Contracting is more than just signing a legal document.
Contracting is more than my three stages of planning, creating and using that document.
Contracting is a process – from the twinkle in a project sponsor’s eye to the project’s successful use.
But in the UK construction industry we are not very good at all types of contracting.
- From the document only perspective, the 2018 NBS National Construction Contracts and Law Report, shows that roughly 1/3 of UK construction projects start without a contract being signed.
- From the 2021 HKA Crux Insights Report, we know that the many disputes are caused by the parties not using their contract as intended.
Perhaps we need to focus on better contracting (or procurement, or whatever you want to call it)?
Contracting as a process
I started to research contract process maturity models in 2017 – partly inspired by the SPICE model, originating from the University of Salford. A traditional maturity matrix has five levels and can create improvement through evolution.
The data shows that capability maturity models can improve productivity and reduce defects. The SPICE research showed that the problems associated with any specific element of the construction lifecycle are often inherited from previous phases. It’s no good fiddling with construction if your pre-construction has gone awry. And your pre-construction is influenced by your design etc etc.
The 2020 Construction Playbook emphasises the importance of getting it right from the start – when a project is a mere twinkle in a project sponsor’s eye. It has good intentions, although so far the evidence for its use is patchy at best.
What should you do?
Don’t just focus on the content of your contracts, the two parties for each deal, the phase you’re most excited about… Look at the whole process from start to finish to decide where you are losing the most value or money or profit.
And start fixing some of those issues.