New construction contracts don’t come around that often: the Joint Contracts Tribunal published the first JCT contract in 1931, the New Engineering Contract debuted in 1993, and Trowers’ & Hamlins PPC2000 partnering contract is now 12 years old. But the CIOB hopes to add a new entrant with the draft of a contract designed to fit 21st century projects — geared to collaborative working, written in plain English, and BIM-ready.
The starting point of the Complex Projects Contract (CPC) is that projects tend to go over budget, and into dispute, when parties fall behind programme and packages fall out of sync, leading to claims for delays, costs and extensions of time. So the contract takes the humble construction programme and puts it centre stage: the client must appoint a project time manager to oversee it fairly and objectively; and the main contractor must regularly provide the scheduling information to update it regularly. The programme also forms the basis for calculating interim payments and EOTs accurately and objectively.
The approach draws on the Guide to Good Practice in the Management of Time in Complex Projects. This document has been drafted by PPCIOB Keith Pickavance, executive consultant at Hill International, his brother Roy Pickavance FCIOB, director of consultant DAQS and an expert in delay analysis, and Nick Lane, partner and head of construction at solicitor Olswang.
The CPC shares some features with the NEC, notably that the parties will work collaboratively in a spirit of “mutual trust”, and risks will be allocated upfront. But it’s more notable for its novel features, says Lane, who argues that it’s the first contract to give the client proper control over the risks related to time and delays.
Employer’s contingency time
It also introduces the concept of the employer’s “contingency time”, giving the client team the option of when to withdraw it throughout the project — Lane says that contractors’ programmes normally include time “floats” that are invisible to employers. “Contractors have different levels of maturity in terms of time management — some contractors will do most of this anyway, others might not like the level of scrutiny and the client’s control over it,” he says.
But the level of administration and reporting required from the contractor could be a deterrent to adopting the contract, argues Michael Dawson MCIOB, an accredited mediator. “On a big job, you would have a team to take on all the specialist roles, and there’s enough value to warrant all the work that needs to be done. But in a market experiencing falling margins, it could be difficult to afford the staff needed to run the job as the contract requires,” says Dawson.
The contract covers both traditional procurement and design and build, so if the parties change the procurement route part-way through there is no need to throw out the old contract. There is also an interlocking suite of appointment documents, for subcontractors and consultants, and using them would be a contractual requirement. Unlike JCT or NCE, the contract has also been written to be compatible with up to 20 legal jurisdictions around the world, thanks to its references to “local law”.
Edwin Glasgow QC, an expert in construction dispute resolution, believes that the plain English approach will have a receptive audience among large international projects where FIDIC is seen as overcomplicated, and at home where there’s dissatisfaction with the JCT. “Every time I get a JCT dispute I think, ‘why can’t someone write it in English!’ Lawyers like imprisoning their clients in structures with which they are familiar, and are too slow to propose a better way.”
Glasgow also feels that the dispute resolution provisions could be more tightly drafted. The contract urges the parties to send representatives to a meeting to discuss “issues” — the precursors to disputes — as soon as they arise. However, Glasgow believes there needs to be a greater onus on the parties to use “all reasonable endeavours” to settle early. He also thinks the reference to mediation as the primary method of dispute resolution should be strengthened to a requirement. But assuming the revised draft improves on these points, he would be happy to recommend it to clients.
The contract has been highlighted as the first in the UK to be BIM-friendly, but May Looi ICIOB, a construction lawyer at Kennedys, thinks this is an overstatement — there’s half a page on BIM in the main contract, plus a thin BIM protocol in the Appendices. “The BIM provisions aren’t very detailed, and appear to have adopted certain principles common in the US,” says Looi. “[Under the CIOB contract] the employer owns the model and all the drawings, but I can’t see consultants here agreeing to that as it would mean the employer owning all the design information,” she says.
Comments such as these are now vital to the process of redrafting the contract to produce a final version, with the consultation period on the proposed contract expiring on 30 July.
As for the likelihood of the contract being adopted, Lane says he will be advising certain clients to take it up, and also hopes that the contract’s fresh approach will start to influence industry thinking. “Even if it doesn’t overtake the NEC, if it influences the way we approach time under building and engineering contracts, it will have achieved something significant,” he concludes.
The draft CPC: Five legal experts give their views
Michael Dawson MCIOB, CIArb
It’s described as being for “complex” projects, but the definition of complex is very wide. It also introduces lots of new and unfamiliar terms — the design coordination manager, the project time manager, issue resolution, for instance. It is perhaps more employer-focused than contractor-focused – for example some of the time allowances gave you only two business days to respond or you’re deemed to have accepted!
Stephen Clarke, Clarke Willmott
I’m not sure there’s a gap in the market. My main concern would be not wanting to be the first person to use it. The courts haven’t looked at it, and that’s the advantage of the JCT. It’s been around for 80 years, and almost every word has been looked at and judges have given their opinion on the meaning — that’s why the original wording has been retained in each successive redraft.
Edwin Glasgow QC
The simplicity and directness of the language overcomes the stilted and dated JCT. One of the world’s largest contractors is China State Engineering. The Chinese hate formalistic language, and hate FIDIC, so the contract has features that are likely to appeal. But if it is to be used on major international projects, it’s an oversight not to have a Dispute Adjudication Board — which exists under FIDIC, for example.
May Looi ICIOB, Kennedys
It’s a complicated contract, but it’s trying to use the familiar principles of JCT and NEC3 and move on to a more modern era of contract management. Putting the programme centre stage is a good idea, because delays and EOTs are a problem in a lot of contracts. But it’s not just the main contractor and project time manager that would have to deal with it, in practice it would involve the whole supply chain.
Gary Kitt FCIOB, EC Harris
It’s heavily weighted towards [project] programming, and goes a lot further and is more specific in its requirements than the NEC. People don’t do what is required by the NEC as it is, so to go further is impractical and labour intensive. As to references to “fragnets”, a programming specialist might know what this means, but I wouldn’t want to explain it to the Turkish contractor I’m currently working with!
