JCT contracts suite

The JCT Constructing Excellence contract is a partnering/collaborative contract and radically different from all other JCT contracts. This contract appears to be an attempt to enter the collaborative contracts market currently dominated by the NEC and PPC2000 forms. The contract is based on the previous BE Collaborative Contract and was re-launched by the JCT in 2007. This contract appears to be rarely used in practice, the RICS contracts in use survey (2010) had only 1 example of this contract being used.

The contract comes with a guide and consists of 2 forms:

• Constructing Excellence Contract; and
• project team agreement.

Constructing Excellence Contract

This is a traditional 2 party contract with the parties called 'supplier' and 'purchaser'. The contract can be used for both the procurement of construction works and construction services.

The terms and conditions are short and simple and the language relatively straight forward avoiding the drafting peculiarities of other collaborative forms such as the NEC forms. The contract comes with 2 pricing options, either a lump sum or target cost with the target cost having a guaranteed maximum cost facility.

What is unusual about this form is that the parties identify the risks of the project and then allocate them between themselves particularly with regards to time and cost. This can be quite a difficult exercise and advice will have to be sought from those with expertise on construction risk. As a rough guide, only the main project risks should be identified as the bulk of the project risk will be here (i.e. identify the 20% of the risk that carry 80% of the project risk). The Constructing Excellence guide provides considerable explanation but it will take time to get used to this form of procurement. This guide also refers to some useful websites and resources.

Project team agreement

As noted in paragraph 55 of the Constructing Excellence Guide, the project team agreement is a simple multi-party agreement that allows the project team to contract with each other and thereby formalise the relationship between them with regards to their rights and obligation to each other. The project team agreement is optional and not required when using the Constructing Excellence Contract. The project team agreement will not override the agreement between supplier and purchaser but is intended to supplement it by providing a formal cross-party (and multi-party) contract encouraging and regularising collaborative working.

That said, the project team agreement is a contract and if it is used then it will mean that a breach of the agreement can have consequences. This agreement is similar to the NEC secondary option X12 but lacks the true multi-party rights and obligations created by the PPC2000 form.