Research and Consultation

Research and consultation

The development of FAC-1 and TAC-1 followed research conducted by the UK Government and by the King’s College London Centre of Construction Law , whose reports and guidance are quoted below. The King’s  research included extensive consultation with over 50 lawyers and a wide range of industry representatives in 12 jurisdictions. The fill list of Consultation Group members are listed below together with a summary of the consultation process.

Research reports

1. FAC-1 takes into account the findings and recommendations of the 2012 Effectiveness of Frameworks Report, prepared by a UK cross-industry Working Group comprising Cabinet Office, Hampshire County Council, the National Efficiency and Improvement Partnership for the Built Environment (NIEP), the Civil Engineering Contractors Association (CECA), the Specialist Engineering Contractors Group (SEC Group), Kier, Partnerships for Schools, HM Treasury, University of Salford, the Department of Health, the Ministry of Defence, Environment Agency and the Ministry of Justice:

 “The Working Group collected evidence from key central government departments and the wider public sector. This evidence indicates that benefits can accrue from the use of effective frameworks in procuring construction and they include: 

– Delivering sustainable efficiency savings

– Reduction in consultancy and construction costs

– Delivery of projects closer to target cost and time

– Reduction of disputes, claims and litigation

– High client satisfaction rates

– High proportion of value of work undertaken by small and medium-sized enterprises

– High proportion of local labour and sub-contractors

– High take-up of government initiatives e.g. fair payment, apprenticeships

– High proportion of construction, demolition and excavation waste diverted from landfill

– Good health and safety performance against national average

– Acting as a key enabler to integration of the supply team.”

The 2012 Effectiveness of Frameworks Report defines an effective public sector framework in terms that are reflected in FAC-1:

  • “Has a demonstrable business need” – FAC-1 Schedule 1 Part 1 sets agreed Objectives and Schedule 1 Part 2 sets agreed Success Measures and Targets, all linked to an agreed understanding of Improved Value
  • “Has effective governance processes, active stakeholder engagement and client leadership” FAC-1 clauses 1.6 and 1.7 establish terms of reference for the Core Group and clause 1.10 establishes engagement with Stakeholders
  • “Actively supports its clients throughout the project lifecycle, ensuring that clients and the supply chain receive a legacy of improvement” – FAC-1 definition of Improved Value (if stated in the Objectives) includes “improved quality, improved Operation, improved staff and other resources, improved health and safety and other working procedures, improved Sustainability…. and other benefits to Alliance Members, Users and Stakeholders”
  • “Is driven by aggregated demand to create volume and generate efficiencies, and provides sufficient work opportunities to cover supplier investment” – FAC-1 Schedule 1 Part 1 sets agreed Objectives, Schedule 1 Part 3 sets agreed Incentives and clause 6 sets agreed Alliance Activities by reference to the Schedule 2 Timetable
  • “Maintains competitive tension in terms of value, quality and performance during its life” – FAC-1 Schedule 4 sets out the agreed Direct Award Procedure and Competitive Award Procedure
  • “Is designed and managed to deliver the required outcomes and continuously improve upon them” – FAC-1 clause 2.1 records the commitment of Alliance Members to seek to achieve the agreed Objectives and clause 2.2 records the agreement of Alliance Members to investigate and submit proposals for Improved Value
  • “Can demonstrate greater value for money for the taxpayer” FAC-1 Improved Value (if stated in the Objectives) includes “improved cost and/or time certainty” and “cost and/or time savings” among other measures
  • “Pays fairly for the work done and the risks taken” – FAC-1 payment provisions are set out in clause 8
  • “Contributes to the development of an effective and efficient construction market” – FAC-1 definition of Improved Value (if stated in the Objectives) includes improved efficiency, improved profitability and other benefits to Alliance Members”
  • “Harnesses the power of public sector procurement to provide jobs and skills, local employment and enables SMEs to prosper” – FAC-1 definition of Sustainability includes “employment and training opportunities” and clause 6.3 Supply Chain Collaboration provides a new system for improved engagement with SMEs
  • “Ensures supply chains are engaged from the earliest stages of a project” – FAC-1 clause 6.3 sets out the system of Supply Chain Collaboration
  • Ensures transparency and collaborative values flow down the supply chain to produce supply hains that clients can have confidence in” FAC-1 clause 6.2 provides for complementary relationships with Supply Chain members and clause 6.3 describes Supply Chain Collaboration.

