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Contracts and collaboration in a post-COVID world · Project Podcast

0:01
Hello and welcome to the APM podcast.
0:03
APM is a childhood body for the project profession.
0:06
My name is Mike Heinen, online, editor for apm's, project
0:09
journal, and your host. And our topic today is contracts
0:12
and collaboration contracts. Create legally binding,
0:15
obligations between the parties involved in a project, they
0:19
describe the nature of those obligations and the actions that
0:21
can be taken, if they are not met as such, the contract is a
0:24
foundational document, whose content will come to define the
0:27
project and how the work unfolds.
0:30
It is there to provide certainty and protection to the parties,
0:33
but there may be an opportunity for contracts to be used to
0:35
create ongoing collaborative relationships, rather than
0:38
simply defining strict requirements, and being regarded
0:41
as a tool to give parties leverage, in the event of
0:43
acrimonious circumstances to find out a bit more about how
0:47
project professionals can enhance their knowledge of
0:49
contracts and get more from their relationships.
0:51
With contractors, I sought the input of a couple of experts.
0:55
First up, I interviewed Sarah shooter, Sarah is an independent
0:59
solicitor Advocate consultant and trainer whose company
1:02
shooter Consulting limited as a niche practice in project,
1:05
management and law. She's also running a webinar
1:09
series for apm's contracts and procurements Sig entitled basic
1:12
contract law for project managers.
1:14
You can find a link to the first installment in the episode
1:16
description. Hi Sarah.
1:24
Thanks for joining us to begin with, please.
1:27
Could you introduce yourself and give a bit of background to your
1:29
role and your experience with contracts.
1:33
Yes, of course. Thanks my gets really, really
1:35
exciting to be here on this, AP and podcast, thank you for the
1:38
invitation. So I'm an independent solicitor
1:42
Advocate. I work for myself.
1:44
My little company, choose, a Consulting limited.
1:48
We've been going for about seven and a half years.
1:50
Now, I specialize in construction, engineering and
1:55
infrastructure, projects, including technology projects,
1:59
and I'm working on projects of All Sorts, but mostly Within
2:03
those sectors at the moment. If I look around my desk, I've
2:07
got a couple of any C3, contracts and subcontracts.
2:11
I've got a Professional Services engagement for project manager
2:15
and a supervisor to look at for one of my clients I've got my
2:19
collaborative workspace, open for a webinar that I'm sort of
2:25
emceeing in September, on alternative dispute, resolution
2:29
and I've got a nondisclosure agreement for Consulting.
2:32
Engineer who I want to help him to get through and to nail a
2:36
deal down. So there's lots going on.
2:39
For sure, at the moment and summer season is no excuse.
2:41
I've also got a pile of accounts in front of me because at this
2:45
time of year, when my kids are off holiday and work, come
2:48
naturally quietens down and deadlines elongates a little bit
2:53
through projects, then I try and get some of the infrastructure
2:56
as I call it to my own company done as well.
2:58
And that includes things like the accounts, updating our
3:01
template. It's getting some new training
3:04
workshops ready for September. So yeah, we've got quite a lot
3:08
on. We're juggling lot, but never
3:10
complain. And always keep trucking.
3:13
We're talking today about contracts for project
3:16
professionals. So I want to start off with a
3:18
very simple question, what are contracts?
3:20
And why are they important in a project context?
3:23
That's a really great place to start.
3:25
A contract, is really an arrangement, a deal.
3:30
It is the means by which you Regulate, an arrangement between
3:35
two or more parties, generally speaking contracts, all over the
3:40
world are what we call bilateral.
3:42
So there between two people or two organizations, or one of
3:45
each you can of course get multi-party contracts as well as
3:49
the partnering variety of the alliance in variety and
3:52
contracts come in all different shapes and sizes.
3:54
So right at the very basic end you've got what we call a simple
3:59
contract which is works and services for money.
4:02
Me and right at the other end of the spectrum, you've got super
4:06
complicated network of project contracts, which might have side
4:10
agreements, which might have third party involvement, which
4:13
might have all sorts of stuff to do with stakeholders and funding
4:17
agencies and local public bodies and that sort of thing, but
4:22
whatever size and shape of contact you've got, however,
4:24
complex or simple. It is the hugely important in a
4:28
project context because they regulate the relationship
4:31
between the Teas. And therefore the parties
4:34
understand what it is that is being done or delivered or
4:40
procured whatever the correct verb is that hat, that attaches
4:43
to, that contract for an amount of money. you've described how
4:48
contracts appear on a spectrum from simple to complex, but are
4:52
their components that are to be found in all contracts
4:55
irrespective of their level of complexity, Yeah, there are
4:59
actually and in order to have a contract in law, you have to
5:02
have these components. So it's not that their
5:05
components of a typical contract of such, but actually that if
5:08
you want to have a contract in the eyes of the law, then you
5:11
need to have these components. Now anybody who has listened to
5:15
the APM, webinar series that I'm doing for the second time, we'll
5:22
have heard in episode 1, what those components are now.
5:25
If you haven't heard that, let me Let me in let you in on that
5:30
on that secret. You need to have five components
5:32
of a contract. The first is that you need to
5:35
have an offer so that is an offer from one party to the
5:40
other. To either do work.
5:43
If it's coming from the seller or to go out to the market and
5:47
ask for work. If you're the buyer of works or
5:49
Services then you need to have the opposite, which is what we
5:52
call acceptance. So it's an acceptance by the
5:55
buyer of the sellers works or services.
5:58
Or it's an acceptance by the seller to what the buyer is
6:02
wanting to to buy. Now, in order to mesh that
6:05
together you need something called consideration which is
6:08
normally money when we're talking projects but it maybe
6:11
money's worth, it doesn't have to be cash as such but it must
6:15
be something which is unidentifiable swap between the
6:18
parties. For those works and services
6:21
that are being done. We also need an intention.
6:26
We call it an intention to to create legal relations.
