Collaborative Contracts: Designing the Contract

Those working collaboratively with clients and contractors know to lock the contract in the bottom drawer. Conventional contracts are all about handling failure of performance and they push the parties into their corners.

Adversarial behaviour in defence of your own interests is inevitable, especially following an attack by another party. So anyone who signs a partnering charter or simply wants to co-operate constructively agrees tacitly or openly to ignore the contract if at all possible, solving difficulties by agreement. The most celebrated case of this approach has been the Ministry of Defence’s experimental “Building Down Barriers” project, where the client formally suspended all recourse to the contract or to insurance in order not to inhibit collaboration within the team.

The result was two projects of outstanding performance and value for money. The MoD gave responsibility for further development of the Building Down Barriers to the Design Build Foundation, now Be (Collaborating for the Built Environment).

However, the real world had to return after the experiment and without a form of contract suitable for collaboration, all the old attitudes came back. Attempts to write less adversarial contracts like NEC and PCP2000 have been quite successful, but Be wanted to create a contract that actively supported collaboration. The new Be collaborative contract was launched on September 12. It takes a very different approach, aimed at supporting collaboration through the act of agreeing the contract contents.

Ideally, it is used where the contractor enters the project early, in a two-stage or framework environment, but it can also be used more conventionally. The document consists of a set of conditions and a purchase order, and is in a two-party format suitable for every relationship in the team, including client-architect. The purchase order requires clear goals to be agreed and lists the identified risks with how each will be handled and costs allocated. The act of surfacing all risks and agreeing their consequences takes away the uncertainties that derail so many projects. “Relief Events” – the circumstances in which additional time or money will be allowable – are also agreed.

No form of contract by itself will make unwilling parties collaborate, but where the desire to work collaboratively exists, the Be contract supports the idea, working out all the points that could cause problems and setting the framework for solving difficulties encountered. For example, a problem between any parties in the team must be notified to all. The guidance notes to the contract are almost more valuable than the document itself, acting as a how-to manual.

The contract dovetails with the Office of Government Commerce’s “Achieving Excellence” recommendations to clients and it supports target-cost working. Three public-sector clients are already trialling it successfully. It is the culmination of a three-year effort by a team at Be, drawn from across the membership of clients, consultants, lawyers, contractors and specialists.

So this is a contract for the top of the desk: using it helps you to collaborate. Have a look at it on and let me know what you think.

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