There was considerable press comment earlier in the year on the appearance of the Chartered Institute of Building’s (CIOB) Contract for use with Complex Projects (CPC 2013). The promoters hailed it as an important step in improving the approach to time management. However, some commentators wondered if it was too complex for everyday use. No doubt more feedback will be forthcoming once it has been adopted on site for suitable projects.
For use on major works
In a number of ways this contract marks a step change in current market practice. Certainly it goes much further than existing standard forms in addressing time management, which CIOB identified in an extensive survey as the major cause of problems in complex projects.
This contract is intended to be used for major works which, according to the guide, “cannot reasonably be expected to be managed intuitively”. It is flexible in that it can be adopted for traditional or design and build approaches and (with some adaptation) for most forms of pricing mechanism. The main documents are the contract conditions and the lengthy appendices. By reference to appendix E, one of the distinguishing features of the contract immediately becomes apparent. This is a comprehensive schedule of progress records which the contractor keeps. Perhaps surprisingly, the promoters have identified the fact that no other standard form requires progress records to be kept outside the context of a claim and the contract’s approach is clearly a step forward.
Time management is central
The central feature of the contract is its approach to time management and, here again, CPC 2013 departs from the approach adopted in other standard form contracts.
CPC 2013 requires a schedule to be maintained that focuses on the anticipated out-turn time and cost rather than predictions made at the time of tender. The schedule is compiled in three densities depending on the imminence of the work in question. In high density (work planned for the near future) detailed assessments are made by reference to resources and progress on site. The schedule is updated regularly as events occur.
But that is not the end of the schedule’s usefulness. It refers to cost as well as time and can be used to calculate both the value of work done to date and the anticipated final cost. It is also intended to assist in calculating the value of variations. The stages of updating and reviewing the schedule are illustrated by flow charts in CIOB’s guide.
As might be expected in a contract where project management is key, definitions are provided of time contingencies and float together with provisions as to how these allowances may be used during the course of the project. Transparency in these areas is likely to promote good risk management.
It is the promoters’ intention that disputes as to time and cost should be capable of being “nipped in the bud” by equipping the parties with information to resolve these issues at the time they occur, not with the benefit of hindsight.
CPC 2013 contains the usual provisions to be expected in a standard form contract for complex projects that is intended to require minimum adaptation for individual circumstances. It recognises the trend towards specialisation in the supervision of building and engineering contracts by identifying additional participants in the process, such as a design co-ordination manager and a project time manager, these being carved out of the traditional contract administrator role.
Is it too complex?
What about the criticism that the contract is too complex? It is fair to say that it took me a while to explore it and any employer, professional or contractor using it will need to be thoroughly conversant with its provisions. Indeed, CIOB are currently running courses on its use. Some time limits are relatively short, possibly leading to traps for the unwary. An example is deemed acceptance of a contractor’s submittal for approval within ten business days of the submittal unless a response to the contrary is given by the contract administrator.
Overall the contract is compiled in a logical sequence but users must be ready to refer to both the contract and the appendices at the same time, not least as the material definitions are (rather unusually) to be found in the appendices.
The contract is meant to be used internationally, as well as in the UK. Where the Construction Act 1996 does not apply, a system of quick fire expert determination is available to resolve “issues” (not yet disputes). A determination is issued within 20 business days of the expert’s appointment. Again, it is an unusual feature of this contract that the expert’s determination may be relied upon by either party in subsequent dispute resolution proceedings and the expert may be called as a witness in those proceedings.
No such proceedings can be opened until the expert has issued his determination or is too late to do so. The expert’s determination is binding on the parties unless a notice of adjudication or arbitration is issued within 20 business days of the delivery of the determination. This procedure has some analogies with domestic adjudication but it is unclear what probative value an expert’s determination or evidence would have in subsequent proceedings. Such a provision may be an incentive to settlement in practical terms. Further, enforceability of the expert’s decision may prove problematic in some jurisdictions.
Inevitably the proof of the pudding will be in the eating but CPC 2013 represents a brave step forward in bringing advanced project management techniques into a standard form contract.