6:30
And in essence, if you have a written contract, that will be
6:33
taken for granted because you will have signatures to the
6:35
contract. If you've got an exchange of
6:37
emails that can perform a similar function with much more
6:41
informal oral contracts, that's a bit more tricky because you
6:44
haven't got any written evidence to show what that is.
6:47
But if the parties agree it, and they can exchange a note on it,
6:51
then again, that will more or less servers as the correct
6:54
component for that and then we need something called Acity now
6:58
capacity in commercial contracts is all about an authorized
7:03
signatory. A person who has the authority
7:06
on behalf of the organization to enter into the contract and if
7:11
you are an individual, then you have authority on behalf of
7:13
yourself so capacity, tends not to be too difficult in
7:17
commercial contracts either. So there you have it.
7:20
Five elements for a contract in law.
7:24
Why is it important for project professionals to have a good
7:26
grasp of contracts and not to regard them as just something
7:29
for the legal department to deal with?
7:32
Yeah, that's a really good question and it is so important
7:34
for project professionals to have a good grasp.
7:37
The first is that for themselves and for their organization to
7:41
understand what are the works. All the services that they
7:44
themselves are delivering for their client.
7:47
What are those promises that they have made or probably have
7:51
been made on their behalf? And then they are delivering
7:53
Going for their organization. So you've got to understand that
7:57
in order to deliver firstly, what you're supposed to be
8:00
delivering but also to then, think about how to do it.
8:03
Effectively efficiently. And of course profitably the
8:07
other angle for project professionals, depends on the
8:09
role and for certain project professionals you're going to
8:14
need to have a better understanding of other contracts
8:17
in the network of the project. For example, if you are
8:21
appointed as a contract 200 JCT contract or your appointed as
8:27
the NEC capitalized project manager, you're going to need to
8:31
understand what it is that the contractors delivering for the
8:34
client because you're there as the contract administrator,
8:37
you're there as the person who is going to be looking at the
8:41
work that's been done, that's going to be certifying what
8:44
money is going to be paid over and perhaps making judgment
8:48
calls and decisions about Works which haven't been done very
8:51
well. All services which haven't been
8:53
completely Added and therefore you don't want to certify that
8:55
money ought to be paid. So you know, the commercial
8:59
details of those other contracts can be blacked out can be
9:02
redacted, but you do as a project professional who is
9:05
dealing with being if you like an agent between the parties,
9:09
you're going to need to understand what the scope of
9:11
that other contract is and perhaps other contracts around
9:14
the outside as well. What details within a contract
9:19
should project professionals? Pay special attention to Okay,
9:24
so the first thing that they need to pay attention to is the
9:27
scope that's going to be the scope of Works themselves or the
9:30
scope of services that are going to be delivered.
9:32
And again, both within their own contract.
9:35
But also with any contracts, which they are helping to
9:38
administer through their Professional Services, they're
9:42
going to need to also look at payment terms, because if you're
9:45
a certify, you need to know what payment to be certifying.
9:49
When, to be doing it, how frequently to be doing it and
9:53
perhaps, Might even be details in the contract such as the
9:56
format to use or template documents or a system that you
10:00
need to have access to in order to be able to do that
10:03
certification process for other project professionals as well.
10:07
In particular for project managers, it's a really good
10:10
idea to have a special look at the contract processes.
10:16
Now there'll be tons of different processes but you can
10:20
focus in on things like problem solving.
10:23
Ooh, okay. What happens if a dispute
10:25
arises? What is the process that the
10:27
parties are going to use? How long is it going to take
10:30
should any third parties be involved other important
10:33
processes for project managers or things like a completion
10:37
process? What does completion mean?
10:40
How is it certified who needs to come and inspect?
10:43
Are there any commissioning tests should videos and
10:46
photographs be kept excetera, Etc.
10:48
So the contract will have lots of detail in it.
10:51
About various processes that project.
10:53
Smells need to pay attention to and project managers in
10:56
particular need to pay attention to those ones.
10:59
And I suppose, if I think about it that the other process to pay
11:02
attention to would be the dealing of any risk, which
11:05
arises those are quite well established in many forms of
11:09
standard contract. But again, there's something to
11:11
pay attention to, there will be time scales to work to.
11:15
There will be paperwork that needs to be exchanged and go
11:18
backwards and forwards and then maybe assessments that need to
11:22
be done as well by the project manager.
11:24
So, I mean, you know, you could say could project professional,
11:27
good pay attention to every contract term but but one never
11:31
has time to do all of those things.
11:32
So, for a project manager, those would be the three.
11:35
I would concentrate on risk management, completion and
11:39
money. And I suppose the fourth one
11:41
which is a good one to have up your sleeve would be problem,
11:44
solving and dispute resolution. Can you tell us a bit about
11:47
Express and implied terms in the contract and what to watch out
11:51
for? Yes, of course.
11:54
It's pretty simple, actually Express.
11:57
Terms are those which are expressed which have been
12:00
written down, which have been agreed between the parties,
12:05
whether orally or in writing. So an Express term is something
12:09
that you can see and an implied term is the opposite.
12:13
An implied term is silent. It's invisible.
12:17
It may be something which are the parties have agreed but
12:19
haven't written down. It may be something which they
12:22
haven't. Gust at all, in which case there
12:26
are scenarios where the law and this is done through a court or
12:29
through an adjudicator, will step in and literally imply a
12:33
term into a contract such that the contract will be interpreted
12:38
using that employed term. So implied, terms can be quite
12:43
useful. They can also be a bit scary
12:46
because, of course, they are invisible, and that makes them
12:48
in certain so people like Xpress terms, because you can see them
12:51
in front of you. And because there, You can
12:53
understand the regulation of the relationship between the
12:56
parties. But implied terms, they can be
12:59
positive, they can be negative. So, positive, implied term would
13:03
be act reasonably and - implied term would be, don't commit
13:09
fraud in your application for payment, you know, things like
13:12
that, which people say, yeah. Okay, fair enough.
