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New FAC-1 contract published


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Summary: On 2 June 2016, the Association of Consultant Architects (ACA) published the first edition of its Framework Alliance Contract (FAC-1).

The new form was drafted by Professor David Mosey, with input from a consultation group of over 120 organisations.  It is intended to provide a clear basis for the award of individual contracts forming part of a framework programme, whilst at the same time embedding collaborative working and joint incentivisation between the framework partners.  It is designed to support the procurement of any type of works, services and suppliers in all sectors and jurisdictions, and can be used with any form of project contract or appointment, including JCT, NEC, ICE, FIDIC or PPC.  The ACA claims that it “creates new systems for achieving improved value”.

However, contrary to what its name suggests, FAC-1 is not an alliance in the sense that the construction industry has traditionally used the term.  An alliance is generally understood to be an arrangement under which various parties are brought together to deliver the client’s objectives on a joint basis, sharing the risks and rewards of the venture under a “no claim, no blame” structure.  FAC-1, on the other hand, operates more like a traditional framework: each party enters into a bilateral contract for the delivery of individual projects and retains the associated risk and responsibility; this is then supplemented by an overarching obligation to collaborate in various activities designed to generate enhanced value from the programme, with the parties sharing any benefits derived from doing so.  This approach is already commonly used by major clients with significant programmes of work and can easily be achieved by incorporating Option X12 (partnering) into an NEC3-based contract.

In short, whilst its objectives are laudable, it is doubtful whether FAC–1 offers anything radically different from contract forms already in use.  Moreover, it provides a framework only and significant work will be needed to develop key aspects of the documentation in order to create a workable package for use on a specific programme.  In particular the objectives, success measures, targets and incentives (Schedule 1), the award procedures (Schedule 4 – note that, for public sector clients, these will need to comply with the Public Contracts Regulations 2015) and the template Project documents (Schedule 5) are all largely blank and will need to be populated on a programme-specific basis.  Furthermore, the approach to generating prices for individual projects is unclear and does not sit comfortably with either a competitive or a direct award procedure.  Prospective users should not therefore be misled into thinking that FAC-1 offers a ready-made form of alliance contract, nor that it represents a step change from other forms available in the market.

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