Revision 2: The latest revisions of the most widely-used SBCC building contract forms are now available. These incorporate many of the principles contained in the JCT "Revision 2" forms, published in 2009.
I have looked at the Design & Build contract (catchily named "Revised October 2009, incorporating JCT Revision 2 2009"). The other forms available include the traditional With / Without Quantities, and Minor Works forms with and without contractor's design.
This is not intended to be a complete list of the points covered, nor an exhaustive examination of the drafting changes from previous versions - however, the main points can be summarised as follows.
Supplemental conditions: The main substantive drafting changes are contained in Schedule Part 2, named "Supplemental Provisions". Each individual section (see below) is activated by completing an "applies / does not apply" entry in the Contract Particulars. If no choice is made, the provision in question does not apply - e.g. the provisions are "opt in" rather than "opt out".
Framework Agreement: If the building contract is supplemental to an over-arching Framework Agreement, the date and parties etc. may be inserted in the Contract Particulars (referred to in Recital Sixth). The Framework Agreement appears not to be mentioned elsewhere in the contract. Any implications the Building Contract had on the Framework Agreement would of course depend on the drafting of the Framework Agreement in question.
Insurance: the Contract Particulars section now provides for separate sub-categories of insurance. For pollution contamination and asbestos claims, the default position is that no insurance is required.
(Perhaps I'm reading too much into this. The English JCT Guidance notes that this position "is in line with market realities". Is it now possible to argue that maintaining contamination or pollution insurance particularly is now not market standard?)
Acceleration Quotations: The Employer is entitled to invite the Contractor to submit quotations with a view to achieving practical completion ahead of the completion date. The Contractor can respond either with i) a quote, noting how much time will be saved, and any adjustments to the Contract Sum, or ii) an explanation as to why "it would be impracticable" to achieve practical completion earlier than the Completion Date.
Is the Contractor obliged to say what time savings are possible, even if the Employer's suggested time saving is not? Does the Employer have anything to lose from inviting a quotation at any stage? The Contractor's overall obligations are unaffected until the Employer accepts a quotation. The Employer is able to accept a quotation up to seven days after it has been issued - there seems to be no sanction or requirement upon the Employer either to accept or reject a quotation.
Payments following Practical Completion: The regime for payment following practical completion has changed. Previously, the Contractor was obliged to submit an Application for Payment at the expiry of the Rectification Period or issue of Notice of Completion of Making Good (under Alternative A), or "as and when further amounts [were] due" to the Contractor, being no more often than monthly (under Alternative B). The new regime seems much simpler - applications for payment following practical completion shall be made every two months, unless otherwise agreed.
Will this make a significant difference to Contractor's cash-flow? Only perhaps where the retention percentage is significant, and the value of the contract works themselves are significant. Importantly, the Contractor will have to progress the rectification of snagging works regularly and diligently in order to make these provisions work in his favour.
Dispute resolution - mediation: The parties are now obliged to "give serious consideration to any request" by the other party to referring the dispute to mediation, in the event that such dispute "cannot" be resolved by direct negotiations.
This drafting looks potentially onerous, but makes no great step forward from the previous obligation - where the parties "may by agreement seek to resolve" any dispute through mediation. The current drafting is triggered by a request to mediate being made -if no request is made, no requirement to give "serious consideration" to mediation arises.
The reference to mediation is explicitly subject to Article 7 - noting the parties' statutory right to refer any dispute arising under the contract to adjudication.
Collaborative Working: The aura of NEC3 is tangible in the (optional) clause dealing with collaboration. This extends to "other project team members", and calls for "a co-operative and collaborative manner", "good faith", and a "spirit of mutual trust and respect". Behaviour which is not collaborative is to be "addressed", although this isn't elaborated upon any further. There is no explicit sanction set out in this short section. Will the market determine that this clause is "opted out" of, or will this be seen as sending the wrong message?
Health and Safety: Although not relating to risk profile, important provisions are made in this area. The parties are obliged to "endeavour to establish and maintain a culture and working environment in which health and safety is of paramount concern to everybody concerned with the project."
Although the drafting could be improved, the sentiment is clear and welcome. The new detailed wording explicitly does not limit existing statutory duties, and is in addition to existing specific requirements of the contract itself regarding health and safety.
Value engineering: The Contractor is "encouraged" to propose changes to designs and specifications - particularly in relation to life-cycle costs or to reduce the cost of the Works. Where the Employer seeks to implement a proposed change, negotiation is then to take place. Interestingly, the share of any financial benefit to be paid to the Contractor is explicitly stated to be part of the negotiations - the incentive for the Contractor to be proactive is specifically included in the new drafting.
Several other significant areas in the contract are covered - not least in relation to valuation of changes, so-called "Named Sub-Contractors", sustainable development, and performance indicators. These will be considered in the next edition of the Jungle.