13:14
I understand those, I don't need to write them down.
13:17
They sound perfectly sensible and, you know, and that's
13:20
absolutely fine. But there are other employed
13:23
term. Terms which always come back to
13:25
the threshold of reasonableness in law.
13:27
So if you want to do something, which isn't going to be measured
13:30
or benchmarked against the test of reasonableness, then you want
13:34
to make it Xpress. For example, the work must be
13:38
completed within three months, okay?
13:42
In the absence of giving that Express term in the contract
13:45
written down or agreed orally, the court would imply, or the
13:48
law would imply an implied term which would be the works.
13:52
Must be finished within a Reasonable time.
13:54
And the reasonable time would be considered of all the
13:57
circumstances in which that work is being done.
14:00
Including resource availability, time of year, whether there are
14:06
any subcontractors involved have complicated, etc, etc.
14:09
So if you want to do something and have the certainty about it,
14:12
the best way to do that is to include the statement as an
14:16
Express term. What are some of the risks
14:19
associated with poor practice around contracts?
14:22
Now what could happen? Example, if a project
14:24
professional doesn't give due care and attention to the terms
14:27
of a contract. That's it.
14:29
That's a great question. It's something that I often come
14:33
across through, lack of Education, really and training
14:37
of project managers. And this is what I something
14:39
like this podcast is such a great opportunity to get that
14:42
message out there for project managers.
14:45
There's lots of risks and they and it comes back to to actually
14:49
the question about having a good grasp of contracts.
14:52
The first is that you need to project managers need to be
14:57
aware of Their Own. Tracked.
14:59
So if you don't deliver your own Services properly that can put
15:02
you in breach of your own contract or your organization's
15:05
contract more likely and that could be also professional
15:09
negligence and that's, you know, hideous for all sorts of
15:12
reasons, you know, on a wider sort of project level.
15:17
If a project manager isn't playing their part then that the
15:22
the agency role. If you like the certifier role,
15:25
the independent assessor role that they Play that they broke a
15:30
between that the client and the contractor is is is poorly
15:35
regulated and is liable to be very fragile or able to be
15:39
vulnerable to disputes. And basically, nobody really
15:42
knows what they're doing. So then everybody is doing what
15:44
they always do and they and they know solidly within their own
15:47
technical expertise what they're doing, but they miss the nuances
15:50
and the subtleties of the contract which are the bits that
15:53
regulate where money flows? How time works?
15:57
Who needs to do what when What is, you know, what is triggered
16:01
by one party when somebody else does does a particular action?
16:06
So the risks are that the project unravels not in a
16:09
technical sense because technical people know their
16:12
stuff and they will get to the end of the project, but it
16:14
unravels in a governance side it unravels in a in a maturity side
16:20
and it unravels in the sense of a relationship side because we
16:24
don't have that tightness that regulator contract process which
16:28
will Here and guide people step-by-step to the end.
16:33
How can project professionals take a more active or proactive
16:36
role in the Contracting process to help mitigate some potential
16:39
risks? Yeah.
16:41
I absolutely Advocate all of that and trying to give my
16:45
project manager. Clients, a voice and encouraging
16:48
those in-house project managers within Contracting functions to
16:53
try and be a bit more vocal pre-contract in procurement in.
16:58
In stage because they are the ones and this is literal.
17:03
In some cases, get handed the contract and told to go off and
17:06
get on with it. You know, our job is done and
17:10
hands are washed and pre contract and procurement folks,
17:13
get on with their next. Prospect the project manager.
17:16
Meanwhile, is given something which they've never seen before.
17:20
They haven't had any input into let alone be able to perhaps
17:24
even influence how the terms of the the of the contractor put
17:29
together. I was actually looking at one
17:31
last week. This is a really good example.
17:34
Actually, a project manager for an NEC subcontract.
17:39
The sub contract was negotiated and the standard term reads that
17:43
a particular action has to happen within 3 weeks.
17:47
Now, the subcontractor has had that term reduced from three
17:53
weeks down to two weeks and the Tractor, which is the
17:59
subcontractors client has had that term increased from three
18:02
weeks to four weeks. So suddenly people who before
18:07
have to do in the vanilla form, do something within 3 weeks have
18:10
either got less time than they thought.
18:12
Or as a bonus, I got more time than they thought and the
18:16
project manager on dealing with that, the subcontractor has only
18:18
very recently been alerted to the fact that they now have two
18:22
weeks to do something rather than three weeks.
18:25
And it's those kind of things where project Jurors could
18:29
really useful e, both be informed but also be consulted
18:34
on, you know, you have to apply the real life to this stuff.
18:37
What does it mean for that project manager to have only 2
18:42
weeks to complete? Whatever the action is rather
18:44
than three weeks is it possible? Is it okay, great?
18:48
If it is but if it isn't always puts the organization at risk,
18:52
or with more resource has to be pulled together in order to have
18:57
the completion. Evidently in capably, within a
19:00
two-week period rather than a three-week period, Then the
19:02
project manager is going to have to be very agile.
19:04
Is going to have to book to Pivot themselves in order to be
19:08
able to do that. And of course, if they don't
19:09
know that exist, how can they possibly plan to deliver the
19:13
services that they that they need to deliver?
19:17
In your experience to contracts. Tend to be viewed negatively.
19:20
I is something that's only referred to, in an adversarial
19:22
situation. Where are they regarded
19:24
positively as the foundation for a good business relationship?
19:28
Well, that of course is exactly how they should be saying.
19:30
I mean the contract is it is what it is, in the sense that it
19:35
is, the the document, hopefully, it's a document that makes life
19:38
a lot easier. The document, by which the
19:41
relationship is regulated, and I come back to this all the time
19:44
because I think that is how it should be viewed.
19:46
And certainly views differ, as to the usefulness of contracts
19:52
and whether they are viewed positively or negatively and I
19:56
guess, depending on any given situation depending on which
19:59
side if you like, and there's a, there's an issue with sides as
20:02
well. You could say that, you know,
20:06
one term is positive for one party and negative for another
20:09
or one process is helpful to one party.
