Understanding the Complex Projects Contract

Launched on 23 April, the Complex Projects Contract 2013 (CPC2013) focuses on managing time to ensure projects are delivered to specification on budget and without delays. Unlike existing contracts, which target failure by requiring financial compensation for late completion, CPC2013 provides the procedures to enable parties to manage time, cost and risk events in a modern and proactive fashion. It is also the first standard form contract to cater for building information modelling (BIM) and the future of collaborative design.

Speaking about the contract, Keith Pickavance, a past president of the Chartered Institute Of Building (CIOB) and lead author of CPC2013, said: “This is a modern day contract designed for the data age. It underlines and meets the need for a collaborative and competent approach to how risks are managed utilising transparent systems of data. It can be used with, or without, building information modelling and has been drafted to work in any country and legal jurisdiction around the world. The causes and consequences of delay are the single most common reason for uncontrolled loss and cost escalation in complex building and engineering projects.”

Unlike many forms of contract, CPC2013 doesn’t favour one party over another and is disencumbered by any vested interests. The contract is designed for projects of high value or complexity such as major real estate, engineering and infrastructure projects, with an experience client focused on achieving success. Amendments would be required to use the contract for ECPM and ‘construction management’ contracts.

Current standard forms of contract do not encourage, and in some cases actually inhibit, the competent management of time making them unsuitable for controlling the risk of time and cost escalation on complex projects. According to CIOB research, 67% of complex building projects were completed late, 49% were up to 6 months late and 18% were completed more than 6 months late. Time management experts can pinpoint the causes for these through careful analysis but by then it’s usually too late; the damage has been done and the parties are left counting the costs of late completion (or worse).

Effective tools

Taking a different approach, CPC2013 is designed to substantially manage, reduce and avoid time and cost risks contemporaneously though collaboration and transparent and effective tools.

While the quality of the program is paramount, the key lies in understanding that it is not enough simply to hold the parties to fixed points in an agreed program for the works. With this in mind, CPC2013 concentrates on ensuring that sufficient information is communicated to manage time effectively and deal with variances from program regardless of the cause. It requires detailed recordkeeping of actual process against the schedule, including resource use and productivity to help project participants understand and manage time risks as early as possible.

Quality assurance processes govern the preparation and maintenance of a dynamic program (called the working schedule) and there are direct links between claims for extensions of time and the working schedule and the contractor’s specified methods of working. The parties must deal with the approval or rejection of the contractor’s submissions early on rather than leave these unresolved and, consequently, potential breeding grounds for later disputes are minimised. A project time manager, with a duty to act fairly and reasonably, helps advise on, and oversee, these processes.

BIM ready

CPC2013 is the first construction contract to be ready for building information modelling, the modern digital standard for collaborative design. Maintaining this 21st century feel, communications between the parties are addressed through email, file transfer protocols and a common data environment.

Elsewhere in the contract, provisions cover deleterious and hazardous materials and the involvement of an expert aids the mitigation and quick resolution of disputes during the works. CPC2013 also caters for construction both on a design and build and a works-only basis, and can be used overseas as well as in the United Kingdom.

Einstein once said that it was not possible to change the world without changing our thinking. There’s little doubt CPC2013 may ruffle a few feathers, but its bold approach to time management is one which must be taken if contracts are to be routinely completed on time and on budget.

This is not the first time the CIOB has been involved in developing forms of contract. Back in 1871 the Institute, with the Royal Institute of British Architects, published the very first standard form of construction contract.

The contract is part of the CIOB’s agenda to establish a culture of effectively managing time in complex projects. In 2011 the Institute published the ‘CIOB Guide to Good Practice in the Management of Time in Complex Projects’ which was followed by the CIOB Project Time Management Qualification in 2012. For more on these topics, see CIOB Project Time Management Qualification (PTMQ) Framework.