The Institution of Civil Engineers (ICE) has called on the government to reduce the use of modified contracts within the construction industry.
The institution has called on the government to insist on universal, unamended NEC contracts throughout the supply chain. This includes minimising the use of Z clauses and avoiding unnecessary amendments which “upset the balance” of risk and reward.
Z clauses are currently inserted into NEC contracts to enable parties to agree additional conditions of contracts. However, many parties - including the NEC itself - have complained that the clauses can be abused or used incorrectly, changing the risk profile of a contract, often making them ambiguous with cost and time implications.
In its list of proposals submitted to the government, the ICE’s report said: “The NEC has played a big part here, and it is inherently flexible to allow clients to tailor works information etc. to their own needs. However, clients continue to make variations to the core and supplementary conditions of contract and more should be done to discourage this.”
The document, which has been submitted for the Government Construction Strategy (GCS) 2016-2020, makes 12 recommendations over the five key areas of commercial strategy, procurement, contracts, digital transformation and risk management.
The recommendations also include adopting the principles set out in Project 13 to promote better engagement with the supply chain and the introduction of a standardised, more collaborative approach to risk measurement and mitigation. The ICE also sets out how it wants the government to progress to BIM levels three and four to enhance digital transformation.
ICE head of policy and public affairs Hannah Vickers said the ICE recognised the importance of the GCS and the role it could play in helping to build a sustainable future for construction. and approached the IPA to enter a submission to the 2018 update.
“In creating this submission, we have bought together key industry experts to highlight best practice. The door is open for the Government to collaborate with the industry to help shape the development of the GCS and together build a sustainable and productive future for construction within the UK.
“We hope to see the Government use its substantial influence effectively and consistently to help build an environment that fosters better working practices, and deliver a step-change in its relationship with industry.”
The document will be submitted via the Infrastructure and Projects Authority (IPA) for consideration by the Government Construction Board (GCB).
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