20:11
But, you know, unhelpful and burdensome to another so it does
20:14
largely depend on the pair of eyes that is At it.
20:17
But I try to get my clients to look at contracts as the
20:21
regulating mechanism as the set of processes and tools that they
20:27
have that have been agreed. And in some cases that their
20:30
organizations have paid a lot of money for to have negotiated on
20:34
their behalf. Not always, of course, a lot of
20:37
it's done in house, but but you know, sometimes there is an
20:41
investment piece. So what's the point of having
20:43
made that investment whether it's time?
20:45
Money, external. Internal people have needed to
20:49
come together to put into shape this contract into being, to
20:53
sign it, to send it through various gateways and governance
20:56
and legal and everything else only for everybody to ignore it
20:59
and do what they always do. So, in that sense, when you talk
21:03
about the, the risks, about poor practice, and why it's useful,
21:08
and helpful to project managers to really kind of stand up and
21:11
say, look, I need to see this contract, I want to have a part
21:14
in the negotiation of it. I want to be consulted.
21:17
Because I'm going to be the one who's delivering there.
21:19
Sits my neck on the Block. Then all of those things come
21:23
together to say, well, we should be viewing contracts in a
21:26
positive way. They aren't, they aren't there
21:29
just to be dusted off when things go wrong.
21:31
Because if, when things have gone wrong it's too late was
21:35
actually the contract is there to help you and to steer you
21:38
through all of the tools and processes and to help you to
21:42
anticipate and have foresight about things, which could go
21:45
wrong or which might go Go on or which look like they might be
21:48
going wrong in which case there's stuff in the contract
21:51
that's going to help you to bring it back on track, whether
21:54
it's by risk management, or early warning, processes or
21:58
flagging up notices and you know, pulling it, pulling an a
22:03
an Emergency meeting together, that sort of thing.
22:05
The contract will have that kind of thing in it.
22:08
Within projects decisions often have to be made very rapidly.
22:12
What is the implication when a quick decision creates working
22:15
Arrangements that aren't covered by an existing contract?
22:18
I think this happens very often and I think it's all credit to
22:23
project managers micro decision-making and ability to
22:28
Pivot that they can do these things confidently.
22:31
And in most cases, fairly capably, there are risks, of
22:34
course attached to creating working Arrangements outside of
22:38
the On track, not least that you might do a heap of work and not
22:41
get paid for it, which I suppose is that another sort of big dose
22:46
of the real life bit of delivering contracts.
22:51
The question around project manager, Authority is an
22:54
interesting one because if the project manager is given
22:57
sufficient authority to create these kind of working
22:59
arrangements and we get the term of payment Etc sorted then
23:04
actually, that can work very, very well and it can, it can
23:07
push through things. He's speedily that might
23:09
otherwise be slowed down by some, you know, torturous
23:13
governance process or have to go through a bunch of stakeholders
23:16
or whatever it happens to be, of course, depending on the size of
23:20
the contract, and the amount of stakeholders that one has to
23:23
talk to you about this stuff but those informal arrangements are
23:27
in some cases necessary. And so the project manager being
23:32
both capable in a contract fashion but also technically
23:35
capable in terms of his or her. These can often work through
23:40
those kind of working Arrangements in a very in a very
23:44
sort of agile and practical fashion.
23:48
The worry of course is the bit that you've done work that you
23:51
don't get paid for and there's no easy way around that
23:56
sometimes decisions have to be done.
23:57
Sometimes that has to be the priority in the moment and the
24:01
other stuff, the commercial side, if you like the financial
24:04
side has to be dealt with after the event.
24:07
It is a risk. But depending on the the, you
24:10
know, the project at stake and what the pivotal decision that
24:12
needs to be made is that might be the right decision in the
24:15
moment and of course project managers need to be supported if
24:19
they've been given you no authority to to move the project
24:24
along as they see fit. So just to end with that like to
24:27
ask you to tell us a bit more about the upcoming installments
24:30
in the webinar series, you're running for the APM contracts
24:33
and procurement Sig. I will, I'm really excited about
24:35
this because we first ran this on Teen.
24:40
I was I've known John broom for many years.
24:45
John Bruno has is very well known in the APM and has been
24:49
the chair of contracts and procurement Sig fought for many
24:51
years. And John invited me.
24:53
I think back in 2016 or 2017 to be thinking about this, this
25:00
contract and project manager space.
25:01
And it's been, it's an area that I've worked on, for many, many
25:04
years. So I was really interested to
25:06
help out. We first ran the serial He's in
25:08
2018, we had a bit of a break and then Corona has happened and
25:13
everybody's been in a bit of a tailspin, of course, but we're
25:16
back for 20 21 and it's new and refreshed.
25:19
It's a three parter where we already had part number one in
25:25
June. And that can be picked up by APM
25:28
members. It's stored in the, in the apm's
25:31
Library, part two is September and part three is in November in
25:37
part 2. We're going to Focusing on how
25:39
you build a contract and what project managers can use freely,
25:43
add to that process. It's going to pick up on things
25:45
like those examples of the the time scales for actions that I
25:49
talked about earlier and part three is going to be some stuff
25:54
on problem solving. And what happens?
25:56
How can project managers help out when when things go wrong or
25:59
they're threatening to go wrong? So we're talking about nipping
26:02
problems in the bud and, and really getting the project
26:06
manager to use all the abilities and, and all the contract
26:10
knowledge that they will have by the end of the series, to put
26:13
them in a good position to then, you know, go off them
26:17
confidently and capably into the contract.
26:19
Sunset. To find out a bit more about
26:24
contracts in action. I spoke with Richard Cairns
26:26
director of Korean Browns London project and program management.
26:29
Team working in the Pharmaceuticals and Life
26:32
Sciences sector. Richard is a fellow of a p.m.
26:34
and a Committee Member of the program management Sig.
