Collaborative Governance

 Collaborative Governance under FAC-1 and TAC-1

David Mosey, Centre of Construction Law, King’s College London

©David Mosey 2016 

A successful Alliance depends on the individuals representing different organisations working together, including in seeking to resolve problems. FAC-1 and TAC-1  include a range of options and processes that have proven successful in supporting a collaborative culture and in resolving problems and preventing disputes.

Stephen Woodward, Guest Editor of Construction Law January/February 2017, noted that  “in case studies testing the new FAC-1 standard form framework alliance contract…potential disputes have been averted through joint working under a collaborative governance system”.

Independent Adviser

FAC-1 and TAC-1 provide for the appointment of an Independent Adviser:

  • who shall be an individual named in the Alliance Agreement and appointed on terms to be agreed by the Alliance Members to provide fair and constructive advice on the implementation of the Alliance Contract and the avoidance or resolution of any disputes (definitions at Appendix 1)
  • who shall provide impartial and constructive advice and support to the Alliance Members through the medium of the Core Group (clause 3.3 of the Contract Terms)
  • who shall attend meetings of the Core Group when considering a notified dispute and making constructive proposals in seeking to achieve an agreed solution (clause 15.1 of the Contract Terms)

The combination of the Independent Adviser role and the Core Group (as described below) have proved particularly effective in resolving any problems or misunderstandings that have arisen on Projects using collaborative contract forms such as PPC2000 and TPC2005 (under each of which only two disputes have been referred to the courts since their publication).

Core Group decision-making

FAC-1 and TAC-1 provide for:

  • a Core Group of named individuals or agreed alternates (clause 1.6 of the Contract Terms)
  • Core Group decisions to be made unanimously by Consensus of those members present at a meeting so that agreement cannot be blocked through non-attendance (clause 1.7 of the Contract Terms).

FAC-1 and TAC-1 provide for Core Group decisions in respect of:

  • review and support for the implementation of the Alliance Contract (clause 1.6 of the Contract Terms)
  • review of Early Warning
  • review of proposals for Supply Chain Collaboration and other Alliance Activities intended to achieve Improved Value (clause 2.2 of the Contract Terms)
  • approval of updates to the Timetable (clause 2.6 of the Contract Terms)
  • agreement of the basis for Alliance Members to share information in order to enable Supply Chain Collaboration (clause 6.3.1 of the Contract Terms)
  • agreement of procedures for Alliance Members to jointly re-negotiate or tender Supply Chain Contracts in order to enable Supply Chain Collaboration (clause 6.3.4 of the Contract Terms)
  • approval of updates to the Risk Register (clause 9.4 of the Contract Terms)
  • proposal of actions to achieve agreed Targets
  • recommendations in the event of notified breach
  • seeking resolution of a notified dispute.
ICG Alliancing Best Practice: “A collaborative arrangement does not reduce the need for effective and timely governance. In fact the self-assurance processes likely to be used in an alliance model will only be effective if they are supported by timely and visible governance.”

Early Warning and dispute avoidance

The Core Group supports collaborative implementation of FAC-1 and TAC-1 and contributes to dispute avoidance and non-adversarial dispute resolution as follows by:

  • seeking an agreed course of action following Early Warning, to be given by an Alliance Member with its proposals for avoiding or remedying the matter as soon as it is aware of any matter adversely that affects or threatens the Alliance or the Programme or any Alliance Member’s performance (clause 1.8 of the Contract Terms)
  • proposing actions to achieve agreed Targets or revised Targets in order to avoid termination of an Alliance Member’s appointment (clause 14.2.1 of the Contract Terms)
  • recommendations in the event of notified breach of the Alliance Contract in order to avoid termination of an Alliance Member’s appointment (clause 14.4 of the Contract Terms)
  • by meeting with all involved Alliance Members when notified of a dispute and seeking to achieve an agreed solution (clause 15.1 of the Contract Terms)
    The SCMG Framework Alliance used a Core Group to resolve “potential disputes with the benefit of full cost and time information plus the motive to retain long-term relationships”.

Alternative dispute resolution

FAC-1 and TAC-1 provide a range of options for non-adversarial dispute resolution, including:

  • appointment of a Conciliator under an agreed Conciliation Procedure stated in the Alliance Agreement by reference to clause 15.2 of the Contract Terms and Appendix 4 Part 1
  • appointment of a Dispute Board under Dispute Board Rules stated in the Framework Alliance Agreement by reference to clause 15.2 of the Contract Terms

FAC-1 and TAC-1 also provide options for the resolution of disputes by:

  • an adjudicator using an agreed Model Adjudication Procedure stated in the Framework Alliance Agreement by reference to clause 15.3 of the Contract Terms and Appendix 4 Part 2
  • one or more arbitrators under arbitration rules stated in the Framework Alliance Agreement by reference to clause 15.4 of the Contract Terms and Appendix 4 Part 3
  • the courts of the country stated in the Alliance Agreement by reference to clauses 13.4 and 15.5 of the Contract Terms.