INTRODUCTION

  All significant construction projects in the UK have a written contract. Although some have bespoke contracts drafted specifically for the project, most use a standard form of contract. There are various standard contracts available from three main authoring bodies: The Association of Consulting Architects (ACA), the New Engineering Contract (NEC) and The Joint Contracts Tribunal (JCT).

HISTORY

  Austin Mitchell MP stated in the committee of January 14: "in 2005 OGC decided there should only be one construction contract, limiting Whitehall in construction contracts to one supplier."

  The OGC conducted its original review in 2005 evaluating construction contracts against its Achieving Excellence in Construction (AEC) criteria. The review was poorly conducted and implemented to such a degree that the contract authoring bodies were not made aware of the objective, and so did not engage in any great detail in the process. The OGC announced that just one contract, NEC3, met its AEC criteria, and consequently endorsed the use of this form of contract on all public building projects, including the 2012 Olympics. It also provided support and training in the use of NEC contracts.

  The other two contract authoring bodies voiced their reservations over the OGC's actions, but it raises the question whether it is the OGC's role to favour one supplier of services to government over another?

REVIEW

  Austin Mitchell MP went on to say: "Under pressure, you commissioned a review by Arups, this had recommended that there be three construction contracts not just one, but the OGC are still sitting on the report and apparently want to stick to the one contract, which again would be a cosy relationship."

  JCT and the ACA both independently asked OGC to reconsider its findings, and in 2008 Arup was commissioned by OGC to undertake a review, which reported at the end of September. It found that the Joint Contracts Tribunal (JCT) Constructing Excellence contract (JCT-CE) and the Association of Consulting Architects (ACA) Project Partnering Contract (PPC2000) both met the criteria, as well as the New Engineering Contract (NEC) Engineering and Construction contract (NEC3).

  The Arup review said: "Each contract reviewed satisfies OGC's Evaluation Criteria. Each contract reviewed would enable parties, using them correctly, to achieve OGC's Achieving Excellence in Construction standards from which the Evaluation Criteria are derived."

  It continued: "No single contract is superior to the other two in all respects—each has its own strengths and weaknesses and each is highly adaptable. The difference in the way that each contract is applied by users will be at least as significant as the differences in the processes or terms and conditions provided within the contract."

  The review has, to date, not been published.

  JCT and ACA were advised that the recommendations of the review eg that all three forms of contract met the OGC's requirements and that this was to be presented to the Public Sector Construction Clients Forum (PSCCF) on December 11. Subsequently, it is understood that this committee was in fact advised by OGC to continue with one contract. Until the review is published so that construction industry interest can see the results of Arup's work, it is difficult for any of the contract providers to understand OGC's position.

JCT and ACA have been advised by OGC that it wishes to continue with the status quo—to continue the sole endorsement of the use of NEC in public building projects—which brings into question the reason why the review, estimated to have cost £50k, was commissioned if OGC was going to ignore its findings.

  Sir Michael Latham, the author of the Government's original review of the construction industry, has commented on the review: "The construction industry has taken huge strides forward in recent years, but it is still not enough. The OGC has attempted to direct public procurement along the right path to collaborative working, and I am pleased that three contract forms now meet its principles for achieving construction excellence. The widespread adoption of these contracts in the public sector, and hopefully the private sector, will enable the industry to take further steps along the path to best contractual practice."