PPC2000 upgrade: Our new three piece suite

The PPC2000 Project Partnering Contract was described by Sir Michael Latham as “the full monty of partnering and modern best practice”, and by 2004 it was being used on UK construction works worth more than £9bn a year (RICS figures). Both PPC2000 and the TPC2005 Term Partnering Contract have been widely adopted for the procurement of offices and housing, schools and universities, care homes and hospitals, airport facilities and roads, and hotels and leisure facilities. Most recently, PPC International has been adopted in the Middle East on a university hospital and two big mixed-use developments.

However, nothing stands still and regular feedback from clients, contractors and service providers through the nationwide PPC User Groups has signalled the need for improvements in the PPC2000 suite. Hence, this month’s relaunch of the PPC, SPC and TPC forms. This article summaries the main changes.

The structure and content of all the PPC documents remains essentially the same. Changes are introduced only where this has a practical purpose and these are primarily as follows:

• Key performance indicators (KPI), targets and incentives PPC2000 and SPC2000 now include provision for a schedule of KPIs and targets to motivate improved performance. They put greater emphasis on agreed incentives including shared savings, shared added value and pain/gain
• Partnering timetable and risk register In line with the approach taken in TPC2005, PPC2000 now incorporates model forms of partnering, timetable and risk register so as to stress the importance of these documents as tools to support efficient project processes. Both documents (and the TPC2005 equivalents) now contain guidance notes as to the activities that they should cover, with cross-references to the relevant contract clauses
• Sustainability PPC2000 has always included improved sustainability as a suggested KPI, and this is now carried through into TPC2005. Both contract forms and SPC2000 also include a full definition of the various measures that fall within the definition of “sustainability”
• Project bank accounts In line with Office of Government Commerce guidance, PPC2000 and SPC2000 include a project bank account option to assist onward cash flow to subcontractors and suppliers, and thereby attract more competitive prices
• Feedback Users of PPC2000 have requested some relaxation in the tight time limits for objection to client representative instructions (now extended from two to five working days) and in the period for the client representative to respond to contractors’ proposals for mitigating delay and disruption (again extended from two to five working days).

Users have also requested that the problem-solving hierarchy should be in place at the date of the project partnering agreement rather than waiting until the commencement agreement, and have requested that the “pre-possession agreement” be renamed the “pre-construction agreement” to give a more accurate description of its status. All of these changes have been incorporated, together with guidance as to the activities to be governed by agreement.

The Land Securities Trillium Job Centre Plus project brought in a £900m programme at a final cost of £737m

• Consistency and clarifications Some provisions of TPC2005 departed from PPC2000/SPC2000 in their drafting. Where possible (but without a major rewrite) all three forms have now been brought more directly into line. In other instances, the text of the contracts has been clarified so as to assist users in their interpretation.

The PPC suite has demonstrated that a multiparty contractual structure with a two-stage approach to create early contractor appointments can achieve significant results. For example the Land Securities Trillium Job Centre Plus project (a joint programme with the Department for Work and Pensions) brought in a £900m programme at a final cost of £737m. PPC contracts also have an exceptional track record in avoiding claims and disputes, with only a handful of adjudications and no known arbitrations or litigations despite their increasing use over the past eight years. However, it is fair to say that any contract form needs refreshing. Hopefully users of the PPC, SPC and TPC forms will benefit from the changes outlined above to ensure that they get the most out of the contracts in practice.