New suite of JCT contracts – top changes for public sector clients

Sharpe Pritchard

The JCT is in the process of updating its standard form building contracts and related contracts. To date, it has published new editions of the Design and Build (D&B) and Minor Works (MW) suites. The top five changes to note for public sector clients are…

1) Incorporation (with minor changes) of the provisions of the Public Sector Supplement 2011

The JCT published the supplement in 2011 to encourage public sector employers to use its contracts by enabling them to use a JCT contract to:

  • meet the government’s fair payment principles as outlined in its Fair Payment Charter;
  • meet obligations in relation to transparency and freedom of information requests; and
  • facilitate the use of Building Information Modelling (BIM) protocols in line with the Government BIM Strategy.

Among other changes, the payment provisions have therefore been significantly revised, including in relation to:

  • loss and expense claims;
  • interim valuation dates; and
  • notice requirements.

The payment section has also been reformatted for ease of navigation.

2) Incorporation of provisions to reflect aspects of the Public Contracts Regulations (PCR) 2015

The Public Contracts Regulations apply to all contracting authorities and have an impact on most procurements carried out by public sector bodies. As such, the relevant provisions have been incorporated via (a) a new Supplemental Provision, in relation to: (i) information on; (ii) exclusion of; and (iii) prompt payment to, sub-contractors, and (b) new termination grounds relating to: (i) modifications to the contract; (ii) mandatory grounds for exclusion; and (iii) European Court of Justice determinations.

3) Incorporation of JCT 2015 amendment addressing the Construction (Design and Management) Regulations (CDM) 2015, in relation to health and safety obligations

Provisions have been incorporated to:

  • reflect the obligation to appoint a principal designer;
  • and document the applicability of the regulations to sub-contractors.

4) Introduction of options to provide performance bond or parent company guarantee in D&B contract

Introduction of these options recognises the almost universal amendment currently made by employers to JCT contracts, being the requirement for provision of one or more forms of security such as a bond and/or parent company guarantee, and frequently both.

5) Increased flexibility in relation to the granting of third party rights in D&B contract

There is now an option for sub-contractors to provide third party rights as an alternative to collateral warranties. Whilst at law there is no difference between the two forms, there has in practice been a slow uptake of third party rights. The JCT’s addition here should therefore continue the move towards using third party rights as a means of providing protection for third parties. Parties will be free to use their own agreed forms of either document.

Other points to note

  • The insurance provisions have been amended to allow for alternative solutions if tenants or domestic homeowners have difficulty obtaining joint names insurance for existing structures. Moreover, the provisions have been consolidated for all insurance types, for ease of reference, in relation to:
    • evidence of insurance;
    • insurance claims; and
    • reinstatement work.
  • Part 2 of the D&B Contract Particulars has been deleted due to the incorporation of provisions related to collateral warranties and third party rights into Part 1.

Implications

The changes above demonstrate the JCT’s recognition of important market trends and its continued relevance in the modern day construction market.


This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.