5.13 There are several ways to approach the concerns expressed by all sides of the construction process about contracts. They are:-
1. To do nothing.
2. To amend existing Standard Forms to meet some of the concerns.
3. To try to define what a modern construction contract ought to contain. If this can be achieved, there are then two further alternatives, which are to change existing contract forms to take account of such requirements, and/or to introduce a new contract which will deliver them.
5.14 It is no longer possible to do nothing. That option can be discarded at once.
5.15 Before choosing alternatives, it is desirable to ask some basic questions:
1. Are there too many forms of contract? Or too few? Does the number matter?
2. Are some of them inherently adversarial, or likely to produce conflict because of the modern structure of the industry?
3. Are there some procurement routes which are more likely to produce a result which meets the client's wishes, and which should therefore be followed? If so, which?
4. Are there certain features which should be adopted across the range of contacts?
5. Are there any contracts which should be used more often?
5.16 There are no universally acceptable answers to any of those questions. There is a vast literature on the industry's contract documentation. There are many courses of learned lectures available. Thousands of highly experienced practitioners have worked for decades in drafting, administering and sitting in judgement upon the contracts. Some believe that a contract which is not negotiated through the industry's established procedures (the JCT or the CCSJC) will not achieve acceptance. But equally, there are those who take the view that such documents do not meet their commercial requirements. These issues are not ultimately susceptible of resolution through scientific analysis. In any case, contracts exist to serve the construction process, not vice versa. During successful projects the contract document is "left in the drawer".
5.17 In paragraph 5.15, I posed five questions about contracts. My personal answers are:-
1. The number of available contracts is not significant. Clients should choose the procurement route which best suits their purpose, and use the appropriate form of contract.
2. Contracts which are drafted on the basis that:
a. design and construction are totally separated, in that the main contractor and subcontractors have no design responsibilities or involvement in the preparation of the design;
b. all design work will be fully planned by consultants retained by the client and not subject to change once tender information has been sent out;
c. the actual construction work will mainly be carried out by the contractor rather than by domestic subcontractors;
d. the architect or engineer acting as contract administrator will also be accepted by the parties to the main contract as impartial adjudicator between client and contractor, especially over matters relating to measurement and certification of work done and related payment or time issues;
do not seem to me to relate easily to reality on modern construction sites and may require revision or replacement by other contractual approaches.
3. Contracts which best meet client objectives on procurement may involve modules which can be adapted by mutual agreement to the particular project. Putting the modules into a standard format means that the system brings together flexibility and familiarity.
4. Certain common features are desirable. They should include:-
a. A general duty to trade fairly, with specific requirements relating to payment and related issues;
b. clearly defined work stages, including milestones or other forms of activity schedule;
c. the pre-pricing of any variations;
d. an adjudication system which is independent of contract administration.
5. The approach of the New Engineering Contract is extremely attractive.22
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22 The NEC Users' Group was launched in January 1994. Its first Newsletter (Spring 1994) says that "more than 700 contracts have been let under the NEC around the world". As of the 3 March 1994, BAA pic. had already used it on 13 contracts. 11 of them are civil engineering and infrastructure works and the other two are building schemes. They range in value from £0.75 million to over £60 million, and total over £100 million. All the contracts have made provision for a named adjudicator, but in no case has it been necessary to call upon the service of the adjudicator, because the Project Manager and the contractor have agreed matters between themselves. (Source: Letter from Mr Michael Maine, Group Technical Director, BAA pic, 3 March 1994.)