2.UK Government Contract Form Working Party

FAC-1 is designed to address the concern expressed by the Contract Form Working Party in its report to the UK Government 2012 that “The general lack of standard-form framework arrangements makes it difficult for clients to procure frameworks on a consistent basis.”

3.Infrastructure Client Group Alliancing Code of Practice

FAC-1 reflects the recommendation in the Infrastructure Client Group Alliancing Code of Practice 2015 that “A horizontal agreement between the respective partners capture(s) the principles within the commercial model, particularly those that jointly incentivise performance and create collaboration.”

The ICG Alliancing Code of Practice sets out the following key principles for an alliance agreement, all of which are reflected in terms and options under FAC-1:

“A clear definition of how partner return will be generated and how this is aligned with project outcomes (back to back)”The FAC-1 Schedule 1 Objectives, Success Measures, Targets and Incentives are agreed by all Alliance Members, and clause 6.2 provides for complementary Supply Chain relationships

  • “A clear definition of the risks that will be collectively assumed by all alliance parties (and any that will be assumed by individual participants – the fewer the better)” – FAC-1 clause 9.2 records agreement of the Alliance Members “to undertake Risk Management together and individually” and the Schedule 3 Risk Register is agreed by all Alliance Members
  • “How incentive mechanisms will work”, “How shared return arrangements will work across all alliance parties- shared pain/ gain”, “How target costs and incentive thresholds will be set” – The FAC-1 Schedule 1 Part 3 Incentives are agreed by all Alliance Members
  • “A no blame – no dispute approach (wilful default being the only direct route to legal process)” FAC-1 clauses 10.1 and 10.2 provide options to amend duty of care
  • “That all parties will act fairly and on a ‘Best for Project’ basis” FAC-1 clause 1.1 provides for Alliance Members to work “together and individually in the spirit of trust, fairness and mutual cooperation for the benefit of the Framework Programme
  • “Full open book costing”FAC-1 clause 4.3 separates Profit and Overheads from other costs
  • “The establishment of collective leadership teams and management groups”, “Collective and unanimous decision making responsibility (with any exceptions clearly defined)” – FAC-1 clauses 1.6 and 1.7 establish terms of reference for the Core Group.

4.  National Association of Construction Frameworks and Local Government Association

FAC-1 is designed to enable greater access to the benefits made clear by NACF and LGA :“Both the LGA and NACF believe and support the position that significant savings, benefits and other efficiencies in construction can be achieved by effective frameworks through the longer term arrangements, non- adversarial relationships, common incentives, integrated teams and objective assessment of performance associated with such frameworks. Continued pressures on public sector finances means that achieving such benefits and efficiencies will be vital.” Effective Construction Frameworks report of the Local Government Association (LGA) and the National Association of Construction Frameworks (NACF) 2016

5. Enabling BIM Through Procurement and Contracts

FAC-1 enables adoption of the July 2016 King’s College London research report “Enabling BIM Through Procurement and Contracts recommendation of a  multi-party protocol (https://www.kcl.ac.uk/law/research/centres/construction/enabling-bim/ebimtpac-form.asp)  :

Interviewees adopted a range of contract forms and it is unlikely that clients and team members will change to a multi-party contracting model solely in order to implement BIM. Meanwhile, despite the potential for improvements in a two party protocol, there remains the issue of how to conclude substantially the same protocols with every other team member. For example, it will be challenging for a main contractor to obtain the same two party protocols from each specialist sub-contractor when in practice sub-contracts take different forms and are concluded at different points in the project process.