26:37
We spoke about contracts including any C4 and how the
26:40
pandemic might be influencing best practice around contracts.
26:47
Thanks for joining us, Richard. So begin with please.
26:49
Could you introduce yourself and give a bit of background to your
26:52
current role? Yeah, hello everyone.
26:54
So I'm Richard Cairns I'm a director at Korean Brown and I'm
26:57
responsible for the London and Southeast pharmaceutical and
27:00
life science project management team.
27:03
So I've got nearly 40 members of Staff in my team and we provide
27:07
projects program design Management Services as well as
27:11
projects and planning schedule management a bit of Bim
27:14
Management Services as well. And then document management
27:17
projects happen and supports it's a various public and
27:20
private sector clients The team were working with some quite
27:24
large and complex and interesting projects at the
27:27
moment and one of them even had a visit from Boris Johnson last
27:30
year although we do lots of Not. So Glamorous, work for our
27:34
clients as well. I've specialized in in
27:38
pharmaceutical and life science program and project delivery
27:41
open last kind of five years. But I haven't always worked in
27:44
that sector. I've also worked in education,
27:47
Healthcare government, and a bit of new build residential and
27:51
regeneration as well. The last kind of 20 years and
27:55
each of these sectors has their preferred unusual contract
27:59
choices and project delivery preferences as well.
28:03
You mentioned there are a couple of different sectors you've
28:05
worked across. So like to ask you with in
28:08
Farmer and Life Sciences, what Contracting disciplines does
28:11
that sector use that perhaps distinguishes it from for
28:14
example the public sector work that you've done in the past.
28:17
Yeah really really good question.
28:20
I suppose. Especially the team currently,
28:24
you know, they're delivering pharmaceutical and life science,
28:27
construction projects, and they vary in size and complexities.
28:32
They work on lots of different types of projects, kind of 200
28:34
million, plus new, build vaccine, manufacturing, and
28:38
pandemic response, facilities, right down to konev refurbishing
28:42
containment, Laboratories upgrading, or replacing kind of
28:45
a Statewide infrastructure Building Services projects as
28:48
well. I supposed, you know, most
28:51
professional bodies Produce their own kind of standard forms
28:55
of construction, contracts, and Engineering contracts as well.
28:59
The most popular kind of standard forms are going to be
29:02
the joint contrast tribunal the J, CT, which publishes Suite of
29:07
Standard, Building contracts, and related contracts as well,
29:11
such as collateral warranties, sub contracts as well.
29:15
Another really popular ones new engineering contract any see
29:18
which was originally kind of published in the early 90s after
29:22
the landfill, Of construction Excellence report and the latest
29:26
edition of our sin e C4 which was published quite recently
29:29
more, you know, 2017. There's others as well.
29:33
So, it's also the association for consultant Architects, quite
29:37
often abbreviated to Aca and that's got the project partner
29:41
in contract which is PPC 2000, which is kind of first,
29:45
published it in the 2000 year, but it's been revised in 2008.
29:50
And again in 2013 and the ACA statement was it was the
29:55
original one, the first standard partment contract as well.
29:58
So the types of contracts used in the team vary from.
30:01
Come on. Sighs type scale, procurement
30:04
and complexity of each of the projects that they're working
30:06
on. And also, if they're in a public
30:08
sector, private sector as well. You know, generally, we use cone
30:12
of je, CT design, and build or Standard Building contracts
30:16
without quantities there. They're more used in the private
30:20
sector and then any see any C3 and any C4 and more used in the
30:25
in the public sector. But it, you know, isn't a hard
30:27
and fast Rule and both sectors and we can and do them.
30:31
Do you? Both forms of contractors.
30:33
Well, we've also got a few projects being delivered under
30:36
the institution of chemical engineer so I can be contracts
30:39
as well. What are some of these strengths
30:43
or unique characteristics of the ik me contracts?
30:47
I can be so that this this type of contrast.
30:50
Drafted as a performance-based contract for the design and
30:53
construction process plan really the other outputs, you know, and
30:57
and output based projects. So it specifically addresses
31:00
liabilities and And testing regimes appropriate for
31:04
performance of plant. Really good example of that.
31:07
We're using an ARCA me contract to deliver a new building
31:10
simulator project. One of our, one of our clients
31:12
are the moment is working wellness.
31:15
It's exactly right for that type of project.
31:18
Really, you know, I'd probably say, you know, generally most
31:22
common use for my Contracting, the team at the moment, it's the
31:25
only see for engineering and Construction contract which is
31:28
abbreviated to ECC. And that's really The, the
31:32
contracted choice for the public sector but that's kind of
31:35
focused on the type of work that we're doing with a lot of
31:38
government bodies of moment as far as specifics go.
31:41
So kind of the NEC for PCC contract is got nine core
31:47
Clauses. You know, these are split
31:48
between like one is General to contractors responsibility three
31:53
time for Quality Management. Five payment goes down, you
31:58
know, six compensation events, 7 title 8.
32:02
Listen Insurance streets at 29, termination.
32:05
You've also got kind of options with NEC as well.
32:08
And it goes from option, A down to option.
32:10
F. These option A is kind of the
32:13
price contract, activity schedule.
32:16
Option b is price contract with bills of quantities, see Target
32:20
contract with activity, schedules, and d-type contract
32:25
with bills of quantities, a cost-reimbursable contrast and F
32:29
management contract. You know, you choose the right
32:33
option based on a client's kind of time, cost quality, and
32:36
procure and Route objectives. Their project really.
32:40
So would you say that customizability and flexibility
32:42
are some of the key strengths of any C4?
32:46
Yeah, you're definitely. Yeah, I mean, most of the, but I
32:49
suppose the most commonly used options that are in the team use
32:52
that, hey, which is kind of price contract, activity,
32:54
schedule and Andy, which is kind of cost-reimbursable.
32:58
So, they're kind of opposite opposite ends of the spectrum,
33:01
really, for kind of fully designed or not, and you're
33:04
doing a Time reimbursable type Arrangement.
