The strengths and weakness of the PPC 2000 contracts against the more traditional JCT 98

Introduction

Design advice and the critical evaluation of building proposals often address the means adopted to meet objectives. The advice explains ‘how to’ design and build appropriately: what procedures to follow and checks to make, what materials to use, where a building should be oriented, how to construct features that are held to have desirable characteristics. An evaluation of a design checks that these means have indeed been adopted in the design (Sebestyén 1998). The preparation and presentation of almost all such design advice or prescriptive evaluation checklists are based on a premise of universality. It is assumed that it is possible to present information about how environmental issues should be addressed in building design in terms of solutions that are not specific to a time, place or client. This creates a theoretical image that such information can be applied directly, or adapted, to a variety of design situations. The concept of meeting needs is an integral component of most definitions of sustainable development, with a clear implication that needs can be determined independently of their context (Sebestyén 1998). The idea of meeting needs has a resonance with thinking on building design, because the idea that buildings must satisfy users’ needs has been part of this discourse over many years. An architect’s images about a good design often relate to the satisfaction of the users needs (Sebestyén 1998). In construction and the construction industry, advices and assistance from other parties help greatly in the success of projects. Assistance can be acquired through partnerships with other organizations. This paper intends to determine why some people prefer to use the PPC 2000. This paper intends to discuss the strengths and weakness of the PPC 2000 contracts against the more traditional JCT 98 and ICE conditions of contract.  The paper would decide whether it will recommend entering into one of the new type of contracts.

 

Discussion

Construction and Partnering

The Partnerships are an integral part of the urban village process and should continue on through to the construction process as individual phases of development are released for private sector development. There are several contractual ways to deliver both the residential and mixed-use components of each scheme; these include traditional contractor agreements, staged tendering, design and build contracts and project partnering (Blyth & Worthington 2001). The essence of the process is to minimize financial uncertainty and construction inefficiency whilst maintaining the design objectives of the master plan and the quality in the detailed components. Partnering does not just happen; it has to be actively sought, and considerable effort is required to extract its benefits. ‘The process has to be built on trust, which in turn can only be established through mutual respect between the individual partners-and that comes with experience and a successful track record’ (Blyth & Worthington 2001). In construction projects, partnering is a popular technique used to gain goals.  To make sure that the goals of partnering is achieved policies have been made. Specific policies such as the PPC 2000 and JCT 98 seem to have responded to the demands of the industry and government reports but there are some who does not prefer to use such contracts.

 

PPC 2000

Partnering contracts, symbiotic arrangements, or mutual trust relationships label the recurrent trend towards corporate disintegration and the substitution of rules for ownership in shaping the actions of formally independent parties. In determining which contracts the law will enforce or otherwise recognize as creating legal rights, regulatory authorities require evidentiary standards to appraise the reasonableness and welfare consequences of these undertakings. ‘The principal concern here relates to what may constitute a legitimate means and span of control that any unit in the industrial value-adding chain may wield over the decisions taken by related stages’ (Boscheck 2002). The importance of trust between contracting parties is highlighted by the modern phenomenon of partnering contracts or the contracts in which the parties commit to an open and cooperative management style known as the non-contractibility of quality, it has been at the centre of the current debate on the contracting of certain public sector services such as prison management. Whether services should be brought back in house on account of this problem depends on the significance of the Non contractibility issue (Domberger 1998).

 

 Partnering is invoked to reduce the adversarial element in contracts and to achieve greater cooperation. It involves creating an atmosphere of trust between the contracting parties, through open communications, sharing of information, and working together towards a common objective. The partnering relationship is achieved through a charter or an agreement to work cooperatively and in the spirit of trust. Interestingly partnering does not replace the traditional contract which legally binds the parties in the transaction (Domberger 1998). Rather, it is additional to it and operates as a social conditioning process: if people behave cooperatively there will be no need to invoke the formal contract.  There is a link between the way contractual arrangements are implemented and the benefits that are subsequently derived. But the link is not always clearly visible, and implementation costs are easily underestimated. Contractual relationships can be thought of as lying along a spectrum which runs from spot transactions at one end, to vertical integration at the other. When circumstances change, a move along the spectrum of contractual relationships may be an appropriate response (Domberger 1998). One type of partnering contract is the PPC2000. This type of partnering contract was created to serve the needs of people who want to adopt a complex approach to project procurement. Part of the PPC 2000 is a condition that states that parties involved will talk amongst themselves and discuss the outline of the project. As the parties discuss the project they need to determine how they can achieve their goals. The strength of PPC 2000 is its desire to boost the communication between members of the construction team and other parities.  The PPC 2000 is and will not be the solution for problems particularly on multi party agreement. PPC 2000 only chooses a good contractor that will implement the project; assistance, ideas and knowledge will come from other parties. PPC 2000’s main weakness is its inability to be used in multi party agreement; this prevents PPC 2000 to show its worth to agreements that are too risky. 