It may be appropriate to develop and make available the option of a multi-party BIM protocol that leaves two party contracts in place while:

  • creating direct relationships between project team members in relation to BIM and not depending on the client and the main contractor acting as intermediaries;
  • enabling mutual reliance on agreed deadlines in respect of BIM contributions and approvals;
  • creating an agreed forum for resolution of clashes between BIM models;
  • creating direct mutual intellectual property rights;
  • establishing clarity as to the reliance on data and on BIM software;
  • spelling out links in relation to the repair, maintenance and operation of the completed capital project;
  • providing for joining agreements to bring in additional members as they join the team.”

6.First User of FAC-1 Case Study

October 2016  Futures Housing Group produced case study of the first trial of FAC-1:

“How…

In the run up to the tender, John Thornhill, the Group’s Procurement & Contracts Manager, enquired of the ACA if there was a replacement contract form for TPC2005. Professor David Mosey PhD advised the Group of a new Framework Alliance Contract he and his team were working on. It was immediately apparent that this would be the perfect platform for the Group’s framework ambitions. Our comments were given and a working draft of the contract was created with help from Professor Mosey and the legal team at Trowers & Hamlins.

The predicted outcomes from the new tender included:

 Better value for money

 Better service delivery through a stronger partnering approach built upon closer ties to the successful bidders.

Efficiency gains from the innovative approach to selecting and managing individual works.

Greater emphasis on employment and training and a greater impact on our local economies.

New standard contract terms providing lower risk through closer engagement criteria.

Continued success in spending over 75% of contractor budget within 25 miles of our two regional offices, contributing to our ‘Lean and Local’ ambitions.

Engaging smaller businesses with public contracts has always been difficult. Most probably wouldn’t consider attempting to win work in a public contract because of the perceived beaurocracy. It is one thing having new rules to level the playing field toward SMEs but another to convince them to try and win a public contract.

Before this process began, the Group engaged with small businesses in several ways. Press coverage in local papers, Chamber of Commerce events and a Supply Chain Conference aimed at launching the tender, all proved very popular. Coaching businesses unfamiliar with public contracts and using electronic methods is important to ensure a wide range of businesses apply when tenders for public contracts are launched. Our determination to collaborate and engage in the way considered in the FAC-1 became part of our whole approach to the tender.

The launch event at our 2015 Supply Chain Conference made clear the size and scope of the tender and how it would be evaluated and awarded in lots. Larger firms who attended quickly came to realise that the size of individual projects was too small to be viable for them. The tender included measures attractive to SMEs but open to all with cashflow easing features that included the provision of key materials in certain lots on a free issue basis, such as heating installations, bathroom installations and electrical works. It also included proposals to have embedded payment cards with the contactors, enabling them to claim payment immediately on agreement of final account.

When…

The restricted tender, was published in the OJEU on 16 December 2015 after the Group carried out consultation with its leaseholders, as required by legislation. Before the PQQ deadline a Bidders Day was held by the Group where all comers could ask questions about the process and about the tender. Attended by over 120 potential bidders, Q and As were published and made available to all enquiries.

At the deadline for receipt of PQQs, 90 bidders had applied. Of these, 60 made the cut to the ITT stage. A second bidder’s day was held, before the ITT deadline for receipt of tenders giving bidders a final opportunity to pose questions in an open forum with the Q and As once again made available to all bidders who had qualified for the ITT stage. Throughout the ITT, the emphasis was on a collaborative approach via the FAC-1.

Results….

Of the 23 contractors invited to join the Framework, only two are non-SME. The average size of the other companies is less than 25 employees.

A second Supply Chain Conference was held in July 2016 to formally end the tender after conclusion of the standstill period attended by all the new contractors. Various tools were used to introduce the Framework Alliance, including a keynote speech by Dr Mosey and a speed dating session, ensuring each contractor met their client counterpart and all the other contractors in the Framework. Every contractor has welcomed the new Framework Alliance Contract, its plain language and sequential approach to each stage making it easy to understand. The sense of truly belonging to a collaborative group is already apparent.

