.

The Toolkit comprises ten stages commencing with project profile and ending with post-construction phase. The various stages cover the preparation of the business case, developing the project brief, design development, appointment of consultants and contractors, risk assessment, value engineering, arrangement of partnering workshops, production and update of programmes.

Generic process maps that form an essential part of Perform 21 enable local authorities to identify what stage they have reached in the procurement process. The flexibility of Perform 21 enables local authorities to amend the process maps to suit their particular needs.

The benefits of PSPC

One of the attractions of the PSPC contract is its simplicity. There are no procedures or long sentences, a minimum of clauses and an extensive number of options.

The central document is the Partnering Agreement. All the partnering team are required to sign up to this document. It includes an obligation for the team to work to achieve the aims and objectives set out in the Partnering Charter included in the appendix. There are the usual clauses that deal with collaborative working, with space in the appendix for a decision-making process.

In keeping with the modern outlook, provision is made for a guaranteed maximum price, which all the partnering team are required to use their best endeavours to achieve. The Partnering Agreement also requires each of the team members to enter into one of the optional contracts for the construction of the work.

Contract options

The options that have been produced as separate contracts comprise the following:

• Term Maintenance – measure and value;
• Term Maintenance – target cost with cost reimbursable;
• Authority Design – lump sum;
• Contractor Design – lump sum;
• Authority Design – target cost with cost reimbursable;
• Contractor Design – target cost with cost reimbursable;
• Subcontract – lump sum;
• Subcontract – target cost with cost reimbursable;
• Professional Services;
• Prestart Agreement;
• Schedule of Costs for use with the second, fifth, sixth and eighth options above;
• Fluctuation Rules.

There is nothing complicated about PSPC as can be seen from the following examples:

• there are only four grounds for extensions of time, with no set procedures for notice and supporting information;
• the clause that entitles the contractor to additional cost resulting from delay is straightforward;
• the options using target cost with cost reimbursable provide an easy to operate gain share/pain share arrangement;
• the variations clause is easy to understand, with no complexity;
• the disputes resolution clause provides for adjudication employing the Scheme for Construction Contracts and arbitration, which calls for the use of the Construction Industry Model Arbitration Rules;
• there is provision in the appendix for the key personnel to be named;
• the Prestart Agreement allows an employer to make use of the knowledge and skills of any member of the supply chain prior to a formal contract being entered into;
• the professional services option can be used by the authority for employing an architect, qs, engineer, planning supervisor or project manager.