33:07
The NEC is split into three different types of Clauses.
33:11
So, X Clauses, a kind of used for Can be optional clause in
33:16
the contract that kind of standard Clauses in the contract
33:20
W Clause is the use for dispute resolution.
33:23
And I supposed to know your point on flexibility.
33:26
You know, any see gives you the option to use said causes for
33:29
additional Clauses in the contract and we can talk a bit
33:32
later about how they can be used to kind of achieve client
33:37
specific objectives in certain areas as well.
33:41
You've plugged recently for a p.m. about the construction play
33:43
book. Published by the government,
33:45
tells us a bit about what the Playbook is, and why?
33:47
It's valuable for the project profession.
33:50
Yeah, that's right. Yeah we wrote A Blog for the APM
33:53
in June this year. It was the construction Playbook
33:57
and how sustainable Contracting is guiding the government's
33:59
recovery plans. So I'm a Committee Member for
34:03
the APM program management sick and I try to provide kind of
34:06
thought leadership on appropriate subject, matter
34:08
topics. And, you know, encourage
34:10
collaboration a bit of knowledge, sharing transfer.
34:14
And I really enjoy that part of my role for the a p.m.
34:17
So I get involved in a in webinars and writing thought
34:19
leadership. Schools.
34:21
I've got a follow-up block it in August, on the construction
34:25
Playbook as well and it's going to focus on Modern methods of
34:28
construction. So or MMC so I've got a busy few
34:32
weeks ahead but specifically answering your question the
34:35
construction Playbook as opposed as part of the government's
34:38
strategy to build our way to a better economy.
34:41
You know, they've committed to delivering construction
34:43
engineering projects and programs.
34:45
You know what you build schools, hospitals prisons and major
34:49
instrument. Infrastructure Works to support
34:51
the economic recovery from the pandemic and delivering
34:55
excellent public sets of works. We are crucial part, the
34:57
government's recovery plan. I think they've committed
35:00
something like 37 billion pounds worth of public sector contracts
35:04
to go to the market over the next year.
35:06
So, you know, we're talking big numbers really to help to help
35:11
me that aim that the cabinet office is produced the
35:14
construction Playbook. You know it's abbreviated down
35:18
to the Playbook is what is commonly known?
35:20
Apps and that provides kind of government guidance on sourcing
35:25
and Contracting Public Works projects and programs really The
35:29
Playbook supports the government's Ambitions and plans
35:32
to transform the public sector estate and infrastructure
35:35
networks. Kind of going through over the
35:38
next decade and Beyond really supporting their aims to kind of
35:41
build build back better faster. And Greener, you know,
35:44
sustainability is a real key key to it as well.
35:48
It focuses on kind of The process of programs and managed
35:51
correctly with the optimum, kind of purple best contractual
35:55
strategy and solution from the outset of really whether the
35:59
scope is delivery of a school, a hospital and major
36:03
infrastructure project, the principles of the Playbook of
36:05
really the same state detail the approach for assessing kind of
36:09
procuring and managing Public Public Works, and projects and
36:13
programs, really. So it's really about best
36:16
practice and how it applies across the board.
36:19
Yeah, yeah definitely. Yeah.
36:21
I mean one of the one of the key principles is creating an
36:24
effective kind of Contracting environment.
36:26
So, you know, that's one of the one of the 14 key policies of
36:31
the Playbook and its aim to ensure that contrast is
36:34
structured to support an exchange of data.
36:38
No Drive collaboration is a really big theme.
36:41
Improved value manage risk with a drive for kind of continuous
36:45
Improvement as well. But as if there's another real
36:48
Theme coming from the Playbook which the government wants to
36:51
still focus on outcomes to create long-term value kind of
36:56
all through successful project delivery.
36:58
So they want this to create a contrasting landscape that
37:00
delivers Converse a sustainable resilient and effective
37:04
relationship between Contracting parties and a supply chain.
37:07
They just they don't want one off contrasted with long-term.
37:11
Collaborative, relationships, being Bill going forward, which
37:13
is great. I think for the industry
37:15
thinking a bit more about collaboration.
37:17
How can contracts be? Used to foster a more
37:20
collaborative way of doing projects.
37:23
Yeah, cut contracts. And there are spoke wording
37:26
causes and requirements can be used to implement kind of many
37:29
specific clients or project requirements including kind of
37:34
promoting and encouraging collaborative working and
37:36
practices kept going back. You know the 1994 constructing
37:42
the team commonly known as the lamp from reports.
37:45
That the starting point for most, you know, most recent
37:48
change changing agenda in the UK construction industry.
37:52
The why? Fred growth of partnering and
37:55
subsequent kind of collaborative working, can all be kind of
37:57
traced back, right? You know, right away back to
38:00
that 1994. All Anthem report, really the
38:04
NEC particularly, you know, approaches and the way
38:07
approaches the management managing of contracts.
38:10
It was really endorsed him in the lamp and Report, you know?
38:14
And which was kind of the government's review of
38:17
procurement and contractual arrangements and UK construction
38:19
industry at that time. So going back nearly kind of
38:23
What 20 years, but the use of any she contrast with Play-Doh a
38:28
key key in helping part in the industry to kind of do things
38:32
differently and better with collaboration kind of right at
38:35
the heart of this, you know, in my view as well.
38:38
The four pillars of success are all kind of embodied in the NEC
38:42
contract and those are kind of you know, one working together
38:46
to stack together, you know, 3 adding value.
38:50
And then for Innovation they're all the key principles of I'm
38:54
fully embodied into the NEC country.
38:56
I really and they should all be embodied into kind of most
38:59
contracts in contracted approaches and processes really
39:02
in my view. How do you think the change in
39:04
working conditions brought about because of the pandemic has
39:07
impacted the way we need to think about Contracting
39:10
practices? Yeah, another another really
39:12
good question, really, so I'm very currents as well.
39:16
So one of the one of the changes in working condition of
39:18
practices that I've personally experienced in a pandemic is
39:21
obviously remote working and remote.