Since launching on 1 August 2016, the framework has seen the first call off contracts by direct award for pilot programmes of heating installation. Kitchen installation and bathroom installation. Site surveys have taken place and costs returned showing an average cost saving of 9.3% against the previous framework. The first mini-competition under the framework was for repairs to a fire damaged property.”

Consultation Group members and consultation process

FAC-1 was developed with the benefit of research conducted by the King’s College London Centre of Construction Law. This research included detailed comments on a draft of FAC-1 prepared and submitted by the Consultation Group members listed below, and the ACA and King’s College London are very grateful for their important contributions.

In early 2015 the Association of Consultant Architects (“ACA”) invited the King’s College London Centre of Construction Law to create a new form of Framework Alliance Contract and a draft was sent out for review and consultation. Feedback from over 120 organisations was discussed at a conference organised by the ACA in October 2015, with outputs circulated to this Consultation Group.

A second consultative conference in February 2016 attracted over 200 delegates, and recommended amendments emerging from that conference comprised the final stage of consultation leading to publication of FAC-1 in June 2016.

Professional bodies

  • Association of Consultant Architects: Alison Low
  • Association for Consultancy and Engineering: Rosemary Beales, Dwight Patten
  • Constructing Excellence: Charles Mills
  • Local Government Association (Construction Steering Group): Tina Holland
  • RICS (Contract Steering Group): Roland Finch

 Lawyers (UK)

  • Anthony Collins: Andrew Millross
  • Atkin Chambers: Andrew Burr, Rupert Choat
  • Beale and Co: Andrew Croft
  • Brechin Tindal Oatts: Marion Davis, Claire Mills
  • Brookstreet des Roches: Joe Bellhouse
  • Devonshires: Mark London, Susannah Davis
  • Fenwick Elliott: Nick Gould
  • Fieldfisher: Cecily Davis
  • Goodman Derrick: Richard Bailey
  • Keating Chambers: Calum Lamont 
  • Lawrence Stephens: Anne Wright
  • Macfarlanes: Angus Dawson, Fiona Bishop
  • McQueens:Emmanuel Amadi
  • Olswang: Francis Ho
  • Pinsent Masons: Nigel Blundell
  • Trowers & Hamlins: Assad Maqbool, Andrew Vickery, Katie Saunders
  • White & Case: Ellis Baker
  • Withers: Julie Teal

    Universities

  • Birmingham City University: Professor Denise Bowes
  • King’s College London: Darya Bahram, Philip Britton, Christopher Howard
  • Nottingham Trent University: David Long
  • Said Business School, University of Oxford: Lindsay Henshaw
  • Salford University: Professor Peter McDermott
  • University College London: Stephen Pryke
  • University of Westminster: Rob Garvey

  Clients

  • AmicusHorizon: Antony Silk
  • Anglian Water: Michael Meenaghan
  • BAA Heathrow: David Ferroussat
  • Bedfordshire County Council: Paul Meigh
  • Birmingham City Council: Rob Barker
  • Bolton at Home: Ian Alker
  • British Gas/Centrica: James Dickinson
  • Cabinet Office: Peter Groves
  • Circle Housing: Christian Carlisle
  • City of London Corporation: Philip Mirabelli
  • Crown Commercial Service: Kevin Murray
  • Defence Infrastructure Organisation: Roy Pouncey
  • Devon County Council: Jamie Staples
  • East Riding of Yorkshire Council: Steve Baker
  • Environment Agency: Veronica Flint-Williams
  • Fusion21: Gordon Ronald
  • Futures Housing Group: John Thornhill
  • Hampshire County Council: Alex Chinn, Keith Heard
  • Highways England: Ken Simmonds
  • King’s College London: Paul Hartmann
  • London Borough of Barking and Dagenham: Keith Harriss
  • London Borough of Hackney: Sean Eratt
  • London Borough of Haringey: David Mulford, Doreen Manning
  • London Underground: Craig Keogh, Lee Grant
  • Ministry of Justice: Guy Beaumont
  • Moat Homes: Marian Burke
  • Procure Plus: Derek Greatorex
  • Solihull MBC: Tim Robbins, Peter Booth
  • Strategic Investment Board (Belfast): Ronan O’Hara
  • Surrey County Council: Jason Russell
  • Transport for London: Simon Addyman, Olu Morgan
  • Whitbread: Nigel Graham

