The BE Collaborative contract will be three years old in September. Paul Sanderson, senior consultant at JR Knowles, explains how risk is spread out among the parties

The BE Collaborative standard form of contract is relatively new and its novelty is yet to be tested for its success and use. This is yet another phoenix form arising from the suggestion that traditional forms, although well-aired, encourage confrontation and disputes.

Taking on board the Egan Report, Re-thinking Construction, as with the NEC series of forms the BE form has regard to the supply chain methods which operate in the manufacturing industry, although uses words found in the traditional forms. Service providers are referred to as suppliers and their procurement is consistent with innovative risk distribution.

Under the BE form, the parties produce a risk register identifying the risks arising from the particular performance and delivery. The risk allocation schedule identifies how control measures were taken into consideration in the tender and in planning. "Relief events" compensate the supplier in one provision for measures that could not reasonably be contemplated and are beyond its control, for both time and money.

An online guide is available giving advice on how the form might be used including a section on how to produce the risk register emphasising that if the risks are not identified early, plans to prevent or control them cannot be put into place. The parties are required as an "overriding principle" to collaborate and cooperate.

Again, analogous with the NEC forms, the BE form provides positive obligations in dealing with risk allocation. Many disputes may be averted by obliging the parties to deal with risks openly at the early stages as soon as they are identified. This is contained in sections three and nine of the guidance. Section three deals with recognition of the client's business needs and section nine with management of the timing and financial consequences.

Interestingly, the form provides that in the event of any dispute a court or adjudicator shall have regard to the overriding principle in the award. The overriding principle is stated to prevail over other express provisions of the contract. It will be interesting to find how a court will deal with this - in the event that a party has strictly performed its obligations, surely a court would enforce the terms? Anything else may be held to be a penalty and unenforceable, and in any event would result in injustice and uncertainty.

How is BE Collaborative going down in the market? According to our straw poll, QSs like the sound of it but they just aren’t using it...

Rob Kennedy, director, MDA Consulting:
“The concept sounds good but there are so many other contracts out there that it will need to have some real unique selling points. Even if it does have some benefits, it will take a while for people to start using it because no one wants to be the first. The tendency at the moment is to want to use the PPC2000, which is new but tried and tested, and it also promotes collaboration.”

Gavin Johnson, co-founder of Day & Johnson:
“We are answerable to big funding bodies and legal organisations and they like tried and tested contracts like JCT. NEC is getting more accepted though. People are not so litigious any more, so there is a bit of a sea change. It sounds like there would be a market for BE Collaborative but it’s a matter of getting it accepted by the banks and employers.”

Ian Brazier, managing director, Adeo Consulting:
“I haven’t seen the BE Collaborative contract but people don’t like change. A number of jobs we are doing at the moment involve sorting out people who don’t properly understand the NEC contract. They treat changes as variations rather than compensation events. Under the NEC, they should be raising early warning notices about changes as they go along rather than claiming at the end.”

Source

QS News