It will have been clear to the construction industry for some time that 2022 was going to be a big year for changes to the statutory framework within which we operate. The Queen's Speech announced a number of upcoming legislative changes and in this article, we take a closer look at what more we now know about the Building Safety Act and what that means for a new era of collaborative procurement.
The Building Safety Act, was granted Royal Assent on 28 April (see our legal updates page for more information), and is already having a ripple effect on agreements for the construction and development of residential buildings, particular high-rise buildings. But there remains a question over whether this legislation will become just another set of technical hoops to jump through while running projects in much the same old way, or whether it will be a spur to an entire culture change in the industry. For those championing a new way of managing and carrying out construction projects, changing procurement practices is the key – and the recent launch of Guidance on Collaborative Procurement for Design and Construction to Support Building Safety was an opportunity to showcase these arguments.
The Guidance, published by the Department for Levelling-Up, Housing and Communities, was launched on 28 March at King's College London. The Guidance is co-written by Professor David Mosey & Russell Poynter-Brown and intended to be a smart, clearly written sourcebook for contracting organisations. The aim is to clearly link the kinds of collaborative procurement championed in Constructing the Gold Standard and the 'best practices' of the earlier Cabinet Office publication, the Construction Playbook, to the Building Safety Act. According to Dame Judith Hackitt, who introduced the Guidance at the launch, we need a wholesale change in culture from the 'race to the bottom' on price that brought us Grenfell, and such change must start at the very beginning, with procurement, which sets the parameters and establishes the values within which projects take shape.
The Guidance sets out in careful detail how using collaborative frameworks sets contractors and clients on the right path from the very beginning of a project, and relatively straightforwardly enables them to fulfil the requirements of the Building Safety Act, and to answer the questions that will be asked at the three Gateway Application stages for higher-risk buildings (for more information on the Building Safety Act please click here).
The Guidance sets out four key elements for good procurement:
- Selection on value not price.
- Early supply chain involvement (ESI).
- Collaborative relationships between all stakeholders, including, crucially, residents.
- Establishing the 'golden thread' of information running right through the project and beyond to ensure continued safety over the lifetime of a building.
The Guidance aims to be a practical guide on how collaborative procurement supports the requirements of the Building Safety Act. Using tried and tested contracting models, and with real life examples at every stage, the Guidance runs through exactly how collaborative practice can act to support building safety and allow the client to smoothly navigate the three Gateways, demonstrating good practice and compliance with the Act at all points throughout the project.
There is no doubt that this kind of collaborative approach is being championed across government and the public sector, with Crown Commercial Services one of the government departments leading the way in the use of such frameworks. Frameworks such as the Framework Alliance Contract, FAC-1, and Term Alliance Contract, TAC-1, and associated project partnering contracts such as the PPC2000, embed partnering and collaboration at an early stage of the project and allow much greater ESI than traditional frameworks and contracts. While such models can suffer from their relative unfamiliarity to participants, and the perceived costs of manging the active engagement of the supply-chain through meetings and collaboration exercises, they have also clocked up impressive successes. It was noted at the launch that they massively reduce disputes (as David Mosey noted, current number of litigations arising from such alliancing frameworks worldwide: zero). Over time, the alliancing process becomes even more efficient: as one participant working with such frameworks noted, the continued involvement of the framework partners across projects starts to produce a shared culture in which decision-making becomes relatively easy: everyone knows what the framework approach and values are, and it becomes a matter of shared 'common sense'.
There are still, of course, factors mitigating against such approaches, not least the conservative tendencies of the insurance industry and funders. While Dame Judith Hackitt suggested at the launch that insures and funders ought to just 'step up', others felt there may have to be government intervention to promote or support more flexible insurance policies. And ultimately, it may require more government intervention to actively promote the kind of collaborative procurement the Guidance champions.
One notable participant at the launch was Lord Aberdare, who has done a great deal to campaign against the use of retentions in construction. He has since tabled an amendment to the Building Safety Bill that would require the Building Safety Regulator to assess the safety risk in procurement arrangements. While this is unlikely to become part of the legislation, it is clear that even without it, the Guidance, together with Constructing the Gold Standard, will be a key source for public bodies and associated private sector organisations seeking to comply with the Construction Playbook and the Building Safety Act – with the ultimate purpose of successfully delivering safer residential buildings.
Please click here for further insight on the Queen's Speech.