The UK Government’s Construction Playbook has 14 key policies for reforming and modernising aspects of public sector projects (and perhaps, with luck and trickle down, the private sector too). However, it will need some robust contract tools to bring those ideas to fruition.
In a series of posts, I consider how contracts will need to change to adequately respond to the Playbook’s policies or themes.
Going Digital
As you might expect, the Playbook wants clients and the sector to develop their digital capabilities covering:
- digital and offsite manufacturing technologies (MMC)
- the UK BIM Framework approach to data (and the ‘golden thread’)
- digital twins (as well as CDBB and the National Digital Twin network)
- digital and automated solutions in standards and specifications
- digital object libraries and a digital component catalogue
- digital design and DfMA (design for manufacture and assembly)
- digital payment processes.
The Playbook defines digital twins as:
Digital twins are realistic digital representations of assets, processes and systems that have a data‑connection with the real world.
What does this mean for contracts?
Essentially, the government is asking for (1) technology in meeting the outcome-focus for its contracts, (2) data-sharing under BIM, and (3) automated payment processes.
In terms of BIM, we have the BS:EN ISO19650 standard, the Information Protocol and means of incorporating those requirements in standard form contracts like JCT and NEC. These don’t actually adopt all elements of BIM ie collaboration, data-sharing, and contract processes all facilitated by technology. What contracts need is a truly joined-up approach to BIM.
When it comes to payment, the Playbook claims that Digitisation will improve transparency, information exchange, payment performance and contract management across the supply chain.
However, payment terms under construction contracts are already constrained by the requirements of the Construction Acts 1996 and 2009, whose aim was to improve payment performance (but in practice did little to change the landscape of late and incomplete payment).
Automated payment systems, a more sophisticated form of project bank account, will only work when we have objective measures of payment. Our current monthly valuation schemes are more akin to haggling in the medina, than something we could programme a computer to do.
Digital platforms can massively improve, review and verify the mass of data on a project such as daily labour timesheets. These technologies will provide better transparency, exchange millions of gigabytes of data weekly, assist with smoothing the payment process and better manage contracts. But our current contracts do not fit this model.
What should you do?
Digital technologies are changing the sector, some more rapidly than others. But our contracts, which set behaviours, standards, culture, processes, rights and remedies are not keeping up.
Rather than allow the contracts to lag behind early adoption of digital solutions, we need contracts which lead the way.