39:23
Idiot delivery. You know, we're all kind of
39:25
working from home, a lot of use of kind of virtual kind of
39:29
meeting software, you know, Ms. Teams is a great example,
39:33
really? I don't think I'm unique here
39:36
and probably the whole country of you saying something similar,
39:38
but I suppose there's a working example.
39:42
Last year I was working on a, on a project, using a development
39:45
management agreements, which stated a requirement for
39:49
contractual notice under under that kind of contract or
39:53
agreement. It's be shoed in hard copy
39:55
recorded correspondence, delivery with wet signatures and
39:59
you know obviously working remotely in a pandemic and kind
40:02
of mitigating spread and kind of this.
40:07
The spread of the virus that just wasn't practical or
40:09
appropriate for those type of working conditions in the
40:12
pandemic, really? I suppose it's worth noting as
40:16
well. That NEC for the new the new
40:19
contract or newish contract. That came out in 2017.
40:23
Mmm. Braces.
40:23
All these kind of digital changes that are happening in
40:26
the construction industry especially around communication
40:29
and, and been really, which are essential in this ever-changing
40:34
world. Particularly the moment, you
40:35
know, in the pandemic or, or coming out of the pandemic, I
40:38
think we've changed over the last 18 months and and
40:42
certainly, for the better really another highly current topic.
40:45
Of course, is sustainability. What are some of the ways in
40:49
your experience of addressing sustainability concerns through
40:52
contracts? Yeah, especially if a client has
40:56
a particular sustainability ambition or Target that they
41:00
want to achieve through a project on way to do this.
41:04
It could be through the use of, I'll use any see again as a
41:08
specific example, but you know, could use a specific Z Clause,
41:12
we talked a bit about that earlier, didn't we?
41:14
You know, as an additional Clause to the contract under the
41:17
NEC engineering and Construction contract?
41:21
You know, it could be worded to include A specific
41:24
sustainability or carbon reduction Target as a key
41:27
performance indicator or or kpi as a contract requirement.
41:32
And, you know, there's a number of reasons that could drive
41:36
this. You know, a local Authority
41:37
planning condition of building regulation part L requirements
41:41
or a Brie am Target or aspiration.
41:45
There's also carbon reduction kind of aspirations aimed a
41:49
supposed minimizing environmental environmental
41:51
impact of your business cutting Waist and acts extravagance as
41:56
well and kind of generate just minimizing your carbon
41:59
footprint, really? It's very, very current and
42:02
topical at the moment. The UK government recently
42:04
stated it is NetZero strategy targets set by the climate
42:09
change Act of 2008 and at least expose 100 percent reduction in
42:15
UK greenhouse gas emissions by 2050 compared to those two kind
42:18
of 1990 levels. So contracts, then requirements
42:22
play Key Parts in Meeting those requirements really, you know,
42:27
as well as sustainability they could be used in other areas as
42:30
well and, you know, we're seeing this a lot, you know, myself and
42:34
the team. You know, this is coming through
42:35
a lot in after areas, where kind of public static clients using
42:39
said Clause is to implement social value or corporate and
42:43
social responsibility aspirations through the
42:46
procurement effect construction projects.
42:48
And this this is all filtering down into the supply chain.
42:50
Are there any specific or unique?
42:53
Meek considerations around sustainability for building
42:55
projects within farmer and life sciences.
42:59
Yeah, I think I think I wouldn't say there's anything
43:01
particularly unique about farmer and Life Sciences very much like
43:05
for like a cross construction industry.
43:07
But farmer and life science unit, depending on what the
43:09
project is, it could be Rd, you know, research and development
43:13
facility or kind of a cgmp Time. Manufacturing facility.
43:19
Everybody controlled environments and complex kind of
43:23
complex buildings and places really and sometimes achieving
43:27
those those The sustainability targets can be more complicated
43:32
than a than a say a new-build block of flats which is
43:36
obviously less complex, you know.
43:37
But but I wouldn't say there's anything particularly specific
43:41
about the farmer and laughs insectary only that it's a much
43:45
more complicated environment, so Implement highly serviced as
43:50
well. So you know, it's a bit more
43:53
complicated I suppose in summary in your view how can contracts
43:57
help drive a culture on a Act, for example, and agile culture.
44:02
Yeah. Yeah.
44:02
I mean contrast can certainly help Drive project culture and I
44:06
suppose it all comes back to to ensuring that you select the
44:10
right procurement and contrast strategy that meets your own
44:13
specific requirements. Really, you know what meeting
44:16
the clients objectives and business case and user
44:20
requirements brief are essential really.
44:24
We've talked a lot about any see in this podcast and I think it's
44:28
a fantastic sweetie of contracts, but it does have its
44:31
crew. Systems which are mainly focused
44:33
around those being heavily administrative, you know, with
44:37
with inflexible kind of process-driven contractual
44:40
requirements, I don't think there's any one size fits all
44:44
type of protein in the construction playbook.
44:47
For example, states, that the standard contract should be
44:50
should be chosen and the following sweets and it
44:53
specifically mentions any c 3 or 4 JC 2016 in and PPC 2000.
45:00
So it gives you a range of Stood options contractual Arrangements
45:04
can be can be usually added to in some kind of model contracts
45:08
to help deal with projects and clients specific requirements or
45:11
risk so which are not covered in the main contract term.
45:15
So, if you've got a kind of actual working requirement,
45:17
these can be easily inserted and dealt with through a contract
45:20
Amendment wording. Or a said clause, for example,
45:23
under any c, so you can easily Implement those if needed
45:27
finally reflecting on the headline-grabbing vaccine
45:30
rollout program from the Okay, government, which is broadly
45:34
been deemed a huge success. Are there any lessons on the
45:37
contracts and procurement side that we can take from that
45:39
program and use going forwards? Yeah, I mean first of all kind
45:44
of in answer to that I think you know I think I think the
45:47
government has done a fantastic job in the vaccine rollout
45:50
program, it's something that country can really be proud of
45:53
over the last Connor, 12 months. I think, you know, when compared
45:56
to other nations we've really excelled in what we've done on
46:00
that program. So, you know how soft to
46:03
everyone that was involved in it.
