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PPC2000 - A Practical Guide to using this Partnering Contract

Scotland
01/09/2012
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This guide is intended to highlight a number of practical points in respect of this contract, which is used in both the public and private sector on a wide range of construction projects.

A different structure and scope

PPC2000 takes a different approach from other standard forms in that:

It brings the various parties in the Project Team together under one multi-party contract, which can incorporate additional parties as the Project progresses.
It is intended to cover the entire procurement process, envisaging and providing for early contractor involvement prior to start on site.

More support for Partnering

PPC2000 then further distinguishes itself from other standard form contracts in the extent to which its terms support a partnering process, which is evident from a number of partnering procedures and obligations such as:

The Partnering Team (all parties for the project who sign up to PPC200) are obliged to work together to achieve a number of general partnering objectives for the benefit of the project and the mutual benefit of the members of the Partnering Team.
The obligation on the members of the Partnering Team to work together and individually in the spirit of trust, fairness and mutual cooperation. This is similar to a general good faith obligation which courts are starting to give effect to when strict contractual provisions are being considered. The interpretation and enforceability of contractual provisions may be affected by whether or not a good faith obligation exists within the contract
The Core Group that is to be established to meet regularly to review and stimulate progress of the Project, whose decisions are to be reached by a consensus of all Core Group members present and then complied with by all of the Partnering Team within the scope of their agreed functions.
The duty of the Client Representative to organise, monitor and make proposals in respect of the contributions of the Partnering Team members to value engineering, value management and risk management exercises in relation to, and in the best interests of, the Project.
The restriction on the Client Representative’s power to issue instructions where such an instruction would prejudice the collaborative spirit of the partnering relationships.
The obligation on the Lead Designer and the other Design Team members to develop the design and process of the Project with the objective of achieving best value for the Client.
The involvement of a Partnering Adviser in the partnering process and the solving of problems as well as the avoidance or resolution of disputes.

Although PPC2000 is notably distinct from other standard form contracts in some areas, in others there are similarities. For example in PPC2000 you will see:

collaborative foresight mechanisms such as Early Warning and the use of Risk Registers;
the ability of the Parties to set out their own agreed payment milestones, activity schedules, cash flows or any other payment arrangements (with fall back provisions in the contract terms);
the use of incentivisation mechanisms such as KPI’s; and
an allocation of construction risk / entitlement of the Constructor / Contractor to claim additional time and money (along with notification requirements that must be complied with by the Constructor in respect of such claims),

that will all be largely familiar to users of other standard forms. (In connection with additional time claims; it is worth noting that PPC2000 does not have the same level of emphasis, as some other standard forms do, on the Constructor providing information on the impact of events on the programme, focussing more on financial impacts.)



In addition, consistent with other standard forms, PPC2000 has been updated to take account of the changes made by the LDEDC Act 2009 such as increased rights of suspension and new payment rules as well as options for matters such as Project Bank Accounts.



Ultimately, the success or failure of any partnering exercise largely depends on the commitment of the parties to engage in the necessary behaviours but PPC2000 offers a solid foundation and useful supporting procedures.


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