EMMA O’BRIEN offers a personal view of the case for collaborative contracting.
There are many issues with the contracting formats that have been in use in the last decade or two in Ireland, and yet still we stumble from one conciliation procedure to the next. Nobody is happy: not the contractor and certainly not the client. The methods don’t work. We’ve tried the laissez-faire approach to contracting and suffered the huge cost overruns that resulted. We’ve also tried the carrot and stick approach, but that turned out to be nearly all stick and very little carrot. The trouble with that option is that the primary aim is cost certainty, so much so that value for money is lost – it doesn’t matter what the cost is just as long as it doesn’t change once the figure is published. Where’s the sense in that?
A novel idea
Here’s a novel idea that some other jurisdictions have already tried with more than a modicum of success. Why don’t we all row in the
same direction for once? Banish the two-team ‘us and them’ approach and collaborate in a single team approach instead. After all, we all have (or ought to have) a common aim to produce a quality construction project on time and within budget.
As far back as 1985, the Institution of Civil Engineers (ICE) recommended “a fundamental review of alternative contract strategies for civil engineering design and construction with the objective of identifying the needs for good practice”. A key issue considered was whether the prevailing standard forms adequately served the best interests of the parties, focused as they were on the parties’ responsibilities and obligations, rather than viewing good project management as the key to successful projects. Later, in 1994, Sir Michael Latham, after spending considerable time studying our industry (in the UK context), published his report ‘Constructing the Team’, which made many recommendations for improvement. It found that an entirely new approach was needed to reduce confrontation and promote co-operation.
A collaborative option
The NEC3 Engineering and Construction Contract (ECC), is one collaborative form that has gained quite a following since it was first published in 1993. It promotes co-operation and collaboration throughout in order to achieve the common aim. Rather than having a co-operation clause in a contract where all the risk sits with the contractor – which is like saying ‘take this risk Mr Contractor, and this one, and this one, and by the way, you WILL co-operate with me’ – this is a contract where collaboration and co-operation are at its heart.
There’s no quasi-judicial role for the engineer, as in the IEI 3rd edition. The contract administrator is a project manager and the client can actually be both employer and project manager. Many clauses that require approval contain reasons for nonapproval, a hugely
beneficial approach, which gives clarity to both parties as well as removing much contention.
In fact, when you delve a little deeper, you will see that the ECC contracts are beautifully simple. Not only is the language plain English and legalese banished, there is no cross referencing between clauses and, most importantly, the operation of clauses is simple and effective.
Collaborative contracting requires not only a change of mindset but also a leap of faith. There needs to be complete setting aside of old behaviours and an opening of the mind to a different style of contracting. This is particularly so considering the Irish industry’s culture of opposing sides, competing aims and contrasting views. Getting on the same page is essential to ensure success and many ECC contracts start with a teach-in attended by the contracting parties, their consultants and advisers. Thus, from the outset, the parties are partners bound in the common aim.
That is not to say that there are never any disputes in collaborative style contract forms. The ECC has certainly spawned a few since
its inception, and while it is true that disputes will never be completely eradicated, it surely has to be an improvement to be
working collaboratively rather than hunkered down in the trenches, firing volleys at each other and pulling in completely opposite