46:04
Really, I personally wasn't involved in the government's
46:09
vaccine rollout program, but I did did have some pre-contract
46:13
involvement in the design and construction of the new build
46:16
vaccine manufacturing and pandemic response facility.
46:19
It was a really great project to work on but I think looking back
46:24
you did need to be very thick-skinned the times whilst
46:26
working on it, but I'm really proud of the role that I played
46:30
or small part that I played in it.
46:31
The frames, you know, it's an absolutely great project to be
46:34
involved in one of the lessons that I've learned and took for
46:38
my involvement in the project is ironically for this podcast is
46:42
that there's definitely a time and a place not to be overly
46:45
contractual and there's definitely a need to be a bit
46:48
pragmatic, you know, particularly, you know, when
46:51
working with such an important projects, you definitely need to
46:54
make sure that you take the time to select the right procurement
46:57
and contract strategy as part of a project initiation, you know,
47:00
right at the beginning. Of a project if you don't get
47:03
that right. You know, it could really the
47:05
wheels could really come off on a project really special.
47:09
What other Lessons Learned can we take from the last 18 months?
47:13
Really? I think flexibility and
47:16
innovation in Project delivery. And contrast strategy has proved
47:20
to be really crucial, you know, in the response to kind of these
47:23
exceptional kind of nature of the pandemic and the challenges
47:27
that we faced over the last kind of year or 18 months for A
47:33
rapidly evolving kind of projects and contract
47:37
requirements, iets complex changing stakeholder groups, you
47:41
know, fluid Financial control, will you know, maybe there isn't
47:45
so much driver to on cost, you know, you just need to get it
47:49
done. Just to kind of save lives,
47:51
really high levels of kind of external public scrutiny, as
47:55
well, with kind of made it necessary to kind of innovate
47:58
and adapt through every aspect of the kind of contract strategy
48:02
process, really? It's been achieved in a number
48:07
of ways, doesn't it throughout kind of the project and program
48:11
life cycle over the kind of lost 80 mums?
48:13
You know, flexible procurements key design and construction
48:17
Solutions need to be highly kind of strategic in your sourcing as
48:22
well. You know, aimed at maximizing
48:24
buying advantage in responding quickly to risks in supply
48:28
chain, disruption, brexit certainly hasn't helped That
48:31
regard, but, you know, we've got through it.
48:34
I think moving forward, you know, stakeholders should
48:36
continue to kind of employee flexible kind of innovative
48:40
procurement solution approach really.
48:42
And that will allow us to adjust.
48:44
And, and flex to me, you know, growing needs going forward as
48:48
part of the pandemic response or kind of, if needed in a
48:53
telephone, a second or third wave now, but, you know, if we
48:56
need to upscale vaccine manufacturer, we will need to be
48:58
flexible. Really What my personal
49:02
reflection of working through the pandemic really is, you
49:05
know, I think we've learned a lot and enormous amount over the
49:08
last 18 months. No against enormous odds.
49:11
You know we could we can still deliver from a contractual
49:14
perspective and you know what we have seen this really you know,
49:18
impossible or unattainable in 2019, we've shown throughout
49:22
kind of 2020 and through into 2021, you know, it's now
49:26
possible. So, you know, just keep
49:29
collaborating be flexible and apply.
49:31
And if it's you've approached I think we can step up and meet
49:35
any new challenge that 2021 and Beyond throws.
49:37
It's just really. Thanks to Sarah and Richard for
49:44
their contributions to this episode.
49:46
I'd like to wrap up by summarizing some of the things
49:48
that we've learned firstly contracts.
49:50
A hugely important in a project context because they regulate
49:53
the relationship between the parties and enable them to
49:55
understand what work is being done to live it up cured.
49:59
They set out in clear terms the scope timescales and processes
50:02
for disputes and risk mitigation as Sara explained.
50:05
And awareness of contract is important for project managers
50:08
because if they don't deliver Services properly, it could be
50:11
in breach of contract. And relationships and governance
50:13
could begin to unravel. Richard meanwhile explained how
50:17
contracts can help Drive project culture during you select the
50:20
right procurement and strategy to meet your own specific
50:22
requirements, along with the clients objectives and business
50:25
case, it's also worth remembering.
50:27
The contracts aren't just there to be dusted off when things go
50:30
wrong because of the huge Investments of time and money
50:33
that go into contracts. They should instead be viewed in
50:35
a positive way, there is an opportunity for project
50:38
professionals to stand up and make their voices heard.
50:41
They need to see the contract, have a part in its negotiation
50:44
or at least be consulted. They are the ones who have to
50:47
deliver and take ultimate responsibility for the outcomes.
50:51
We also heard about the role of contracts in sustainability.
50:53
Now inserting specific Clauses, can Implement social value or
50:57
corporate social responsibility aspirations through, for
50:59
example, procurement of a construction project.
51:03
And finally have the pandemic has taught us collaboration,
51:06
flexibility and Innovation and project.
51:08
Delivery and contract strategy are crucial and faced with
51:11
rapidly evolving situations. With complex changing,
51:14
stakeholder groups, check the episode description for links to
51:17
Sarah's webinar series and Richards latest blogs for a p.m.
51:20
Em. Get in touch with your feedback
51:22
and suggestions at a p.m. podcast at think publishing
51:25
.co.uk. This podcast has been brought to
51:28
you by APM the charts body for the project profession.
51:32
For more information on a p.m. visit, a p.m.
51:35
Dot org.uk. Em.
51:21
Get in touch with your feedback and suggestions at a p.m.
51:24
podcast at think publishing .co.uk.
51:27
This podcast has been brought to you by APM the charts body for
51:30
the project profession. For more information on a p.m.
51:34
visit, a p.m. Dot org.uk.