Contractors

  • Bilfinger HSG International Facilities Management: Peter Excell
  • Costain: Adam Freemantle
  • Kier: Liam McGirl
  • Lendlease: Simon Caron
  • Higgins: Adrian Kelly
  • Mears: Jane Nelson
  • Mitie: Tyron Stalberg
  • Morgan Sindall: Helen Mason
  • Mulalley and Company: Gareth Stephens
  • OpenView Security Solutions: Patrick Sweeney
  • Osborne: Phil Clarke
  • Seddon: Keith Waddington
  • United Living: Darren Moseley
  • Willmott Dixon: Danny Corley
  • Vinci: Garry McInerney

     Consultants

  • AECOM: Peter Roberts, Dale Sinclair
  • Amaben: Mary Bennell
  • Arcadis: Tes Adamou
  • Atkins: Mark Dunne
  • Bridgeman Consulting: Roger Bridgeman
  • Cameron Consulting: Neil Thody
  • Champion Pearce: Ronan Champion
  • Cirrus: Fiona Moore
  • DGA: Richard Jenkinson
  • Driver Trett: Nabeel Khokhar
  • Elementa Consulting: Carl Collins
  • Faithorn Farrell Timms: Lee Maskell
  • Greenwood Consulting: Paul Greenwood
  • IP Initiatives: Kevin Thomas
  • Jacobs: Kareen Murray
  • KPMG: Emma-Jane Houghton
  • Lupton Stellakis: Sarah Lupton
  • Marshall Aerospace: Jan Robjohn
  • Navigant: Sena Gbedemah
  • On-Pole: Russell Poynter-Brown
  • PML Group: Kim Newman
  • Resolex: Stephen Woodward
  • Ridge: Mike Rumbelow, Peter Frank
  • RLB: Paul King
  • Savills: Shane Hughes, John Kiely
  • Stradia: Nigel Barr
  • Sweett: Andy Taylor, Chung Sam
  • The Change Business: Alan Mossman
  • Turner and Townsend: David Barnsley

  Insurers

  • Towergate: Alan Eyre

   Australia

  • DLA Piper: John Gallagher
  • Fenwick Elliott Grace:Jeanie Elliott
  • GHD Engineers : Craig Muir , Mark Shaw
  • Jackson McDonald: Basil Georgiou
  • Monash University: Professor Paula Gerber
  • Piper Alderman: Andrew Robertson
  • University of Melbourne: Wayne Jocic

Brazil

  • Aroeira Salles: Alexandre Aroeira

Bulgaria

  • EQE Control: Adriana Spassova

China

  • JustFaith law firm: Dongfeng Shao   

 Germany

  • Breyer Rechtsanwälte: Dr Wolfgang Breyer
  • Professor Stefan Leupertz, former Federal Judge
  • Züblin: Peter Steinhagen

  Hong Kong

  • Hong Kong City University: Professor Sai On Cheung

 Indonesia

  • PP: Tommy Anwar

 Ireland

  • Dublin School of Architecture: Malachy Mathews
  • Dublin Institute of Technology: Louis Gunnigan
  • Trinity College Dublin: Deirdre Ní Fhloinn
  • University College Dublin: Orla Hegarty

 Malaysia

  • Zul Rafique & Partners: Thayananthan Baskaran

New Zealand

  • Department of Education: Stephen Palfrey

 Singapore

  • National University of Singapore: Professor Philip Chan
  • Rodyk & Davidson: Paul Wong

 Sweden

  • Chalmers University of Technology: Professor Anna Kadefors
  • Foyen: John Hane

  USA

  • Columbia University Law School: Professor Christina Tvarno