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.
Like every government report into the sector since Banwell 1964, the Construction Playbook cites collaboration as being central to its aims, specifically to:
- longer-term contracting (and thus greater value)
- sustainable win-win contracting arrangements that incentivise better outcomes, improve risk management and promote the general financial health of the sector (hark back to Carillion?)
- increasing the speed of end-to-end project and programme delivery by investing up-front to set projects up for success.
The Playbook says government will:
ensure that contracts are structured to support an exchange of data, drive collaboration, improve value and manage risk.
It also suggests that “Contracts should create positive relationships and processes designed to integrate and align multiple parties’ commercial objectives and incentives.”
The Playbook recommends that “a partnership model with the principles of collaboration, openness, transparency and flexibility based on contractual delivery” will drive successful outcomes and innovation for more complex projects.
What does that mean for contracts?
The Playbook only really includes suggestions for creating a collaborative culture on a project-by-project basis. There are no magic wands being waved to ensure the sector as a whole becomes more collaborative…
Collaboration does not come from a sentence or two in an adversarial contract. It is hard-wired into every process, remedy, responsibility, risk allocation as well as jointly agreed key aims, all as set out in the contract.
If the government truly believes collaboration is critical then it will need to ensure its contracts (and not just its pre-delivery workshops) reflect the ‘win-together fail-together’ approach it espouses. This goes beyond most of our existing contractual schemes.
What should you do?
Everyone involved in a project (ideally) needs to be working under a collaborative, partnering style contract. Collaboration means also early involvement to help develop shared outcomes, innovative solutions and sustainability/social value.
This may means more two-stage or multiple-stage tendering where the supply network is paid and incentivised to provide alternative solutions to the client’s stated outcomes – collaboration would not be characterised by the industry working at risk!
We may be able to adapt existing collaborative contracts to meet the Playbook’s requirements for longer term strategic partnerships. However, some of the other themes and policies may prove more challenging to include in your contract.