 

JCT 98

Construction of a development may be undertaken by a single contractor, or a group of contractors managed by a project manager appointed from the team of the main contractor. It is also commonplace for contractors to appoint sub-contractors for some of the activities to be undertaken. All contractors are required to undertake their work in accordance with a written contract. Standard forms of building contracts are regularly used which have been developed, published, monitored and amended by the Joint Contracts Tribunal (JCT).’The number of versions and forms published by the JCT has grown considerably’ (Balchin & Rhoden 1998). The JCT of the United Kingdom have attempted to bring arbitrations more in line with modern contract management systems, especially in settling smaller disputes which will also give the parties an opportunity for mediation before plunging into a full-scale arbitration. Arbitration has long been regarded as a relatively quick and inexpensive method of resolving disputes. Unfortunately, in recent years there has been a tendency to follow High Court procedure and as a result arbitrations have resembled a nightmare. Long inexplicable delays accompanied by astronomic costs seem almost to be the norm (McGill 1995).

 

The lack of power available to an arbitrator to discuss a claimant’s case for want of prosecution and to deal adequately with a respondent who deliberately delays the proceedings is one of the most frequently cited and most valid criticisms of the arbitration process when compared with litigation. The inclusion of such powers in the JCT rules is one of the most cogent justifications for their production. Given the contemporary complexity of commercial and construction contracts, it is not unreasonable to predict that the settlement of disputes arising from them will also be complex, and by definition, time-consuming and commensurately expensive (McGill 1995). It is incumbent, therefore, on the experienced arbitrator to explore all avenues of achieving speedy settlement and resolution of the disputes put to him for adjudication. Recognizing that arbitration may not be the complete answer to speedy and economic resolution to commercial disputes, nor need the arbitral process slavishly follow (McGill 1995). The JCT creates various forms of contract, guidance notes and other standard documentation, this are used in the construction industry.  JCT 1998 features separate areas for private with quantities, private without quantities, private with approximate quantities, local authorities with quantities, local authorities without quantities and local authorities with approximate quantities.  The separate areas help the people concerned to choose their appropriate classification.  Under the different areas are amendments that focus on Construction Industry Scheme, Sundry Amendments, Terrorism cover and Joint Fire Code, Extension of time / Loss and expense / Advance payment and Construction Skills Certification Scheme. The major weaknesses with the JCT 1998 are the inability to arrange clause positioning and lack of project specific information. This can help the parties involved to relate the amendments in the contract to their specific situation. An organization should choose the JCT contracts because it has constant amendments that relate to newer problems in the project.

 

Conclusion

In construction projects, partnering is a popular technique used to gain goals.  To make sure that the goals of partnering is achieved policies have been made. Specific policies such as the PPC 2000 and JCT 98 seem to have responded to the demands of the industry and government reports.  There are some who does not prefer to use the PPC 2000 because of its inability to be used in multi party agreement. The JCT 98 is a better contract policy because it features separate areas that help the people concerned to choose their appropriate classification.  A construction business should choose the JCT contracts because it provides constant amendments that can relate to newer problems in the project. The constant amendments to the JCT contracts helps a construction firm to be fully prepared for any situation while doing the project.

 

References

Balchin, P & Rhoden, M (eds.) 1998, Housing: The essential

foundations, Routledge, London.

 

Blyth, A & Worthington, J 2001, Managing the brief for

better design, Spon Press, London. 

 

Boscheck, R 2002, Market drive and governance: Re-examining

the rules for economic and commercial contest, Routledge,

London.

 

Domberger, S 1998, The contracting organization: A

strategic guide to outsourcing, Oxford University Press,

Oxford, England.

 

McGill, G 1995, Building on the past: A guide to the

archaeology and development process, E & FN Spon, London

 

Sebestyén, G 1998, Construction: craft to industry, E and

FN Spon, London.

 

 

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