PPC, i.e. Project Partnering Contract, was launched in 2000 to promote partnering in major construction or refurbishment projects. Essentially, PPC(S)2000 is a standard form of contract, with all the teams involved in the project signing up to one single contract.
In the main, the advantages of the PPC(S)2000 are that all the parties are contracted for the benefit of the project as a whole, allowing all parties to be fully aware of one another’s roles, duties and liabilities. The risks are identified and shared at the stage of signing the contract, allowing for the balance of risk to be apportioned amongst the parties on an agreed basis. One of the main incentives is to identify what savings are achievable to allow for the rewards to be shared, thus providing incentives to meet, and exceed, targets and comply with deadlines. At the most basic level, it should be a clearer, more cost effective and time saving way to operate.
A common query…
Collateral warranties: Given the fact that all the team members sign up to, and enter into, one contract, there is, strictly speaking, no need for the team members to grant to each other and/or to the client, collateral warranties, clause 22.1 covering the point. However, clause 22.2 does deal specifically with the granting of collateral warranties by the partnering team members if requested by the client. Collateral warranties may be required by the client in three circumstances:
- Where a specialist is appointed by a contractor but the specialist does not sign up to the contract itself;
- Where it is envisaged that the properties will transfer to a third party (a tenant or a buyer), in which case the team members may be asked by the client to grant collateral warranties to those third parties; and
- Where the client's lender requires collateral warranties.
Where it is known that collateral warranties will be required, the team members should agree styles of collateral warranties and have them annexed to the contract. Industry-standard collateral warranties can be adjusted to suit the terms of PPC(S) 2000. Where it is not known whether collateral warranties will be required or not, PPC(S)2000 is varied accordingly to cater for the eventuality. Where it is known that no collateral warranties will be required, then no reference is made to them; clause 22.2 is then simply deleted as suggested on page v of PPC(S)2000.
Contact:
Patrice Fabien